Loan Agreement between Premier Financial Bancorp and The Bankers' Bank of Kentucky
      dated November 10, 2006


    EXHIBIT
      10.1


    
LOAN
      AGREEMENT

    


    


    This
      Loan Agreement is made and entered into as of the 10th
      day of November, 2006, by and between THE
      BANKERS’ BANK OF KENTUCKY, INC.,
      a Kentucky banking organization with main offices in Frankfort, Kentucky
      (“Bankers’”) and PREMIER
      FINANCIAL BANCORP, INC.,
      a Kentucky corporation (“Borrower”) and a multi-bank holding company under the
      Bank Holding Company Act of 1956, as amended, for various banking
      organizations;

    


    WHEREAS,
      the parties hereto have reached an understanding as to the lending of money
      by
      Bankers’ to Borrower which Borrower will use to retire in full existing Trust
      Preferred Securities and from time to time, for general corporate
      purposes.

    


    NOW,
      THEREFORE, in consideration of the mutual representations, covenants and
      agreements and undertakings contained in this Agreement, which Borrower
      acknowledges Bankers’ is relying upon in granting, renewing, and making advances
      upon the Credit Facility referred to below, and for all the good and valuable
      consideration, Bankers’ and Borrower hereby agree as follows:

     

    I.

    Loan.

    


    1.
      The
      Loan.

    


    (a)
      Bankers’ agrees, on the terms and conditions set forth herein, to make a Credit
      Facility (“Facility”) in the maximum amount of Ten Million ($10,000,000) Dollars
      through the lending to Borrower of Six Million Five Hundred Thousand
      ($6,500,000) Dollars under that Term Note of even date herewith (“Term Note”)
      and the lending to Borrower from time to time of up to Three Million Five
      Hundred Thousand ($3,500,000) Dollars under that Promissory Note of even date
      herewith (“Promissory Note”) all in accordance with the terms hereof and the
      Stock Pledge and Security Agreement of even date herewith; provided, that the
      outstanding principal balance at any time through advances of funds under the
      Promissory Note shall not exceed $3,500,000 (the “Maximum Amount”).

    


    (b)
      Advances by Bankers’ to Borrower under the Promissory Note shall be made by
      Bankers’ within three (3) business days after written request for an advance is
      received by Bankers’ from Borrower; provided, however, that any advance by
      Bankers’ shall be contingent and conditioned upon:

     

    (i)
      receipt of a written Request for Advance by Bankers’ from Borrower, which shall
      state the amount requested to be advanced; and

    


    (ii)
      no Default or Event of Default shall have occurred under this Agreement;
      and

    


    (iii)
      no material adverse change shall have occurred with respect to the business,
      assets, or operations of Borrower or its subsidiaries which, in the sole
      discretion of the Bankers’, would adversely effect Borrower, its subsidiaries or
      their businesses; and

    


    (iv)
      the amount requested to be advanced by Bankers’ to Borrower shall not cause or
      result in the outstanding amount owed under the Promissory Note to exceed the
      Maximum Amount.

    


    1.2
      Security.

    


    The
      Credit Facility (including both the Term Note and the Promissory Note) to
      Borrower, including all costs, expenses and interest thereunder, shall be
      continuously secured by a first and prior pledge and security interest in a
      minimum of one hundred (100%) percent of (a) the outstanding shares of common
      capital stock, $1 par value, of Citizens Deposit Bank and Trust, Inc.,
      Vanceburg, Kentucky (“Citizens”) and (b) the outstanding shares of common
      capital stock, $25 par value, of Farmers-Deposit Bank, Eminence, Kentucky
      (“Farmers”), and any other equity security of Citizens and Farmers as may be
      outstanding from time to time and as allowed under this Agreement, the Stock
      pledge and Security Agreement or the Term Note or the Promissory
      Note.

     

    
 

    II.

    Closing.

    


    2.1
      The
      Closing.

    


    The
      closing (“Closing”) shall take place at ____ o’clock _M, local time, on November
      10, 2006, at the main offices of Bankers’.

    


    2.2
      Documents
      at Closing.

    


    At
      or prior to Closing, Borrower shall deliver to Bankers’ each of the following
      documents duly authorized, and executed, and in form acceptable to
      Bankers’:

    


    (a)
      This Agreement;

    


    (b)
      The Term Note and the Promissory Note (Exhibits “A” and “B”) evidencing the
      obligation of Borrower to Bankers’ pursuant to this Agreement;

    


    (c)
      The Stock Pledge and Security Agreement attached hereto as Exhibit “C”, together
      with original Certificates representing the shares specified in Subsection
      1.2
      hereof, (clear of all liens and encumbrances) with duly executed stock powers;
      

    


    (d)
      Certificates executed by Borrower affirming that, as of the date of Closing
      (i)
      the representations and warranties set forth herein are true, complete and
      accurate; (ii) Borrower is not in breach of any covenants contained herein;
      and
      (iii) no Event of Default has occurred or is existing;

    


    (e)
      An Opinion of Counsel for Borrower dated the date of Closing in the form of
      Exhibit “D”, attached hereto and otherwise in form and substance satisfactory to
      Bankers’ in its sole discretion;

    


    (f)
      A copy of the Articles of Incorporation of Borrower, Citizens and Farmers,
      and a
      copy of the By-Laws of each said Organization, certified by the Secretary of
      each of said Organizations to be true, complete and correct copies thereof,
      as
      of the date of Closing;

    


    (g)
      Copies of Minutes of Borrower, certified by its Secretary, evidencing due and
      proper authorization for Borrower to enter into this Agreement, the Stock Pledge
      Agreement and Security Agreement, the Term Note and the Promissory Note and
      supplemental documents thereto and to engage in the acts and transactions
      specified therein; 

    


    (h)
      A Certificate of the Secretary of Borrower certifying the names of the officers
      authorized to execute and deliver this Agreement, the Note, the Stock Pledge
      and
      Security Agreement and other documents supplemental thereto and to which the
      Borrower is party, together with the true signatures of such officers so
      authorized;

    


    (i)
      Borrower’s check in an amount sufficient too pay the costs of preparation of
      this Loan Agreement, supplemental documents and closing this loan
      transaction.

    


    (j)
      Such other documents and instruments as Bankers’ may request to insure the
      binding effect in accordance with the terms thereof of any document supplemental
      to this Agreement, or to effect the intent of this Agreement.

    


    2.3
      Further
      Considerations to Closing.

    


    The
      obligation of Bankers’ to enter into the Credit Facility and to make the loans
      under the Term Note and the Promissory Note at Closing is subject additionally
      to the following conditions:

    


    (a)
      Accuracy
      of Representations:
      The representations and warranties made herein and in any document supplemental
      hereto shall be true and correct as of the date of Closing;

    


    (b)
      Compliance
      of Covenants:
      There shall be no violation of, and no event or condition shall have occurred
      which could or would result in a violation of, any covenant or other provision
      contained in this Agreement, the Term Note and the Promissory Note, the Stock
      Pledge and Security Agreement, or any document supplemental hereto;

    


    (c)
      Event
      of Default:
      No Event of Default shall have occurred or be continuing or be threatened as
      of
      the date of Closing;

    


    (d)
      Satisfactory
      Financial Condition:
      Borrower’s financial condition and that of Bank, shall be satisfactory to
      Bankers’, in its sole discretion, as of Closing;

    


    (e)
      Proceedings:
      All proceedings to be taken in connection with the transactions contemplated
      by
      this Agreement and all documents instrumental thereto, shall be satisfactory
      in
      form and substance to Bankers’ and their counsel, in Bankers’ sole and absolute
      discretion.

     

     

    III.

    Representations
      and Warranties.

    


    To
      induce Bankers’ to enter into this Agreement, Borrower makes the following
      representations and warranties as of the date hereof, and, except where
      specified, to be effective and true at all times throughout the term of this
      Agreement, which shall survive the Closing and shall be deemed to be restated
      each time Borrower delivers documents or reports required hereby pursuant to
      this Agreement or receives an advance of funds under the Promissory
      Note:

    


    3.1
      Organization:

    


    (a)
      Borrower is a corporation duly organized and validly existing under the laws
      of
      the Commonwealth of Kentucky, has paid all fees due and owing to the Office
      of
      the Kentucky Secretary of State, and has delivered to that Office its most
      recent Annual Report as required, has never filed Articles of Dissolution,
      has
      the requisite power and authority (corporate and otherwise), to own its property
      and conduct its business as such business presently is being conducted, and
      is
      qualified and in good standing as a foreign corporation in all jurisdictions
      where such qualification is required. Borrower maintains its principal office
      at
      2883 Fifth Avenue, Huntington, West Virginia, 25702. Borrower is authorized
      to
      become a bank holding company and is duly registered by the Board of Governors
      of the Federal Reserve System under the Bank Holding Company Act of 1956, as
      amended, and the regulations promulgated thereunder. Borrower owns all of the
      outstanding shares of stock of Citizens and Farmers. 

    


    (b)
      Citizens is a Kentucky banking organization, validly existing under the laws
      of
      the Commonwealth of Kentucky, has paid all fees due and owing to Kentucky and/or
      regulatory entities and agencies, has never filed Articles of Dissolution,
      is a
      member in good standing of the Federal Deposit Insurance Corporation, is not
      subject to any Order, Memorandum or Letter of Agreement with any bank regulatory
      agency, and has all requisite power and authority (corporate or otherwise)
      to
      own its assets and to conduct its business as such business is presently being
      conducted. Citizens does not own any property or carry on any activities that
      do
      or will require it to qualify to do business as a foreign organization in any
      state other than Kentucky. Citizens presently has authorized, and has issued
      and
      outstanding 559,800 shares of Common Capital Stock, $1 par value. All of such
      outstanding shares have been duly and validly issued, are fully paid and
      non-assessable, have not been issued in violation of any person’s pre-emptive
      rights and no options, rights or agreements to issue shares of Citizens exist.
      Citizens has no subsidiaries.

    


    (c)
      Farmers is a Kentucky banking organization, validly existing under the laws
      of
      the Commonwealth of Kentucky, has paid all fees due and owing to Kentucky and/or
      regulatory entities and agencies, has never filed Articles of Dissolution,
      is a
      member in good standing of the Federal Deposit Insurance Corporation, is not
      subject to any Order, Memorandum or Letter of Agreement with any bank regulatory
      agency (except for a Board Resolution entered into on October 30, 2006, at
      the
      direction of the Federal Deposit Insurance Corporation), and has all requisite
      power and authority (corporate or otherwise) to own its assets and to conduct
      its business as such business is presently being conducted. Farmers does not
      own
      any property or carry on any activities that do or will require it to qualify
      to
      do business as a foreign organization in any state other than Kentucky. Farmers
      presently has authorized, and has issued and outstanding 18,750 shares of Common
      Capital Stock, $25 par value. All of such outstanding shares have been duly
      and
      validly issued, are fully paid and non-assessable, have not been issued in
      violation of any person’s pre-emptive rights and no options, rights or
      agreements to issue shares of Farmers exist. Farmers has no
      subsidiaries.

    


    3.2
      Authorization.
      Borrower has full right, power and authority to execute and deliver this
      Agreement, the Term Note and Promissory Note, Stock Pledge and Security
      Agreement and other documents supplemental thereto, and to consummate the
      transactions contemplated hereby and thereby, and such actions have been duly
      and validly authorized by all necessary corporate actions. The documents
      executed by Borrower will be valid, legal and binding obligations, enforceable
      and in accordance with their respective terms.

    


    3.3
      Financial
      Statements.
      Borrower has delivered to Bankers’ audited financial statements for Borrower,
      consolidated with its subsidiaries for the twelve month period ended December
      31, 2005, and they are hereby certified by Borrower to be complete and accurate
      in all respects. (“Financial Statements”). To the best of Borrower’s knowledge,
      after good faith investigation, the Financial Statements fairly present the
      financial condition of Borrower and any banks owned by Borrower, respectively,
      as of the date stated, and have been prepared in conformity with Generally
      Accepted Accounting Principals applied on a consistent basis for such
      periods.

    


    3.4
      Taxes.
      Borrower and all of its subsidiaries have filed all tax returns which are
      required to be filed and each such party has paid, or has made adequate
      provision for the payment of, all taxes which are, or may become, due pursuant
      to such returns or to assessments received by each of them and neither of them
      has been advised of or is aware of any deficiency with respect to any such
      periods which has not been paid or settled except for a deficiency of
      approximately $56,000 which is being contested.

    


    3.5
      Litigation.
      There are no actions or proceedings pending, or to the knowledge of Borrower,
      threatened, against or effecting Borrower or its subsidiaries, or any of the
      rights or properties of any of them in any Court or before any governmental
      authority, or in any other forum, which involve the possibility of materially
      or
      adversely affecting Borrower’s, or its subsidiaries, their respective
      businesses, properties or rights, or the ability of Borrower to comply with
      the
      provisions of this Agreement and the documents supplemental hereto, and neither
      Borrower nor its subsidiaries is in default with respect to any Order or
      directive of any Court or governmental authority.

    


    3.6
      Compliance
      with Instruments.
      Neither Borrower nor its subsidiaries are, to the extent applicable, in default
      under or violating:

    


    (a)
      Any provisions of their respective Articles of Incorporation or By-Laws;
      or

    


    (b)
      Any indenture, agreement, deed, lease, loan agreement, note or other instrument
      to which it is a party or is bound or to which it or its assets is subject.
      Neither the execution or delivery of this Agreement, the Term Note and
      Promissory Note, or the documents supplemental thereto, nor the consummation
      of
      the transactions contemplated therein, nor compliance with the terms, conditions
      or provisions thereof, will (i) conflict with or result in the breach of, or
      constitute a default under, any of the foregoing, (ii) result in the creation
      of
      any lien or encumbrance upon the assets of Borrower or its subsidiaries, other
      than the lien created thereby, or (iii) violate, or cause Borrower or its
      subsidiaries to violate, any statute, law, rule, regulation, interpretation
      or
      ordinance of any governmental authority. No Event of Default, or condition
      which
      could reasonably result in an Event of Default, has occurred or is
      continuing.

    


    3.7
      Enforceability.
      No registration with, notice to, consent or approval of any third party,
      including any governmental agency of any kind, is required for the due execution
      and delivery, or the enforceability of, this Agreement, or the documents
      supplemental hereto, or for the consummation of the loan transactions specified
      herein.

    


    3.8
      Disclosure.
      Neither this Agreement, nor the Financial Statements referred to in Section
      3.3
      hereof, nor any other document, certificate or statement referred to herein,
      or
      furnished to Bankers’ by or on behalf of Borrower in connection herewith
      contains any untrue statement of a material fact or omits to state a material
      fact necessary in order to make the statements contained herein and therein
      not
      misleading. There is no fact which does or may materially or adversely effect
      the business, operations, affairs, prospects or condition of Borrower or its
      subsidiaries, or any of the properties or assets of any of them, which has
      not
      been specifically identified in this Agreement or in the Financial Statements.
      

    


    3.9
      Special
      Contracts.
      Except as specified in Attachment 3.9, there are no contracts or agreements
      of
      Borrower or Citizens or Farmers, which:

    


    (a)
      Require any of them to repurchase any assets previously sold by them except
      for
      repurchase agreements entered into in the ordinary course of business;
      or

    


    (b)
      Obligate Borrower beyond one year or in an amount greater than Five Hundred
      Thousand ($500,000) Dollars; or

    


    (c)
      Obligate Citizens or Farmers beyond one year or in an amount greater than One
      Hundred Thousand ($100,000) Dollars; or

    


    (d)
      Are otherwise material to the business of any of them.

    


    3.10
      Title
      to Shares and Assets.
      Except as specified on Attachment 3.10, Borrower and Citizens and Farmers have
      good and marketable title to all their assets and property. None of the Shares
      of Citizens or Farmers covered by this Agreement are subject to any lien,
      charge, pledge, encumbrance, claim or security interest other than Bankers’
created hereby, nor are those shares subject to a voting trust or any other
      agreement or understanding which effects the ability of Borrower to vote or
      dispose of them. Other than liens or encumbrances permitted hereunder, there
      are
      no liens or encumbrances existing with respect to any assets of Borrower or
      Citizens or Farmers, except as specified on Attachment 3.10.

    


    3.11
      Compliance
      with Laws.
      Borrower and Citizens and Farmers are in compliance with all applicable
      governmental, occupational safety and health, workers compensation laws and
      regulations applicable to the conduct of their business and the ownership of
      their properties and they have obtained such licenses, permits, and governmental
      authorizations as are necessary to the carrying on of their
      businesses.

    


    3.12
      Use
      of Proceeds.
      Borrower shall use the proceeds of the Term Note solely and exclusively to
      retire all of the trust preferred securities Borrower has outstanding. Borrower
      shall use the proceeds of the Promissory Note for general corporate purposes
      (not including retiring trust preferred securities). 

    


    3.13
      Loans
      and Allowance for Loan and Lease Losses.
      Each of the allowances for possible loan and lease losses and any allowance
      for
      real estate owned for Citizens and Farmers is adequate (i) in all material
      respects to provide for all known and anticipated losses of each of them and
      (ii) in all material respects under the requirements of GAAP and standard
      banking practice to provide for possible losses, net recoveries relating to
      loans and leases previously charged off, on loans outstanding, lease receivables
      or real estate owned by them (including, without limitation, accrued interest
      receivable).

    


    3.14
      Repurchase
      Agreements.
      With respect to all repurchase agreements to which Borrower, Citizens or Farmers
      is a party, (i) where either Borrower, Citizens or Farmers has the obligation
      to
      sell securities, it has a valid, perfected first lien or security interest
      in
      the government securities or other collateral securing the repurchase agreement,
      and the value of the collateral securing each such repurchase agreement equals
      or exceeds the amount of the debt secured by such collateral under such
      agreement, and (ii) where either Borrower, Citizens or Farmers has the
      obligation to buy securities, the value of the collateral securing such
      obligation does not materially exceed the amount of the obligation.

    


    3.15
      Absence
      of Changes.
      Except as specified on Attachment 3.15, since December 31, 2005, the business
      of
      Borrower and its subsidiaries has been conducted in the ordinary course of
      business and none of said entities has otherwise:

    


    (a)
      experienced or suffered any material adverse change in their assets, revenue
      or
      business; 

    


    (b)
      borrowed or agreed to borrow any funds or incurred, or become subject to, any
      other absolute or contingent obligation or liability, or guaranteed any
      liabilities or obligations of any other person;

    


    (c)
      created any encumbrance with respect to its properties, business or
      assets;

    


    (d)
      sold, pledged, transferred or otherwise disposed of, or agreed to sell, transfer
      or otherwise dispose of any portion of its assets, properties or rights, except
      in the ordinary course of business;

    


    (e)
      incurred or become subject to any claim or liability for any damages which
      could
      have a material adverse effect on it, for negligence or any other tort, or
      for
      breach of contract; 

    


    (f)
      entered into any contract other than in the ordinary course of business;


    


    (g)
      forgiven or canceled any debts or claims, or waived or permitted to lapse any
      rights, other than in the ordinary course of business; or

    


    (h)
      committed any act or omitted to do any act which would cause a breach of any
      contract to which it is a party or by which it is bound on the date hereof,
      which breach may reasonably result in a material adverse effect.

    


    3.16
      Environmental
      Matters.
      Except as specified on Attachment 3.16, apart from non-compliance which could
      not have a material adverse effect, Borrower, Citizens and Farmers have
      complied, and are currently in compliance, with all Environmental Laws, and
      neither of Borrower, Citizens or Farmers, nor any assets at any time owned,
      leased, operated or held as collateral by any of them is or has been (to their
      knowledge) in violation of any Environmental Laws. There are (to the knowledge
      of Borrower, Citizens or Farmers) no locations at any real estate or facilities
      now or heretofore owned, leased, operated or held as collateral by them or
      at
      which they have disposed of (or arranged for the disposal of) hazardous
      materials, where hazardous materials have caused conditions in the environment
      that require or required remedial action in order to comply with Environmental
      Laws, or the common law of nuisance, or which locations are the subject of
      any
      governmental body enforcement action or other investigation under any
      Environmental Laws, which may lead to any material adverse consequences for
      Borrower, Citizens or Farmers.

     

    3.17
      ERISA.
      Each employee benefit plan, including these defined in Section 3(3) of ERISA,
      which is maintained by Borrower, Citizens or Farmers for the benefit of their
      employees is in compliance with all applicable requirements of ERISA, the
      Internal Revenue Code and other applicable laws. No Reportable Event within
      the
      meaning of Section 4043 of ERISA has occurred and is outstanding with regard
      to
      any such employee benefit plan.

    


    3.18
      Contract
      Status.
      Borrower, Citizens or Farmers is not in default under any contract, entered
      into
      in the ordinary course of business or otherwise, which default is reasonably
      likely to result in a material adverse effect with respect to Borrower, Citizens
      or Farmers. 

    


    3.20
      Full
      Disclosure.
      None of the representations, warranties and statements of Borrower made in
      this
      Section III or in any other provisions of this Agreement contains any untrue
      statement of a material fact or omits to state a material fact necessary to
      make
      the statements therein, in light of the circumstances under which they were
      made, not misleading.

    


     

    IV.

    Covenants.

    


    Borrower
      covenants that so long as this Agreement is in effect and until all obligations
      of Borrower to Bankers’ have been paid or satisfied in full, Borrower shall
      comply with the following covenants and shall take all necessary and appropriate
      action to cause its subsidiaries, as applicable, to so comply and therefore,
      warrants and agrees to their respective compliance with the following
      covenants:

    


    4.1
      Financial
      Statements and Other Information.
      If not available through electronic media, within the time frames specified,
      Borrower shall furnish to Bankers’ (i) copies of all Call and other Reports
      submitted by them to any Federal regulatory agency having or claiming
      supervisory authority over Borrower, Citizens or Farmers, promptly after such
      reports are submitted; (ii) if not included within the reports described in
      Subsection (i) of this sentence, copies, at least quarterly within forty-five
      (45) days after the end of each fiscal quarter of Citizens or Farmers, of the
      reports submitted to any federal agency which disclose the “average daily
      assets” and the “average net outstanding loans” of Citizens and Farmers, or if
      no reports containing such information are so submitted, a calculation in
      reasonable detail of such amounts certified as correct by their Chief Executive
      Officer(s) and Chief Financial Officer(s); (iii) as soon as practicable, and
      in
      any event within ninety (90) days after the end of each fiscal year, an annual
      audit, including an audit of the balance sheet of Borrower on a consolidated
      basis with its subsidiaries, as of the end of the applicable fiscal year, and
      related audited statements of operations, changes in stockholders’ equity and
      cash flows for such years, setting forth in comparative form the figures for
      such fiscal year and the prior fiscal year, prepared in reasonable detail,
      and
      in conformity with Generally Accepted Accounting Principles accompanied by
      an
      opinion of Borrower’s Certified Public Accountants stating such facts, it being
      agreed that Bankers’ personnel shall have the right to on site review of the
      management report of such accounting firm to the Board of Directors of Borrower;
      and (iv) with reasonable promptness, such other information concerning the
      business affairs and financial condition of Borrower and its subsidiaries as
      Bankers’ may reasonably request.

    


    In
      conjunction with Borrower’s delivery of the information specified above,
      Borrower shall also submit a Certificate stating that there exists no Event
      of
      Default under this Agreement at the time of delivery. Borrower will, and will
      cause Citizens and Farmers, upon obtaining knowledge of an Event of Default,
      or
      any facts or events which could reasonably lead to an Event of Default
      hereunder, to deliver within three (3) days of obtaining such knowledge to
      Bankers’ a Certificate specifying the nature thereof, the period of existence
      thereof, and what action has been taken or is proposed to be taken with respect
      thereto.

    


    4.2
      Financial
      Records and Assets.
      Borrower and its subsidiaries shall: (i) keep true and complete financial
      records in accordance with Generally Accepted Accounting Principles consistently
      applied; (ii) maintain and make readily available to Bankers’ the books and
      records of each of them at their principal offices; and (iii) permit authorized
      representatives of Bankers’ to visit and inspect their respective properties and
      books and records, upon reasonable notice, and to discuss said matters with
      their respective officers and directors at reasonable times.

    


    4.3
      Insurance.
      Borrower, Citizens and Farmers shall each procure, maintain and carry in full
      force and effect general liability, public liability, workmens’ compensation
      liability and property damage insurance with respect to their respective
      operations to such extent, in such amounts and with such deductibles as are
      commonly carried by prudent businesses similarly situated, and shall cause
      Citizens and Farmers to obtain and maintain “standard bankers bond insurance”
protecting it from loss.

    


    4.4
      Obligations.
      Borrower and its subsidiaries, respectively, shall pay in full, and when due,
      all taxes, assessments, governmental charges and levies (except those being
      contested in good faith) and all obligations for, or on account of, borrowed
      funds.

    


    4.5
      Corporate
      Existence.
      Borrower and its subsidiaries will do or cause to be done all things necessary
      to preserve in good standing and keep in full force and effect the corporate
      existence and rights and franchises of Borrower and its subsidiaries, and to
      comply with all applicable laws and regulations applicable to them.

    


    4.6
      Maintenance
      of Properties.
      Borrower, Citizens and Farmers will maintain in good repair, working order
      and
      condition all property owned by them or used in their businesses.

    


    4.7
      Disclosure.
      Borrower and its subsidiaries shall promptly notify Bankers’ of any fact or
      event, including the institution of any litigation, investigation or proceeding,
      which could reasonably have a material adverse effect upon the businesses or
      assets of any of them, or their subsidiaries, and shall provide prompt notice
      to
      Bankers’ of any default by any of them under any obligation, deed, indenture,
      liability, indebtedness, agreement, contract or note or other instrument or
      document to which any of them is a party, of any breach or failure of any
      covenant made herein, and of any proceeding, investigation, order, judgment,
      memorandum or letter of agreement against Borrower or its subsidiaries affecting
      or relating to any property or business of Borrower or its subsidiaries in
      any
      material adverse respect.

    


    4.8
      Performance
      Agreements.
      Unless disputed in good faith, Borrower and its subsidiaries shall comply with
      all their respective agreements and obligations to and with all parties, and
      will not permit any event or fact to exist which could have a material adverse
      effect upon their businesses or assets.

    


    4.9
      Compliance
      with Laws.
      Borrower and its subsidiaries shall comply with all applicable material laws,
      regulations and orders, so long as the applicability thereof is not being
      continuously and promptly contested in good faith, but in any event, each shall
      promptly advise Bankers’ of any such contest, and the pertinent facts applicable
      thereto.

    


    4.10
      Use
      of Proceeds.
      Borrower shall not, directly or indirectly, use any part of the Credit Facility
      provided for under this Agreement for any purpose other than as provided for
      herein.

    


    4.11
      Loan
      to Officers and Directors.
      Borrower shall cause Citizens and Farmers to be in continuous compliance with,
      and shall not violate, the provisions of Regulation O as promulgated by the
      Federal Reserve Board of Governors.

    


    4.12
      Dividend
      and Stock Ownership Restriction.
      Citizens and Farmers may pay, declare or make any dividend payments during
      any
      calendar year during the term of this Agreement in compliance with both federal
      and Kentucky law; provided, however, that at no time shall Borrower’s
      outstanding obligations to Bankers’ under this Credit Facility exceed
      seventy-five (75%) percent of the combined equity of Citizens and Farmers.
      So
      long as this Agreement is in effect, neither Citizens nor Farmers shall return
      any capital to their stockholders as such or make any distribution of assets
      to
      their stockholders, and neither Citizens nor Farmers shall create or issue
      any
      new shares of any class of stock without prior written consent of Bankers’.
      Borrower will continue to own l00% of the outstanding capital stock of Citizens
      and Farmers, all of such shares of Citizens and Farmers to be free and clear
      of
      all liens, encumbrances or any cloud of title whatsoever, except as granted
      to
      Bankers’ hereunder. Bankers’ shall continue to hold and own a first priority
      security interest in and to one hundred (100%) percent of the issued and
      outstanding capital stock of Citizens and Farmers. Citizens and Farmers shall
      issue no additional capital stock without the prior written consent of Bankers’.


    


    4.13
      Limitation
      of Debt or Stock Issuances.
      Borrower shall not incur debt except in the ordinary course of its business.
      Neither Citizens nor Farmers shall issue bonds, debentures, trust preferred
      securities, capital or other notes, or debt of similar nature. Farmers and
      Citizens shall be permitted to borrow from the Federal Home Loan Bank on a
      short
      and/or long term basis in the ordinary course of business.

    


    4.14
      Limitation
      on Encumbrances.
      Neither Borrower nor its subsidiaries will directly or indirectly, subordinate
      to any other person the payment of any indebtedness owed by any person to any
      of
      them, nor, except as specified on Attachment 3.10, shall they incur, create,
      assume or suffer to exist, any pledge, lien or encumbrances upon any properties
      or assets owned by any of them, except for security interest held by Bankers’,
      but so long as no other provision of this Loan Agreement and the documents
      supplemental hereto is violated, the following are permitted:

    


    (a)
      Mechanics, materialmens, carriers and other similar liens incurred in the
      ordinary course of business; and 

    


    (b)
      Liens of taxes or assessments not at the time due, or the liens of taxes or
      assessments already due, but the validity of which is being contested in good
      faith and which adequate reserves have been established; and

    


    (c)
      Judgment liens, so long as the finality of such Judgment is being contested
      in
      good faith and execution thereon is stayed; and

    


    (d)
      Easements, zoning restrictions or similar defects, encumbrances or restrictions
      the existence of which does not impair the use of the property subject thereto;
      and

    


    (e)
      Actions appropriate under customary banking practices in dealing with past-due
      “work-out” loans.

    


    4.15
      Contingent
      Liabilities.
      Except for customary actions and procedures under the Gold Medallion Guaranty
      Program, neither Borrower nor its subsidiaries will guarantee or become a surety
      for or otherwise become contingently liable for any obligations of any other
      person.

    


    4.16
      Lease
      Obligation.
      Except as specified on Attachment 4.16, without Bankers’ prior written consent,
      which shall not be unreasonably withheld by Bankers’, neither Borrower, Citizens
      nor Farmers will enter into any arrangements with any person involving the
      leasing by one or either of them of any real or personal property or interest
      therein which requires payment with respect to Borrower in excess of Five
      Hundred Thousand ($500,000), in the aggregate, or with respect to either
      Citizens or Farmers in excess of One Hundred Thousand ($100,000) Dollars in
      aggregate in any calendar year.

    


    4.17
      Subsidiaries.
      Except as presently existing, neither of Borrower, Citizens nor Farmers shall
      create or acquire any subsidiaries without Bankers’ prior written consent, which
      shall not be unreasonably withheld.

    


    4.18
      Amendment
      to Articles or By-Laws.
      Neither Citizens nor Farmers will amend their respective Articles of
      Incorporation or any material provisions of their By-Laws, without the prior
      written consent of Bankers’. 

    


    4.19
      Transactions
      with Affiliates.
      Neither Borrower, Citizens nor Farmers shall make any advances to, or enter
      into
      any contract or agreement material to the business of either of them, with
      any
      affiliate, other than in the ordinary course of banking business, without the
      prior written consent of Bankers’, which shall not be unreasonably
      withheld.

    


    4.20
      Sale
      of Assets, Merger, Dissolution.
      Neither Borrower, Citizens nor Farmers shall dispose of all or substantially
      all
      their assets, or any portion of their assets which are material to either of
      them, their business operations or their financial condition, except in the
      ordinary course of business. None of them shall purchase all or substantially
      all of the assets of any person, purchase, create or acquire any interest in
      any
      other enterprise or entity, liquidate, dissolve, consolidate or merge with
      any
      other person or effect a split, reverse split, recapitalization, reorganization,
      reclassification or take any similar corporate action without the prior written
      consent of Bankers’.

    


    4.21
      Financial
      Condition.
      The financial condition of Borrower, Citizens and Farmers, shall at all times
      be
      acceptable to Bankers’, in its sole discretion.

    


    4.22
      Hazardous
      Waste.
      Except as specified at Attachment 3.16, neither Borrower nor its subsidiaries
      have or will permit to be stored or released or discharged upon, in or under
      any
      premises or property owned or leased by them, any toxic materials or hazardous
      substance as defined under applicable federal and state law; nor do either
      of
      them have any knowledge of the prior storage of any such substance or material
      in, on or under any of their respective properties, nor do either of them have
      any knowledge of any environmental spill, damage or release or any environmental
      lien on any of their respective properties.

    


    4.23
      Conduct
      of Business in Ordinary Course.
      Without in any way limiting or otherwise altering the terms, promises, covenants
      and agreements contained herein, Borrower nor its subsidiaries shall not engage
      in any transaction other than in good faith in the ordinary course of
      business.

    


    4.24
      Regulatory
      Proceedings.
      Borrower shall notify Bankers’ in writing within three (3) business days should
      Borrower, Citizens, or Farmers become subject to any Order, Memorandum, Letter
      of Agreement or any proceeding instituted by any governmental regulatory agency
      having jurisdiction over any of them. Upon such notice, Borrower shall provide
      Bankers’ with a plan of action addressing any such proceeding within 90 calendar
      days of the effective date of the proceeding. Furthermore, Borrower shall
      provide updates as to the progress toward achieving satisfactory resolution
      of
      any such proceeding within 30 days of each March 31, June 30, September 30
      and
      December 31 of each year during the term of this Loan Agreement and such
      information pertaining to the proceedings as Bankers’ may request at any
      time.

    


    4.25
      Financial
      Status.
      Citizens and Farmers shall maintain at the end of each fiscal quarter a ratio
      of
      Tier 1 Capital to Risk Based Assets and a ratio of Total Qualifying Capital
      to
      Risk Based Assets, in amounts to qualify as, and meet the criteria of, “well
      capitalized” as specified and defined by the Federal Deposit Insurance
      Corporation.

    


    4.26
      Return
      on Assets.
      Citizens shall maintain a rate of Net Income to Total Assets of a minimum of
      .75
      percent for each fiscal year this Credit Facility is in effect. Farmers shall
      maintain such a ratio of 0.5 percent for fiscal year 2007, 0.6 percent for
      fiscal year 2008, and .75 percent for each fiscal year thereafter that this
      Credit Facility is in effect.

    


    4.27
      Loan
      Loss Reserve.
      Each of Citizens and Farmers shall, at all times, maintain an adequate loan
      loss
      reserve to provide for all of its known and anticipated losses and adequate
      under the requirements of GAAP and standard banking practices. Adequacy shall
      be
      calculated using the methodology determined by Citizens and Farmers and approved
      by their Boards of Directors and validated by their primary bank regulatory
      agency. The reserve shall be at least equal to the lowest amount calculated
      to
      be adequate under their methodology and shall be reported promptly to Bankers’
as of December 31, March 31, June 30 and September 30 of each year.


    


    4.28
      Designation
      of Loans as Non-Accruing.
      Citizens and Farmers shall place each loan made by either of them or in which
      they have purchased a non-recourse participation interest on a non-accrual
      basis
      on their books and records in accordance with the requirements and guidelines
      of
      the governmental body having jurisdiction over Citizens and
      Farmers.

    


    4.29
      Non-Performing
      Loans. 

    


    (A)
      Citizens shall not permit the sum of (i) its aggregate unpaid principal and
      accrued interest on loans and leases or in which it has purchased a non-recourse
      participation and which is more than ninety (90) days past due, (ii) the
      aggregate of its unpaid principal and accrued interest on loans and leases
      or in
      which it has purchased a non-recourse participation and which have been placed
      in a non-accrual basis and (iii) the value on its books of other real estate
      owned as determined by reference to its most recent quarterly report of
      condition and income, to exceed (a) as of any two consecutive fiscal year ends
      2% of the total loans and leases made by Citizens or in which it has purchased
      a
      non-recourse participation, net of unearned income or (b) as of its fiscal
      year
      ends, 5% of the total loans and leases made by Citizens or in which it has
      purchased a non-recourse participation, in each case net of unearned
      income.

    


    (B)
      Farmers shall not permit the sum of (i) its aggregate unpaid principal and
      accrued interest on loans and leases or in which it has purchased a non-recourse
      participation and which is more than ninety (90) days past due, (ii) the
      aggregate of its unpaid principal and accrued interest on loans and leases
      or in
      which it has purchased a non-recourse participation and which have been placed
      in a non-accrual basis and (iii) the value on its books of other real estate
      owned as determined by reference to its most recent quarterly report of
      condition and income, to exceed as of its fiscal year ending December 31, 2006,
      6.5% of the total loans and leases made by Farmers or in which it has purchased
      a non-recourse participation, in each case net of unearned income. Further,
      with
      respect to the fiscal year ending December 31, 2007, this percentage shall
      decrease to 6% and with respect to the fiscal year ending December 31, 2008,
      this percentage shall decrease to 5%. Thereafter, this percentage shall remain
      below 5.0% with respect to each calendar quarter-end.

    


    4.30
      Principal
      Office.
      Borrower shall not change its principal office, or that of Citizens or Farmers,
      without Bankers’ written consent, which shall not be unreasonably withheld by
      Bankers’.

    


    


    V.

    Events
      of Default

    


    Each
      of the following shall constitute an Event of Default under this Agreement
      (whether the occurrence of same shall be voluntary or involuntary or come about
      or be effected by operation of law or pursuant to or in compliance with any
      judgment, decree or order of any court or any order, rule or regulation of
      any
      governmental body):

    


    5.1
      Payments.
      Failure to make payment of the principal of, or interest or cost upon, the
      Term
      Note or the Promissory Note within ten (10) days after the due date of such
      payment.

    


    5.2
      Covenants
      and Agreements.
      If any covenant or agreement required pursuant to this Agreement, the Term
      Note
      and Promissory Note, the Stock Pledge or Security Agreement or any other
      documents supplemental thereto, (other than as referred to in Section 5.1 above)
      to be kept or performed by Borrower or its subsidiaries, shall not be kept
      or
      performed and such failure or breach shall not be remedied within the time
      period, if any, provided in any such loan document; provided that in the case
      of
      a breach of any provision of this Loan Agreement, such failure or breach shall
      not be remedied within thirty (30) days after Bankers’ provides Borrower with
      notice of such breach. Borrower shall be strictly liable and accountable for
      any
      such default by such other person specified.

    


    5.3
      Other
      Obligations.
      If any default shall be made in the due and punctual payment or performance
      of
      any of the other obligations of Borrower or its subsidiaries other than the
      Agreement, the Term Note or the Promissory Note or the Stock Pledge and Security
      Agreement, and such default shall not be remedied within thirty (30) days after
      the date for such payment and/or performance.

    


    5.4
      Representations
      and Warranties.
      If any representation or warranty contained herein shall be untrue at the time
      when made or during the terms of this Agreement.

    


    5.5
      Judgments
      and Liens.
      If a final judgment or judgments for the payment of money in excess of the
      sum
      of Two Hundred Fifty Thousand ($250,000) Dollars in the aggregate shall be
      rendered against either Borrower, Citizens or Farmers and such judgment or
      judgments shall remain unsatisfied and in effect and shall not have been
      discharged by the last to occur of: (i) the expiration of thirty (30)
      consecutive days after the entry thereof, if execution thereon shall not have
      been stayed pending appeal, or (ii) if so stayed, thirty (30) days after the
      expiration of such stay; or if a lien or notice of lien is filed against any
      of
      Borrower’s, Citizens’ or Farmers’ assets (other than a lien of ad valorem taxers
      not yet due and payable or any mechanics’ or materialmen or suppliers’ lien
      filed pursuant to applicable law for monies not yet due and payable), and the
      same is not released within twenty (20) days after the filing
      thereof.

    


    5.6
      Solvency.
      If Borrower or any banking subsidiary of Borrower, as applicable, shall (a)
      discontinue business; or (b) make a general assignment for the benefit of
      creditors; or (c) apply for or consent to the appointment of a receiver, trustee
      or liquidator of all or a substantial part of their assets; (d) be adjudicated
      bankrupt or insolvent; or (e) file a voluntary petition in bankruptcy or file
      a
      petition or answer seeking reorganization or an arrangement with creditors
      to
      seek to take advantage of any other law (whether federal or state) relating
      to
      relief from debtors, or admit (by answer, default or otherwise) the material
      allegations of any involuntary petition filed against it in any bankruptcy,
      reorganization, insolvency or other proceeding (whether federal or state)
      relating to relief from debtors; or (f) suffer the filing of any involuntary
      petition in any bankruptcy, reorganization, insolvency or other proceeding
      (whether federal or state), if the same is not dismissed within thirty (30)
      days
      after the date of such filing; or (g) suffer or permit any judgment, decree
      or
      order entered by a court or governmental agency of competent jurisdiction which
      assumes control of any of them or approves a petition seeking reorganization,
      composition or arrangement of any of them or any other judicial modification
      of
      the rights of any of their respective creditors, or appoints a receiver, trustee
      or liquidator for any of them or for all or a substantial part of any of the
      businesses or assets of any of them; or (h) be enjoined or restrained from
      conducting all or a material part of any of the businesses as then conducted
      and
      the same is not dismissed and dissolved within thirty (30) days after the entry
      thereof. 

    


    5.7
      Impairment
      of Permits, Security of Payment.
      If Borrower, Citizens or Farmers shall fail to seek, gain, obtain, and retain
      all licenses, permits and all other approvals of any governmental agency or
      other person necessary to continue their respective businesses.

    


    5.8
      Borrower
      Impairment.
      If Bankers’, at any time in good faith, shall deem itself insecure or shall
      determine that a substantial likelihood exists that Borrower will be unable
      to
      repay the Credit Facility in accordance with its terms, or perform the other
      obligations of Borrower to Bankers’ arising under this Agreement or any other
      document supplemental hereto.

    


    5.9
      Change
      of Control.
      If Borrower, Citizens or Farmers experiences a Change of Control as defined
      by
      applicable laws and regulations of federal and state agencies. 

    


     

    VI.

    Rights
      and Remedies Upon Default.

    


    Notwithstanding
      any contrary provision or inference herein or elsewhere:

    


    6.1
      Bankers’
      Right to Declare Default in its Sole Discretion.
      If any Event of Default referred to in this Agreement entitled “Events of
      Default”, except for Section 5.6 of that Article, shall occur or begin to exist,
      Bankers’ may declare the Credit Facility, including the Term Note and the
      Promissory Note, and each or all of the other obligations of the Borrower to
      Bankers’ to be, whereupon the same shall be, immediately due and payable in
      full, all without any presentment, demand or notice of any kind, all of which
      are hereby expressly waived by Borrower; and

    


    6.2
      Automatic
      Default.
      If any Event of Default referred to in Section V of the Article of this
      Agreement entitled “Events of Default” shall occur, the Credit Facility, and all
      of Borrower’s other obligations to Bankers’ shall thereupon become immediately
      due and payable in full, all without presentment, demand or notice of any kind,
      all of which are hereby expressly waived by Borrower; and

    


    6.3
      Enforcement.
      Immediately upon a declaration of a Default pursuant to Section 6.1 of this
      Article or the occurrence of an Event of Default resulting in automatic Default
      pursuant to Section 6.2 of this Article, Bankers’ may exercise any and all
      rights at law or in equity to realize upon the security afforded herein or
      under
      any other loan document, including without limitation, the security secured
      pursuant to the Stock Pledge and Security Agreement, the right to seize any
      collateral securing the Credit Facility and the right to commence proceedings
      for the foreclosure upon and sale of any or all of the collateral in any
      sequence or order whatsoever and to pursue all remedies afforded under the
      terms
      of any Loan Document; and

    


    6.4
      Right
      of Set-Off.
      If any Event of Default or default conditions shall occur or begin to exist,
      Bankers’ shall have the right then, or any time thereafter, to set off against,
      and to appropriate and apply toward the payment of the unpaid principal of
      and
      accrued and unpaid interest on the Term Note and/or the Promissory Note, in
      such
      order as Bankers’ may select in its sole and absolute discretion, whether or not
      the Term Note and/or the Promissory Note shall then have matured or be due
      and
      payable and whether or not Bankers’ has declared the Term Note or the Promissory
      Note to be in default and immediately due and payable, any and all deposit
      balances, other sums, indebtedness and other property then held or owed by
      Bankers’ or for the credit or account of Borrower, and in and on all of which
      Borrower hereby grants Bankers’ a first priority security interest and lien to
      secure the payment of the Note, all without notice to or demand upon Borrower
      or
      any person, all such notices and demands being hereby expressly
      waived.

     

    6.5
      Rights
      Cumulative.
      All of the rights and remedies of Bankers’ upon occurrence of an Event of
      Default hereunder shall be cumulative to the greatest extent permitted by law
      and shall be in addition to all those rights and remedies afforded Bankers’ at
      law or in equity or bankruptcy. 

    


     

     

    
 

     

    VII.

    Miscellaneous

    


    7.1
      Courses
      of Dealing; No Waiver.
      No course of dealing in respect of, nor any omission or delay in the exercise
      of, any right, power, remedy or privilege by Bankers’ shall operate as a waiver
      thereof, nor shall any right, power, remedy or privilege of Bankers’ be
      exclusive of any other right, power, remedy or privilege referred to herein
      or
      in any related document, or now or hereafter available at law, in equity, in
      bankruptcy, by statute or otherwise. Each such right, power, remedy or privilege
      may be exercised by Bankers’, either independently or concurrently with others,
      and as often and in such order as Bankers’ may deem expedient. Bankers’ shall
      not be deemed to have waived any rights under this Agreement, unless such waiver
      is given in writing and signed by Bankers’. No delay or omission on the part of
      Bankers’ in exercising any right shall operate as a waiver of such right or any
      other right. A waiver by Bankers’ of a provision of this Agreement shall not
      prejudice or constitute a waiver of Bankers’ right otherwise to demand strict
      compliance with that provision or any other provision of this Agreement. No
      prior waiver by Bankers’, nor any course of dealing between Bankers’ and
      Borrower, shall constitute a waiver of any of Bankers’ rights or of any of
      Borrower’s obligations as to any future transactions. Whenever the consent of
      Bankers’ is required under this Agreement, the granting of such consent by
      Bankers’ in any instance shall not constitute continuing consent to subsequent
      instances where such consent is required and in all cases such consent may
      be
      granted or withheld in the sole discretion of Bankers’.

    


    7.2
      No
      Oral Amendment.
      No amendment or modification of any provision of the Loan Agreement, Note,
      Stock
      Pledge and Security Agreement, or documents supplemental thereto, nor consent
      to
      any departure by any party therefrom, shall be binding and effective unless
      the
      same shall be in writing and signed by Bankers’, which writing shall be strictly
      construed.

    


    7.3
      Indemnification.
      Borrower agrees to indemnify Bankers’, and to defend and hold harmless Bankers’,
      its affiliates, officers, directors, employees and agents from, all claims,
      demands, causes of action, damages, settlement costs and/or expenses (including
      without limitation, attorneys’ fees of counsel selected by Bankers’ to defend)
      which arise out of or in any way connected with the making, maintenance or
      collection of the Credit Facility (including without limitation, claims,
      demands, causes of action, damages, settlement costs and/or expenses resulting
      from or involving the Borrower’s or its subsidiaries, acts or omissions, and
      which are asserted by a third party). This Agreement and all obligations
      provided for by this Section 7.3 shall survive the termination or cancellation
      of this Agreement. All amounts due pursuant to these provisions shall constitute
      a part of the Credit Facility, payable upon demand, and until all such amounts
      are paid, interest shall accrue at the rate set forth in the Term Note and
      Promissory Note as applicable to overdue payments of the principal and/or
      interest. 

    


    7.4
      Time
      of Essence.
      Time shall be of the essence in the performance of all of the obligations of
      Borrower.

    


    7.5
      Successors.
      The provisions of this Loan Agreement shall bind and benefit Borrower and
      Bankers’, and the respective heirs, successors, legal representatives and
      assigns of each of them, including each subsequent holder, if any, of the Term
      Note and Promissory Note.

    


    7.6
      Captions.
      The several captions, section heading and subsection headings of this Agreement
      are inserted for convenience only and shall be ignored in interpreting the
      provision of this Agreement.

    


    7.7
      Governing
      Law.
      This Agreement, the Note, and documents supplemental thereto and all other
      related writings and the respective rights and obligations of the parties
      thereto shall be construed in accordance with and governed by the laws of the
      Commonwealth of Kentucky.

    


    7.8
      Severability.
      The invalidity or unenforceability of any provision hereof shall not affect
      or
      impair the validity or enforceability of any other provisions.

    


    7.9
      Entire
      Agreement.
      This Agreement, the Term Note, the Promissory Note, the Stock Pledge and
      Security Agreement and the documents supplemental thereto contain the final,
      complete and exclusive agreement of the parties pertaining to its subject matter
      and cancel and supersede all prior written and oral agreements pertaining
      hereto.

    


    7.10
      Notices.
      All notices required or permitted to be given hereunder shall be sufficient
      if
      given in writing and delivered personally, or delivered or sent by registered
      or
      certified mail, postage prepaid, addressed as follows:

    


    


    Borrower:                  Robert
      W. Walker, President/CEO

                       Premier
      Financial Bancorp, Inc.

                       2883
      5th
      Avenue

                       Huntington,
      West Virginia 25702

    


    


    Bankers’:          The
      Bankers’ Bank of Kentucky, Inc. 

    Attention:
      John Clark, Executive Vice

    President

    Post
      Office Box 713

    Frankfort,
      Kentucky 40602

    


    or,
      as to each party, at such other address as such party shall have designated
      in a
      written notice to the party giving such notice or communication. All such
      notices and communications shall be, when mailed, in accordance with the
      foregoing, deemed given one (1) day following the date deposited in the United
      States mails, first class mail, postage prepaid.

    


    7.11
      No
      Third Party Beneficiaries.
      The provisions of this Agreement shall inure to the benefit and responsibility
      of the parties hereto, their heirs, successors and assigns (but only to the
      extent such assignment is permitted herein) and shall not benefit or affect
      any
      third party.

    


    7.12
      Gender,
      Number: Accounting Principles.
      As used herein, any gender includes all other genders, the singular includes
      the
      plural, and the plural includes the singular. Except as otherwise provided
      herein, all accounting terms used herein shall be defined in accordance with
      Generally Accepted Accounting Principles.

    


    7.13
      Exhibits.
      Any Exhibits and Attachments hereto, and all terms and provisions thereof,
      are
      deemed to be a part hereof as if fully set forth herein and are deemed to be
      incorporated by reference herein.

    


    7.14
      Compliance
      with Covenants.
      Each covenant by the Borrower contained in the Article of this Agreement
      entitled “Covenants” shall be construed without reference to any other such
      covenant, and any determination of whether is in compliance with any such
      covenant shall be made without reference to whether Borrower is in compliance
      with any other such covenant.

    


    7.15
      Consent
      to Jurisdiction and Venue; Waiver of Jury Trial.
      BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT THE CIRCUIT COURTS
      OF FRANKLIN COUNTY, KENTUCKY AND/OR UNITED STATES DISTRICT COURT FOR THE EASTERN
      DISTRICT OF KENTUCKY, SITTING IN FRANKFORT, KENTUCKY, SHALL BE THE SOLE PROPER
      VENUE FOR THE RESOLUTION OF ANY DISPUTES, CLAIMS OR PROCEEDINGS REGARDING THE
      OBLIGATIONS AND LIABILITIES OF BORROWER UNDER THIS AGREEMENT AND BORROWER HEREBY
      IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO A DETERMINATION OF ANY
      SUCH
      PROCEEDING AGAINST OR INVOLVING BANK BY A COURT IN ANY OTHER VENUE AND AGREE
      NOT
      TO PLEAD OR CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN THE CIRCUIT COURT OF
      FRANKLIN COUNTY, KENTUCKY AND/OR THE UNITED STATES DISTRICT COURT FOR THE
      EASTERN DISTRICT OF KENTUCKY, SITTING IN FRANKFORT, KENTUCKY, HAS BEEN BROUGHT
      IN AN INCONVENIENT FORUM. BORROWER FURTHER AGREES THAT SERVICE OF PROCESS BY
      ANY
      JUDICIAL OFFICER OR BY REGISTERED OR CERTIFIED U.S. MAIL SHALL ESTABLISH
      PERSONAL JURISDICTION OVER BORROWER AND BORROWER WAIVES ANY RIGHTS UNDER THE
      LAWS OF ANY STATE TO OBJECT TO JURISDICTION WITHIN THE COMMONWEALTH OF
      KENTUCKY.

    


    7.16
      Waiver
      of a Jury Trial.
      BORROWER HEREBY AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
      CAUSE
      OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER
      IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED
      IN
      ANY COURT THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING
      WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND
      ALL
      OTHER COMMON LAW AND STATUTORY CLAIMS. BORROWER ACKNOWLEDGES THAT THIS WAIVER
      IS
      A MATERIAL INDUCEMENT FOR BANK TO ENTER INTO A BUSINESS RELATIONSHIP WITH
      BORROWER AND THAT BANK HAS ALREADY RELIED ON THE WAIVER IN ITS RELATED FUTURE
      DEALINGS WITH BORROWER. BORROWER FURTHER WARRANTS AND REPRESENTS THAT IT HAS
      REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND
      VOLUNTARILY WAIVES JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
      THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY
      OR
      IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
      SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT (IF ANY). IN THE EVENT OF
      LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
      THE
      COURT.

    


    7.17
      Relationship
      of the Parties.
      Bankers’ and Borrower intend that the relationship between them be solely that
      of creditor and debtor. Nothing contained in the Loan Documents shall be deemed
      or construed to create a partnership, fiduciary relationship, joint venture
      or
      co-ownership by or between the parties herein. Bankers’ shall not, in any way,
      be responsible or liable for the debts, losses, obligations or duties of
      Borrower. All obligations to pay property or other taxes, assessments, insurance
      on the collateral and all other fees and charges arising from the ownership
      and
      operation of the assets of Borrower shall be the sole responsibility of the
      Borrower.

    


    


    IN
      WITNESS WHEREOF,
      the parties have caused this Agreement to be signed by their duly authorized
      representatives as of the date first set forth above.

    


    


    The
      Bankers’ Bank of Kentucky, Inc.:

    


    /s/
      John Clark                     

    By:
      John Clark

    Title:
      Executive Vice President

    


    


    Premier
      Financial Bancorp, Inc.:

    


    /s/
      Robert W. Walker                 

    By:
      Robert W. Walker

    Title:
      President/CEO

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    ATTACHMENTS

    
      


      


      


      3.9   - Contracts

      3.10    - Title
        to Shares and Assets

      3.15    -
        Absence of
        Changes

      3.16    -
        Environmental
        Matters

      4.16    -
        Exceptions to Lease
        Obligations

       

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      Schedule
        3.9 Contracts

      


      1.) Loan
        Agreement dated January 31, 2006 between Borrower and First Guaranty Bank,
        Hammond, Louisiana

      


      2.) Data
        processing contract dated December 20, 2004 between Borrower and Fiserv
        Solutions, Inc. also obligating Farmers and Citizens for their respective
        portions of services rendered.

      


      3.) Item
        processing contract dated December 30, 2004 between Borrower and Fiserv
        Solutions, Inc. also obligating Farmers and Citizens for their respective
        portions of services rendered.

      


      4.) ATM
        processing contract dated November 28, 2001 between Farmers and Fifth Third
        Bank.

      


      5.) ATM
        processing contract dated November 28, 2001 between Citizens and Fifth Third
        Bank.

      


      6.) Overdraft
        permission (Bounce Protection) contract dated November 9, 2001 between Citizens
        and Pinnacle.

      


      7.) Overdraft
        permission (Bounce Protection) contract dated January 31, 2003 between Farmers
        and Pinnacle.

      


      8.) Internet
        access and bill payment services contract dated March 14, 2005 between Citizens
        and Funds Xpress.

      


      9.) Checkbook
        printing services contract dated February 23, 2006 between Borrower and Clarke
        American.

      


      


      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      Schedule
        3.10 Title to Shares and Assets

      


      1.) Loan
        Agreement dated January 31, 2006 between Borrower and First Guaranty Bank,
        Hammond, Louisiana encumbering Borrower’s stock ownership of Boone County Bank,
        Inc.

      


      2.) Standard
        FHLB blanket lien on 1-4 family mortgages at Citizens to secure the following
        FHLB borrowings: 

                  
$2,000,000
        bullet
        maturity on May 3, 2010

               
        $2,000,000 bullet maturity on May 24, 2010

      


      3.) Standard
        FHLB blanket lien on 1-4 family mortgages at Farmers to secure the following
        FHLB borrowings:

      
        $1,000,000
          amortizing 10 year note maturing on March 9, 2011, 
                  Sept
        30, 2006 balance, $407,905

      $2,000,000
        amortizing 10 year note maturing on March 27, 2011, 

      Sept
        30, 2006 balance, $811,045

      $400,000
        amortizing 10 year note maturing on April 4, 2011, 

      Sept
        30, 2006 balance, $165,000

      $1,000,000
        amortizing 10 year note maturing on June 1, 2011, 

      Sept
        30, 2006 balance, $427,791

      $1,500,000
        amortizing 10 year note maturing on June 5, 2011, 

      Sept
        30, 2006 balance, $640,262

      $1,200,000
        amortizing 10 year note maturing on October 31, 2011, 

      Sept
        30, 2006 balance, $554,659

      $1,500,000
        amortizing 10 year note maturing on June 11, 2012, 

      Sept
        30, 2006 balance, $625,774

      


      4.) FHLB
        holds bonds totaling $4,400,000 face value $4,323,000 market value as of
        September 30, 2006 in safekeeping as collateral securing the FHLB borrowings
        at
        Farmers detailed in item 3 above.

      


      5.) Citizens
        and Farmers routinely pledge investment portfolio securities in the normal
        course of business to collateralize certain deposits from customers that
        exceed
        $100,000. The aggregate pledged balance is reported quarterly in the FDIC
        call
        report on Schedule RC-B.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      Schedule
        3.15 Absence of Changes

      


      Since
        December 31, 2005 the following events have occurred:

      


      1.) Borrower
        entered into a $7.0 million loan agreement dated January 31, 2006 with First
        Guaranty Bank, Hammond, Louisiana. The proceeds were used to redeem $7.0
        million
        of Trust Preferred Securities outstanding. After the redemption there were
        $8.25
        million of Trust Preferred Securities still outstanding.

      


      2.) A
        decision was made to terminate in due course the trust department line of
        business at Farmers. This process is on-going as trust agreements expire
        and are
        not renewed.

      


      



      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      Schedule
        3.16 Environmental Matters

      


      1.) Mt.
        Vernon Financial Holdings, Inc. (Mt. Vernon), a wholly owned non-banking
        subsidiary of Borrower, owns title to a tract of land acquired through
        foreclosure that was once a Petroleum Storage Tank Facility. In preparing
        the
        property for sale, Mt. Vernon contracted for remedial environmental clean-up
        services in order to secure compliance with the 401 KAR 100:030 remediation
        requirements. Notice of such compliance was obtained from the Kentucky Division
        of Waste Management in a letter dated October 14, 2005 whereby no further
        action
        was required. 

       

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      Schedule
        4.16 Exceptions to Lease Obligations

      


      1.) Lease
        agreement between Borrower and River City Properties, LLC (“lessor”) dated
        September 1, 2002.

      


      2.) Lease
        agreement between Citizens and Triad Exchange, LLC (“lessor”) dated March 9,
        2004.

      


      3.) Lease
        agreement between Citizens and Bee Mart Express, Inc. now FDE Properties
        (“lessor”) dated September 18, 1997.