Promissory Note between Premier Financial Bancorp and The Kentucky Bankers’ Bank dated November 10, 2006.


    Exhibit
      10.3


    


     

    PROMISSORY
      NOTE

    


     

    
      	 $3,500,000	
              November
                10, 2006 

            


    

     

    
          
(1)
        For
        value received, the undersigned, Premier Financial Bancorp, Inc., a Kentucky
        corporation with principal offices in Huntington, West Virginia (“Borrower”)
        hereby promises to pay in lawful money of the United States of America to
        the
        order of The Bankers’ Bank of Kentucky, Inc., a Kentucky banking organization,
        with main offices in Frankfort, Kentucky (“Lender”), at the main offices of
        Lender, 107 Progress Drive, Frankfort, Kentucky, 40602, on November 9 of
        2007,
        the outstanding principal amount loaned to Borrower under this Promissory
        Note,
        and not previously repaid, together with interest due and owing as of such
        date
        upon such outstanding principal amount, as reflected by the books and records
        of
        the Lender. The Parties agree and acknowledge that the Borrower may request
        and
        receive monies from Lender under this Promissory Note from time to time,
        but the
        aggregate outstanding principal balance at any time shall not exceed Three
        Million Five Hundred Thousand ($3,500,000) Dollars, and that the right to
        request and receive monies from Lender hereunder shall cease and terminate
        on
        November 9, 2007.

    

    


    (2)
      The outstanding principal balance under this Promissory Note shall bear annual
      interest at the rate of the Prime Rate, as announced from time to time by J.P.
      Morgan Chase Bank, New York, New York, minus one (1%) percent, adjusted daily.
      In addition to the interest payments required under this Paragraph (1) above,
      interest on this Promissory Note shall be due and payable on the 5th day of
      each, January, April, July and October during the term of this Promissory Note,
      and at the maturity date hereof. The Prime Rate of J.P. Morgan Chase Bank will
      function only as a tool for setting the rate on this Promissory Note and Lender
      does not represent that such rate has any relationship to the rate it charges
      its other customers.

    


    (3)
      All payments on account of indebtedness evidenced by this Promissory Note shall
      be first applied to interest, costs and expenses, and then to principal, and
      interest shall be computed on the basis of a 360-day year.

    


         
(4)
      The occurrence of any one or more of the following shall constitute a Default
      or
      Event of Default under this Promissory Note as those terms are defined under
      the
      Loan Agreement described above:

     

            (i)
      Failure to make
      any payment of principal, interest or costs within ten (10) days after any
      such
      payment is due hereunder; and

     

            (ii)
      The occurrence
      of any other Default or Event of Default under the Loan Agreement, the Term
      Note, or the Stock Pledge and Security Agreement executed of even date herewith
      by Lender and Borrower.

    


    (5)
      Time is of the essence with respect to this Promissory Note and in the Event
      of
      Default or an Event of Default under this Promissory Note, then (i) the entire
      principal balance hereof, and all accrued interest and costs shall, at the
      option of the Lender, without notice, bear interest at a rate from time to
      time
      equal to five (5%) percentage points over what otherwise would have been the
      Promissory Note rate from the date of Default or Event of Default and until
      said
      is cured; and (ii) the entire principal balance hereof and all accrued interest
      and costs shall immediately become due and payable at the option of the Lender
      without notice. Lender’s failure to exercise any option hereunder shall not
      constitute a waiver of the right to exercise the same at a subsequent time
      or
      upon the occurrence of any such Default or Event of Default.

    


    (6)
      Borrower acknowledges that, if any payment, whether of principal, interest
      or
      costs, under this Promissory Note is not paid when due, Lender will, as a result
      thereof, incur costs not contemplated hereunder, the exact amount of which
      would
      be extremely difficult or impractical to ascertain. Such costs include, without
      limitation, process and accounting charges. Therefore, Borrower hereby agrees
      to
      pay to Lender with respect to each payment of any nature which is not received
      by Lender within twenty (20) days after such payment is due hereunder, a late
      charge equal to three (3%) percent of the amount of such payment. Borrower
      and
      Lender agree that such late charge represents a fair and reasonable estimate
      of
      the cost(s) Lender will incur by reason of any such late payment. Acceptance
      of
      such late charge by Lender shall in no event constitute a waiver of a Default
      or
      Event of Default with respect to the overdue payment and shall not prohibit
      or
      prevent Lender from exercising any of the other rights and remedies available
      to
      Lender.

    


    (7)
      If there is any Default or Event of Default under this Promissory Note and
      Lender consults with an attorney regarding the enforcement of any of its rights
      hereunder or under the Stock Pledge and Security Agreement, the Term Note or
      the
      Loan Agreement executed of even date herewith, or if this Promissory Note is
      placed in the hands of an attorney for collection, or if suit be brought to
      enforce this Promissory Note, or Loan Agreement, the Term Note or the Stock
      Pledge and Security Agreement, Borrower promises and agrees to pay
      all costs thereof, including reasonable attorneys fee’s. Such costs and
      attorneys fees shall include, without limitation, costs and attorneys fee’s in
      any appeal or in any proceeding under any present or future federal bankruptcy
      act, state receivership law or federal or state banking agency
      proceedings.

    


    (8)
      This Promissory Note is secured by a pledge under the Stock Pledge and Security
      Agreement of even date herewith of one hundred (100%) percent of the outstanding
      common stock of Citizens Deposit Bank and Trust, Vanceburg, Kentucky, and one
      hundred (100%) percent of the outstanding common stock of Farmers Deposit Bank,
      Eminence, Kentucky.

    


    (9)
      Borrower hereby waives presentment and demand for payment, notice of dishonor,
      protest and notice of protest.

    


    (10)
      This Promissory Note shall be construed and enforced and otherwise governed
      by
      the Laws of the Commonwealth of Kentucky.

    


    (11)
      As used herein, the term “Lender” shall mean any holder or owner of this
      Promissory Note, or any portion thereof, or participation therein.

    


    


     

    
      Premier
        Financial Bancorp, Inc.

      A
        Kentucky Corporation

      


      By:
        /s/ Robert W. Walker            

       

      


      Title:
        Chief Executive Officer