UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

                                QUARTERLY REPORT
                       Pursuant to Section 13 OR 15(d) of
                       The Securities Exchange Act of 1934

                For the quarterly period ended September 30, 2005


                        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)

       Registrant's telephone number, including area code - (502)-227-1668


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



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days.

                                  Yes X No ____

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).

                                  Yes X No ____

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                  Yes ____ No X

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

                    Common stock, par value $0.125 per share
                6,796,058 shares outstanding at November 2, 2005


<PAGE>
<TABLE>
<CAPTION>

                                                           TABLE OF CONTENTS

<S>                                                                                                                       <C>
PART I- FINANCIAL INFORMATION.............................................................................................3

   Item 1. Financial Statements............................................................................................3
     Unaudited Consolidated Balance Sheets.................................................................................3
     Unaudited Consolidated Statements of Income...........................................................................4
     Unaudited Consolidated Statements of Comprehensive Income.............................................................6
     Unaudited Consolidated Statements of Cash Flows.......................................................................7
     Unaudited Consolidated Statements of Changes in Shareholders' Equity..................................................9
     Notes to Unaudited Consolidated Financial Statements.................................................................10
   Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations.........................13
   Item 3.  Quantitative and Qualitative Disclosures About Market Risk....................................................30
   Item 4.  Controls and Procedures.......................................................................................30

PART II - OTHER INFORMATION...............................................................................................30

   Item 1.  Legal Proceedings.............................................................................................30
   Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds...................................................30
   Item 6.  Exhibits......................................................................................................31
   SIGNATURES.............................................................................................................32
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
UNAUDITED CONSOLIDATED BALANCE SHEETS
-------------------------------------------------------------------------------------------------------------------------------
                                                                                        September 30,       December 31,
(In thousands, except share data)                                                                2005               2004
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>                <C>
ASSETS
Cash and cash equivalents:
   Cash and due from banks                                                               $    111,214       $    42,418
   Interest bearing deposits in other banks                                                     1,716             2,569
   Federal funds sold and securities purchased under agreements to resell                      38,241            34,273
-------------------------------------------------------------------------------------------------------------------------------
      Total cash and cash equivalents                                                         151,171            79,260
-------------------------------------------------------------------------------------------------------------------------------
Investment securities:
   Available for sale, amortized cost of $338,450 (2005) and $348,240 (2004)                  336,733           349,317
   Held to maturity, fair value of $16,980 (2005) and $20,555 (2004)                           16,646            19,803
-------------------------------------------------------------------------------------------------------------------------------
      Total investment securities                                                             353,379           369,120
-------------------------------------------------------------------------------------------------------------------------------
Loans, net of unearned income                                                                 897,543           876,705
Allowance for loan losses                                                                     (11,268)          (12,804)
-------------------------------------------------------------------------------------------------------------------------------
       Loans, net                                                                             886,275           863,901
-------------------------------------------------------------------------------------------------------------------------------
Premises and equipment, net                                                                    27,586            27,415
Company-owned life insurance                                                                   27,853            26,978
Goodwill                                                                                        8,927             8,722
Other intangibles, net                                                                          3,522             4,259
Other assets                                                                                   24,238            17,489
-------------------------------------------------------------------------------------------------------------------------------
      Total assets                                                                        $ 1,482,951       $ 1,397,144
-------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Deposits:
   Noninterest bearing                                                                    $   236,263       $   173,522
   Interest bearing                                                                           958,371           965,505
-------------------------------------------------------------------------------------------------------------------------------
      Total deposits                                                                        1,194,634         1,139,027
-------------------------------------------------------------------------------------------------------------------------------
Federal funds purchased and securities sold under agreements to repurchase                     60,078            59,758
Other short-term borrowings                                                                       792             1,791
Subordinated notes payable to unconsolidated trusts                                            25,774
Other long-term debt                                                                           53,851            53,158
Dividends payable                                                                               2,241             2,232
Other liabilities                                                                              10,790             9,728
-------------------------------------------------------------------------------------------------------------------------------
      Total liabilities                                                                     1,348,160         1,265,694
-------------------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS EQUITY
Common stock, par value $.125 per share
   9,608,000 shares authorized;  8,257,963 and 8,234,423
   shares issued at September  30, 2005 and December 31, 2004, respectively                     1,032             1,029
Capital surplus                                                                                21,346            20,744
Retained earnings                                                                             155,064           149,985
Treasury stock, at cost;  1,465,981 and 1,450,055 shares
   at September 30, 2005 and December 31, 2004, respectively                                  (41,534)          (41,008)
Accumulated other comprehensive (loss) income                                                  (1,117)              700
-------------------------------------------------------------------------------------------------------------------------------
      Total shareholders equity                                                               134,791           131,450
-------------------------------------------------------------------------------------------------------------------------------
      Total liabilities and shareholders' equity                                          $ 1,482,951       $ 1,397,144
-------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
---------------------------------------------------------------------------------------------------------------------------------
                                                                        Three Months Ended                   Nine Months Ended
                                                                              September 30,                       September 30,
(In thousands, except per share data)                                  2005              2004              2005             2004
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>              <C>                <C>              <C>
INTEREST INCOME
Interest and fees on loans                                      $    14,981      $    12,775        $    42,973      $    36,306
Interest on investment securities:
   Taxable                                                            2,087            2,094              6,044            6,079
   Nontaxable                                                           968              999              2,912            2,930
Interest on deposits in other banks                                      23               11                 57               29
Interest of federal funds sold and securities purchased
    under agreements to resell                                          496               51              1,379              218
---------------------------------------------------------------------------------------------------------------------------------
      Total interest income                                          18,555           15,930             53,365           45,562
---------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits                                                  5,656            3,999             15,906           11,275
Interest on federal funds purchased and securities sold
    under agreements to repurchase                                      601              317              1,706              784
Interest on other borrowed funds                                        543              572              1,596            1,567
Interest on subordinated notes payable to unconsolidated trusts         255                                 255
---------------------------------------------------------------------------------------------------------------------------------
      Total interest expense                                          7,055            4,888             19,463          13,626
---------------------------------------------------------------------------------------------------------------------------------
       Net interest income                                           11,500           11,042             33,902          31,936
---------------------------------------------------------------------------------------------------------------------------------
Provision for loan losses                                               248              666                184           1,479
---------------------------------------------------------------------------------------------------------------------------------
       Net interest income after provision for loan losses           11,252           10,376             33,718          30,457
---------------------------------------------------------------------------------------------------------------------------------
NONINTEREST INCOME
Service charges and fees on deposits                                  2,430            2,210              7,213           6,193
Allotment processing fees                                               659              198              1,957             598
Other service charges, commissions, and fees                            551              702              1,786           2,076
Data processing income                                                  344              340              1,078           1,055
Trust income                                                            394              416              1,217           1,244
Investment securities gains (losses), net                                                102                 (3)            167
Gains on sale of mortgage loans, net                                    187              114                596             229
Income from company-owned life insurance                                329              363                900           1,130
Other                                                                   123               94                957             170
---------------------------------------------------------------------------------------------------------------------------------
      Total noninterest income                                        5,017            4,539             15,701          12,862
---------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits                                        6,296            6,070             18,410          16,847
Occupancy expenses, net                                                 788              735              2,277           2,031
Equipment expenses                                                      682              650              2,046           1,755
Data processing and communication expenses                            1,103            1,044              3,236           2,935
Bank franchise tax                                                      368              367              1,091           1,045
Correspondent bank fees                                                 226              192                724             632
Other                                                                 2,040            1,931              6,577           5,055
---------------------------------------------------------------------------------------------------------------------------------
      Total noninterest expense                                      11,503           10,989             34,361          30,300
---------------------------------------------------------------------------------------------------------------------------------
       Income before income taxes                                     4,766            3,926             15,058          13,019
---------------------------------------------------------------------------------------------------------------------------------
Income tax expense                                                      913              727              3,261           2,571
---------------------------------------------------------------------------------------------------------------------------------
       Net income                                               $     3,853      $     3,199       $     11,797    $     10,448
---------------------------------------------------------------------------------------------------------------------------------
NET INCOME PER COMMON SHARE
   Basic                                                        $       .57      $       .47       $       1.74    $       1.55
   Diluted                                                              .56              .47               1.73            1.54
WEIGHTED AVERAGE SHARES OUTSTANDING
   Basic                                                              6,786            6,736              6,786           6,730
   Diluted                                                            6,821            6,787              6,824           6,781
---------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
---------------------------------------------------------------------------------------------------------------------------
                                                                        Three Months Ended             Nine Months Ended
                                                                              September 30,                September 30,
 (In thousands)                                                         2005          2004            2005          2004
---------------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>          <C>             <C>            <C>
NET INCOME                                                        $    3,853   $     3,199     $    11,797    $   10,448
Other comprehensive income:
   Unrealized holding (loss) gain on available for sale
   securities arising during the period, net of tax
   of $(867), $2,350, $(981), and $138, respectively                  (1,610)        4,364          (1,822)          257
Reclassification adjustment for prior period
   unrealized loss (gain) recognized during current period,
   net of tax of $47, $3, and $100, respectively                                        88               5          (186)
---------------------------------------------------------------------------------------------------------------------------
Other comprehensive (loss) income                                     (1,610)        4,452          (1,817)           71
---------------------------------------------------------------------------------------------------------------------------
Comprehensive Income                                              $    2,243   $     7,651     $     9,980    $   10,519
---------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------------------------------------------------------------------------------------
Nine months ended September 30, (In thousands)                                                         2005          2004
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                                               $       11,797    $    10,448
   Adjustments to reconcile net income to net cash provided by operating activities:
       Depreciation and amortization                                                                 3,272          2,369
       Net amortization of investment security premiums and (discounts):
          Available for sale                                                                           303          1,222
          Held to maturity                                                                             (33)           (32)
       Provision for loan losses                                                                       184          1,479
       Noncash compensation expense                                                                                   217
       Mortgage loans originated for sale                                                          (27,359)       (14,529)
       Proceeds from sale of mortgage loans                                                         25,551         14,244
       Deferred income tax benefit                                                                    (355)          (402)
       Gains on sale of mortgage loans, net                                                           (596)          (229)
       Gain on sale of credit card portfolio                                                          (700)
       Loss (gain) on sale of premises and equipment, net                                               22             (3)
       Loss (gain) on sale of available for sale investment securities, net                              3           (167)
       Increase in accrued interest receivable                                                        (919)          (980)
       Income from company-owned life insurance                                                       (875)        (1,120)
       Increase in other assets                                                                     (5,856)        (1,622)
       Increase in accrued interest payable                                                            358            221
       Increase in other liabilities                                                                 1,086          1,907
-----------------------------------------------------------------------------------------------------------------------------
        Net cash provided by operating activities                                                    5,883         13,023
-----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Proceeds from maturities and calls of investment securities:
      Available for sale                                                                           139,738        215,591
       Held to maturity                                                                              3,190          3,194
   Proceeds from sale of available for sale investment securities                                    3,038         59,603
   Purchase of available for sale investment securities                                           (133,292)      (218,358)
    Investment in unconsolidated trusts                                                                774
    Loans originated for investment, net of principal collected                                    (19,454)       (65,556)
   Purchase of subsidiary, net of cash acquired                                                                    (5,818)
   Purchase of premises and equipment                                                               (2,851)        (2,831)
   Proceeds from sale of equipment                                                                     123             83
-----------------------------------------------------------------------------------------------------------------------------
        Net cash used in investing activities                                                       (8,734)       (14,092)
-----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Net increase (decrease) in deposits                                                              55,607        (19,392)
   Net increase in securities sold under agreements to repurchase                                      320          6,004
   Proceeds from long-term debt issued to unconsolidated trusts                                     25,774
   Proceeds from other long-term debt                                                                2,000          1,800
    Repayments of long-term debt                                                                    (1,307)        (5,931)
   Net (decrease) increase in other short-term borrowings                                             (999)         1,015
   Dividends paid                                                                                   (6,709)        (6,656)
   Purchase of common stock                                                                           (526)           (86)
   Shares issued under Employee Stock Purchase Plan                                                    147             42
   Stock options exercised                                                                             455            686
-----------------------------------------------------------------------------------------------------------------------------
        Net cash provided by (used in) financing activities                                         74,762        (22,518)
-----------------------------------------------------------------------------------------------------------------------------
        Net increase (decrease) in cash and cash equivalents                                        71,911        (23,587)
-----------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of year                                                      79,260        127,216
-----------------------------------------------------------------------------------------------------------------------------
        Cash and cash equivalents at end of period                                          $      151,171   $    103,629
-----------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
   Interest                                                                                 $       19,105   $     13,405
   Income taxes                                                                                      2,000          2,525
Transfers from loans to repossessed assets                                                           2,599          3,079
Cash dividend declared and unpaid                                                                    2,241          2,223
-----------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

------------------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share data)                                                                   Accumulated
                                                                                                           Other           Total
Nine months ended                   Common Stock       Capital       Retained     Treasury Stock       Comprehensive   Shareholders'
September 30, 2005 and 2004        Shares   Amount     Surplus       Earnings    Shares       Amount       Income         Equity
------------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>     <C>        <C>           <C>           <C>      <C>             <C>            <C>
  Balance at January 1, 2005       8,234   $ 1,029    $ 20,744      $ 149,985     1,450    $ (41,008)      $    700       $ 131,450
Net income                                                             11,797                                                11,797
Other comprehensive income                                                                                   (1,817)         (1,817)
Cash dividends declared,
  $.99 per share                                                       (6,718)                                               (6,718)
Purchase of common stock                                                             16         (526)                          (526)
Stock options exercised,
  including related tax benefits      18         2         456                                                                  458
Shares issued pursuant
  to Employee Stock Purchase plan      6         1         146                                                                  147
------------------------------------------------------------------------------------------------------------------------------------
  Balance at September 30, 2005    8,258   $ 1,032    $ 21,346      $ 155,064     1,466    $ (41,534)      $ (1,117)      $ 134,791
------------------------------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------------------------------------------------------------------
  Balance at January 1, 2004       8,161   $ 1,020    $ 18,670      $ 145,489     1,445    $ (40,830)      $  2,122       $ 126,471
Net income                                                             10,448                                                10,448
Other comprehensive income                                                                                       71              71
Cash dividends declared,
  $.99 per share                                                       (6,664)                                               (6,664)
Purchase of common stock                                                              2          (86)                           (86)
Stock options exercised,
  including related tax benefits      28         4         685                                                                  689
Shares issued pursuant
  to Employee Stock Purchase plan      1                    42                                                                   42
Noncash compensation expense
  attributed to stock option grants                        217                                                                  217
------------------------------------------------------------------------------------------------------------------------------------
  Balance at September 30, 2004    8,190    $ 1,024   $ 19,614      $ 149,273     1,447    $ (40,916)      $  2,193       $ 131,188
------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>



NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.       BASIS OF PRESENTATION AND NATURE OF OPERATIONS

The consolidated  financial  statements  include the accounts of Farmers Capital
Bank  Corporation  (the  "Company"),   a  financial  holding  company,  and  its
wholly-owned  six bank and two active nonbank  subsidiaries.  Bank  subsidiaries
include  Farmers Bank & Capital Trust Co.  ("Farmers  Bank") in  Frankfort,  KY;
United  Bank & Trust  Co.  in  Versailles,  KY;  Lawrenceburg  National  Bank in
Harrodsburg,  KY; First  Citizens Bank in  Elizabethtown,  KY;  Farmers Bank and
Trust Company  ("Farmers  Georgetown") in Georgetown,  KY; and Kentucky  Banking
Centers,  Inc. in Glasgow, KY. The Company has two active nonbank  subsidiaries,
FCB Services,  Inc. and Kentucky General Holdings,  LLC. FCB Services, Inc. is a
data processing subsidiary located in Frankfort,  KY, which provides services to
the Company's banks as well as unaffiliated  banks.  Kentucky General  Holdings,
LLC holds a 50%  voting  interest  in KHL  Holdings,  LLC,  which is the  parent
company of Kentucky Home Life  Insurance  Company.  Leasing One  Corporation,  a
commercial  leasing  company,  and Farmers  Capital  Insurance  Corporation,  an
insurance  agency,  are wholly-owned  subsidiaries of Farmers Bank. Pro Mortgage
Partners,  LLC, a mortgage  brokerage company,  is a wholly-owned  subsidiary of
Farmers Georgetown.  All significant intercompany  transactions and balances are
eliminated in consolidation.

The  Company  provides  financial  services  through  its  27  locations  in  16
communities  throughout Central Kentucky to individual,  business,  agriculture,
government,   and  educational  customers.  Its  primary  deposit  products  are
checking,  savings, and term certificate accounts.  Its primary lending products
are residential mortgage, commercial lending and leasing, and installment loans.
Substantially  all loans and leases are secured by specific  items of collateral
including business assets,  consumer assets, and commercial and residential real
estate.  Commercial  loans and leases are  expected  to be repaid from cash flow
from operations of businesses. Farmers Bank has served as the general depository
for the Commonwealth of Kentucky for over 70 years and also provides  investment
and other  services to the  Commonwealth.  Other services  include,  but are not
limited to, cash management  services,  issuing letters of credit,  safe deposit
box rental, and providing funds transfer services.  Other financial instruments,
which  potentially  represent  concentrations  of credit risk,  include  deposit
accounts in other financial institutions and federal funds sold.

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities as of the date
of the financial  statements  and the reported  amounts of revenues and expenses
during the reporting period.  Estimates used in the preparation of the financial
statements  are based on various  factors  including  the current  interest rate
environment  and the  general  strength  of the local  economy.  Changes  in the
overall  interest rate  environment can  significantly  affect the Company's net
interest  income and the value of its recorded  assets and  liabilities.  Actual
results  could  differ  from  those  estimates  used in the  preparation  of the
financial statements.

The  financial  information  presented as of any date other than December 31 has
been  prepared  from the books  and  records  without  audit.  The  accompanying
consolidated  financial  statements  have been prepared in  accordance  with the
instructions  to Form 10-Q and Rule 10-01 of  Regulation  S-X and do not include
all of the  information  and the  footnotes  required by  accounting  principles
generally accepted in the United States of America for complete  statements.  In
the opinion of  management,  all  adjustments,  consisting  of normal  recurring
adjustments,  necessary for a fair  presentation  of such financial  statements,
have been included.  The results of operations  for the interim  periods are not
necessarily indicative of the results to be expected for the full year.

For further  information,  refer to the  consolidated  financial  statements and
footnotes  thereto  included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2004.

2.       RECLASSIFICATIONS

Certain   reclassifications   have  been  made  to  the  consolidated  financial
statements of prior periods to conform to the current period presentation. These
reclassifications  do not  affect net  income or total  shareholders'  equity as
previously reported.

3.       NET INCOME PER COMMON SHARE

Basic net income per common  share is  determined  by dividing net income by the
weighted average total number of shares of common stock outstanding. Diluted net
income  per  common  share is  determined  by  dividing  net income by the total
weighted  average number of shares of common stock  outstanding,  plus the total
weighted average number of shares that would be issued upon exercise of dilutive
stock options  assuming  proceeds are used to repurchase  shares pursuant to the
treasury stock method.  Net income per common share computations were as follows
at September 30, 2005 and 2004.
<TABLE>
<CAPTION>

 ------------------------------------------------------------------------------------------
                                               Three Months Ended        Nine Months Ended
                                                  September 30,             September 30,
 (In thousands, except per share data)          2005         2004          2005        2004
 ------------------------------------------------------------------------------------------
<S>                                       <C>          <C>          <C>          <C>
 Net income, basic and diluted            $    3,853   $    3,199   $   11,797   $  10,448
 ------------------------------------------------------------------------------------------

 Average shares outstanding                    6,786        6,736        6,786       6,730
 Effect of dilutive stock options                 35           51           38          51
 ------------------------------------------------------------------------------------------
 Average diluted shares outstanding            6,821        6,787        6,824       6,781
 ------------------------------------------------------------------------------------------

 Net income per share, basic              $      .57   $      .47   $     1.74   $    1.55
 Net income per share, diluted                   .56          .47         1.73        1.54
 ------------------------------------------------------------------------------------------
</TABLE>

4.       STOCK-BASED COMPENSATION

In 1997, the Company's Board of Directors  approved a nonqualified  stock option
plan (the "Plan") that  provides for granting of stock  options to key employees
and officers of the Company. The Plan was subsequently ratified by the Company's
shareholders  at its annual  shareholders'  meeting  held on May 12,  1998,  the
measurement  date of the options  granted  during  1997.  All stock  options are
awarded at a price equal to the fair market value of the Company's  common stock
at the date the options are granted.  The Company applies Accounting  Principles
Board ("APB") Opinion No. 25 and related  interpretations  in accounting for its
Plan.  Accordingly,  since  options were granted  during 1997 at the fair market
value of the  Company's  stock  on the  grant  date,  and the  measurement  date
occurred during 1998, the Company recognized noncash  compensation  expense over
the vesting  period of the options,  which term ended during 2004,  based on the
intrinsic  value  of the  stock  options  measured  on the  date of  shareholder
ratification of the Plan.

The Company granted 40,049 and 54,000  additional  options under the Plan during
2004  and  2000 in  which  there is no  compensation  expense  being  recognized
pursuant to APB No. 25. In addition,  the Company issued shares  pursuant to its
Employee Stock Purchase Plan ("ESPP") during each of the quarters beginning with
the  quarter  ended  September  30, 2004 and  recorded  no related  compensation
expense.  Had  compensation  expense been determined under the fair value method
described in the Financial  Accounting  Standards  Board  ("FASB")  Statement of
Financial  Accounting  Standards  ("SFAS") No. 123,  ACCOUNTING FOR  STOCK-BASED
COMPENSATION,   as  amended  by  SFAS  No.  148,   ACCOUNTING  FOR   STOCK-BASED
COMPENSATION-TRANSITION  AND DISCLOSURE, the Company's net income and income per
common share would have been as shown in the following table.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                                  Three Months Ended         Nine Months Ended
                                                                     September 30,             September 30,
(In thousands, except per share data)                              2005        2004          2005          2004
----------------------------------------------------------------------------------------------------------------
<S>                                                          <C>         <C>           <C>          <C>
NET INCOME
  As reported                                                $    3,853  $    3,199    $   11,797   $    10,448
  Add:  Stock-based employee compensation expense
        included in reported net income, net of related
        tax effects                                                              51                         141
  Less: Stock-based compensation expense determined
        under fair value based method for all awards, net
        of related tax effects                                      (15)        (65)          (95)         (182)
----------------------------------------------------------------------------------------------------------------
Proforma                                                     $    3,838  $    3,185    $   11,702   $    10,407
----------------------------------------------------------------------------------------------------------------
NET INCOME PER COMMON SHARE
  Basic, as reported                                         $      .57  $      .47    $     1.74   $      1.55
  Basic, proforma                                                   .56         .47          1.72          1.55

  Diluted, as reported                                              .56         .47          1.73          1.54
  Diluted, proforma                                                 .56         .47          1.71          1.53
----------------------------------------------------------------------------------------------------------------
</TABLE>


On March 16, 2005 the Compensation Committee of the Company's Board of Directors
acted to approve an immediate  and full  acceleration  of the vesting on options
granted  during  2004.  As a result,  options to purchase  40,049  unvested  and
"out-of-the-money"  shares of the  Company's  common  stock  became  immediately
exercisable as of March 16, 2005.  The exercise  price of these options  remains
unchanged at $34.80 per share.  The closing  price of the  Company's  shares was
$34.50 on March  15,  2005.  None of the  accelerated  options  are  granted  to
directors or executive officers of the Company.

The  purpose  of the  accelerated  vesting  is to allow  the  Company  to reduce
anticipated  future  compensation  expense attributed to its stock option grants
pursuant to recently issued SFAS No. 123 (revised), "SHARE-BASED PAYMENT". Under
SFAS No. 123 (revised),  the Company will be required to recognize  compensation
expense in its income  statement  beginning  January 1, 2006 (in compliance with
SEC Release No.  33-8568) for awards  granted or modified on or after that date,
as well as recognizing  compensation expense for the portion of existing options
that vest January 1, 2006 or later. Since the options granted during 2004 had an
exercise  price in excess of the market  price on the date of  modification  and
there is no future vesting  requirement,  there will be no compensation  expense
recorded for these options in the current or future  periods.  This represents a
reduction in estimated future compensation expense of approximately  $31,000 and
$26,000 for the twelve  months ended  December 31, 2006 and 2007,  respectively.
The Company  anticipates  that it will record  compensation  expense pursuant to
SFAS No.  123  (revised)  for  unvested  options  from its 2000 grant and shares
issued under its ESPP.

5.       EMPLOYEE STOCK PURCHASE PLAN

The Company's 2004 ESPP was approved by its  shareholders  at the Company's 2004
annual meeting.  The purpose of the ESPP is to provide a means by which eligible
employees  may  purchase,  at a discount,  shares of common stock of the Company
through payroll withholding. The purchase price of the shares is equal to 85% of
their fair market value on specified  dates as defined in the plan. The ESPP was
effective  July 1, 2004.  There were 1,825 shares and 5,245 shares  issued under
the plan during the current three and  nine-month  periods  ended  September 30,
2005.  Compensation cost related to the ESPP included in the proforma net income
disclosure in the table in Note 4 above was $6,000 and $21,000 for the three and
nine-month periods ended September 30, 2005, respectively.

6.       PENDING BUSINESS COMBINATION - CITIZENS BANCORP, INC.

On July 1, 2005 the Company  announced  the signing of an agreement  and plan of
merger with  Citizens  Bancorp,  Inc.  ("Citizens")  whereby  Citizens  would be
acquired in a cash and stock transaction valued at approximately  $39.1 million.
Approximately  55% of the purchase  price will be paid in cash and the remaining
amount will be in the form of newly issued shares of the Company's common stock.
In July 2005 the Company issued $25.0 million of Trust  Preferred  Securities in
connection with this plan of merger.

Citizens is a bank holding company  headquartered  in Newport,  Kentucky and the
parent  corporation  of Citizens  Bank of  Northern  Kentucky,  Inc.  ("Citizens
Bank").   Pending  the  required  approvals  from  the  appropriate   regulatory
authorities  and subject to the  satisfaction of the conditions set forth in the
definitive  agreement,  this  transaction is expected to close during the fourth
quarter of 2005.  Citizens  Bank  operates  six offices  located in Campbell and
Kenton Counties in Kentucky.  As of September 30, 2005,  Citizens Bank had total
assets of $186  million,  total loans (net of unearned  income) of $149 million,
total deposits of $164 million, and shareholders' equity of $16.7 million.

7.       TRUST PREFERRED SECURITIES AND SUBORDINATED NOTES

In July 2005,  the Company  completed two private  offerings of trust  preferred
securities  through two  separate  Delaware  statutory  trusts  sponsored by the
Company.  Farmers  Capital  Bank  Trust I  ("Trust  I") sold  $10.0  million  of
preferred  securities and Farmers  Capital Bank Trust II ("Trust II") sold $15.0
million of preferred securities (Trust I and Trust II are hereafter collectively
referred to as the  "Trusts").  The proceeds  from the offering  will be used in
funding  the  acquisition  of  Citizens.  The  Company  owns  all of the  common
securities of each of the Trusts.

The Trusts used the proceeds from the sale of preferred securities, plus capital
contributed  to  establish  the  trusts,   to  purchase  the  Company's   junior
subordinated  notes in amounts and bearing  terms that  parallel the amounts and
terms of the respective preferred  securities.  The subordinated notes mature in
2035 and bear a floating interest rate (current three-month LIBOR plus 150 basis
points in the case of the notes held by Trust I and  current  three-month  LIBOR
plus 165 basis  points in the case of the notes held by Trust II).  Interest  on
the notes is payable quarterly.

The subordinated notes are redeemable in whole or in part,  without penalty,  at
the Company's  option on or after September 30, 2010 and mature on September 30,
2035.  The notes are junior in right of payment of all present and future senior
indebtedness.

Under FASB Interpretation No. 46 (revised),  "CONSOLIDATION OF VARIABLE INTEREST
ENTITIES",  the  Company  does not  consolidate  the Trusts  into its  financial
statements.  Accordingly,  the Company does not report the securities  issued by
the Trusts as liabilities,  but instead reports as liabilities the  subordinated
notes issued by the Company and held by the Trusts. The Company accounts for its
investment in each of the Trusts as assets. The Company records interest expense
on the corresponding notes issued to the Trusts on its statement of income.

In March 2005,  the Federal  Reserve  Board adopted final rules that continue to
allow  the  inclusion  of  trust  preferred  securities  in Tier 1  capital  for
regulatory  capital  adequacy  purposes in an amount not to exceed 25% of Tier 1
capital, net of goodwill and any related deferred tax liabilities. The amount of
trust preferred securities and certain other elements in excess of the limit may
be included in Tier 2 capital, subject to restrictions.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This report contains  forward-looking  statements  under the Private  Securities
Litigation Reform Act of 1995 that involve risks and uncertainties. Although the
Company believes that the assumptions underlying the forward-looking  statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore,  there  can  be no  assurance  that  the  forward-looking  statements
included  herein will prove to be  accurate.  Factors  that could  cause  actual
results to differ from the results discussed in the  forward-looking  statements
include,  but are not limited to: economic  conditions  (both generally and more
specifically in the markets in which the Company and its subsidiaries  operate);
competition  for the  Company's  customers  from other  providers  of  financial
services; government legislation and regulation (which changes from time to time
and over which the Company has no control);  changes in interest rates; material
unforeseen  changes  in the  liquidity,  results  of  operations,  or  financial
condition of the Company's customers;  and other risks detailed in the Company's
filings with the Securities and Exchange Commission,  all of which are difficult
to predict and many of which are beyond the control of the Company.  The Company
expressly  disclaims  any intent or  obligation  to update  any  forward-looking
statements after the date hereof to conform such statements to actual results or
to changes in our opinions or expectations.

RESULTS OF OPERATIONS

                    THIRD QUARTER 2005 VS. THIRD QUARTER 2004
                    -----------------------------------------

The Company reported net income of $3.9 million, an increase of $654 thousand or
20.4%  compared to $3.2  million for the same period in 2004.  Basic and diluted
net  income  per  share  were $.57 and $.56 for the  current  three  months,  an
increase  of $.10 or 21.3%  and $.09 or  19.1%,  respectively  compared  to $.47
reported for basic and diluted per share earnings in the same period a year ago.
The operating results related to Financial National  Electronic  Transfer,  Inc.
("FiNET")  acquired  on October 8, 2004 are  included in the  financial  results
presented for the current quarter.  Since this  acquisition  occurred during the
fourth  quarter  of 2004,  there are no  comparable  results  for the prior year
period.  Net  assets  acquired  from  FiNET on the date of  purchase,  primarily
intangibles, were approximately $6.6 million.

The  increase in net income for the three  months  ended  September  30, 2005 is
primarily attributed to an increase in net interest income and a lower provision
for loan  losses  partially  offset  by higher  net  noninterest  expenses.  Net
interest income for the current  quarter was $11.5 million,  an increase of $458
thousand or 4.1%  compared to $11.0 during the same period a year  earlier.  The
increase in net interest income in the quarterly comparison can be attributed to
higher interest income,  primarily on loans, which offset the growth in interest
expense.

The  provision  for  loans  losses  decreased  $418  thousand  or  62.8%  in the
three-month comparison. The decrease in the provision for loan losses relates to
a $455 thousand and $4.8 million reduction in nonperforming loans in the current
three  and  nine-month  periods  ended  September  30,  2005 and the sale of the
Company's  $3.2 million  credit card  portfolio  during the first nine months of
2005.  Nonperforming  loans include  nonaccrual loans,  restructured  loans, and
loans  past  due  90  days  or  more  in  which  interest  is  still   accruing.
Nonperforming  loans and credit card loans typically have larger  allowances due
to their identified risk of loss characteristics.

Noninterest income increased $478 thousand or 10.5% in the quarterly comparison.
The increase in noninterest  income was led by higher allotment  processing fees
of $461  thousand  or 232.8% and is  attributed  to the FiNET  acquisition  late
during 2004. Other significant  increases in noninterest  income include service
charges and fees on deposits of $220  thousand or 10.0% and gains on the sale of
mortgage loans of $73 thousand or 64.0%.  Notable declines in noninterest income
include income from  company-owned life insurance of $34 thousand or 9.4% due to
lower  crediting  rates on the underlying  investments,  lower service  charges,
commissions,  and fees of $151 thousand or 21.5%,  and lower securities gains of
$102  thousand.  Until  recently,  the  underlying  investments  related  to the
company-owned  life  insurance  have been  repricing  in a lower  interest  rate
environment.

Noninterest expenses increased $514 thousand or 4.7% in the current three months
compared to the same period a year ago. These increases offset the $478 thousand
higher  amount of reported  noninterest  income.  The  increase  in  noninterest
expenses occurred across a broad range of line items and is generally attributed
to the  Company's  business  expansion  during  the last half of 2004.  The most
significant  increase was salaries and employee  benefits,  which increased $226
thousand or 3.7% in the comparison as the average number of full time equivalent
employees rose to 518 from 501. Another notable increase in noninterest expenses
includes amortization of intangibles of $118 thousand.  In addition,  income tax
expense  increased  $186 thousand or 25.6% as the effective  federal  income tax
rate  increased to 19.2% from 18.5% along with higher  pretax  income  growth of
$840 thousand or 21.4%.

The return on average  assets  ("ROA")  was 1.06% for the  current  quarter,  an
increase of 13 basis  points  compared to .93%  reported  for the same period in
2004.  The increase in ROA is mainly  attributed  to the positive  impact of the
decrease in the provision  for loan losses  accounting  for 12 basis  points,  a
higher  contribution  from  noninterest  bearing  sources  of  funds of 11 basis
points, and higher  noninterest  income of 7 basis points.  These increases were
partially  offset  primarily by a 19 basis point decrease in net interest spread
to 3.33% from 3.52%.  Return on average  equity ("ROE") was 11.40% for the third
quarter of 2005 compared to 9.98% in the same period of 2004. This represents an
increase of 142 basis points and is attributed  mainly to the reported  increase
in net income.

NET INTEREST INCOME
-------------------

The trend of the general  interest rate  environment in the current three months
ended  September  30, 2005  compared to the same period a year  earlier has been
upward primarily as a result of short-term  interest rate increases by the Board
of Governors of the Federal  Reserve  System (the "Fed").  The Fed has increased
short-term  interest  rates by 200 basis points in eight equal  increments of 25
basis points since  September 30, 2004.  The effects of these rate  increases by
the Fed has  generally  led to higher  average rates earned and paid on interest
earning assets and interest  bearing  liabilities  with a faster increase in the
average  rates  paid on  interest  bearing  liabilities  due to their  repricing
characteristics.

Net interest income is the most significant component of the Company's earnings.
Net  interest  income is the  excess of the  interest  income  earned on earning
assets over the interest paid for funds to support  those  assets.  The two most
common metrics used to analyze net interest  income are net interest  spread and
net interest margin.  Net interest spread represents the difference  between the
yields on earning assets and the rates paid on interest bearing liabilities. Net
interest  margin  represents  the  percentage of net interest  income to average
earning  assets.  Net interest margin will exceed net interest spread because of
the  existence  of  noninterest  bearing  sources of funds,  principally  demand
deposits  and  shareholders'  equity,  which are also  available to fund earning
assets.  Changes in net interest  income and margin result from the  interaction
between the volume and the composition of earning assets,  their related yields,
and the associated  cost and  composition of the interest  bearing  liabilities.
Accordingly,  portfolio size, composition, and the related yields earned and the
average  rates paid can have a  significant  impact on net  interest  spread and
margin.  The table on the  following  page  represents  the major  components of
interest  earning  assets and interest  bearing  liabilities on a tax equivalent
basis.  To compare the tax-exempt  asset yields to taxable  yields,  amounts are
adjusted to pretax  equivalents based on the marginal corporate Federal tax rate
of 35%.

The  Company's  tax  equivalent  ("TE") yield on earning  assets for the current
three  months was 5.9%,  an  increase  of 49 basis  points from 5.4% in the same
period a year ago. The cost of funds for the current  three months was 2.5%,  an
increase of 68 basis points  compared to 1.9% in the same period a year earlier.
A goal of the Company in the current  interest rate  environment  is to increase
earning assets while maintaining the current  relatively low interest rates paid
on interest  bearing  liabilities.  The Company  strives to accomplish this goal
while  providing  excellent  service to its customers and  maintaining  its core
deposit  base.  Maintaining  the  relatively  low  cost  of  funds  is  becoming
increasingly  difficult  due to the recent  rise in general  interest  rates and
competitive  market forces.  Average  earning assets  increased $71.9 million or
5.9% to $1.3 billion in the quarterly  comparison,  driven mainly by loan growth
and temporary  investments.  As a percentage of total  average  assets,  earning
assets  increased 54 basis points to 89.5% from 89.0%.  The higher earning asset
ratio increased ROA by three basis points in the quarterly comparison.

Interest income results from interest earned on earning assets,  which primarily
include loans and investment  securities.  Interest income is affected by volume
(average  balance),  composition of earning assets, and the related rates earned
on those assets.  Total interest  income for the third quarter of 2005 was $18.6
million,  an  increase  of $2.6  million  or 16.5%  from the same  period in the
previous  year.  The growth in interest  income was mainly  attributed to higher
interest income on loans. Interest income on loans increased as a result of both
higher average loan balances  outstanding and higher average rates earned on the
portfolio.  The Company's tax equivalent yield on earning assets for the current
period was 5.9%,  an increase of 49 basis  points  compared to the same period a
year ago.

Interest and fees on loans was $15.0 million, an increase of $2.2 million due to
higher average loan balances  outstanding  along with an increase in the average
rate earned.  Average loans  increased  $47.4 million or 5.6% to $901 million in
the  comparison  due to higher  loan  demand in what  remains a  relatively  low
interest rate environment.  The tax equivalent yield on loans increased 65 basis
points  to 6.6% from  6.0% in the  quarterly  comparison.  Interest  on  taxable
securities was $2.0 million,  relatively  unchanged in the comparison as a $17.2
million  decrease in the average  balance  outstanding  was offset by a 22 basis
point increase in the average rate earned. Interest on nontaxable securities was
also  relatively  unchanged  at $968  thousand.  A $2.3  million  decline in the
average  balance  outstanding  coupled  with an 11 basis  point  decrease in the
average rate earned  resulted in a decrease in interest  income from  nontaxable
securities  of $31 thousand or 3.1% in the  comparison.  Interest on  short-term
investments,  including  time deposits in other banks,  federal funds sold,  and
securities purchased under agreements to resell,  increased $457 thousand due to
an increase in the average  balance  outstanding  of $44.0  million or 306.9% to
$58.3  million  from $14.3  million and, to a lesser  extent,  a 181 basis point
increase  in the  average  rate  earned to 3.5% from 1.7%.  The  increase in the
average balance is driven by the $25.0 million proceeds from the Company's trust
preferred  securities  offering during the third quarter of 2005. These proceeds
will remain invested in short-term  investments  until they are used to fund the
cash portion of the Citizens acquisition that is expected to close in the fourth
quarter of 2005.  The higher  average rate earned on short-term  investments  is
closely related to the increases in general market interest rates resulting from
the Fed's increase of short-term interest rates during the last twelve months.

Interest   expense   results  from  incurring   interest  on  interest   bearing
liabilities,  which include interest bearing  deposits,  federal funds purchased
and securities  sold under  agreements to repurchase,  and other borrowed funds.
Interest  expense  is  affected  by  volume,  composition  of  interest  bearing
liabilities,  and the related rates paid on those  liabilities.  Total  interest
expense was $7.1 million for third  quarter of 2005, an increase of $2.2 million
or  44.3%  from the  same  period  in prior  year.  Interest  expense  increased
primarily as a result of higher average rates paid on interest  bearing deposits
throughout the portfolio along with an increase in average balances  outstanding
of time deposits.  The Company's cost of funds was 2.5% for the third quarter of
2005, an increase of 68 basis points from 1.9% for the prior year.  The increase
in  cost of  funds  was led by a 186  basis  point  increase  in  federal  funds
purchased and securities  sold under  agreements to repurchase,  which generally
reprice more quickly than other interest bearing sources of funds and correlates
with the increase in general short-term market interest rates.

Interest  expense on time  deposits,  the largest  component  of total  interest
expense,  increased  $1.2  million or 38.1% to $4.4  million.  The  increase was
driven mainly by a 58 basis point increase in the average rate paid to 3.3% from
2.7% a year  earlier  and a  $63.2  million  or  13.3%  higher  average  balance
outstanding in the current  three-month  period that was driven by the promotion
of the FlexSpender certificate of deposit product beginning during the last half
of 2004 and into 2005. Interest expense on savings deposits and interest bearing
demand  deposits  increased  $253  thousand or 59.0% and $177 thousand or 50.1%,
respectively.  The increase in interest expense on savings deposits was due to a
47 basis point increase in the average rates paid to 1.4% from .92% coupled with
an increase in average  balances  outstanding of $10.1 million or 5.5% to $195.0
million.  Interest on interest bearing demand deposits increased due to a higher
average  rate paid of 35 basis  points  to .92%,  which  offset a lower  average
balance outstanding of $17.3 million or 7.1%. The increase in average rates paid
for deposits follows the trend of increasing  general short-term market interest
rates  between  the  comparable  periods.  Interest  expense  on  federal  funds
purchased and securities sold under  agreements to repurchase and other borrowed
funds increased $284 thousand or 89.6% and $226 thousand or 39.5%, respectively.
The increase in interest  expense on federal funds purchased and securities sold
under  agreements to repurchase  was due to an increase in the average rate paid
of 186 basis  points to 3.4% from 1.5%,  which  offset a decline in the  average
balance of $13.6 million or 16.0% to $71.1  million.  Interest  expense on other
borrowed  funds was up due to increases in both the average rate paid and higher
average balances  outstanding.  The higher balance outstanding was driven by the
$25.0 million subordinated notes payable issued in connection with the Company's
trust preferred securities offering during the third quarter of 2005.

The net interest  margin (TE) decreased 8 basis points to 3.70% during the third
quarter of 2005 compared to 3.78% in the third quarter of 2004.  The decrease in
net  interest  margin is  primarily  attributed  to a 19 basis point drop in the
spread  between  rates  earned on earning  assets and the rates paid on interest
bearing  liabilities  to 3.33% in the  current  quarter  from 3.52% in the third
quarter of 2004. The effect of noninterest  bearing  sources of funds offset the
19 basis point lower spread by 11 basis points, resulting in the decrease in net
interest  margin.  The  effect of  noninterest  bearing  sources of funds on net
interest margin typically increases in a rising rate environment.

<PAGE>

The  following  tables  present  an  analysis  of net  interest  income  for the
quarterly periods ended September 30.
<TABLE>
<CAPTION>

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY:  INTEREST RATES AND INTEREST DIFFERENTIAL
----------------------------------------------------------------------------------------------------------------------------------
Quarter Ended September 30,                                     2005                                         2004
----------------------------------------------------------------------------------------------------------------------------------
                                              Average                         Average         Average                    Average
(In thousands)                                Balance         Interest          Rate          Balance      Interest        Rate
----------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>             <C>                  <C>       <C>            <C>              <C>
EARNING ASSETS
Investment securities
  Taxable                                    $    236,017    $     2,087          3.51%     $   253,214    $   2,094        3.29%
  Nontaxable(1)                                    95,037          1,417          5.92           97,371        1,475        6.03
Time deposits with banks, federal
   funds sold and securities purchased
   under agreements to resell                      58,302            519          3.53           14,328           62        1.72
Loans(1,2,3)                                      900,837         15,076          6.64          853,402       12,851        5.99
----------------------------------------------------------------------------------------------------------------------------------
   Total earning assets                         1,290,193    $    19,099          5.87%       1,218,315    $  16,482        5.38%
----------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses                         (11,696)                                      (13,401)
----------------------------------------------------------------------------------------------------------------------------------
   Total earning assets, net of
   allowance for loan losses                    1,278,497                                     1,204,914
----------------------------------------------------------------------------------------------------------------------------------
NONEARNING ASSETS
Cash and due from banks                            71,261                                        85,716
Premises and equipment, net                        27,798                                        26,976
Other assets                                       63,421                                        51,354
----------------------------------------------------------------------------------------------------------------------------------
   Total assets                              $  1,440,977                                   $ 1,368,960
----------------------------------------------------------------------------------------------------------------------------------
INTEREST BEARING LIABILITIES
Deposits
  Interest bearing demand                    $    227,412    $       530           .92%     $   244,713    $     353         .57%
  Savings                                         194,958            682          1.39          184,811          429         .92
  Time                                            537,034          4,444          3.28          473,856        3,217        2.70
Federal funds purchased and
   securities sold under agreements
   to repurchase                                   71,107            601          3.35           84,679          317        1.49
Other borrowed funds                               72,574            798          4.36           59,105          572        3.85
----------------------------------------------------------------------------------------------------------------------------------
   Total interest bearing liabilities           1,103,085    $     7,055          2.54%       1,047,164    $   4,888        1.86%
----------------------------------------------------------------------------------------------------------------------------------
NONINTEREST BEARING LIABILITIES
Commonwealth of Kentucky deposits                  34,913                                        32,881
Other demand deposits                             156,279                                       151,325
Other liabilities                                  12,643                                        10,049
----------------------------------------------------------------------------------------------------------------------------------
   Total liabilities                            1,306,920                                     1,241,419
----------------------------------------------------------------------------------------------------------------------------------
   Shareholders' equity                           134,057                                       127,541
----------------------------------------------------------------------------------------------------------------------------------
   Total liabilities and shareholders'
   equity                                    $  1,440,977                                   $ 1,368,960
----------------------------------------------------------------------------------------------------------------------------------
Net interest income                                               12,044                                      11,594
TE basis adjustment                                                 (544)                                       (552)
----------------------------------------------------------------------------------------------------------------------------------
   Net interest income                                       $    11,500                                   $   11,042
----------------------------------------------------------------------------------------------------------------------------------
Net interest spread                                                               3.33%                                     3.52%
Impact of noninterest bearing sources
   of funds                                                                        .37                                       .26
----------------------------------------------------------------------------------------------------------------------------------
Net interest margin                                                               3.70%                                     3.78%
----------------------------------------------------------------------------------------------------------------------------------

(1)Income and yield stated at a fully tax equivalent basis using the marginal corporate Federal tax rate of 35%.
(2)Loan balances include principal balances on nonaccrual loans.
(3)Loan fees included in interest income amounted to $508 thousand and $583 thousand in 2005 and 2004, respectively.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

ANALYSIS OF CHANGES IN NET INTEREST INCOME (TAX EQUIVALENT BASIS)
---------------------------------------------------------------------------------------------------------------
(In thousands)                                                       Variance          Variance Attributed to
Quarter Ended September 30,                                        2005/2004(1)         Volume           Rate
---------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>              <C>            <C>
INTEREST INCOME
Taxable investment securities                                       $       (7)      $    (565)     $     558
Nontaxable investment securities(2)                                        (58)            (33)           (25)
Time deposits with banks, federal funds sold and
   securities purchased under agreements to resell                         457             340            117
Loans(2)                                                                 2,225             754          1,471
---------------------------------------------------------------------------------------------------------------
    Total interest income                                                2,617             496          2,121
---------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest bearing demand deposits                                           177            (159)           336
Savings deposits                                                           253              24            229
Time deposits                                                            1,227             470            757
Federal funds purchased and securities sold under
   agreements to repurchase                                                284            (326)           610
Other borrowed funds                                                       226             143             83
---------------------------------------------------------------------------------------------------------------
    Total interest expense                                               2,167             152          2,015
---------------------------------------------------------------------------------------------------------------
Net interest income                                                 $      450       $     344      $     106
---------------------------------------------------------------------------------------------------------------
Percentage change                                                        100.0%           76.4%          23.6%
---------------------------------------------------------------------------------------------------------------

(1)The changes that are not solely due to rate or volume are allocated on a percentage basis using the absolute
   values of rate and volume variances as a basis for allocation.
(2)Income stated at fully tax equivalent basis using the marginal corporate Federal tax rate of 35%.
</TABLE>

NONINTEREST INCOME

Noninterest  income  totaled  $5.0  million  for the third  quarter of 2005,  an
increase of $478 thousand or 10.5%  compared to $4.5 million for the same period
in the prior year.  Noninterest income represents 21.3% of total revenue for the
current  quarter,  a decrease of 89 basis  points from 22.2% for the same period
last year. The increase in noninterest income is due primarily to an increase in
allotment  processing fees of $461 thousand  attributed to the FiNET acquisition
during the fourth quarter of 2004,  higher  service  charges and fees on deposit
accounts of $220 thousand or 10.0%,  and an increase in net gains on the sale of
mortgage loans of $73 thousand or 64.0%.  The increased net gains on the sale of
mortgage  loans is attributed to higher  mortgage  loans  originated for sale of
$5.8  million  or  113.8% in the  comparison  and is  mainly  attributed  to the
operations of Pro Mortgage  Partners,  a mortgage company that was formed during
2004. The increase in service charges and fees on deposit accounts is due mainly
to fees related to new deposit  accounts  resulting from the FiNET  acquisition.
Since this is a recent  acquisition,  the  increase in service  charges and fees
related  to these  deposit  accounts  is  expected  to level off once  there are
comparable periods in the future.

Other service charges,  commissions, and fees declined $151 thousand or 21.5% to
$551  thousand  from $702  thousand  in the  quarterly  comparison.  Credit card
interchange fees are down $27 thousand or 63.8% as a result of lower fees earned
on credit card  transactions  related to the sale of the  Company's  credit card
portfolio earlier in 2005.  Custodial  safekeeping fees declined $32 thousand or
26.9%.  Net  gains on  investment  securities  were down  $102  thousand  in the
comparison  since  there  were no  sales  in the  current  period.  Income  from
company-owned  life insurance was $329  thousand,  a decrease of $34 thousand or
9.4% from $363 thousand in the third quarter of 2004.  The decline is attributed
to lower crediting  rates on the underlying  investments.  Until  recently,  the
underlying  investments  related to the  company-owned  life insurance have been
repricing downward in a lower interest rate environment.

NONINTEREST EXPENSE

Total  noninterest  expenses  were  $11.5  million  for the three  months  ended
September  30, 2005,  an increase of $514  thousand or 4.7% compared to the same
period in 2004. The growth in noninterest  expenses was partially  alleviated by
growth in noninterest  income. The increase in noninterest  expenses occurred in
nearly every  reported  category and is generally  attributed  to the  Company's
business  expansion during the last half of 2004. The most significant  increase
was  salaries  and employee  benefits,  which grew $226  thousand or 3.7% in the
three-month  comparisons as the average number of full time equivalent employees
rose to 518 from  501.  A  significant  portion  of the  increase  in full  time
equivalent  employees  is  attributed  to the  Citizens  Bank  (Kentucky),  Inc.
("Citizens  Georgetown") and FiNET acquisitions and additional  employees at Pro
Mortgage Partners. Salaries and related payroll taxes increased $224 thousand or
4.8% to $4.9 million due to increased  personnel  and normal  salary  increases.
Noncash compensation expense related to the Company's  nonqualified stock option
plan  declined  $79  thousand  or 100.0%  due to the  structure  of the  vesting
schedule.  All options for which the Company  had  previously  recorded  noncash
compensation  expense  became  fully vested  during the fourth  quarter of 2004.
Therefore,  there is no further noncash  compensation expense recorded for these
stock  options.  Employee  benefit  expenses  increased $81 thousand or 6.3% due
mainly to increased personnel.

Occupancy  expense,  net of rental  income,  increased  $53 thousand or 7.2% and
totaled $788 thousand for the quarter ended September 30, 2005. The increase was
driven by the  Company's  business  expansion  activities  that began during the
final half of 2004.  Equipment  expenses were $682 thousand,  an increase of $32
thousand or 4.9% that was also driven by business expansion. Data processing and
communications  expense  rose $59  thousand  or 5.7% to $1.1  million  from $1.0
million.  The  increase  is  attributed  to  larger  processing  volumes  in the
comparison  periods.  All other noninterest  expenses increased $144 thousand or
5.8% to $2.6  million  from $2.5  million.  Included  in this  increase  is $118
thousand of net amortization expense of intangibles,  including $123 thousand of
customer relationship  intangibles related to the Company's acquisition of FiNET
in which there is no corresponding amount for the third quarter of 2004.

INCOME TAXES

Income tax expense for the third quarter of 2005 was $913 thousand,  an increase
of $186  thousand or 25.6% from the same period a year  earlier.  The  effective
federal  income tax rate  increased to 19.2% from 18.5% along with higher pretax
income growth of $840 thousand or 21.4%. The change in the effective tax rate is
due to increased  revenues  from taxable  sources and a decrease in revenue from
nontaxable investment securities.

             FIRST NINE MONTHS OF 2005 VS. FIRST NINE MONTHS OF 2004
             -------------------------------------------------------

Net  income for the nine  months  ended  September  30,  2005 was $11.8  million
compared to net income of $10.4 million for the same period in 2004, an increase
of $1.3  million or 12.9%.  Basic and diluted net income per share was $1.74 and
$1.73 for the current nine months,  an increase of $.19 or 12.3% on both a basic
and diluted per share basis  compared to $1.55 and $1.54 for the prior year. The
operating  results  related to FiNET  acquired  on October 8, 2004 and  Citizens
Georgetown  acquired  on July 1,  2004 are  included  in the  financial  results
presented for the current nine-month period.  Since these acquisitions  occurred
in the last  half of 2004,  the  timing  of these  acquisitions  have  generally
resulted  in higher  reported  income  and  expense  line  items in the  current
nine-month  period  compared  to the same period a year  earlier.  Net loans and
deposits  acquired from  Citizens  Georgetown on the date of purchase were $50.1
million and $62.4 million,  respectively.  Net assets acquired from FiNET on the
date of purchase, primarily intangibles, were approximately $6.6 million.

The  increase  in net income for the nine  months  ended  September  30, 2005 is
primarily attributed to an increase in net interest income and a lower provision
for loan  losses  partially  offset  by higher  net  noninterest  expenses.  Net
interest  income for the current nine months was $33.9  million,  an increase of
$2.0  million or 6.2%  compared to $31.9  million  during the same period in the
prior year. The increase in net interest income in the nine-month comparison can
be attributed to higher interest  income,  primarily on loans,  which offset the
growth in interest expense, mainly on deposits.

The provision for loans losses was $184 thousand for the current nine months,  a
decrease  of $1.3  million  or 87.6% in the  nine-month  comparison.  The  lower
provision  for  loan  losses  is  attributed  to a  $4.8  million  reduction  in
nonperforming  loans in the current  nine-month  period ended September 30, 2005
and the sale of the  Company's  credit card  portfolio  in the first  quarter of
2005.  Nonperforming  loans include  nonaccrual loans,  restructured  loans, and
loans  past  due  90  days  or  more  in  which  interest  is  still   accruing.
Nonperforming  loans and credit card loans typically have larger  allowances due
to their identified risk of loss characteristics.

Noninterest income increased $2.8 million or 22.1% in the nine-month comparison.
The increase in noninterest  income was led by higher allotment  processing fees
of $1.4 million or 227.3% and is attributed to the FiNET acquisition late during
2004. Other significant  increases in noninterest income include service charges
and fees on  deposits  of $1.0  million or 16.5%,  gains on the sale of mortgage
loans of $367  thousand or 160.3%,  and a one-time  gain of $700 thousand on the
sale of the Company's $3.2 million credit card portfolio during the current nine
months.  Under the sale agreement,  the Company continues to offer its customers
credit cards via an agency  arrangement with the purchaser.  All existing credit
card  accounts  on the  purchase  date  remained  active.  Notable  declines  in
noninterest  income  include  income from  company-owned  life insurance of $230
thousand or 20.4% due to lower  crediting  rates on the underlying  investments,
lower service  charges,  commissions,  and fees of $290  thousand or 14.0%,  and
lower  securities  gains  of  $170  thousand.  Until  recently,  the  underlying
investments related to the company-owned life insurance have been repricing in a
lower interest rate environment.

Noninterest  expenses increased $4.1 million or 13.4% in the current nine months
compared to the same period a year ago. These increases  offset the $2.8 million
higher  amount of reported  noninterest  income.  The  increase  in  noninterest
expenses occurred across a broad range of line items and is generally attributed
to the  Company's  business  expansion  during  the last half of 2004.  The most
significant increase was salaries and employee benefits, which grew $1.6 million
or 9.3%  in the  comparison  as the  average  number  of  full  time  equivalent
employees rose to 517 from 475. Other significant increases include amortization
of intangibles of $609 thousand,  data processing and communication  expenses of
$301 thousand,  and occupancy and equipment  expenses of $537 thousand or 14.2%.
Income tax expense  increased  $690 thousand or 26.8% as the  effective  federal
income tax rate  increased to 21.7% from 19.7% along with higher  pretax  income
growth of $2.0 million or 15.7%.

ROA was 1.10% for the current  nine-month  period, an increase of 4 basis points
compared to 1.06% reported for the same period in 2004. Significant factors that
positively  impacted ROA and their amount  include the lower  provision for loan
losses of 13 basis points,  higher noninterest income relative to average assets
of 16 basis points, and a higher  contribution from noninterest  bearing sources
of funds of 8 basis points.  Significant  factors that  negatively  impacted ROA
include a lower net interest  spread of 19 basis  points and higher  noninterest
expenses  relative to average assets of 13 basis points.  ROE was 11.91% for the
first nine months of 2005  compared to 11.00% for the same period of 2004.  This
represents  an increase of 91 basis points and is attributed to a 46 basis point
increase in financial leverage to 10.9% from 10.4% combined with the increase in
net income. Financial leverage represents the degree in which borrowed funds, as
opposed to equity, are used in the funding of assets.

NET INTEREST INCOME

The trend of the general  interest rate  environment  in the current nine months
ended  September  30, 2005  compared to the same period a year  earlier has been
upward  primarily as a result of short-term  interest rate increases by the Fed.
The Fed has  increased  short-term  interest  rates by 200 basis points in eight
equal  increments of 25 basis points since  September  30, 2004.  The effects of
these rate increases by the Fed has generally led to higher average rates earned
and paid on interest  earning  assets and interest  bearing  liabilities  with a
faster increase in the average rates paid on interest bearing liabilities due to
their repricing characteristics.

Net interest income is the most significant component of the Company's earnings.
Net  interest  income is the  excess of the  interest  income  earned on earning
assets over the interest paid for funds to support  those  assets.  The two most
common metrics used to analyze net interest  income are net interest  spread and
net interest margin.  Net interest spread represents the difference  between the
yields on earning assets and the rates paid on interest bearing liabilities. Net
interest  margin  represents  the  percentage of net interest  income to average
earning  assets.  Net interest margin will exceed net interest spread because of
the  existence  of  noninterest  bearing  sources of funds,  principally  demand
deposits  and  shareholders'  equity,  which are also  available to fund earning
assets.  Changes in net interest  income and margin result from the  interaction
between the volume and the composition of earning assets,  their related yields,
and the associated  cost and  composition of the interest  bearing  liabilities.
Accordingly,  portfolio size, composition, and the related yields earned and the
average  rates paid can have a  significant  impact on net  interest  spread and
margin.  The table on the  following  page  represents  the major  components of
interest  earning  assets and interest  bearing  liabilities on a tax equivalent
basis.  To compare the tax-exempt  asset yields to taxable  yields,  amounts are
adjusted to pretax  equivalents based on the marginal corporate Federal tax rate
of 35%.

The Company's tax equivalent yield on earning assets for the current nine months
was 5.7%,  an  increase  of 37 basis  points from 5.4% in the same period a year
ago. The cost of funds for the current  nine months was 2.4%,  an increase of 56
basis points  compared to 1.8% in the same period a year earlier.  A goal of the
Company in the current  interest rate  environment is to increase earning assets
while  maintaining  the current  relatively  low interest rates paid on interest
bearing liabilities. The Company strives to accomplish this goal while providing
excellent  service to its  customers  and  maintaining  its core  deposit  base.
Maintaining  the  relatively low cost of funds is becoming more difficult due to
the recent rise in general interest rates and competitive market forces. Average
earning assets  increased $107 million or 9.1% to $1.3 billion in the nine month
comparison,  helped in part to the acquisition of Citizens Georgetown during the
last half of 2004.  As a percentage  of total  average  assets,  earning  assets
increased 13 basis points to 89.2% from 89.0%.

Interest income results from interest earned on earning assets,  which primarily
include loans and investment  securities.  Interest income is affected by volume
(average  balance),  composition of earning assets, and the related rates earned
on those  assets.  Total  interest  income for the first nine months of 2005 was
$53.4 million,  an increase of $7.8 million or 17.1% from the same period in the
previous  year.  The growth in interest  income was mainly  attributed to higher
interest income on loans,  which was due to both an increase in average balances
outstanding and an increase in the average rate earned.  The increase in average
loan  balances   outstanding   resulting  from  both  the  Citizens   Georgetown
acquisition in July,  2004 and internally  generated loan growth.  The Company's
tax  equivalent  yield on earning  assets for the  current  period was 5.7%,  an
increase of 37 basis points compared to the same period a year ago.

Interest  and fees on loans was $43.0  million,  an increase of $6.7  million or
18.4% due to higher average loan balances  outstanding along with an increase in
the average rate earned.  Average loans increased $89.3 million or 11.2% to $890
million in the comparison due to higher loan demand in what remains a relatively
low interest rate environment and, to a lesser extent, the loans acquired in the
Citizens  Georgetown  acquisition.  On  July  1,  2004,  the  Company  purchased
approximately  $50.1  million  in  loans  related  to  the  Citizens  Georgetown
acquisition.  The tax equivalent yield on the loan portfolio  increased 40 basis
points to 6.5% from  6.1% in the  nine-month  comparison.  Interest  on  taxable
securities was $6.0 million, a decrease of $35 thousand or less than 1.0% in the
comparison as a $17.9 million  decrease in the average balance  outstanding more
than offset a 23 basis point  increase in the average rate  earned.  Interest on
nontaxable  securities was relatively  unchanged and totaled $2.9 million in the
current and comparable  period a year ago.  Interest on short-term  investments,
including  time  deposits in other banks,  federal  funds sold,  and  securities
purchased under agreements to resell,  increased $1.2 million due to a 183 basis
point  increase in the average  rate  earned to 2.9% from 1.1%  coupled  with an
increase in the average balance  outstanding of $35.6 million or 118.9% to $65.5
million  from  $29.9  million.  The higher  average  rate  earned on  short-term
investments  correlates  to the  increases  in  general  market  interest  rates
resulting  from the Fed's  increase of short-term  interest  rates over the last
year while the increase in the average  balance is attributed to the overall net
funding position of the Company and, to a lesser extent, the impact of the $25.0
million proceeds from the Company's trust preferred  securities  offering during
the third quarter of 2005.  These  proceeds  will remain  invested in short-term
investments  until  they  are  used to fund the  cash  portion  of the  Citizens
acquisition that is expected to close in the fourth quarter of 2005.

Interest   expense   results  from  incurring   interest  on  interest   bearing
liabilities,  which include interest bearing  deposits,  federal funds purchased
and securities  sold under  agreements to repurchase,  and other borrowed funds.
Interest  expense  is  affected  by  volume,  composition  of  interest  bearing
liabilities,  and the related rates paid on those  liabilities.  Total  interest
expense was $19.5  million  for first nine  months of 2005,  an increase of $5.8
million  or 42.8%  from the same  period in the  prior  year.  Interest  expense
increased  primarily as a result of higher  average  rates paid  throughout  the
entire deposit  portfolio,  with an increase in average balances  outstanding of
certain deposit categories, particularly time deposits, also contributing to the
increase.  The  Company's  cost of funds  was 2.4%  for the nine  months  ending
September 30, 2005, an increase of 56 basis points from 1.8% for the prior year.
The  increase in cost of funds was led by a 165 basis point  increase in federal
funds  purchased  and  securities  sold under  agreements to  repurchase,  which
generally  reprice more quickly than other interest bearing sources of funds and
correlates with the increase in general short-term market interest rates.

Interest  expense on time  deposits,  the largest  component  of total  interest
expense,  increased  $3.3  million or 36.6% to $12.4  million.  The increase was
driven mainly by a $86.6 million or 19.6% higher average balance  outstanding in
the  current  nine-month  period  that  was  boosted  by  the  promotion  of the
FlexSpender  certificate of deposit  product  beginning  during the last half of
2004 and into 2005 and the effect of $62.4 million additional  deposits from the
Citizens  Georgetown  acquisition in July,  2004. In addition,  the average rate
paid on time  deposits  increased  40  basis  points  to 3.1%  from  2.7% a year
earlier.  Interest  expense on savings  deposits  and  interest  bearing  demand
deposits   increased  $576  thousand  or  46.0%  and  $726  thousand  or  78.4%,
respectively.  These  increases  were due almost  entirely to an increase in the
average rates paid on savings and interest  bearing demand  deposits of 37 basis
points or 41.6% and 40 basis  points or 76.9%,  respectively.  The  increase  in
average rates paid follows upward movement in general short-term market interest
rates  between  the  comparable  periods.  The average  outstanding  balances of
savings and interest  bearing demand deposits grew $5.5 million or 2.9% and $2.2
million or .9%, respectively.

The net interest margin (TE) decreased 11 basis points to 3.70% during the first
nine months of 2005  compared to 3.81% in the same period of 2004.  The decrease
in net interest  margin is primarily  attributed  to a 19 basis point decline in
the spread between rates earned on earning assets and the rates paid on interest
bearing  liabilities to 3.37% in the current period from 3.56% in the comparable
period in 2004. The effect of noninterest bearing sources of funds offset the 19
basis point lower  spread by 8 basis  points,  resulting  in the decrease in net
interest  margin.  The  effect of  noninterest  bearing  sources of funds on net
interest margin typically increases in a rising rate environment.

<PAGE>

The  following  tables  present an analysis of net interest  income for the nine
months ended September 30.
<TABLE>
<CAPTION>

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY:  INTEREST RATES AND INTEREST DIFFERENTIAL
-----------------------------------------------------------------------------------------------------------------------------------
Nine Months Ended September 30,                               2005                                         2004
-----------------------------------------------------------------------------------------------------------------------------------
                                              Average                        Average       Average                       Average
(In thousands)                                Balance         Interest        Rate         Balance        Interest         Rate
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>              <C>               <C>      <C>               <C>              <C>
EARNING ASSETS
Investment securities
  Taxable                                   $    233,310     $     6,044       3.46%    $    251,213      $   6,079        3.23%
  Nontaxable(1)                                   95,067           4,268       6.00           95,204          4,329        6.07
Time deposits with banks, federal
   funds sold and securities purchased
   under agreements to resell                     65,536           1,436       2.93           29,934            247        1.10
Loans(1,2,3)                                     889,521          43,239       6.50          800,269         36,554        6.10
-----------------------------------------------------------------------------------------------------------------------------------
   Total earning assets                        1,283,434     $    54,987       5.73%       1,176,620      $  47,209        5.36%
-----------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses                        (12,308)                                    (12,063)
-----------------------------------------------------------------------------------------------------------------------------------
   Total earning assets, net of
   allowance for loan losses                   1,271,126                                   1,164,557
-----------------------------------------------------------------------------------------------------------------------------------
NONEARNING ASSETS
Cash and due from banks                           78,609                                      90,450
Premises and equipment, net                       27,583                                      25,136
Other assets                                      62,181                                      41,462
-----------------------------------------------------------------------------------------------------------------------------------
   Total assets                             $  1,439,499                                $  1,321,605
-----------------------------------------------------------------------------------------------------------------------------------
INTEREST BEARING LIABILITIES
Deposits
  Interest bearing demand                   $    241,026     $     1,652        .92%    $    238,853      $     926         .52%
  Savings                                        194,319           1,829       1.26          188,795          1,253         .89
  Time                                           529,843          12,425       3.14          443,194          9,096        2.74
Federal funds purchased and
   securities sold under agreements
   to repurchase                                  78,101           1,706       2.92           82,682            784        1.27
Other borrowed funds                              60,529           1,851       4.09           56,155          1,567        3.73
-----------------------------------------------------------------------------------------------------------------------------------
   Total interest bearing liabilities          1,103,818     $    19,463       2.36%       1,009,679      $  13,626        1.80%
-----------------------------------------------------------------------------------------------------------------------------------
NONINTEREST BEARING LIABILITIES
Commonwealth of Kentucky deposits                 38,689                                      36,780
Other demand deposits                            152,498                                     139,701
Other liabilities                                 12,033                                       8,526
-----------------------------------------------------------------------------------------------------------------------------------
   Total liabilities                           1,307,038                                   1,194,686
-----------------------------------------------------------------------------------------------------------------------------------
   Shareholders' equity                          132,461                                     126,919
-----------------------------------------------------------------------------------------------------------------------------------
   Total liabilities and shareholders'
   equity                                   $  1,439,499                                $  1,321,605
-----------------------------------------------------------------------------------------------------------------------------------
Net interest income                                               35,524                                     33,583
TE basis adjustment                                               (1,622)                                    (1,647)
-----------------------------------------------------------------------------------------------------------------------------------
   Net interest income                                       $    33,902                                  $  31,936
-----------------------------------------------------------------------------------------------------------------------------------
Net interest spread                                                            3.37%                                        3.56%
Impact of noninterest bearing sources
   of funds                                                                     .33                                          .25
-----------------------------------------------------------------------------------------------------------------------------------
Net interest margin                                                            3.70%                                        3.81%
-----------------------------------------------------------------------------------------------------------------------------------

(1)Income and yield stated at a fully tax equivalent basis using the marginal corporate Federal tax rate of 35%.
(2)Loan balances include principal balances on nonaccrual loans.
(3)Loan fees included in interest income amounted to $1.7 million and $1.8 million in 2005 and 2004, respectively.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

ANALYSIS OF CHANGES IN NET INTEREST INCOME (TAX EQUIVALENT BASIS)
--------------------------------------------------------------------------------------------------------------
(In thousands)                                                       Variance          Variance Attributed to
Nine Months Ended September 30,                                     2005/2004(1)        Volume            Rate
--------------------------------------------------------------------------------------------------------------
<S>                                                                <C>             <C>            <C>
INTEREST INCOME
Taxable investment securities                                      $       (35)    $     (596)    $       561
Nontaxable investment securities(2)                                        (61)            (7)            (54)
Time deposits with banks, federal funds sold and
   securities purchased under agreements to resell                       1,189            496             693
Loans(2)                                                                 6,685          4,210           2,475
--------------------------------------------------------------------------------------------------------------
    Total interest income                                                7,778          4,103           3,675
--------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest bearing demand deposits                                           726              8             718
Savings deposits                                                           576             38             538
Time deposits                                                            3,329          1,906           1,423
Federal funds purchased and securities sold under
   agreements to repurchase                                                922            (74)            996
Other borrowed funds                                                       284            127             157
--------------------------------------------------------------------------------------------------------------
    Total interest expense                                               5,837          2,005           3,832
--------------------------------------------------------------------------------------------------------------
Net interest income                                                $     1,941     $    2,098     $      (157)
--------------------------------------------------------------------------------------------------------------
Percentage change                                                        100.0%         108.1%          (8.1)%
--------------------------------------------------------------------------------------------------------------

(1)The changes that are not solely due to rate or volume are allocated on a percentage basis using the absolute
   values of rate and volume variances as a basis for allocation.
(2)Income stated at fully tax equivalent basis using the marginal corporate Federal tax rate of 35%.
</TABLE>

NONINTEREST INCOME
------------------

Noninterest  income  totaled $15.7 million for the first nine months of 2005, an
increase of $2.8 million or 22.1%  compared to $12.9 million for the same period
in the prior year.  Noninterest income represents 22.7% of total revenue for the
current  nine  months,  an increase  of 72 basis  points from 22.0% for the same
period last year.  The  increase in  noninterest  income is due  primarily to an
increase in allotment  processing  fees of $1.4 million or 227.3%  attributed to
the FiNET  acquisition  late during  2004,  higher  service  charges and fees on
deposit  accounts of $1.0 million or 16.5%, an increase in net gains on the sale
of mortgage loans of $367 thousand or 160.3%,  and a one-time $700 thousand gain
on the sale of the  Company's  $3.2  million  credit card  portfolio  during the
current nine months.  The increased  net gains on the sale of mortgage  loans is
attributed  to higher  mortgage  loans  originated  for sale of $12.8 million or
88.3% in the  comparison  and is  mainly  attributed  to the  operations  of Pro
Mortgage Partners,  a mortgage company that was formed during 2004. The increase
in service charges and fees on deposit accounts is due mainly to additional fees
related to new deposit accounts  resulting from the FiNET acquisition during the
fourth  quarter of 2004.  Since this is a recent  acquisition,  the  increase in
service charges and fees related to these deposit  accounts is expected to level
off once there are comparable periods in the future.

Other service charges,  commissions, and fees declined $290 thousand or 14.0% to
$1.8  million  from $2.1  million  in the  nine-month  comparison.  Credit  card
interchange fees are down $77 thousand or 44.8% as a result of lower fees earned
on credit card  transactions  related to the sale of the  Company's  credit card
portfolio earlier in 2005. Other declines in service charges,  commissions,  and
fees occurred over a broad range of categories,  with no significant  decline in
any other single category.  Net gains on the sale of investment  securities were
down $170 thousand or 101.8% due to lower sales activity in the current  period.
Income from company-owned  life insurance was $900 thousand,  a decrease of $230
thousand or 20.4% from $1.1 million in the prior year. The decline is attributed
to lower crediting  rates on the underlying  investments.  Until  recently,  the
underlying  investments  related to the  company-owned  life insurance have been
repricing downward in a lower interest rate environment.

NONINTEREST EXPENSE
-------------------

Total  noninterest  expenses  were  $34.4  million  for the  nine  months  ended
September  30, 2005,  an increase of $4.1 million or 13.4%  compared to the same
period in 2004. The increase in noninterest  expenses are mainly a result of the
Citizens  Georgetown  and  FiNET  acquisitions  and  the  expansion  of  banking
operations into the Lexington, Kentucky market, all of which occurred during the
last six months of 2004.  The  largest  increase  in  noninterest  expenses  was
salaries and employee  benefits,  which rose $1.6 million or 9.3% as the average
number of full time equivalent  employees  increased 8.9% to 517 from 475 in the
nine-month  comparison.  A  significant  portion  of the  increase  in full time
equivalent  employees  is  attributed  to  the  Citizens  Georgetown  and  FiNET
acquisitions  and additional  employees at Pro Mortgage  Partners.  Salaries and
related  payroll taxes  increased  $1.6 million or 11.9% to $14.7 million due to
increased personnel and normal salary increases.  Noncash  compensation  expense
related to the Company's  nonqualified  stock option plan declined $217 thousand
or 100.0% due to the  structure of the vesting  schedule.  All options for which
the Company had previously  recorded noncash  compensation  expense became fully
vested during the fourth quarter of 2004. Therefore, there is no further noncash
compensation expense recorded for these stock options. Employee benefit expenses
increased $213 thousand or 6.1% due mainly to higher health care costs.

Occupancy  expense,  net of rental  income,  increased $246 thousand or 12.1% to
$2.3 million for the nine months  ended  September  30,  2005.  The increase was
driven by the Company's  business  acquisitions  and expansion  during the final
half of 2004. Equipment expenses were $2.0 million, an increase of $291 thousand
or 16.6%  that was also  driven  by  business  expansion.  Data  processing  and
communications  expense  rose $301  thousand or 10.3% to $3.2  million from $2.9
million.  The increase is mainly attributed to higher processing  volumes in the
comparison  periods.  All other noninterest  expenses  increased $1.7 million or
24.7% to $8.4  million  from $6.7  million.  Included  in this  increase is $369
thousand of amortization  expense of core deposit  intangibles and $241 thousand
of  customer  relationship  intangibles  related to the timing of the  Company's
acquisition  activity  during  2004.  Additionally,  there  was an  increase  in
auditing  expenses of  approximately  $223  thousand  in the current  nine-month
period compared to the same period in 2004 driven by Sarbanes-Oxley  compliance,
a $378 thousand increase in net expenses attributed to the Company's  foreclosed
real estate properties,  and increases in other general expenses relating to the
Company's acquisitions and business expansion activity during 2004. The increase
in net expenses attributed to the Company's foreclosed real estate properties is
unusually  high  since  there  were  approximately  $142  thousand  in net gains
reported in the comparable period a year earlier.

INCOME TAXES
------------

Income  tax  expense  for the first  nine  months of 2005 was $3.3  million,  an
increase  of $690  thousand or 26.8% from the same  period a year  earlier.  The
effective  tax rate  increased  191 basis  points to 21.7% from 19.7% along with
higher  pretax  income  growth of $2.0  million or 15.7%.  The  increase  in the
effective  tax rate is due to  increased  revenues  from  taxable  sources and a
decrease in revenue from nontaxable investment securities.

FINANCIAL CONDITION

Total  assets were $1.5  billion on  September  30,  2005,  an increase of $85.8
million  or 6.1% from  year-end  2004.  The growth in assets was the result of a
$71.9 million or 90.7% increase in cash and cash equivalents, a $22.4 million or
2.6%  increase in net loans,  and a $7.3  million or 8.6% net  increase in other
assets,  partially offset by a decline in investment securities of $15.7 million
or 4.3%. The $7.3 million higher other assets total is due mainly to an increase
in other real estate owned of $5.4 million or 144.0% and is related primarily to
a single  credit.  The increase in total assets  correlates  to  additional  net
funding  sources,  primarily  $55.6 million or 4.9% in  additional  deposits and
$25.8  million in  subordinated  notes payable  related to the  Company's  trust
preferred  securities  offering  during the  current  quarter.  The  increase in
deposits is mainly due to higher  noninterest  bearing deposits of $62.7 million
or 36.2% and is related  primarily to deposit  activity of the  Commonwealth  of
Kentucky.  The higher noninterest bearing deposit totals was partially offset by
a $7.1 million or .7% decline in interest bearing deposits.  Total shareholders'
equity  increased $3.3 million or 2.5% due mainly to net income of $11.8 million
partially  offset  by  dividends  paid  to  shareholders  of  $6.7  million  and
unrealized losses on the investment securities portfolio of $1.8 million, net of
tax effect.

Management of the Company considers it noteworthy to understand the relationship
between the Company's  principal  subsidiary,  Farmers Bank & Capital Trust Co.,
and the  Commonwealth  of Kentucky.  Farmers Bank provides  various  services to
state agencies of the  Commonwealth.  As the  depository  for the  Commonwealth,
checks are drawn on Farmers Bank by these agencies,  which include paychecks and
state  income tax  refunds.  Farmers  Bank also  processes  vouchers  of the WIC
(Women,  Infants and Children) program for the Cabinet for Human Resources.  The
Bank's investment  department also provides services to the Teacher's Retirement
systems. As the depository for the Commonwealth,  large fluctuations in deposits
are likely to occur on a daily basis.  Therefore,  reviewing average balances is
important to understanding the financial condition of the Company.

On an average basis, total assets were $1.4 billion for the first nine months of
2005, an increase of $91.9 million or 6.8% from year-end 2004.  Average  earning
assets, primarily loans and securities, were $1.3 billion at September 30, 2005,
an increase of $82.7 million or 6.9% from year-end 2004.  Average earning assets
represent  89.2%  of  total  average  assets  for the  nine-month  period  ended
September 30, 2005, an increase of 6 basis points compared to 89.1% for year-end
2004.

LOANS
-----

Loans,  net of unearned  income,  totaled $898 million at September 30, 2005, an
increase of $20.8 million or 2.4% from year-end  2004.  The  composition  of the
loan portfolio is summarized in the table below.

--------------------------------------------------------------------------------
                                      September 30, 2005       December 31, 2004
(Dollars in thousands)                 Amount       %           Amount        %
--------------------------------------------------------------------------------

Commercial, financial,
   and agriculture                   $  130,367    14.5%    $   134,016    15.3%
Real estate - construction               76,548     8.5          63,156     7.2
Real estate mortgage - residential      312,567    34.8         313,711    35.8
Real estate mortgage farmland and
   other commercial enterprises         276,536    30.8         251,094    28.6
Installment                              64,351     7.2          75,271     8.6
Lease financing                          37,174     4.2          39,457     4.5
--------------------------------------------------------------------------------
   Total                             $  897,543   100.0%    $   876,705   100.0%
--------------------------------------------------------------------------------

On average,  loans  represented  69.3% of earning assets during the current nine
month period compared to 68.2% for year-end 2004. As loan demand fluctuates, the
available  funds are  reallocated  between  loans and  lower  earning  temporary
investments  or investment  securities,  which  typically  involve a decrease in
credit risk and lower yields.

ALLOWANCE FOR LOAN LOSSES
-------------------------

The  allowance  for loan  losses was $11.3  million at  September  30,  2005,  a
decrease of $1.5 million or 12.0% from the prior  year-end.  The  allowance  for
loan losses was 1.26% of loans net of unearned  income at September  30, 2005, a
decrease  of five and 20 basis  points from 1.31% and 1.46% at June 30, 2005 and
December 31, 2004,  respectively.  The provision for loan losses  decreased $418
thousand  or 62.8% and $1.3  million  or 87.6% in the  current  three-month  and
nine-month  periods,  respectively,  compared to the same  periods in 2004.  The
decrease in the  provision for loan losses for the current three and nine months
is related to a $442 thousand and $4.8 million reduction in nonperforming  loans
in the current three and  nine-month  periods  ended  September 30, 2005 and the
sale of the  Company's  $3.2  million  credit  card  portfolio  during the first
quarter of 2005. These factors contributed to a lower allowance for loans losses
at September 30, 2005.  Nonperforming  loans include  nonaccrual loans and loans
past due 90 days or more in which  interest  is  still  accruing.  Nonperforming
loans and credit  card  loans  typically  have  larger  allowances  due to their
identified risk of loss characteristics.

The Company had net charge-offs of $754 thousand and $1.7 million in the current
three and nine months of 2005, respectively, compared to net charge-offs of $797
thousand  and $1.5  million  during  the same  periods of 2004.  Annualized  net
charge-offs  represent  .33% and .26% of  average  net  loans for three and nine
months ended September 30, 2005, respectively compared to .32% at year-end 2004.
The  allowance for loan losses as a percentage  of  nonperforming  loans totaled
217.0% and 203.9% at September  30, 2005 and  December  31, 2004,  respectively.
Management  continues to emphasize  collection  efforts and  evaluation of risks
within the loan portfolio.

NONPERFORMING ASSETS
--------------------

Nonperforming  assets for the Company include  nonperforming  loans,  other real
estate owned, and other foreclosed  assets.  Nonperforming  assets totaled $14.4
million at  September  30, 2005,  an increase of $585  thousand or 4.2% from the
prior year-end. Nonperforming loans totaled $5.2 million at September 30, 2005 a
decrease of $4.8 million or 48.2%  compared to $10.0  million at year-end  2004.
The decline in  nonperforming  loans was driven  primarily by two  extensions of
credit  secured by real  estate.  One involves a balance of  approximately  $1.3
million to a financially trouble builder secured by multifamily residential real
estate,  the other relates to  approximately  $1.4 million secured by commercial
real estate.  The underlying  collateral  securing the credit to the financially
troubled builder was transferred to the Company through  foreclosure  during the
first  quarter of 2005.  The $1.4  million  commercial  real  estate  credit was
collected in the first  quarter of 2005.  Nonperforming  loans  represent .6% of
loans net of  unearned  income at  September  30,  2005,  a decrease of 56 basis
points from 1.1% compared to year-end 2004.

Other real estate owned was $9.1 million at September 30, 2005.  This represents
an increase of $5.4 million or 144.0% compared to $3.7 million at year-end 2004.
The increase is attributed mainly to the transfer of $6.3 million of residential
real  estate  to the  Company  through  foreclosure  related  to the  previously
disclosed financially troubled builder.

TEMPORARY INVESTMENTS
---------------------

Temporary  investments  consist of interest  bearing deposits in other banks and
federal funds sold and  securities  purchased  under  agreements to resell.  The
Company  uses these funds in the  management  of  liquidity  and  interest  rate
sensitivity. At September 30, 2005, temporary investments were $40.0 million, an
increase of $3.1  million or 8.5%  compared to $36.8  million at year-end  2004.
Temporary  investments  averaged  $65.5 million  during the first nine months of
2005, an increase of $25.0 million or 61.7% from year-end  2004. The increase is
primarily a result of the Company's net funding position, which was driven by an
increase in average interest bearing deposits of $72.7 million or 8.1% and, to a
lesser extent, the impact of the $25.0 million proceeds from the Company's trust
preferred  securities  offering  during  the third  quarter  of 2005.  Temporary
investments  are  reallocated as loan demand and other  investment  alternatives
present the opportunity.

INVESTMENT SECURITIES
---------------------

The investment  securities  portfolio is comprised  primarily of U.S. Government
agency  securities,  mortgage-backed  securities,  and tax-exempt  securities of
states and political subdivisions. Total investment securities were $353 million
on September 30, 2005, a decrease of $15.7 million or 4.3% from year-end 2004.

Total  investment  securities  averaged $328 million for the current  nine-month
period,  a decrease  of $12.9  million or 3.8% from the  average  2004  year-end
balance.  The decrease in average  investment  securities  was driven by a $38.4
million net decline in mortgage-backed securities, which was partially offset by
net additional  purchases of U.S.  Government agency securities  averaging $28.8
million during the current  nine-month  period. The Company had a net unrealized
loss on available  for sale  investment  securities of $1.7 million at September
30, 2005, a decrease of $2.8 million  compared to a net unrealized  gain of $1.1
million at year-end 2004. The decrease in the current  nine-month  period is due
primarily to the impact of changing economic  conditions,  including an increase
in short-term market interest rates that have generally lowered the value of the
investment  portfolio  at the  end of the  current  period.  As  overall  market
interest  rates have drifted  higher in the current  period,  the  portfolio has
declined in value. Market values of fixed rate investments are inversely related
to changes in market interest rates.

COMPANY-OWNED LIFE INSURANCE
----------------------------

Company-owned  life  insurance  totaled  $27.9 million at September 30, 2005, an
increase of $875  thousand or 3.2% from $27.0 million at year-end  2004.  Income
from  company-owned  life  insurance was $329 thousand and $900 thousand for the
three and nine months ended September 30, 2005, respectively.  This represents a
decrease  of $34  thousand  or 9.4% and $230  thousand or 20.4% in the three and
nine-month  comparisons.  The  decline  is due to lower  crediting  rates on the
underlying  investments.  Until recently,  the underlying investments related to
the  company-owned  life  insurance  have  been  repricing  downward  in a lower
interest rate environment.

DEPOSITS
--------

The  Company's  primary  source  of  funding  for  its  lending  and  investment
activities results from its customer deposits,  which consist of noninterest and
interest  bearing  demand,  savings,  and time deposits.  On September 30, 2005,
deposits  totaled  $1.2  billion,  an  increase  of $55.6  million  or 4.9% from
year-end  2004.  The  growth in  deposits  was due to a $62.7  million  or 36.2%
increase in noninterest  bearing deposits  partially offset by a $7.1 million or
..7% decline in interest bearing  deposits.  The increase in noninterest  bearing
deposits  is  attributed  to  $58.7  million  higher  balance   related  to  the
Commonwealth  of Kentucky.  Excluding  the  Commonwealth  of Kentucky  deposits,
noninterest  bearing deposits  increased $4.1 million or 2.7% in the comparison.
The net decrease in interest  bearing  deposits  include higher time deposits of
$28.0 million or 5.4%,  offset by lower savings deposit balances of $8.9 million
or 4.3% and lower interest  bearing  demand  deposits of $26.2 million or 10.6%.
Time deposits grew  primarily as a result of a net  additional  $24.4 million of
FlexSpender  certificate of deposit accounts opened during the nine months ended
September  30,  2005.  The Company  anticipates  that the growth of  FlexSpender
accounts will diminish  since  marketing  efforts to sell this product have been
scaled  back.  The  decrease in interest  bearing  demand  deposits was led by a
decline in a relatively  few  larger-balance  deposit  accounts.  Average  total
deposits  were $1.2  billion for the first nine  months of 2005,  an increase of
$83.9  million or 7.8%  compared  to the  average  for the twelve  months  ended
December  31,  2004.  Net  increases  in  average   deposits  were  as  follows:
noninterest  bearing demand of $11.2 million or 6.2%;  savings  accounts of $3.2
million or 1.7%; and time deposits of $70.5 million or 15.4%.  Average  interest
bearing demand deposits  declined $1.0 million or .4% in the current  nine-month
period  compared to the average for the twelve  months ended  December 31, 2004.
The increase in average time deposits is attributed to the growth in FlexSpender
certificate of deposits, which were introduced during 2004.

BORROWED FUNDS
--------------

Borrowed  funds totaled $140 million at September 30, 2005, an increase of $25.8
million or 22.5% from $115 million at year-end  2004. The increase is due to the
issuance of  subordinated  notes  payable in the amount of $25.8  million to two
separate  trusts  sponsored  by the  Company's  in  connection  with its private
offering of trust preferred  securities as discussed previously in Note 7 to the
Companies unaudited consolidated financial statements of this Form 10-Q.

LIQUIDITY

The Parent  Company's  primary use of cash consists of dividend  payments to its
common shareholders,  purchases of its common stock, corporate acquisitions, and
other  general  operating  purposes.  Liquidity  of the Parent  Company  depends
primarily  on the  receipt  of  dividends  from its  subsidiary  banks  and cash
balances maintained.  As of September 30, 2005 combined retained earnings of the
subsidiary banks were $56.3 million, of which $7.0 million was available for the
payment of dividends to the Parent Company without obtaining prior approval from
bank regulatory agencies. As a practical matter,  payment of future dividends is
also  subject to the  maintenance  of  capital  ratio  requirements.  Management
expects that in the aggregate,  its  subsidiary  banks will continue to have the
ability to pay dividends in order to provide funds to the Parent  Company during
the remainder of 2005 sufficient to meet its liquidity needs. The Parent Company
had cash  balances of $31.6  million at September 30, 2005, an increase of $20.8
million  or 193.0%  from $10.8  million  at  year-end  2004.  The $20.8  million
increase in cash at the Parent Company is due primarily to the proceeds from the
issuance of trust preferred securities as described earlier, partially offset by
$6.7 million in dividends paid to the Company's shareholders and for the payment
of general operating expenses.  The Company received  approximately $3.8 million
in dividends from its affiliated banks, which partially offset cash outflows for
dividend payments and operating expenses.

The  Company's  objective  as it  relates  to  liquidity  is to ensure  that the
subsidiary  banks have funds  available to meet deposit  withdrawals  and credit
demands without unduly penalizing  profitability.  In order to maintain a proper
level of liquidity, the subsidiary banks have several sources of funds available
on a daily basis that can be used for liquidity purposes. Those sources of funds
include the  subsidiary  banks' core  deposits,  consisting of both business and
nonbusiness deposits; cash flow generated by repayment of principal and interest
on loans and investment securities; FHLB borrowings; and federal funds purchased
and  securities  sold under  agreements  to  repurchase.  While  maturities  and
scheduled  amortization  of loans and  investment  securities  are  generally  a
predictable  source of funds,  deposit  outflows  and mortgage  prepayments  are
influenced  significantly by general interest rates,  economic  conditions,  and
competition  in our local  markets.  As of  September  30,  2005 the Company had
approximately  $179 million in additional  borrowing capacity under various FHLB
and federal funds borrowing  agreements  with  unaffiliated  entities.  However,
there is no guarantee  that these sources of funds will continue to be available
to the Company,  or that current  borrowings  can be refinanced  upon  maturity,
although the Company is not aware of any events or uncertainties that are likely
to cause a decrease in our liquidity from these sources.

For the longer term, the liquidity position is managed by balancing the maturity
structure of the balance sheet. This process allows for an orderly flow of funds
over an extended  period of time. The Company's  Asset and Liability  Management
Committee,  both at the bank subsidiary level and on a consolidated basis, meets
regularly  and  monitors  the   composition  of  the  balance  sheet  to  ensure
comprehensive management of interest rate risk and liquidity.

Liquid assets consist of cash, cash  equivalents,  and securities  available for
sale. At September 30, 2005,  such assets  totaled $488 million,  an increase of
$59.3  million or 13.8% from  year-end  2004.  The increase in liquid  assets is
attributed  to the  overall  funding  position of the Company and was led by the
increase  in deposits  received  from the  Commonwealth  of  Kentucky.  Net cash
provided by  operating  activities  was $5.9 million in the first nine months of
2005, a decline of $7.1  million or 54.8%  compared  $13.0  million for the same
period a year earlier. The decrease in net cash provided by operating activities
in the  comparable  period is  attributed  to the effect of an increase in other
assets,  primarily a $5.4 million higher balance of other real estate owned, and
higher net mortgage loans originated for sale and sold of $1.5 million. Net cash
used in investing  activities was $8.7 million in the current  nine-month period
compared  to $14.1  million in the same  period last year.  This  represents  an
increase in net cash  provided by  investing  activities  of $5.4 million in the
nine-month  comparable periods. The most significant items include $47.4 million
lower net cash flows provided by investment  securities  activities  offset by a
$46.1 million increase in cash flow from loans originated for investment, net of
principal  collected,  and higher cash flows of $5.8 million  attributed  to net
cash used in the  acquisition of Citizens  Georgetown in the  comparable  period
last year.  Net cash provided by financing  activities was $74.8 million for the
nine months ended  September 30, 2005 compared to $22.5 million net cash used in
the same nine-month  period a year earlier.  This represents an increase in cash
flows of $97.3 million in the  comparison and is related mainly to $75.0 million
attributed to increased  deposit activity and $25.8 million related to the trust
preferred securities offering, partially offset by $5.7 million related to lower
federal  funds  purchased  and  securities  sold under  agreements to repurchase
activity in the comparable periods.

Commitments  to  extend  credit  are  considered  in  addressing  the  Company's
liquidity  management.   The  Company  does  not  expect  these  commitments  to
significantly effect the liquidity position in future periods.

CAPITAL RESOURCES

Shareholders'  equity was $135 million on September 30, 2005. This represents an
increase of $3.3 million or 2.5% from year-end 2004 due mainly to an increase in
retained  earnings of $5.1  million or 3.4%.  Retained  earnings  increased as a
result of $11.8 million in net income offset by $6.7 million, or $.99 per share,
in dividends  declared during the current  nine-month period. The Company issued
18 thousand and 5 thousand shares of common stock during the current nine months
pursuant  to its  nonqualified  stock  option plan and ESPP,  respectively.  The
issuance of these shares increased  shareholders'  equity by $605 thousand.  The
Company  purchased  approximately  16 thousand shares of its outstanding  common
stock at a total cost of $526 thousand during the current  nine-month  period of
2005.

Accumulated  other  comprehensive  loss,  consisting of net  unrealized  holding
losses on  available  for sale  securities  (net of tax),  was $1.1  million  at
September 30, 2005, a decrease of $1.8 million from year-end  2004. The decrease
is due  primarily to the impact of changing  economic  conditions,  including an
increase in short-term  market  interest rates that have  generally  lowered the
value of the investment  portfolio at the end of the current period.  As overall
market  rates have  drifted  higher in the current  period,  the  portfolio  has
declined in value. Market values of fixed rate investments are inversely related
to changes in market interest rates.

Consistent with the objective of operating a sound financial  organization,  the
Company's goal is to maintain  capital ratios well above the regulatory  minimum
requirements.  The  Company's  capital  ratios as of  September  30,  2004,  the
regulatory  minimums  and  the  regulatory  standard  for a  "well  capitalized"
institution are as follows.

                            Farmers Capital       Regulatory           Well
                           Bank Corporation         Minimum         Capitalized
-------------------------------------------------------------------------------
Tier 1 risk based               15.15%               4.00%             6.00%
Total risk based                16.30%               8.00%            10.00%
Leverage                        10.39%               4.00%             5.00%

As of September 30, 2005, all of the Company's  subsidiary  banks were in excess
of the  well-capitalized  regulatory  ratio  requirements  as  calculated  under
guidelines established by federal banking agencies.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company uses a simulation  model as a tool to monitor and evaluate  interest
rate risk  exposure.  The model is designed to measure  the  sensitivity  of net
interest  income and net income to  changing  interest  rates over  future  time
periods.  Forecasting  net  interest  income and its  sensitivity  to changes in
interest  rates  requires the Company to make  assumptions  about the volume and
characteristics  of  many  attributes,  including  assumptions  relating  to the
replacement  of  maturing  earning  assets and  liabilities.  Other  assumptions
include,  but are not limited to, projected  prepayments,  projected new volume,
and the predicted  relationship  between  changes in market  interest  rates and
changes in  customer  account  balances.  These  effects are  combined  with the
Company's  estimate of the most likely rate environment to produce a forecast of
net interest income and net income. The forecasted results are then adjusted for
the effect of a gradual  increase and decrease in market  interest  rates on the
Company's net interest income and net income. Because assumptions are inherently
uncertain, the model cannot precisely estimate net interest income or net income
or the effect of interest  rate changes on net  interest  income and net income.
Actual results could differ significantly from simulated results.

At  September  30,  2005,  the model  indicated  that if rates were to gradually
increase by 75 basis points during the remainder of the calendar year,  then net
interest  income and net income would increase .20% and .42%,  respectively  for
the year ending  December 31, 2005.  The model  indicated  that if rates were to
gradually  decrease by 75 basis points over the same  period,  then net interest
income and net income would decrease .79% and 1.70%, respectively.

ITEM 4.  CONTROLS AND PROCEDURES

The  Registrant's  Chief  Executive  Officer and Chief  Financial  Officer  have
reviewed and evaluated the effectiveness of the Registrant's disclosure controls
and  procedures  as of the end of the period  covered by this  report,  and have
concluded that the Registrant's disclosure controls and procedures were adequate
and effective to ensure that all material  information  required to be disclosed
in this annual report has been made known to them in a timely fashion.

There were no significant  changes in the Registrant's  internal  controls or in
other factors that could  significantly  affect these controls subsequent to the
date of the Chief Executive Officer and Chief Financial Officers evaluation, nor
were there any material  weaknesses in the controls  which  required  corrective
action.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

As of  September  30,  2005,  there  were  various  pending  legal  actions  and
proceedings  against the Company  arising from the normal course of business and
in which claims for damages are  asserted.  Management,  after  discussion  with
legal  counsel,  believes  that these  actions  are  without  merit and that the
ultimate liability  resulting from these legal actions and proceedings,  if any,
will not have a material effect upon the  consolidated  financial  statements of
the Company.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides  information with respect to shares of common stock
repurchased by the Company during the quarter ended September 30, 2005.
<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------
                                                                                Total Number of Shares        Maximum Number of
                                                                                 Purchased as Part of      Shares that May Yet Be
                                        Total Number of      Average Price        Publicly Announced         Purchased Under the
               Period                  Shares Purchased     Paid per Share        Plans or Programs           Plans or Programs
------------------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>              <C>                       <C>                       <C>
July 1, 2005 to July 31, 2005                                                                                      180,708
------------------------------------------------------------------------------------------------------------------------------------
August 1, 2005 to August 31, 2005             226              $   32.21                 226                       180,482
------------------------------------------------------------------------------------------------------------------------------------
September 1, 2005 to September 30, 2005                                                                            180,482
------------------------------------------------------------------------------------------------------------------------------------
    Total                                     226              $   32.21                 226
------------------------------------------------------------------------------------------------------------------------------------
On January 27, 2003, the Company's  Board of Directors  authorized  the purchase of up to 300,000  shares of the Company's
outstanding common stock.  No stated expiration date was established under this plan.
</TABLE>



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, 1998).

     3ii. Amended  and  Restated  By-Laws of Farmers  Capital  Bank  Corporation
          (incorporated  by  reference  to  Annual  Report  of Form 10-K for the
          fiscal year ended December 31, 1997.

     3iia Amendments   to   By-Laws   of  Farmers   Capital   Bank   Corporation
          (incorporated  by reference  to Quarterly  Report of Form 10-Q for the
          quarterly period ended March 31, 2003).

     31.1 CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
          2002 (page 33)

     31.2 CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
          2002 (page 34)

     32   CEO & CFO Certifications Pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002 (page 35)


<PAGE>

SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.





Date:  November 3, 2005             /s/ G. Anthony Busseni
      ----------------------------  --------------------------------------------
                                    G. Anthony Busseni,
                                    President and CEO
                                    (Principal Executive Officer)


Date:  11-3-05                      /s/ Doug Carpenter
      ----------------------------  --------------------------------------------
                                    C. Douglas Carpenter,
                                    Vice President, Secretary, and CFO
                                    (Principal Financial and Accounting Officer)