UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003

                                       or

            [ ] Transition Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

                         For the transition period from
                                       to
                           -----------    -----------

                         Commission File Number 0-14412

                        FARMERS CAPITAL BANK CORPORATION
             (Exact name of registrant as specified in its charter)


          KENTUCKY                                      61-1017851
---------------------------------------- ---------------------------------------
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)


P.O. BOX 309, 202 WEST MAIN STREET
FRANKFORT, KENTUCKY                                       40602
---------------------------------------- ---------------------------------------
(Address of principal executive offices)               (Zip Code)


       Registrant's telephone number, including area code: (502) 227-1600

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 Securities Exchange Act of 1934).

                                   Yes |X| No


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 $.125 per share
                  6,722,551 shares outstanding at May 12, 2003
<PAGE>

                                TABLE OF CONTENTS


Part I - Financial Information                                          Page No.

     Item 1 - Financial Statements

         Unaudited Consolidated Balance Sheets -
             March 31, 2003 and December 31, 2002                            3

         Unaudited Consolidated Statements of Income -
             For the Three Months Ended
             March 31, 2003 and March 31, 2002                               4

         Unaudited Consolidated Statements of Comprehensive Income -
             For the Three Months Ended
             March 31, 2003 and March 31, 2002                               5

         Unaudited Consolidated Statements of Cash Flows -
             For the Three Months Ended
             March 31, 2003 and March 31, 2002                               6

         Unaudited Consolidated Statements of Changes in
             Shareholders' Equity -
             For the Three Months Ended
             March 31, 2003 and March 31, 2002                               7

         Notes to Unaudited Consolidated Financial Statements                8

     Item 2 - Management's Discussion and Analysis of Financial
               Condition and Results of Operations                          10

     Item 3 - Quantitative and Qualitative Disclosures About Market Risk    17

     Item 4 - Controls and Procedures                                       18

Part II - Other Information

     Item 1 - Legal Proceedings                                             18

     Item 6 - Exhibits and Reports on Form 8-K                              19

     Signatures                                                             20

     Certification of Chief Executive Officer                               21

     Certification of Chief Financial Officer                               22
<PAGE>
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
<TABLE>
<CAPTION>
UNAUDITED CONSOLIDATED BALANCE SHEETS
---------------------------------------------------------------------------------------------------------------------------
                                                                                             March 31,       December 31,
(In thousands, except share data)                                                                2003               2002
---------------------------------------------------------------------------------------------------------------------------
<S>                                                                                        <C>                <C>
ASSETS
Cash and cash equivalents:
     Cash and due from banks                                                               $    67,021        $    44,083
     Interest bearing deposits in other banks                                                    3,500              3,947
     Federal funds sold and securities purchased under
          agreements to resell                                                                  27,286             19,071
---------------------------------------------------------------------------------------------------------------------------
          Total cash and cash equivalents                                                       97,807             67,101
---------------------------------------------------------------------------------------------------------------------------
Investment securities:
     Available for sale, amortized cost of $293,650 (2003) and $407,560 (2002)                 297,814            413,038
     Held to maturity, fair value of $29,068 (2003) and $30,312 (2002)                          27,333             28,519
---------------------------------------------------------------------------------------------------------------------------
          Total investment securities                                                          325,147            441,557
---------------------------------------------------------------------------------------------------------------------------
Loans, net of unearned income                                                                  738,244            738,639
Allowance for loan losses                                                                      (11,129)           (11,061)
---------------------------------------------------------------------------------------------------------------------------
          Loans, net                                                                           727,115            727,578
---------------------------------------------------------------------------------------------------------------------------
Premises and equipment, net                                                                     24,198             24,155
Company-owned life insurance                                                                    24,214
Other assets                                                                                    17,923             15,211
---------------------------------------------------------------------------------------------------------------------------
          Total assets                                                                     $ 1,216,404        $ 1,275,602
---------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Deposits:
     Noninterest bearing                                                                   $   164,776        $   141,238
     Interest bearing                                                                          795,468            816,242
---------------------------------------------------------------------------------------------------------------------------
          Total deposits                                                                       960,244            957,480
---------------------------------------------------------------------------------------------------------------------------
Federal funds purchased and securities sold under agreements to repurchase                      54,839            115,979
Other short-term borrowings                                                                      8,641              9,207
Long-term debt                                                                                  58,170             57,152
Dividends payable                                                                                2,158              2,191
Other liabilities                                                                                7,932              7,820
---------------------------------------------------------------------------------------------------------------------------
          Total liabilities                                                                  1,091,984          1,149,829
---------------------------------------------------------------------------------------------------------------------------
Commitments and contingencies

SHAREHOLDERS' EQUITY
Common stock, par value $.125 per share
     9,608,000 shares authorized; 8,138,877 and 8,135,977
     shares issued at March 31, 2003 and December 31, 2002, respectively                         1,017              1,017
Capital surplus                                                                                 17,801             17,623
Retained earnings                                                                              142,634            141,199
Treasury stock, at cost
     1,411,838 and 1,344,463 shares at March 31, 2003 and
     December 31, 2002, respectively                                                           (39,739)           (37,627)
---------------------------------------------------------------------------------------------------------------------------
          Total shareholders' equity                                                           124,420            125,773
---------------------------------------------------------------------------------------------------------------------------
          Total liabilities and shareholders' equity                                       $ 1,216,404        $ 1,275,602
---------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>


UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
--------------------------------------------------------------------------------
(In thousands, except per share data)
Three months ended March 31,                                 2003          2002
--------------------------------------------------------------------------------
INTEREST INCOME
Interest and fees on loans                               $ 12,229      $ 13,064
Interest on investment securities:
     Taxable                                                2,299         2,742
     Nontaxable                                               803           911
Interest on deposits in other banks                            15            20
Interest of federal funds sold and securities
     purchased under agreements to resell                     162           211
--------------------------------------------------------------------------------
          Total interest income                            15,508        16,948
--------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits                                        4,647         5,981
Interest on federal funds purchased and securities
     sold under agreements to repurchase                      259           473
Interest on other borrowed funds                              550           339
--------------------------------------------------------------------------------
          Total interest expense                            5,456         6,793
--------------------------------------------------------------------------------
          Net interest income                              10,052        10,155
--------------------------------------------------------------------------------
Provision for loan losses                                     385           121
--------------------------------------------------------------------------------
          Net interest income after provision
          for loan losses                                   9,667        10,034
--------------------------------------------------------------------------------
NONINTEREST INCOME
Service charges and fees on deposits                        1,835         1,819
Other service charges, commissions, and fees                  840           821
Data processing income                                        345           336
Trust income                                                  399           367
Investment securities gains, net                              147           597
Gain on sale of mortgage loans, net                           269           129
Income from company-owned life insurance                      265
Other                                                          66            52
--------------------------------------------------------------------------------
          Total noninterest income                          4,166         4,121
--------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits                              5,068         5,150
Occupancy expenses, net                                       658           571
Equipment expenses                                            937           926
Bank franchise tax                                            334           307
Other                                                       2,142         2,083
--------------------------------------------------------------------------------
          Total noninterest expense                         9,139         9,037
--------------------------------------------------------------------------------
          Income before income taxes                        4,694         5,118
--------------------------------------------------------------------------------
Income tax expense                                          1,101         1,336
--------------------------------------------------------------------------------
          Net income                                     $  3,593      $  3,782
--------------------------------------------------------------------------------
NET INCOME PER COMMON SHARE
     Basic                                               $    .53      $    .55
     Diluted                                                  .53           .54
--------------------------------------------------------------------------------
WEIGHTED AVERAGE SHARES OUTSTANDING
     Basic                                                  6,764         6,901
     Diluted                                                6,798         6,961
--------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
<PAGE>



UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
--------------------------------------------------------------------------------
Three months ended March 31, (In thousands)                   2003        2002
--------------------------------------------------------------------------------
NET INCOME                                                 $ 3,593     $ 3,782
Other comprehensive loss:
     Unrealized loss on available for sale
     securities arising during the period, net of tax
     of $(398) and $(415), respectively                       (740)       (770)
Reclassification adjustment for prior period
     unrealized gain recognized during current period,
     net of tax of $(61) and $(218), respectively             (114)       (404)
--------------------------------------------------------------------------------
Other comprehensive loss                                      (854)     (1,174)
--------------------------------------------------------------------------------
COMPREHENSIVE INCOME                                       $ 2,739     $ 2,608
--------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
<PAGE>

<TABLE>
<CAPTION>
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
------------------------------------------------------------------------------------------------------
Three months ended March 31, (In thousands)                                      2003           2002
------------------------------------------------------------------------------------------------------
<S>                                                                          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                                              $  3,593     $    3,782
     Adjustments to reconcile net income to net cash provided
          by operating activities:
          Depreciation and amortization                                           741            729
          Net amortization of investment security premiums and (discounts):
                Available for sale                                                453           142
                Held to maturity                                                  (18)          (16)
          Provision for loan losses                                               385           121
          Noncash compensation expense                                            107           166
          Mortgage loans originated for sale                                  (15,555)       (8,666)
          Proceeds from sale of mortgage loans                                 13,563         7,591
          Deferred income tax expense (benefit)                                    86          (256)
          Gain on sale of mortgage loans, net                                    (269)         (129)
          Gain on sale of premises and equipment                                   (2)
          Gain on sale of available for sale investment securities, net          (147)         (597)
          Decrease in accrued interest receivable                                 234           597
          (Increase) decrease in other assets                                  (3,211)          708
          Decrease in accrued interest payable                                   (186)          (66)
          Increase in other liabilities                                           672         1,357
------------------------------------------------------------------------------------------------------
             Net cash provided by operating activities                            446         5,463
------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
     Proceeds from maturities and calls of investment securities:
          Available for sale                                                  134,522       156,811
          Held to maturity                                                      1,204         2,873
     Proceeds from sale of available for sale investment
           securities                                                          74,137       100,438
     Purchase of available for sale investment securities                     (95,055)     (263,373)
     Loans originated for investment, net of principal collected                2,339        15,937
     Purchase of company-owned life insurance                                 (23,949)
     Purchase of premises and equipment                                          (785)         (391)
     Proceeds from sale of equipment                                                3
------------------------------------------------------------------------------------------------------
             Net cash provided by investing activities                         92,416        12,295
------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
     Net increase (decrease) in deposits                                        2,764        (5,910)
     Net decrease in federal funds purchased and securities
           sold under agreements to repurchase                                (61,140)       (4,358)
     Proceeds from long-term debt                                               1,683        14,500
     Repayments of long-term debt                                                (665)         (636)
     Net (decrease) increase in other short-term borrowings                      (566)        6,700
     Dividends paid                                                            (2,191)       (2,152)
     Purchase of common stock                                                  (2,112)         (891)
     Stock options exercised                                                       71           392
------------------------------------------------------------------------------------------------------
             Net cash (used in) provided by financing activities              (62,156)        7,645
------------------------------------------------------------------------------------------------------
             Net increase in cash and cash equivalents                         30,706        25,403
------------------------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of year                                 67,101       106,385
------------------------------------------------------------------------------------------------------
             Cash and cash equivalents at end of period                      $ 97,807     $ 131,788
------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
     Interest                                                                 $ 5,642       $ 6,859
Cash dividend declared and unpaid                                               2,158         2,138
------------------------------------------------------------------------------------------------------
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
Three months ended                        Common Stock       Capital    Retained      Treasury Stock   Comprehensive  Shareholders'
March 31, 2003 and 2002               Shares     Amount      Surplus    Earnings   Shares     Amount       Income         Equity
------------------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>       <C>         <C>        <C>         <C>     <C>            <C>           <C>
  Balance at January 1, 2003           8,136     $1,017      $17,623    $141,199    1,344   $(37,627)      $3,561        $125,773
Net income                                                                 3,593                                            3,593
Other comprehensive loss                                                                                     (854)           (854)
Cash dividends declared,
  $.32 per share                                                          (2,158)                                          (2,158)
Purchase of common stock                                                               68     (2,112)                      (2,112)
Stock options exercised                    3                      71                                                           71
Noncash compensation expense
  attributed to stock option grants                              107                                                          107
------------------------------------------------------------------------------------------------------------------------------------
  Balance at March 31, 2003            8,139     $1,017      $17,801    $142,634    1,412   $(39,739)      $2,707        $124,420
------------------------------------------------------------------------------------------------------------------------------------



------------------------------------------------------------------------------------------------------------------------------------
  Balance at January 1, 2002           8,058     $1,007      $15,179    $137,227    1,153   $(31,077)      $1,224        $123,560
Net income                                                                 3,782                                            3,782
Other comprehensive loss                                                                                   (1,174)         (1,174)
Cash dividends declared,
  $.31 per share                                                          (2,138)                                          (2,138)
Purchase of common stock                                                               25       (891)                        (891)
Stock options exercised                   16          2          390                                                          392
Noncash compensation expense
  attributed to stock option grants                              166                                                          166
------------------------------------------------------------------------------------------------------------------------------------
  Balance at March 31, 2002            8,074     $1,009      $15,735    $138,871    1,178   $(31,968)      $   50        $123,697
------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.   BASIS OF PRESENTATION

The consolidated  financial  statements  include the accounts of Farmers Capital
Bank  Corporation  (the  "Company"),   a  financial  holding  company,  and  its
subsidiaries,  including its principal subsidiary,  Farmers Bank & Capital Trust
Company.  All  significant  intercompany  transactions  and  accounts  have been
eliminated in consolidation.

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, 2002.

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.   COMPANY-OWNED LIFE INSURANCE

The Company has purchased life insurance  policies on certain key employees with
their  knowledge and consent.  Company-owned  life  insurance is recorded at its
cash surrender  value, or the amount that can be realized,  on the  consolidated
balance sheet. The related change in cash surrender value and proceeds  received
under the policies are  reported on the  consolidated  statement of income under
the caption "Income from company-owned life insurance".

4.   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 March 31, 2003 and 2002.


   --------------------------------------------------------------
   (In thousands, except per share data)
   Three months ended March 31,                  2003        2002
   --------------------------------------------------------------

   Net income, basic and diluted            $  3,593    $   3,782
   --------------------------------------------------------------

   Average shares outstanding                  6,764        6,901
   Effect of dilutive stock options               34           60
   --------------------------------------------------------------
   Average diluted shares outstanding          6,798        6,961
   --------------------------------------------------------------

   Net income per share, basic              $    .53    $     .55
   Net income per share, diluted                 .53          .54
   --------------------------------------------------------------


5.    STOCK-BASED COMPENSATION

In 1997, the Company's Board of Directors  approved a nonqualified  stock option
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 plan.  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  recognizes
noncash  compensation  expense based on the intrinsic value of the stock options
measured on the date of shareholder ratification of the plan.

The Company granted 54,000  additional  options during 2000 in which there is no
compensation  expense being recognized  pursuant to APB No. 25. 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
table below.


   ---------------------------------------------------------------------------
     (In thousands, except per share data)
     Three months ended March 31,                         2003           2002
   ---------------------------------------------------------------------------
     NET INCOME
       As reported                                    $  3,593      $   3,782
       Add:  Stock-based employee compensation
             expense included in reported net
             income, net of related tax effects             70            108
       Less: Stock-based compensation expense
             determined under fair value based
             method for all awards, net of related
             tax effects                                   (85)          (126)
    ---------------------------------------------------------------------------
     Proforma                                         $  3,578      $   3,764
    ---------------------------------------------------------------------------
     NET INCOME PER COMMON SHARE
       Basic, as reported                             $    .53      $     .55
       Basic, proforma                                     .53            .55

       Diluted, as reported                                .53            .54
       Diluted, proforma                                   .53            .54
    ---------------------------------------------------------------------------

The fair value of the options granted are estimated as of the  measurement  date
using the Black-Scholes option pricing model with the following weighted average
assumptions  used for grants in 2000 and 1997,  respectively:  dividend yield of
3.12% and 3.18%; expected volatility of 29.6% and 23.4%; risk-free interest rate
of 6.71% and  5.75%;  and  expected  life of seven  years for both  grants.  The
weighted  average fair value of options  granted  during 2000 and 1997 was $9.25
and $16.11 per share, respectively.

The plan  provides for the granting of options to purchase up to 450,000  shares
of the  Company's  common stock at a price equal to the fair market value of the
Company's  common  stock on the  date the  option  is  granted.  The term of the
options  expires after ten years from the date on which the options are granted.
Options  granted  under the plan vest ratably over various time periods  ranging
from four to seven years.  All options granted must be held for a minimum of one
year before they can be  exercised.  Forfeited  options  are  available  for the
granting of additional stock options under the plan.

Item 2.  Management's Discussion and Analysis of Financial Condition and Result
-------------------------------------------------------------------------------
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.

RESULTS OF OPERATIONS

                    FIRST QUARTER 2003 VS. FIRST QUARTER 2002
                    -----------------------------------------

The Company reported net income of $3.6 million for the first quarter of 2003, a
decrease of $189  thousand or 5.0%  compared to $3.8 million for the same period
in 2002. Basic net income per share was $.53 for the current quarter, a decrease
of $.02 or 3.6% compared to $.55 a year  earlier.  On a diluted per share basis,
net income decreased $.01 or 1.9% to $.53 in the quarterly comparison.  The 3.6%
decrease in basic net income per share is 140 basis points  better than the 5.0%
decrease  reported  in dollar  terms due to the  effect of fewer  common  shares
outstanding pursuant to the Company's stock purchase program.

The decrease in net income is primarily  attributed  to a $450 thousand or 75.4%
decrease  in gains on the sale of  available  for sale  securities  included  in
noninterest  income.  Other factors  contributing  to the decrease in net income
include the following:  a $103 thousand or 1.0% decrease in net interest  income
to $10.1 million;  a $264 thousand or 218.2%  increase in the provision for loan
losses to $385  thousand;  and a $102 thousand or 1.1%  increase in  noninterest
expenses  to $9.1  million.  Results  that had a  positive  effect on net income
include the following:  an increase in noninterest income (excluding  securities
gains) of $495 thousand or 14.0% to $4.0 million;  and a reduction in income tax
expense of $235 thousand or 17.6% to $1.1 million.

The return on average  assets ("ROA") was 1.17% for the first quarter of 2003, a
decrease of 11 basis  points  compared to 1.28%  reported for the same period of
2002.  Significant  components of the 11 basis point decrease in ROA include the
following:  a decrease in net interest  margin of 28 basis  points to 3.71%;  an
increase in the earning asset ratio  contributing 9 basis points; an increase of
9 basis points in the provision for loan losses  relative to average  assets;  a
decrease of 8 basis points in noninterest  expense relative to average assets; a
3 basis point decrease in noninterest  income relative to average assets;  and a
12 basis point decrease in income taxes relative to average earning assets.  The
return on average  equity was 11.66% for the first quarter of 2003,  compared to
12.35%  for the same  period of 2002.  The  decrease  is due to lower net income
reported in the current period coupled with a slight  increase in average equity
compared to the same period a year ago.

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

Although continuing  weaknesses in the overall economic environment are present,
the current  interest rate  environment is less volatile  compared to a year ago
when short-term interest rates began to stabilize.  Actions taken by the Federal
Reserve  Board (the "Fed") have  resulted in a general  reduction in  short-term
interest  rates  since the first  quarter  of 2002 and have now  leveled  off to
historic lows. Fed changes to short-term  interest  rates,  left unchanged since
December  2001,  were reduced by an  additional 50 basis points in November 2002
with a 50 basis points reduction in the federal funds rate. The effects of prior
rate  reductions  by the Fed along with  intense  competition  in the  Company's
market areas continue to negatively  impact net interest  margin.  The effect of
the Fed's actions on the Company has generally led to interest  rates on earning
assets declining more rapidly than rates paid on interest  bearing  liabilities.
During a falling rate environment,  the challenge is to reduce the rates paid on
interest bearing liabilities  (primarily  deposits) to offset the decline in the
yield on variable rate assets (primarily  loans) while remaining  competitive in
our markets. The Company's tax equivalent ("TE") yield on earning assets for the
current three months was 5.64%, a reduction of 88 basis points from 6.52% in the
same  period a year ago.  The cost of funds for the  current  three  months  was
2.31%, a decline of 67 basis points  compared to 2.98% in the same period a year
earlier.  A goal of the Company in the current  interest rate  environment is to
increase earning assets and decrease the interest rates paid on interest bearing
liabilities.  Average  earning  assets  increased  $60.8 million or 5.6% to $1.1
billion in the quarterly  comparison.  As a percentage of total average  assets,
earning assets  increased 160 basis points to 92.35% from 90.75%.  This increase
had the effect of adding an additional 9 basis points to ROA in the comparison.

Interest  income totaled $15.5 million for the first quarter of 2003, a decrease
of $1.4 million or 8.5% compared to the same period in the prior year.  Interest
expense totaled $5.5 million,  a decrease of $1.3 million or 19.7%. Net interest
income fell $103 thousand or 1.0% in the comparison and totaled $10.1 million at
March 31, 2003.

Interest and fees on loans  totaled $12.2  million,  a decrease of $835 thousand
mainly due to a decrease in the average rate  earned.  Average  loans  increased
$46.9  million or 6.8% to $736.0  million in the  comparison  due to higher loan
demand in a lower rate environment.  The tax equivalent yield on loans decreased
96 basis  points to 6.80% from 7.76% and  offset the  effects of higher  average
balances on interest income.  Interest on taxable securities was $2.3 million, a
decrease of $443  thousand or 16.2% due  primarily  to a decrease in the average
rate earned.  The average rate earned on taxable  securities  decreased 96 basis
points to 3.30% from  4.26% and  offset  the  effect of a $21.8  million or 8.4%
increase in the average balance. Interest on nontaxable securities declined $108
thousand or 11.9% due to a $9.8 million decrease in the average balance to $71.6
million from $81.4 million.  Interest on short-term investments,  including time
deposits in other banks,  federal funds sold,  and  securities  purchased  under
agreements  to resell,  decreased  $54  thousand,  which is due  primarily  to a
decrease in the average rate earned on these  investments  of 42 basis points to
1.22% from 1.64%.

Interest expense on deposits  decreased $1.3 million or 22.3% to $4.6 million in
the quarterly  comparison.  This decrease resulted from a general decline in the
average rate paid  throughout  the deposit  portfolio  and  correlates  with the
general decline in market interest rates in the reporting  periods.  The decline
in the average rates paid offset increases in average  balances.  The decline in
interest  expense on deposits was as follows:  time  deposits  $969  thousand or
20.5%;  interest  bearing  demand  deposits $205 thousand or 36.7%;  and savings
deposits $160  thousand or 26.1%.  The average rate paid on time  deposits,  the
largest component of interest bearing deposits,  was 3.73% for the first quarter
of 2003  compared to 4.88% for the same period of 2002.  The average  balance of
time deposits  increased  $17.6 million or 4.4% to $417.6  million.  The average
rate paid on interest  bearing demand deposits  declined 41 basis points to .64%
from 1.05% while the average  balance  increased  $6.5 million or 3.0% to $222.9
million.  The average rate paid on savings deposits decreased 45 basis points to
1.08% from 1.53% while the average  balance  increased  $7.5  million or 4.6% to
$170.2 million from $162.7 million.  Interest  expense on overnight  borrowings,
consisting of federal funds  purchased and securities  sold under  agreements to
repurchase,  decreased  $214  thousand  due to a 47 basis  point  decline in the
average rate paid along with a $27.7 million  decline in their average  balance.
Interest  expense  on  other  borrowed  funds  increased  $211  thousand  in the
comparison as additional  borrowings  from the Federal Home Loan Bank  increased
the average  balance  outstanding.  The average  balance of other borrowed funds
totaled $65.6 million,  an increase of $30.3 million or 85.9% in the comparison.
The average rate paid on other  borrowed funds declined 50 basis points to 3.40%
from 3.90%.

The net interest margin (TE) decreased 28 basis points to 3.71% during the first
quarter of 2003 compared to 3.99% in the first quarter of 2002.  The decrease in
net interest  margin is primarily  attributed to a 21 basis point decline 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 3.54% in the first
quarter of 2002. The effect of noninterest  bearing sources of funds contributed
an additional 7 basis points to the decline in net interest  margin.  The effect
of  noninterest  bearing  sources  of funds  on net  interest  margin  typically
declines in a falling rate environment.
<PAGE>

The  following  tables  present  an  analysis  of net  interest  income  for the
quarterly periods ended March 31.
<TABLE>
<CAPTION>
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY:  INTEREST RATES AND INTEREST DIFFERENTIAL
----------------------------------------------------------------------------------------------------------------------------------
Three months ended March 31,                                   2003                                         2002
----------------------------------------------------------------------------------------------------------------------------------
                                                Average                       Average          Average                    Average
(In thousands)                                  Balance         Interest        Rate           Balance      Interest       Rate
----------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                 <C>            <C>         <C>              <C>            <C>
EARNING ASSETS
Investment securities
  Taxable                                    $   282,563         $ 2,299        3.30%       $   260,761      $ 2,742        4.26%
  Nontaxable1                                     71,648           1,181        6.68             81,404        1,327        6.61
Time deposits with banks,
federal funds sold and
securities purchased under                        59,027             177        1.22             57,175          231        1.64
agreements to resell
Loans1,2,3                                       736,039          12,339        6.80            689,158       13,193        7.76
----------------------------------------------------------------------------------------------------------------------------------
     Total earning assets                      1,149,277        $ 15,996        5.64%         1,088,498      $17,493        6.52%
----------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses                        (11,279)                                       (10,559)
----------------------------------------------------------------------------------------------------------------------------------
     Total earning assets, net
     of allowance for loan losses              1,137,998                                      1,077,939
----------------------------------------------------------------------------------------------------------------------------------
NONEARNING ASSETS
Cash and due from banks                           64,383                                         85,507
Premises and equipment, net                       24,045                                         24,693
Other assets                                      18,109                                         13,336
----------------------------------------------------------------------------------------------------------------------------------
     Total assets                            $ 1,244,535                                    $ 1,201,475
----------------------------------------------------------------------------------------------------------------------------------
INTEREST BEARING LIABILITIES
Deposits
  Interest bearing demand                    $   222,879          $  354        0.64%       $   216,414       $  559        1.05%
  Savings                                        170,183             453        1.08            162,732          613        1.53
  Time                                           417,581           3,840        3.73            400,007        4,809        4.88
Federal funds purchased
  and securities sold
  under agreements to repurchase                  80,828             259        1.30            108,534          473        1.77
Other borrowed funds                              65,609             550        3.40             35,286          339        3.90
----------------------------------------------------------------------------------------------------------------------------------
     Total interest bearing liabilities          957,080         $ 5,456        2.31%           922,973      $ 6,793        2.98%
----------------------------------------------------------------------------------------------------------------------------------
NONINTEREST BEARING LIABILITIES
Commonwealth of Kentucky deposits                 32,918                                         30,365
Other demand deposits                            121,013                                        115,406
Other liabilities                                  8,535                                          8,564
----------------------------------------------------------------------------------------------------------------------------------
     Total liabilities                         1,119,546                                      1,077,308
----------------------------------------------------------------------------------------------------------------------------------
     Shareholders' equity                        124,989                                        124,167
----------------------------------------------------------------------------------------------------------------------------------
     Total liabilities and shareholders'
     equity                                  $ 1,244,535                                    $ 1,201,475
----------------------------------------------------------------------------------------------------------------------------------
Net interest income                                               10,540                                      10,700
TE basis adjustment                                                 (488)                                       (545)
----------------------------------------------------------------------------------------------------------------------------------
     Net interest income                                         $10,052                                     $10,155
----------------------------------------------------------------------------------------------------------------------------------
Net interest spread                                                             3.33%                                       3.54%
Impact of noninterest bearing sources
  of funds                                                                       .38                                         .45
----------------------------------------------------------------------------------------------------------------------------------
Net interest margin                                                             3.71%                                       3.99%
----------------------------------------------------------------------------------------------------------------------------------

1Income and yield stated at a fully tax equivalent basis using the marginal corporate Federal tax rate of 35%.
2Loan balances include principal balances on nonaccrual loans.
3Loan fees included in interest income amounted to $521 thousand and $430 thousand in 2003 and 2002, respectively.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

ANALYSIS OF CHANGES IN NET INTEREST INCOME (TAX EQUIVALENT BASIS)
-----------------------------------------------------------------------------------------------------------
(In thousands)                                                     Variance         Variance Attributed to
Three months ended March 31,                                      2003/20021         Volume          Rate
-----------------------------------------------------------------------------------------------------------
<S>                                                                <C>              <C>           <C>
INTEREST INCOME
Taxable investment securities                                      $   (443)        $ 1,235       $ (1,678)
Nontaxable investment securities2                                      (146)           (239)            93
Time deposits with banks, federal funds sold and
   securities purchased under agreements to resell                      (54)             47           (101)
Loans2                                                                 (854)          4,392         (5,246)
-----------------------------------------------------------------------------------------------------------
     Total interest income                                           (1,497)          5,435         (6,932)
-----------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest bearing demand deposits                                       (205)            112           (317)
Savings deposits                                                       (160)            176           (336)
Time deposits                                                          (969)          1,294         (2,263)
Federal funds purchased and securities sold under
   agreements to repurchase                                            (214)           (105)          (109)
Other borrowed funds                                                    211             490           (279)
-----------------------------------------------------------------------------------------------------------
     Total interest expense                                          (1,337)          1,967         (3,304)
-----------------------------------------------------------------------------------------------------------
Net interest income                                                 $  (160)        $ 3,468       $ (3,628)
-----------------------------------------------------------------------------------------------------------
Percentage change                                                     100.0%       (2,167.5)%      2,267.5%
-----------------------------------------------------------------------------------------------------------

1The 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.
2Income stated at fully tax equivalent basis using the marginal corporate Federal tax rate of 35%.
</TABLE>

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

Noninterest income was $4.2 million for the current quarter,  an increase of $45
thousand  or 1.1%  compared  to the first  quarter  of the prior  year.  Service
charges and fees on  deposits,  the largest  component  of  noninterest  income,
remained  relatively flat at $1.8 million.  Other service charges,  commissions,
and fees  increased  $19  thousand  or 2.3%.  Data  processing  fees  were  $345
thousand, an increase of 2.7% from $336 thousand in the prior year. Trust income
totaled $399  thousand,  an increase of $32  thousand or 8.7%.  Net gains on the
sale of available for sale securities for the current quarter were $147 thousand
compared to $597 thousand in the prior year as the Company  continually seeks to
properly manage its balance sheet composition. Net gains on the sale of mortgage
loans were $269 thousand, an increase of $140 thousand from $129 thousand in the
prior year as mortgage  loans  originated for sale increased $6.9 million in the
comparison  due  to  the  low  interest  rate  environment.  Income  from  a new
company-owned  life  insurance  program  initiated  near the end of the  current
quarter was $265 thousand.  Other  noninterest  income totaled $66 thousand,  an
increase of $14 thousand.

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

Total  noninterest  expenses  increased  $102  thousand  or 1.1%  from the first
quarter  of 2002 and  totaled  $9.1  million.  Salaries  and  employee  benefits
accounts for more than half of the total of  noninterest  expense.  Salaries and
benefits  decreased  $82  thousand  or  1.6% to $5.1  million  in the  quarterly
comparison.  Employee benefit related expenses decreased $100 thousand primarily
due to lower health insurance costs. Noncash compensation expense related to the
Company's  nonqualified  stock  option plan  declined  $63  thousand  due to the
structure of the vesting schedule and forfeitures.  Salaries and related payroll
taxes increased $81 thousand or 2.0% to $4.1 million mainly due to normal salary
increases.  The number of full time equivalent  employees  decreased to 456 from
460  reported in the prior  period.  Occupancy  expense,  net of rental  income,
increased $87 thousand or 15.2% and totaled $658  thousand.  The increase in net
occupancy  expense is  attributed  to  increases  in  maintenance  and  repairs,
utilities  costs,  and real  estate  taxes.  Equipment  expense  was  relatively
unchanged at $937 thousand. Other noninterest expense,  including bank franchise
taxes, increased $86 thousand or 3.6% to $2.5 million.

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

Income tax expense for the first quarter of 2003 was $1.1 million, a decrease of
$235  thousand or 17.6% from the same period a year  earlier.  The effective tax
rate decreased 264 basis points to 23.46% from 26.10% in 2002. The change in the
effective  tax rate is due to a  combination  of  factors,  primarily  including
credits derived from qualified zone academy bonds and nontaxable  income accrued
from the increase in cash  surrender  value on life  insurance  purchased on key
employees.

FINANCIAL CONDITION

Total assets were $1.2 billion on March 31, 2003, a decrease of $59.2 million or
4.6% from  December 31, 2002.  The decrease in assets  include a $116.4  million
lower balance in the securities portfolio, offset by a $30.7 million increase in
cash and cash equivalents and a $26.9 million increase in other assets resulting
primarily from the  implementation of a company-owned  life insurance program in
the current quarter. Fed funds purchased and securities sold under agreements to
repurchase declined $61.1 million and correspond to the decline in assets during
the period.  The makeup of the balance sheet continually  changes as the Company
responds to  extremely  competitive  market  forces.  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,  these  agencies issue
checks drawn on Farmers Bank,  including 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  also  important  to
understanding the financial condition of the Company. On an average basis, total
assets  were $1.2  billion for the first  three  months of 2003,  an increase of
$38.2 million or 3.1% from year-end  2002.  Average  earning  assets,  primarily
loans and securities,  were $1.1 billion at March 31, 2003, an increase of $60.8
million or 5.6% from year-end 2002.  Average earning assets  represent 92.35% of
total average assets on March 31, 2003, an increase of 160 basis points compared
to 90.75% at year-end 2002.

LOANS
-----

Loans,  net of unearned  income,  totaled  $738.2  million at March 31,  2003, a
decrease of $395 thousand or 0.1% from year-end  2002.  The  composition  of the
loan portfolio is summarized in the table below.

-------------------------------------------------------------------------------
                                  March 31, 2003            December 31, 2002
(Dollars in thousands)            Amount       %            Amount       %
-------------------------------------------------------------------------------

Commercial, financial,
  and agriculture              $  114,306    15.5%       $  110,056    14.9%

Real estate - construction         53,120     7.2            55,896     7.6
Real estate - mortgage            461,202    62.5           459,620    62.2
Installment                        73,694    10.0            76,162    10.3
Lease financing                    35,922     4.8            36,905     5.0
-------------------------------------------------------------------------------
     Total                     $  738,244   100.0%       $  738,639   100.0%
-------------------------------------------------------------------------------


On average,  loans represented 64.0% of earning assets during the current period
compared to 64.7% for year-end  2002.  As loan demand  declines,  the  available
funds are  redirected  to 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 $11.1 million at March 31, 2003, an increase
of $68 thousand or 0.6% from the prior  year-end.  The allowance for loan losses
was 1.51% of loans net of unearned  income at March 31,  2003,  an increase of 1
basis  point  compared to  December  31,  2002.  The  provision  for loan losses
increased $264 thousand in the current  three-month  period compared to the same
period in 2002.  The Company had net  charge-offs  of $317 thousand in the first
three months of 2003  compared to net  charge-offs  of $341 thousand in the same
period of 2002, a decrease of $24 thousand or 7.0%.  Annualized net  charge-offs
represent  0.17% and 0.20% of average net loans for three months ended March 31,
2003  and  2002,  respectively,  as  compared  to 0.60% at  year-end  2002.  The
allowance for loan losses as a percentage of  nonperforming  loans totaled 67.7%
and 57.3% at March 31, 2003 and December 31, 2002, respectively. The increase is
primarily  reflective of the decline in nonperforming  assets of $2.9 million in
the  comparison.  Management  continues  to  emphasize  collection  efforts  and
evaluation of risks within the loan  portfolio.  In  management's  opinion,  the
allowance  for loan  losses is  adequate  to cover  losses  inherent in the loan
portfolio.

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

Nonperforming  assets for the Company include  nonperforming  loans,  other real
estate  owned,  and other  foreclosed  assets.  Nonperforming  loans  consist of
nonaccrual loans,  restructured loans, and loans past due ninety days or more on
which interest is still accruing.  Nonperforming assets totaled $16.9 million at
March 31,  2003,  a decrease of $2.9  million or 14.6% from the prior  year-end.
Nonperforming  loans  totaled $16.4 million at March 31, 2003 a decrease of $2.9
million or 14.9% compared to year-end 2002.  Nonperforming  loans include a pool
of  constructions  loans  secured by  residential  real estate to a  financially
troubled  builder.  This pool of loans  totaled $12.0 million at March 31, 2003.
Interest  income  lost on this  group of loans  due to their  nonaccrual  status
totaled  $189  thousand  during the three  months  ended March 31,  2003.  It is
currently  estimated  that a total of $177  thousand of interest  income will be
lost in each  subsequent  quarter  related  to this  credit  while it remains on
nonaccrual status.  Nonperforming  loans as a percentage of net loans were 2.22%
at March 31, 2003, a decrease of 39 basis points from 2.61% compared to year-end
2002.

Other real estate owned,  which had a balance of $385 thousand at year-end 2002,
decreased $121 thousand or 31.4% to $264 thousand on March 31, 2003

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

Temporary  investments  consist of interest  bearing  deposits with other banks,
federal funds sold,  and  securities  purchased  under  agreements to resell and
totaled  $30.8  million at March 31, 2003,  an increase of $7.8 million or 33.7%
from year-end 2002.  Temporary  investments averaged $59.0 million for the first
three  months of 2003,  a decrease  of $9.9  million  from  year-end  2002.  The
decrease is  primarily a result of the  Company's  net funding  position and the
relationship  between its principal  subsidiary and the Commonwealth of Kentucky
as described in preceding  sections of this report.  Temporary  investments  are
reallocated  as loan  demand  and  other  investment  alternatives  present  the
opportunity.

INVESTMENT SECURITIES

Investment  securities  were  $325.1  million on March 31,  2003,  a decrease of
$116.4  million  or 26.4% from  year-end  2002.  Available  for sale and held to
maturity  securities  were  $297.8  million  and  $27.3  million,  respectively.
Investment  securities averaged $354.2 million for the first quarter of 2003, an
increase of $37.8 million or 11.9% from year-end  2002.  The increase in average
investment  securities is  attributable  to the Company's  continued  efforts to
manage its net interest  margin during a period of low market interest rates and
correlates  with the  increase  in average  borrowed  funds.  The Company had an
unrealized gain on available for sale  investment  securities of $4.2 million at
March 31, 2003 compared to $5.5 million at year-end 2002. The decrease is due to
a combination of recognized  gains on the sale of available for sale  investment
securities during the current quarter of $147 thousand,  maturities and calls of
securities  during the  quarter,  and a general  decline in the market  value of
securities held in the portfolio at March 31, 2003.

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

The Company  purchased  life insurance  policies on certain key employees,  with
their  knowledge  and  consent,  during the  current  quarter at a cost of $23.9
million.  Company-owned  life insurance is recorded at its cash surrender value,
or the amount that can be realized,  on the consolidated  balance sheet with the
related change in cash surrender value and proceeds  received under the policies
reported on the consolidated statement of income as tax-free noninterest income,
which  totaled $265  thousand for the current  quarter.  The Company is the sole
beneficiary of proceeds  received under the policies.  Expected  income from the
purchase of the  insurance  policies  will be used to offset the rising costs of
the  Company's  various  benefit  plans  as  well  as the  additional  costs  of
implementing  a new  postretirement  health  insurance  program.  Under  the new
postretirement  health  insurance  plan,  any  employee  that meets the  service
requirements  upon  retirement  would  be  eligible  to  continue  their  health
insurance  coverage,  identical  to the  coverage  that  is  offered  to  active
employees.  The employee  will pay 50% of the cost and the Company will pay 50%.
It is currently  estimated  that the expense  related to the new  postretirement
health  insurance plan will be  approximately  $114 thousand per quarter for the
remainder of 2003.


DEPOSITS
--------

Total  deposits  were  $960.2  million at March 31,  2003,  an  increase of $2.8
million or 0.3% from year-end 2002. Noninterest bearing deposits increased $23.5
million  or 16.7% in the  comparison.  This  increase  is  primarily  due to the
relationship  between the Company's principal subsidiary and the Commonwealth of
Kentucky  as  described  in  preceding  sections  of this  report.  On  average,
noninterest  bearing  deposits were $153.9 million during the current period,  a
decrease  of $3.1  million  or 2.1%.  End of  period  interest  bearing  deposit
balances  decreased  $20.8 million  during the three months ended March 31, 2003
due to decreases in interest  bearing checking  accounts of $5.8 million,  money
market deposit accounts of $18.3 million,  and savings accounts of $4.2 million.
Time  deposits  increased  $7.5  million  in the end of period  comparisons.  On
average, interest bearing deposits were $810.6 million in the current period, an
increase of $23.2 million from year-end 2002.  The increase in average  interest
bearing  deposits  is  attributable  to  increases  in interest  bearing  demand
deposits of $7.1 million,  time deposits of $12.9 million,  money market deposit
accounts of $1.8 million,  and savings accounts of $1.3 million.  Total deposits
averaged  $964.6  million,  an increase of $26.3  million or 2.8% from  year-end
2002.

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

Borrowed  funds  totaled  $121.6  million at March 31, 2003, a decrease of $60.7
million or 33.3% from $182.3 million at year-end  2002. A $1.0 million  increase
in long-term  borrowings  was offset by a $61.7  million  decrease in short-term
borrowings,  which  account for the total  decrease in borrowed  funds.  Federal
funds  purchased and securities  sold under  agreements to repurchase  decreased
$61.1 million or 52.7% due primarily to the  relationship  between the Company's
principal  subsidiary and the Commonwealth of Kentucky as described in preceding
sections of this report.  Other  short-term  borrowings  decreased $566 thousand
mainly due to  repayments  of  borrowed  funds from the  Federal  Home Loan Bank
("FHLB"). The $1.0 million increase in long-term borrowings is mainly attributed
to the funding of new data  processing  equipment  financed  over a term of four
years.  Total  borrowed  funds  averaged  $146.4  million,  an increase of $10.4
million or 7.7% from year-end 2002.

LIQUIDITY

The Parent  Company's  primary use of cash consists of dividend  payments to its
common shareholders,  purchases of its common stock, 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 March
31, 2003 combined  retained earnings of the subsidiary banks were $62.0 million,
of which $9.2 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 other 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 2003  sufficient
to meet its  liquidity  needs.  The Parent  Company  had cash  balances  of $6.9
million at March 31, 2003.

The Company's  objective as it relates to liquidity is to insure that 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 banks have several  sources of funds available on a daily basis,
which can be used for  liquidity  purposes.  These  sources  of funds  primarily
include the  subsidiary  banks' core  deposits,  consisting of both business and
nonbusiness  deposits;  cash flow  generated by repayment of loan  principal and
interest;  and federal funds purchased and securities  sold under  agreements to
repurchase.  The  terms  of the  recent  FHLB  advances  have  been  taken  into
consideration in relation to the overall funding needs of the Company.

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  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 March 31, 2003, such assets totaled $395.6 million, a decrease of $84.5
million or 17.6% from year-end 2002. The decrease in liquid assets is attributed
to the overall funding position of the Company and the purchase of company-owned
life insurance on key employees during the current quarter. Net cash provided by
operating  activities  was $446  thousand in the first three  months of 2003,  a
decrease of $5.0  million or 91.8%  compared  to the same period last year.  Net
cash provided by investing  activities was $92.4  million,  an increase of $80.1
million due primarily to a $118.1 million  increase from  investment  securities
transactions  offset by the  purchase of  company-owned  life  insurance  on key
employees of $23.9  million and a decrease in net loan  principal  repayments of
$13.6  million  during  the  three-month  periods.  Net cash  used in  financing
activities  was $62.2 million for the period ended March 31, 2003 as a result of
a $61.1 million net decrease in federal  funds  purchased  and  securities  sold
under  agreements  to  repurchase  attributed  to the  Commonwealth  of Kentucky
deposit  activity.  In the same period of the prior year,  financing  activities
provided $7.6 million primarily due to additional FHLB borrowing activity.

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 $124.4  million on March 31,  2003, a decrease of $1.4
thousand or 1.1% from year-end  2002 and due  primarily to  additional  treasury
stock  purchases.  The Company  purchased 68 thousand  shares of its outstanding
common  stock  during  the first  three  months of 2003 for a total cost of $2.1
million.

The  Company  issued 3 thousand  shares of common  stock  during the first three
months pursuant to its nonqualified stock option plan. Dividends of $2.2 million
or $.32 per share  were  declared  during  the first  three  months of 2003,  an
increase  of 3.2% per  share  compared  to the  prior  year.  Accumulated  other
comprehensive  income,  consisting of unrealized  holding gains on available for
sale investment  securities (net of tax),  decreased $854 thousand from year-end
2002 due to a combination of recognized  gains on the sale of available for sale
investment  securities  during  the  current  quarter,  maturities  and calls of
securities  during the  quarter,  and a general  decline in the market  value of
securities held in the portfolio at March 31, 2003.

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 March 31, 2003, 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           15.31%                 4.00%               6.00%
Total risk based            16.56%                 8.00%              10.00%
Leverage                     9.78%                 4.00%               5.00%
--------------------------------------------------------------------------------

As of March 31, 2003,  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 March 31, 2003, the model indicated that if rates were to gradually  increase
by 150 basis points during the calendar year,  then net interest  income and net
income would increase 0.99% and 2.08%, respectively for the year ending December
31, 2003. The model  indicated  that if rates were to gradually  decrease by 150
basis points over the same period, then net interest income and net income would
decrease 2.44% and 5.38%, respectively.

In the current low interest rate environment, it is not practical or possible to
reduce certain  deposit rates by the same magnitude as rates on earning  assets.
The average rate paid on some of the Company's deposits is well below 1.5%. This
situation  magnifies the model's  predicted  results when modeling a decrease in
interest rates, as earning assets with higher yields have more of an opportunity
to reprice at lower rates than lower-rate deposits.

ITEM 4.  CONTROLS AND PROCEDURES
--------------------------------

The Company's Chief Executive  Officer and Chief Financial Officer have reviewed
and evaluated the Company's disclosure controls and procedures within 90 days of
the filing of this report,  and have  concluded  that the  Company's  disclosure
controls and procedures  were adequate and effective to ensure that  information
required to be disclosed is recorded,  processed,  summarized, and reported in a
timely manner.

There were no significant changes in the Company'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 significant  deficiencies or material weaknesses in the controls which
required corrective action.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS
--------------------------

In September  1992,  Farmers Bank & Capital Trust Company (the "Bank") was named
as a defendant in Case No.  92CIO5734 in Jefferson  Circuit  Court,  Louisville,
Kentucky,  in a case styled  Shilling  et al. v.  Farmers  Bank & Capital  Trust
Company.  Details of this case have been disclosed in previous Annual Reports on
Form 10-K and  subsequent  10-Q  filings.  The  named  plaintiffs  purported  to
represent a class  consisting  of all present and former owners of the County of
Jefferson,  Kentucky,  Nursing Home  Refunding  Revenue  Bonds (Filson Care Home
Project)  Series  1986A  and  County  of  Jefferson,   Kentucky,   Nursing  Home
Improvement  Revenue Bonds (Filson Care Home Project) Series 1986B (collectively
"the Bonds").  The plaintiffs  alleged that the class had been damaged through a
reduction in the value of the Bonds and a loss of interest on the Bonds  because
of the  actions  of the  Bank  in its  capacity  as  indenture  trustee  for the
Bondholders. The plaintiffs demanded compensatory and punitive damages.

On July 6, 1993, the Court denied the plaintiffs'  motion to certify the case as
a class action.  Subsequently,  the plaintiffs  amended their  complaint to join
additional  Bondholders as plaintiffs.  The plaintiffs  claimed to hold Bonds in
the aggregate  principal  amount of $480,000.  Before trial, the Court dismissed
thirty-nine of the  plaintiffs  because they were unable or unwilling to present
testimony to support their claims.

The case was tried to a jury  beginning  on March 28, 2000 on the claims of four
plaintiffs holding Bonds in the aggregate principal amount of $80,000. The Court
granted a directed  verdict in favor of the Bank on the  plaintiffs'  claim that
the Bank had  engaged in  commercial  bribery  and that the legal fees that were
paid by the Bank should be disgorged  because of an alleged conflict of interest
of the Bank's  counsel.  The jury found for the plaintiffs on the claim that the
Bank had  breached  its  fiduciary  duty and awarded the  plaintiffs  $99,875 in
compensatory damages and $600,000 in punitive damages.

The Bank filed a motion for  judgment  notwithstanding  the  verdict  or, in the
alternative,  for a new trial,  asserting  that the jury's verdict that the Bank
breached its fiduciary duty was not supported by sufficient  evidence,  that the
jury's award of damages was  speculative  and was not supported by the evidence,
and that the jury's award of punitive  damages was not  supported by  sufficient
evidence.  The Bank also asserted that a new trial was warranted  because of the
erroneous admission of evidence concerning legal fees paid by the Bank.

Plaintiffs filed an appeal contending that the denial of class certification was
erroneous,  that the individual  plaintiffs  should not have been dismissed from
the  lawsuit,  that  certain  evidence was  erroneously  excluded,  and that the
directed  verdict  regarding the  disgorgement  of legal fees and the commercial
bribery claims was  erroneous.  On August 1, 2000, the Kentucky Court of Appeals
dismissed the appeal as having been prematurely filed.

On January 3, 2001, the Jefferson Circuit Court entered judgment in favor of the
Bank notwithstanding the jury's verdict in favor of the plaintiffs, holding that
the Bank  reasonably  relied in good  faith on the advice of its  counsel,  that
there  was no  evidence  that  the  Bank  breached  its  fiduciary  duty  to the
plaintiffs,  and that there was no evidence that the Bank caused the plaintiffs'
losses.

On January 31, 2001,  the  plaintiff  bondholders  appealed,  and on February 9,
2001, defendant Bank cross-appealed, the judgment of the Jefferson Circuit Court
to the Kentucky Court of Appeals.

In their appeal,  the  Bondholders  claim that the trial court's denial of class
certification was erroneous,  that certain individual plaintiffs should not have
been dismissed  from the lawsuit,  that the trial court  erroneously  directed a
verdict  against  them on the  issue of a  conflict  of  interest,  and that the
judgment  notwithstanding  the  verdict  was  erroneously  granted  because  the
evidence was sufficient to support the jury's verdict.

In its cross-appeal, the Bank claims that the trial court erroneously bifurcated
the trial on the issue of liability and damages,  that certain  witnesses should
have been  excluded  from the  trial,  that the Bank  should  have been  granted
summary judgment,  and that certain evidence and testimony regarding  attorneys'
fees should have been excluded.

On May 10, 2002,  the Kentucky Court of Appeals  affirmed the Jefferson  Circuit
Court's judgment in favor of the Bank. The plaintiff  bondholders filed a motion
for discretionary review to the Kentucky Supreme Court on June 7, 2002.

On June 7, 2002, the plaintiffs  filed with the Kentucky  Supreme Court a motion
for  discretionary  review.  The Bank filed a response  opposing the plaintiffs'
motion

On April 17, 2003 the  Kentucky  Supreme  Court  denied  plaintiffs'  motion for
discretionary  review.  The judgment in favor of the Bank is therefore now final
and subject to no further appeal or judicial review.

As of March 31,  2003,  there were  various  other  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  adverse  effect  upon  the  consolidated  financial
statements of the Company.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------

a)       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  (page
               23)

          99.1 CEO Certification  Pursuant to Section 906 of the  Sarbanes-Oxley
               Act of 2002 (page 24)

          99.2 CFO Certification  Pursuant to Section 906 of the  Sarbanes-Oxley
               Act of 2002 (page 25)


b)       Reports on Form 8-K
         -------------------

          On January 28, 2003, the  Registrant  filed a report on Form 8-K under
          Item 5 disclosing  its  intention to purchase up to 300,000  shares of
          its  outstanding  common  stock.  The  purchases  will be dependent on
          market  conditions and there is no guarantee as to the exact number of
          shares to be purchased.  There were no financial statements filed with
          this Form 8-K.


          On March 31,  2003,  the  Registrant  filed a report on Form 8-K under
          Item  4  disclosing   the  change  in  the   Registrant's   certifying
          accountant.  There were no financial  statements  filed with this Form
          8-K.

          On April 21,  2003,  the  Registrant  filed a report on Form 8-K under
          Item 9 (furnished  under Item 12) in  accordance  with SEC release No.
          33-8216  reporting its earnings for the first  quarter of 2003.  There
          were no financial statements filed with this Form 8-K.
<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: May-13, 2003               /s/ G. Anthony Busseni
--------------------             -----------------------------------------------
                                 G. Anthony Busseni,
                                 President and CEO
                                 (Principal Executive Officer)


Date:  5-13-03                   /s/ C Douglas Carpenter
--------------------             -----------------------------------------------
                                 C. Douglas Carpenter,
                                 Vice President, Secretary, and CFO
                                 (Principal Financial and Accounting Officer)




<PAGE>


                                 CERTIFICATIONS



I, G. Anthony Busseni, certify that:

1.   I have reviewed this quarterly  report on Form 10-Q of Farmers Capital Bank
     Corporation;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a)
     designed such  disclosure  controls and  procedures to ensure that material
     information   relating  to  the  registrant,   including  its  consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the period in which  this  quarterly  report is being
     prepared;  b) evaluated the  effectiveness of the  registrant's  disclosure
     controls  and  procedures  as of a date  within 90 days prior to the filing
     date of this quarterly report (the "Evaluation  Date"); and c) presented in
     this  quarterly  report  our  conclusions  about the  effectiveness  of the
     disclosure  controls  and  procedures  based  on our  evaluation  as of the
     Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent  function):  a) all  significant  deficiencies  in the design or
     operation  of  internal   controls   which  could   adversely   affect  the
     registrant's  ability to record,  process,  summarize and report  financial
     data  and  have  identified  for the  registrant's  auditors  any  material
     weaknesses in internal controls; and b) any fraud, whether or not material,
     that involves  management or other employees who have a significant role in
     the registrant's internal controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



Date:  Mayt 13, 2003                                 /s/ G. Anthony Busseni
----------------------                               --------------------------
                                                     G. Anthony Busseni
                                                     President and CEO
<PAGE>






I, C. Douglas Carpenter, certify that:

1.   I have reviewed this quarterly  report on Form 10-Q of Farmers Capital Bank
     Corporation;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a)
     designed such  disclosure  controls and  procedures to ensure that material
     information   relating  to  the  registrant,   including  its  consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the period in which  this  quarterly  report is being
     prepared;  b) evaluated the  effectiveness of the  registrant's  disclosure
     controls  and  procedures  as of a date  within 90 days prior to the filing
     date of this quarterly report (the "Evaluation  Date"); and c) presented in
     this  quarterly  report  our  conclusions  about the  effectiveness  of the
     disclosure  controls  and  procedures  based  on our  evaluation  as of the
     Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent  function):  a) all  significant  deficiencies  in the design or
     operation  of  internal   controls   which  could   adversely   affect  the
     registrant's  ability to record,  process,  summarize and report  financial
     data  and  have  identified  for the  registrant's  auditors  any  material
     weaknesses in internal controls; and b) any fraud, whether or not material,
     that involves  management or other employees who have a significant role in
     the registrant's internal controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.



Date: 5-13-03                               /s/ C Douglas Carpenter
---------------                             -----------------------------------
                                            C. Douglas Carpenter
                                            Vice President, Secretary, and CFO
<PAGE>


Exhibit 3iia

            AMENDMENTS TO BY-LAWS OF FARMERS CAPITAL BANK CORPORATION
            ---------------------------------------------------------


RESOLVED, that the first sentence of Section 2.11 of the Corporation's Bylaws is
hereby amended so that said sentence shall henceforth read as follows:

Each outstanding share of common stock authorized by the Corporation's  Articles
of  Incorporation  to have voting  power shall be entitled to one vote upon each
matter submitted to a vote at a meeting of shareholders.


RESOLVED,  that Section 2.13 of the  Corporation's  Bylaws is hereby  amended so
that said Section 2.13 shall henceforth read in its entirety as follows:

2.13 Voting for Directors. Corporation directors shall be elected by a plurality
of votes cast by the shares  entitled  to vote in the  election  at a meeting of
shareholders  at  which a  quorum  is  present.  A  "plurality"  means  that the
individuals  with the largest number of votes are elected as directors up to the
maximum number of directors to be chosen at the election.


<PAGE>


Exhibit 99.1

                        CERTIFICATION OF PERIODIC REPORT
                        --------------------------------


I, G. Anthony Busseni,  President and Chief Executive Officer of Farmers Capital
Bank Corporation,  certify, pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section 1350, that:

1)   the Quarterly  Report on Form 10-Q of the Company for the quarterly  period
     ended March 31, 2003 (the "Report") fully complies with the requirements of
     Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2)   the information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and results of operations of the Company.




Date:  May 13, 2003                                  /s/ G. Anthony Busseni
---------------------                                --------------------------
                                                     G. Anthony Busseni
                                                     President and CEO





<PAGE>




Exhibit 99.2

                        CERTIFICATION OF PERIODIC REPORT
                        --------------------------------


I, C. Douglas Carpenter, Vice President,  Secretary, and Chief Financial Officer
of Farmers  Capital Bank  Corporation,  certify,  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1)   the Quarterly  Report on Form 10-Q of the Company for the quarterly  period
     ended March 31, 2003 (the "Report") fully complies with the requirements of
     Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2)   the information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and results of operations of the Company.




Date:  5-13-03                              /s/ C Douglas Carpenter
----------------                            -----------------------------------
                                            C. Douglas Carpenter
                                            Vice President, Secretary, and CFO
[{"type": "10-Q", "sequence": "1", "filename": "a10q033103.txt", "description": "FORM 10-Q 3-31-03", "secsgml_size_bytes": 99547}]
{"company-data": {"conformed-name": "FARMERS CAPITAL BANK CORP", "cik": "0000713095", "assigned-sic": "6021", "irs-number": "611017851", "state-of-incorporation": "KY", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-14412", "film-number": "03697824"}, "business-address": {"street1": "PO BOX 309", "street2": "202 W MAIN ST", "city": "FRANKFORT", "state": "KY", "zip": "40602", "phone": "5022271668"}, "mail-address": {"street1": "P O BOX 309", "street2": "202 WEST MAIN STREET", "city": "FRANKFORT", "state": "KY", "zip": "40602"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003

                                       or

            [ ] Transition Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

                         For the transition period from
                                       to
                           -----------    -----------

                         Commission File Number 0-14412

                        FARMERS CAPITAL BANK CORPORATION
             (Exact name of registrant as specified in its charter)

          KENTUCKY                                      61-1017851
---------------------------------------- ---------------------------------------
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)

P.O. BOX 309, 202 WEST MAIN STREET
FRANKFORT, KENTUCKY                                       40602
---------------------------------------- ---------------------------------------
(Address of principal executive offices)               (Zip Code)

       Registrant's telephone number, including area code: (502) 227-1600

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 Securities Exchange Act of 1934).

                                   Yes |X| No

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 $.125 per share
                  6,722,551 shares outstanding at May 12, 2003
TABLE OF CONTENTS

Part I - Financial Information                                          Page No.

     Item 1 - Financial Statements

         Unaudited Consolidated Balance Sheets -
             March 31, 2003 and December 31, 2002                            3

         Unaudited Consolidated Statements of Income -
             For the Three Months Ended
             March 31, 2003 and March 31, 2002                               4

         Unaudited Consolidated Statements of Comprehensive Income -
             For the Three Months Ended
             March 31, 2003 and March 31, 2002                               5

         Unaudited Consolidated Statements of Cash Flows -
             For the Three Months Ended
             March 31, 2003 and March 31, 2002                               6

         Unaudited Consolidated Statements of Changes in
             Shareholders' Equity -
             For the Three Months Ended
             March 31, 2003 and March 31, 2002                               7

         Notes to Unaudited Consolidated Financial Statements                8

     Item 2 - Management's Discussion and Analysis of Financial
               Condition and Results of Operations                          10

     Item 3 - Quantitative and Qualitative Disclosures About Market Risk    17

     Item 4 - Controls and Procedures                                       18

Part II - Other Information

     Item 1 - Legal Proceedings                                             18

     Item 6 - Exhibits and Reports on Form 8-K                              19

     Signatures                                                             20

     Certification of Chief Executive Officer                               21

     Certification of Chief Financial Officer                               22
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
UNAUDITED CONSOLIDATED BALANCE SHEETS
---------------------------------------------------------------------------------------------------------------------------
                                                                                             March 31,       December 31,
(In thousands, except share data)                                                                2003               2002
---------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and cash equivalents:
     Cash and due from banks                                                               $    67,021        $    44,083
     Interest bearing deposits in other banks                                                    3,500              3,947
     Federal funds sold and securities purchased under
          agreements to resell                                                                  27,286             19,071
---------------------------------------------------------------------------------------------------------------------------
          Total cash and cash equivalents                                                       97,807             67,101
---------------------------------------------------------------------------------------------------------------------------
Investment securities:
     Available for sale, amortized cost of $293,650 (2003) and $407,560 (2002)                 297,814            413,038
     Held to maturity, fair value of $29,068 (2003) and $30,312 (2002)                          27,333             28,519
---------------------------------------------------------------------------------------------------------------------------
          Total investment securities                                                          325,147            441,557
---------------------------------------------------------------------------------------------------------------------------
Loans, net of unearned income                                                                  738,244            738,639
Allowance for loan losses                                                                      (11,129)           (11,061)
---------------------------------------------------------------------------------------------------------------------------
          Loans, net                                                                           727,115            727,578
---------------------------------------------------------------------------------------------------------------------------
Premises and equipment, net                                                                     24,198             24,155
Company-owned life insurance                                                                    24,214
Other assets                                                                                    17,923             15,211
---------------------------------------------------------------------------------------------------------------------------
          Total assets                                                                     $ 1,216,404        $ 1,275,602
---------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Deposits:
     Noninterest bearing                                                                   $   164,776        $   141,238
     Interest bearing                                                                          795,468            816,242
---------------------------------------------------------------------------------------------------------------------------
          Total deposits                                                                       960,244            957,480
---------------------------------------------------------------------------------------------------------------------------
Federal funds purchased and securities sold under agreements to repurchase                      54,839            115,979
Other short-term borrowings                                                                      8,641              9,207
Long-term debt                                                                                  58,170             57,152
Dividends payable                                                                                2,158              2,191
Other liabilities                                                                                7,932              7,820
---------------------------------------------------------------------------------------------------------------------------
          Total liabilities                                                                  1,091,984          1,149,829
---------------------------------------------------------------------------------------------------------------------------
Commitments and contingencies

SHAREHOLDERS' EQUITY
Common stock, par value $.125 per share
     9,608,000 shares authorized; 8,138,877 and 8,135,977
     shares issued at March 31, 2003 and December 31, 2002, respectively                         1,017              1,017
Capital surplus                                                                                 17,801             17,623
Retained earnings                                                                              142,634            141,199
Treasury stock, at cost
     1,411,838 and 1,344,463 shares at March 31, 2003 and
     December 31, 2002, respectively                                                           (39,739)           (37,627)
---------------------------------------------------------------------------------------------------------------------------
          Total shareholders' equity                                                           124,420            125,773
---------------------------------------------------------------------------------------------------------------------------
          Total liabilities and shareholders' equity                                       $ 1,216,404        $ 1,275,602
---------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
--------------------------------------------------------------------------------
(In thousands, except per share data)
Three months ended March 31,                                 2003          2002
--------------------------------------------------------------------------------
INTEREST INCOME
Interest and fees on loans                               $ 12,229      $ 13,064
Interest on investment securities:
     Taxable                                                2,299         2,742
     Nontaxable                                               803           911
Interest on deposits in other banks                            15            20
Interest of federal funds sold and securities
     purchased under agreements to resell                     162           211
--------------------------------------------------------------------------------
          Total interest income                            15,508        16,948
--------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits                                        4,647         5,981
Interest on federal funds purchased and securities
     sold under agreements to repurchase                      259           473
Interest on other borrowed funds                              550           339
--------------------------------------------------------------------------------
          Total interest expense                            5,456         6,793
--------------------------------------------------------------------------------
          Net interest income                              10,052        10,155
--------------------------------------------------------------------------------
Provision for loan losses                                     385           121
--------------------------------------------------------------------------------
          Net interest income after provision
          for loan losses                                   9,667        10,034
--------------------------------------------------------------------------------
NONINTEREST INCOME
Service charges and fees on deposits                        1,835         1,819
Other service charges, commissions, and fees                  840           821
Data processing income                                        345           336
Trust income                                                  399           367
Investment securities gains, net                              147           597
Gain on sale of mortgage loans, net                           269           129
Income from company-owned life insurance                      265
Other                                                          66            52
--------------------------------------------------------------------------------
          Total noninterest income                          4,166         4,121
--------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits                              5,068         5,150
Occupancy expenses, net                                       658           571
Equipment expenses                                            937           926
Bank franchise tax                                            334           307
Other                                                       2,142         2,083
--------------------------------------------------------------------------------
          Total noninterest expense                         9,139         9,037
--------------------------------------------------------------------------------
          Income before income taxes                        4,694         5,118
--------------------------------------------------------------------------------
Income tax expense                                          1,101         1,336
--------------------------------------------------------------------------------
          Net income                                     $  3,593      $  3,782
--------------------------------------------------------------------------------
NET INCOME PER COMMON SHARE
     Basic                                               $    .53      $    .55
     Diluted                                                  .53           .54
--------------------------------------------------------------------------------
WEIGHTED AVERAGE SHARES OUTSTANDING
     Basic                                                  6,764         6,901
     Diluted                                                6,798         6,961
--------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
--------------------------------------------------------------------------------
Three months ended March 31, (In thousands)                   2003        2002
--------------------------------------------------------------------------------
NET INCOME                                                 $ 3,593     $ 3,782
Other comprehensive loss:
     Unrealized loss on available for sale
     securities arising during the period, net of tax
     of $(398) and $(415), respectively                       (740)       (770)
Reclassification adjustment for prior period
     unrealized gain recognized during current period,
     net of tax of $(61) and $(218), respectively             (114)       (404)
--------------------------------------------------------------------------------
Other comprehensive loss                                      (854)     (1,174)
--------------------------------------------------------------------------------
COMPREHENSIVE INCOME                                       $ 2,739     $ 2,608
--------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
------------------------------------------------------------------------------------------------------
Three months ended March 31, (In thousands)                                      2003           2002
------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                                              $  3,593     $    3,782
     Adjustments to reconcile net income to net cash provided
          by operating activities:
          Depreciation and amortization                                           741            729
          Net amortization of investment security premiums and (discounts):
                Available for sale                                                453           142
                Held to maturity                                                  (18)          (16)
          Provision for loan losses                                               385           121
          Noncash compensation expense                                            107           166
          Mortgage loans originated for sale                                  (15,555)       (8,666)
          Proceeds from sale of mortgage loans                                 13,563         7,591
          Deferred income tax expense (benefit)                                    86          (256)
          Gain on sale of mortgage loans, net                                    (269)         (129)
          Gain on sale of premises and equipment                                   (2)
          Gain on sale of available for sale investment securities, net          (147)         (597)
          Decrease in accrued interest receivable                                 234           597
          (Increase) decrease in other assets                                  (3,211)          708
          Decrease in accrued interest payable                                   (186)          (66)
          Increase in other liabilities                                           672         1,357
------------------------------------------------------------------------------------------------------
             Net cash provided by operating activities                            446         5,463
------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
     Proceeds from maturities and calls of investment securities:
          Available for sale                                                  134,522       156,811
          Held to maturity                                                      1,204         2,873
     Proceeds from sale of available for sale investment
           securities                                                          74,137       100,438
     Purchase of available for sale investment securities                     (95,055)     (263,373)
     Loans originated for investment, net of principal collected                2,339        15,937
     Purchase of company-owned life insurance                                 (23,949)
     Purchase of premises and equipment                                          (785)         (391)
     Proceeds from sale of equipment                                                3
------------------------------------------------------------------------------------------------------
             Net cash provided by investing activities                         92,416        12,295
------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
     Net increase (decrease) in deposits                                        2,764        (5,910)
     Net decrease in federal funds purchased and securities
           sold under agreements to repurchase                                (61,140)       (4,358)
     Proceeds from long-term debt                                               1,683        14,500
     Repayments of long-term debt                                                (665)         (636)
     Net (decrease) increase in other short-term borrowings                      (566)        6,700
     Dividends paid                                                            (2,191)       (2,152)
     Purchase of common stock                                                  (2,112)         (891)
     Stock options exercised                                                       71           392
------------------------------------------------------------------------------------------------------
             Net cash (used in) provided by financing activities              (62,156)        7,645
------------------------------------------------------------------------------------------------------
             Net increase in cash and cash equivalents                         30,706        25,403
------------------------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of year                                 67,101       106,385
------------------------------------------------------------------------------------------------------
             Cash and cash equivalents at end of period                      $ 97,807     $ 131,788
------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
     Interest                                                                 $ 5,642       $ 6,859
Cash dividend declared and unpaid                                               2,158         2,138
------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
------------------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share data)                                                                                 Accumulated
                                                                                                           Other         Total
Three months ended                        Common Stock       Capital    Retained      Treasury Stock   Comprehensive  Shareholders'
March 31, 2003 and 2002               Shares     Amount      Surplus    Earnings   Shares     Amount       Income         Equity
------------------------------------------------------------------------------------------------------------------------------------
Balance at January 1, 2003           8,136     $1,017      $17,623    $141,199    1,344   $(37,627)      $3,561        $125,773
Net income                                                                 3,593                                            3,593
Other comprehensive loss                                                                                     (854)           (854)
Cash dividends declared,
  $.32 per share                                                          (2,158)                                          (2,158)
Purchase of common stock                                                               68     (2,112)                      (2,112)
Stock options exercised                    3                      71                                                           71
Noncash compensation expense
  attributed to stock option grants                              107                                                          107
------------------------------------------------------------------------------------------------------------------------------------
  Balance at March 31, 2003            8,139     $1,017      $17,801    $142,634    1,412   $(39,739)      $2,707        $124,420
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
  Balance at January 1, 2002           8,058     $1,007      $15,179    $137,227    1,153   $(31,077)      $1,224        $123,560
Net income                                                                 3,782                                            3,782
Other comprehensive loss                                                                                   (1,174)         (1,174)
Cash dividends declared,
  $.31 per share                                                          (2,138)                                          (2,138)
Purchase of common stock                                                               25       (891)                        (891)
Stock options exercised                   16          2          390                                                          392
Noncash compensation expense
  attributed to stock option grants                              166                                                          166
------------------------------------------------------------------------------------------------------------------------------------
  Balance at March 31, 2002            8,074     $1,009      $15,735    $138,871    1,178   $(31,968)      $   50        $123,697
------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.   BASIS OF PRESENTATION

The consolidated  financial  statements  include the accounts of Farmers Capital
Bank  Corporation  (the  "Company"),   a  financial  holding  company,  and  its
subsidiaries,  including its principal subsidiary,  Farmers Bank & Capital Trust
Company.  All  significant  intercompany  transactions  and  accounts  have been
eliminated in consolidation.

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, 2002.

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.   COMPANY-OWNED LIFE INSURANCE

The Company has purchased life insurance  policies on certain key employees with
their  knowledge and consent.  Company-owned  life  insurance is recorded at its
cash surrender  value, or the amount that can be realized,  on the  consolidated
balance sheet. The related change in cash surrender value and proceeds  received
under the policies are  reported on the  consolidated  statement of income under
the caption "Income from company-owned life insurance".

4.   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 March 31, 2003 and 2002.

   --------------------------------------------------------------
   (In thousands, except per share data)
   Three months ended March 31,                  2003        2002
   --------------------------------------------------------------

   Net income, basic and diluted            $  3,593    $   3,782
   --------------------------------------------------------------

   Average shares outstanding                  6,764        6,901
   Effect of dilutive stock options               34           60
   --------------------------------------------------------------
   Average diluted shares outstanding          6,798        6,961
   --------------------------------------------------------------

   Net income per share, basic              $    .53    $     .55
   Net income per share, diluted                 .53          .54
   --------------------------------------------------------------

5.    STOCK-BASED COMPENSATION

In 1997, the Company's Board of Directors  approved a nonqualified  stock option
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 plan.  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  recognizes
noncash  compensation  expense based on the intrinsic value of the stock options
measured on the date of shareholder ratification of the plan.

The Company granted 54,000  additional  options during 2000 in which there is no
compensation  expense being recognized  pursuant to APB No. 25. 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
table below.

   ---------------------------------------------------------------------------
     (In thousands, except per share data)
     Three months ended March 31,                         2003           2002
   ---------------------------------------------------------------------------
     NET INCOME
       As reported                                    $  3,593      $   3,782
       Add:  Stock-based employee compensation
             expense included in reported net
             income, net of related tax effects             70            108
       Less: Stock-based compensation expense
             determined under fair value based
             method for all awards, net of related
             tax effects                                   (85)          (126)
    ---------------------------------------------------------------------------
     Proforma                                         $  3,578      $   3,764
    ---------------------------------------------------------------------------
     NET INCOME PER COMMON SHARE
       Basic, as reported                             $    .53      $     .55
       Basic, proforma                                     .53            .55

       Diluted, as reported                                .53            .54
       Diluted, proforma                                   .53            .54
    ---------------------------------------------------------------------------

The fair value of the options granted are estimated as of the  measurement  date
using the Black-Scholes option pricing model with the following weighted average
assumptions  used for grants in 2000 and 1997,  respectively:  dividend yield of
3.12% and 3.18%; expected volatility of 29.6% and 23.4%; risk-free interest rate
of 6.71% and  5.75%;  and  expected  life of seven  years for both  grants.  The
weighted  average fair value of options  granted  during 2000 and 1997 was $9.25
and $16.11 per share, respectively.

The plan  provides for the granting of options to purchase up to 450,000  shares
of the  Company's  common stock at a price equal to the fair market value of the
Company's  common  stock on the  date the  option  is  granted.  The term of the
options  expires after ten years from the date on which the options are granted.
Options  granted  under the plan vest ratably over various time periods  ranging
from four to seven years.  All options granted must be held for a minimum of one
year before they can be  exercised.  Forfeited  options  are  available  for the
granting of additional stock options under the plan.

Item 2.  Management's Discussion and Analysis of Financial Condition and Result
-------------------------------------------------------------------------------
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.

RESULTS OF OPERATIONS

                    FIRST QUARTER 2003 VS. FIRST QUARTER 2002
                    -----------------------------------------

The Company reported net income of $3.6 million for the first quarter of 2003, a
decrease of $189  thousand or 5.0%  compared to $3.8 million for the same period
in 2002. Basic net income per share was $.53 for the current quarter, a decrease
of $.02 or 3.6% compared to $.55 a year  earlier.  On a diluted per share basis,
net income decreased $.01 or 1.9% to $.53 in the quarterly comparison.  The 3.6%
decrease in basic net income per share is 140 basis points  better than the 5.0%
decrease  reported  in dollar  terms due to the  effect of fewer  common  shares
outstanding pursuant to the Company's stock purchase program.

The decrease in net income is primarily  attributed  to a $450 thousand or 75.4%
decrease  in gains on the sale of  available  for sale  securities  included  in
noninterest  income.  Other factors  contributing  to the decrease in net income
include the following:  a $103 thousand or 1.0% decrease in net interest  income
to $10.1 million;  a $264 thousand or 218.2%  increase in the provision for loan
losses to $385  thousand;  and a $102 thousand or 1.1%  increase in  noninterest
expenses  to $9.1  million.  Results  that had a  positive  effect on net income
include the following:  an increase in noninterest income (excluding  securities
gains) of $495 thousand or 14.0% to $4.0 million;  and a reduction in income tax
expense of $235 thousand or 17.6% to $1.1 million.

The return on average  assets ("ROA") was 1.17% for the first quarter of 2003, a
decrease of 11 basis  points  compared to 1.28%  reported for the same period of
2002.  Significant  components of the 11 basis point decrease in ROA include the
following:  a decrease in net interest  margin of 28 basis  points to 3.71%;  an
increase in the earning asset ratio  contributing 9 basis points; an increase of
9 basis points in the provision for loan losses  relative to average  assets;  a
decrease of 8 basis points in noninterest  expense relative to average assets; a
3 basis point decrease in noninterest  income relative to average assets;  and a
12 basis point decrease in income taxes relative to average earning assets.  The
return on average  equity was 11.66% for the first quarter of 2003,  compared to
12.35%  for the same  period of 2002.  The  decrease  is due to lower net income
reported in the current period coupled with a slight  increase in average equity
compared to the same period a year ago.

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

Although continuing  weaknesses in the overall economic environment are present,
the current  interest rate  environment is less volatile  compared to a year ago
when short-term interest rates began to stabilize.  Actions taken by the Federal
Reserve  Board (the "Fed") have  resulted in a general  reduction in  short-term
interest  rates  since the first  quarter  of 2002 and have now  leveled  off to
historic lows. Fed changes to short-term  interest  rates,  left unchanged since
December  2001,  were reduced by an  additional 50 basis points in November 2002
with a 50 basis points reduction in the federal funds rate. The effects of prior
rate  reductions  by the Fed along with  intense  competition  in the  Company's
market areas continue to negatively  impact net interest  margin.  The effect of
the Fed's actions on the Company has generally led to interest  rates on earning
assets declining more rapidly than rates paid on interest  bearing  liabilities.
During a falling rate environment,  the challenge is to reduce the rates paid on
interest bearing liabilities  (primarily  deposits) to offset the decline in the
yield on variable rate assets (primarily  loans) while remaining  competitive in
our markets. The Company's tax equivalent ("TE") yield on earning assets for the
current three months was 5.64%, a reduction of 88 basis points from 6.52% in the
same  period a year ago.  The cost of funds for the  current  three  months  was
2.31%, a decline of 67 basis points  compared to 2.98% in the same period a year
earlier.  A goal of the Company in the current  interest rate  environment is to
increase earning assets and decrease the interest rates paid on interest bearing
liabilities.  Average  earning  assets  increased  $60.8 million or 5.6% to $1.1
billion in the quarterly  comparison.  As a percentage of total average  assets,
earning assets  increased 160 basis points to 92.35% from 90.75%.  This increase
had the effect of adding an additional 9 basis points to ROA in the comparison.

Interest  income totaled $15.5 million for the first quarter of 2003, a decrease
of $1.4 million or 8.5% compared to the same period in the prior year.  Interest
expense totaled $5.5 million,  a decrease of $1.3 million or 19.7%. Net interest
income fell $103 thousand or 1.0% in the comparison and totaled $10.1 million at
March 31, 2003.

Interest and fees on loans  totaled $12.2  million,  a decrease of $835 thousand
mainly due to a decrease in the average rate  earned.  Average  loans  increased
$46.9  million or 6.8% to $736.0  million in the  comparison  due to higher loan
demand in a lower rate environment.  The tax equivalent yield on loans decreased
96 basis  points to 6.80% from 7.76% and  offset the  effects of higher  average
balances on interest income.  Interest on taxable securities was $2.3 million, a
decrease of $443  thousand or 16.2% due  primarily  to a decrease in the average
rate earned.  The average rate earned on taxable  securities  decreased 96 basis
points to 3.30% from  4.26% and  offset  the  effect of a $21.8  million or 8.4%
increase in the average balance. Interest on nontaxable securities declined $108
thousand or 11.9% due to a $9.8 million decrease in the average balance to $71.6
million from $81.4 million.  Interest on short-term investments,  including time
deposits in other banks,  federal funds sold,  and  securities  purchased  under
agreements  to resell,  decreased  $54  thousand,  which is due  primarily  to a
decrease in the average rate earned on these  investments  of 42 basis points to
1.22% from 1.64%.

Interest expense on deposits  decreased $1.3 million or 22.3% to $4.6 million in
the quarterly  comparison.  This decrease resulted from a general decline in the
average rate paid  throughout  the deposit  portfolio  and  correlates  with the
general decline in market interest rates in the reporting  periods.  The decline
in the average rates paid offset increases in average  balances.  The decline in
interest  expense on deposits was as follows:  time  deposits  $969  thousand or
20.5%;  interest  bearing  demand  deposits $205 thousand or 36.7%;  and savings
deposits $160  thousand or 26.1%.  The average rate paid on time  deposits,  the
largest component of interest bearing deposits,  was 3.73% for the first quarter
of 2003  compared to 4.88% for the same period of 2002.  The average  balance of
time deposits  increased  $17.6 million or 4.4% to $417.6  million.  The average
rate paid on interest  bearing demand deposits  declined 41 basis points to .64%
from 1.05% while the average  balance  increased  $6.5 million or 3.0% to $222.9
million.  The average rate paid on savings deposits decreased 45 basis points to
1.08% from 1.53% while the average  balance  increased  $7.5  million or 4.6% to
$170.2 million from $162.7 million.  Interest  expense on overnight  borrowings,
consisting of federal funds  purchased and securities  sold under  agreements to
repurchase,  decreased  $214  thousand  due to a 47 basis  point  decline in the
average rate paid along with a $27.7 million  decline in their average  balance.
Interest  expense  on  other  borrowed  funds  increased  $211  thousand  in the
comparison as additional  borrowings  from the Federal Home Loan Bank  increased
the average  balance  outstanding.  The average  balance of other borrowed funds
totaled $65.6 million,  an increase of $30.3 million or 85.9% in the comparison.
The average rate paid on other  borrowed funds declined 50 basis points to 3.40%
from 3.90%.

The net interest margin (TE) decreased 28 basis points to 3.71% during the first
quarter of 2003 compared to 3.99% in the first quarter of 2002.  The decrease in
net interest  margin is primarily  attributed to a 21 basis point decline 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 3.54% in the first
quarter of 2002. The effect of noninterest  bearing sources of funds contributed
an additional 7 basis points to the decline in net interest  margin.  The effect
of  noninterest  bearing  sources  of funds  on net  interest  margin  typically
declines in a falling rate environment.
The  following  tables  present  an  analysis  of net  interest  income  for the
quarterly periods ended March 31.
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY:  INTEREST RATES AND INTEREST DIFFERENTIAL
----------------------------------------------------------------------------------------------------------------------------------
Three months ended March 31,                                   2003                                         2002
----------------------------------------------------------------------------------------------------------------------------------
                                                Average                       Average          Average                    Average
(In thousands)                                  Balance         Interest        Rate           Balance      Interest       Rate
----------------------------------------------------------------------------------------------------------------------------------
EARNING ASSETS
Investment securities
  Taxable                                    $   282,563         $ 2,299        3.30%       $   260,761      $ 2,742        4.26%
  Nontaxable1                                     71,648           1,181        6.68             81,404        1,327        6.61
Time deposits with banks,
federal funds sold and
securities purchased under                        59,027             177        1.22             57,175          231        1.64
agreements to resell
Loans1,2,3                                       736,039          12,339        6.80            689,158       13,193        7.76
----------------------------------------------------------------------------------------------------------------------------------
     Total earning assets                      1,149,277        $ 15,996        5.64%         1,088,498      $17,493        6.52%
----------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses                        (11,279)                                       (10,559)
----------------------------------------------------------------------------------------------------------------------------------
     Total earning assets, net
     of allowance for loan losses              1,137,998                                      1,077,939
----------------------------------------------------------------------------------------------------------------------------------
NONEARNING ASSETS
Cash and due from banks                           64,383                                         85,507
Premises and equipment, net                       24,045                                         24,693
Other assets                                      18,109                                         13,336
----------------------------------------------------------------------------------------------------------------------------------
     Total assets                            $ 1,244,535                                    $ 1,201,475
----------------------------------------------------------------------------------------------------------------------------------
INTEREST BEARING LIABILITIES
Deposits
  Interest bearing demand                    $   222,879          $  354        0.64%       $   216,414       $  559        1.05%
  Savings                                        170,183             453        1.08            162,732          613        1.53
  Time                                           417,581           3,840        3.73            400,007        4,809        4.88
Federal funds purchased
  and securities sold
  under agreements to repurchase                  80,828             259        1.30            108,534          473        1.77
Other borrowed funds                              65,609             550        3.40             35,286          339        3.90
----------------------------------------------------------------------------------------------------------------------------------
     Total interest bearing liabilities          957,080         $ 5,456        2.31%           922,973      $ 6,793        2.98%
----------------------------------------------------------------------------------------------------------------------------------
NONINTEREST BEARING LIABILITIES
Commonwealth of Kentucky deposits                 32,918                                         30,365
Other demand deposits                            121,013                                        115,406
Other liabilities                                  8,535                                          8,564
----------------------------------------------------------------------------------------------------------------------------------
     Total liabilities                         1,119,546                                      1,077,308
----------------------------------------------------------------------------------------------------------------------------------
     Shareholders' equity                        124,989                                        124,167
----------------------------------------------------------------------------------------------------------------------------------
     Total liabilities and shareholders'
     equity                                  $ 1,244,535                                    $ 1,201,475
----------------------------------------------------------------------------------------------------------------------------------
Net interest income                                               10,540                                      10,700
TE basis adjustment                                                 (488)                                       (545)
----------------------------------------------------------------------------------------------------------------------------------
     Net interest income                                         $10,052                                     $10,155
----------------------------------------------------------------------------------------------------------------------------------
Net interest spread                                                             3.33%                                       3.54%
Impact of noninterest bearing sources
  of funds                                                                       .38                                         .45
----------------------------------------------------------------------------------------------------------------------------------
Net interest margin                                                             3.71%                                       3.99%
----------------------------------------------------------------------------------------------------------------------------------

1Income and yield stated at a fully tax equivalent basis using the marginal corporate Federal tax rate of 35%.
2Loan balances include principal balances on nonaccrual loans.
3Loan fees included in interest income amounted to $521 thousand and $430 thousand in 2003 and 2002, respectively.
ANALYSIS OF CHANGES IN NET INTEREST INCOME (TAX EQUIVALENT BASIS)
-----------------------------------------------------------------------------------------------------------
(In thousands)                                                     Variance         Variance Attributed to
Three months ended March 31,                                      2003/20021         Volume          Rate
-----------------------------------------------------------------------------------------------------------
INTEREST INCOME
Taxable investment securities                                      $   (443)        $ 1,235       $ (1,678)
Nontaxable investment securities2                                      (146)           (239)            93
Time deposits with banks, federal funds sold and
   securities purchased under agreements to resell                      (54)             47           (101)
Loans2                                                                 (854)          4,392         (5,246)
-----------------------------------------------------------------------------------------------------------
     Total interest income                                           (1,497)          5,435         (6,932)
-----------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest bearing demand deposits                                       (205)            112           (317)
Savings deposits                                                       (160)            176           (336)
Time deposits                                                          (969)          1,294         (2,263)
Federal funds purchased and securities sold under
   agreements to repurchase                                            (214)           (105)          (109)
Other borrowed funds                                                    211             490           (279)
-----------------------------------------------------------------------------------------------------------
     Total interest expense                                          (1,337)          1,967         (3,304)
-----------------------------------------------------------------------------------------------------------
Net interest income                                                 $  (160)        $ 3,468       $ (3,628)
-----------------------------------------------------------------------------------------------------------
Percentage change                                                     100.0%       (2,167.5)%      2,267.5%
-----------------------------------------------------------------------------------------------------------

1The 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.
2Income stated at fully tax equivalent basis using the marginal corporate Federal tax rate of 35%.
NONINTEREST INCOME
------------------

Noninterest income was $4.2 million for the current quarter,  an increase of $45
thousand  or 1.1%  compared  to the first  quarter  of the prior  year.  Service
charges and fees on  deposits,  the largest  component  of  noninterest  income,
remained  relatively flat at $1.8 million.  Other service charges,  commissions,
and fees  increased  $19  thousand  or 2.3%.  Data  processing  fees  were  $345
thousand, an increase of 2.7% from $336 thousand in the prior year. Trust income
totaled $399  thousand,  an increase of $32  thousand or 8.7%.  Net gains on the
sale of available for sale securities for the current quarter were $147 thousand
compared to $597 thousand in the prior year as the Company  continually seeks to
properly manage its balance sheet composition. Net gains on the sale of mortgage
loans were $269 thousand, an increase of $140 thousand from $129 thousand in the
prior year as mortgage  loans  originated for sale increased $6.9 million in the
comparison  due  to  the  low  interest  rate  environment.  Income  from  a new
company-owned  life  insurance  program  initiated  near the end of the  current
quarter was $265 thousand.  Other  noninterest  income totaled $66 thousand,  an
increase of $14 thousand.

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

Total  noninterest  expenses  increased  $102  thousand  or 1.1%  from the first
quarter  of 2002 and  totaled  $9.1  million.  Salaries  and  employee  benefits
accounts for more than half of the total of  noninterest  expense.  Salaries and
benefits  decreased  $82  thousand  or  1.6% to $5.1  million  in the  quarterly
comparison.  Employee benefit related expenses decreased $100 thousand primarily
due to lower health insurance costs. Noncash compensation expense related to the
Company's  nonqualified  stock  option plan  declined  $63  thousand  due to the
structure of the vesting schedule and forfeitures.  Salaries and related payroll
taxes increased $81 thousand or 2.0% to $4.1 million mainly due to normal salary
increases.  The number of full time equivalent  employees  decreased to 456 from
460  reported in the prior  period.  Occupancy  expense,  net of rental  income,
increased $87 thousand or 15.2% and totaled $658  thousand.  The increase in net
occupancy  expense is  attributed  to  increases  in  maintenance  and  repairs,
utilities  costs,  and real  estate  taxes.  Equipment  expense  was  relatively
unchanged at $937 thousand. Other noninterest expense,  including bank franchise
taxes, increased $86 thousand or 3.6% to $2.5 million.

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

Income tax expense for the first quarter of 2003 was $1.1 million, a decrease of
$235  thousand or 17.6% from the same period a year  earlier.  The effective tax
rate decreased 264 basis points to 23.46% from 26.10% in 2002. The change in the
effective  tax rate is due to a  combination  of  factors,  primarily  including
credits derived from qualified zone academy bonds and nontaxable  income accrued
from the increase in cash  surrender  value on life  insurance  purchased on key
employees.

FINANCIAL CONDITION

Total assets were $1.2 billion on March 31, 2003, a decrease of $59.2 million or
4.6% from  December 31, 2002.  The decrease in assets  include a $116.4  million
lower balance in the securities portfolio, offset by a $30.7 million increase in
cash and cash equivalents and a $26.9 million increase in other assets resulting
primarily from the  implementation of a company-owned  life insurance program in
the current quarter. Fed funds purchased and securities sold under agreements to
repurchase declined $61.1 million and correspond to the decline in assets during
the period.  The makeup of the balance sheet continually  changes as the Company
responds to  extremely  competitive  market  forces.  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,  these  agencies issue
checks drawn on Farmers Bank,  including 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  also  important  to
understanding the financial condition of the Company. On an average basis, total
assets  were $1.2  billion for the first  three  months of 2003,  an increase of
$38.2 million or 3.1% from year-end  2002.  Average  earning  assets,  primarily
loans and securities,  were $1.1 billion at March 31, 2003, an increase of $60.8
million or 5.6% from year-end 2002.  Average earning assets  represent 92.35% of
total average assets on March 31, 2003, an increase of 160 basis points compared
to 90.75% at year-end 2002.

LOANS
-----

Loans,  net of unearned  income,  totaled  $738.2  million at March 31,  2003, a
decrease of $395 thousand or 0.1% from year-end  2002.  The  composition  of the
loan portfolio is summarized in the table below.

-------------------------------------------------------------------------------
                                  March 31, 2003            December 31, 2002
(Dollars in thousands)            Amount       %            Amount       %
-------------------------------------------------------------------------------

Commercial, financial,
  and agriculture              $  114,306    15.5%       $  110,056    14.9%

Real estate - construction         53,120     7.2            55,896     7.6
Real estate - mortgage            461,202    62.5           459,620    62.2
Installment                        73,694    10.0            76,162    10.3
Lease financing                    35,922     4.8            36,905     5.0
-------------------------------------------------------------------------------
     Total                     $  738,244   100.0%       $  738,639   100.0%
-------------------------------------------------------------------------------

On average,  loans represented 64.0% of earning assets during the current period
compared to 64.7% for year-end  2002.  As loan demand  declines,  the  available
funds are  redirected  to 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 $11.1 million at March 31, 2003, an increase
of $68 thousand or 0.6% from the prior  year-end.  The allowance for loan losses
was 1.51% of loans net of unearned  income at March 31,  2003,  an increase of 1
basis  point  compared to  December  31,  2002.  The  provision  for loan losses
increased $264 thousand in the current  three-month  period compared to the same
period in 2002.  The Company had net  charge-offs  of $317 thousand in the first
three months of 2003  compared to net  charge-offs  of $341 thousand in the same
period of 2002, a decrease of $24 thousand or 7.0%.  Annualized net  charge-offs
represent  0.17% and 0.20% of average net loans for three months ended March 31,
2003  and  2002,  respectively,  as  compared  to 0.60% at  year-end  2002.  The
allowance for loan losses as a percentage of  nonperforming  loans totaled 67.7%
and 57.3% at March 31, 2003 and December 31, 2002, respectively. The increase is
primarily  reflective of the decline in nonperforming  assets of $2.9 million in
the  comparison.  Management  continues  to  emphasize  collection  efforts  and
evaluation of risks within the loan  portfolio.  In  management's  opinion,  the
allowance  for loan  losses is  adequate  to cover  losses  inherent in the loan
portfolio.

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

Nonperforming  assets for the Company include  nonperforming  loans,  other real
estate  owned,  and other  foreclosed  assets.  Nonperforming  loans  consist of
nonaccrual loans,  restructured loans, and loans past due ninety days or more on
which interest is still accruing.  Nonperforming assets totaled $16.9 million at
March 31,  2003,  a decrease of $2.9  million or 14.6% from the prior  year-end.
Nonperforming  loans  totaled $16.4 million at March 31, 2003 a decrease of $2.9
million or 14.9% compared to year-end 2002.  Nonperforming  loans include a pool
of  constructions  loans  secured by  residential  real estate to a  financially
troubled  builder.  This pool of loans  totaled $12.0 million at March 31, 2003.
Interest  income  lost on this  group of loans  due to their  nonaccrual  status
totaled  $189  thousand  during the three  months  ended March 31,  2003.  It is
currently  estimated  that a total of $177  thousand of interest  income will be
lost in each  subsequent  quarter  related  to this  credit  while it remains on
nonaccrual status.  Nonperforming  loans as a percentage of net loans were 2.22%
at March 31, 2003, a decrease of 39 basis points from 2.61% compared to year-end
2002.

Other real estate owned,  which had a balance of $385 thousand at year-end 2002,
decreased $121 thousand or 31.4% to $264 thousand on March 31, 2003

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

Temporary  investments  consist of interest  bearing  deposits with other banks,
federal funds sold,  and  securities  purchased  under  agreements to resell and
totaled  $30.8  million at March 31, 2003,  an increase of $7.8 million or 33.7%
from year-end 2002.  Temporary  investments averaged $59.0 million for the first
three  months of 2003,  a decrease  of $9.9  million  from  year-end  2002.  The
decrease is  primarily a result of the  Company's  net funding  position and the
relationship  between its principal  subsidiary and the Commonwealth of Kentucky
as described in preceding  sections of this report.  Temporary  investments  are
reallocated  as loan  demand  and  other  investment  alternatives  present  the
opportunity.

INVESTMENT SECURITIES

Investment  securities  were  $325.1  million on March 31,  2003,  a decrease of
$116.4  million  or 26.4% from  year-end  2002.  Available  for sale and held to
maturity  securities  were  $297.8  million  and  $27.3  million,  respectively.
Investment  securities averaged $354.2 million for the first quarter of 2003, an
increase of $37.8 million or 11.9% from year-end  2002.  The increase in average
investment  securities is  attributable  to the Company's  continued  efforts to
manage its net interest  margin during a period of low market interest rates and
correlates  with the  increase  in average  borrowed  funds.  The Company had an
unrealized gain on available for sale  investment  securities of $4.2 million at
March 31, 2003 compared to $5.5 million at year-end 2002. The decrease is due to
a combination of recognized  gains on the sale of available for sale  investment
securities during the current quarter of $147 thousand,  maturities and calls of
securities  during the  quarter,  and a general  decline in the market  value of
securities held in the portfolio at March 31, 2003.

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

The Company  purchased  life insurance  policies on certain key employees,  with
their  knowledge  and  consent,  during the  current  quarter at a cost of $23.9
million.  Company-owned  life insurance is recorded at its cash surrender value,
or the amount that can be realized,  on the consolidated  balance sheet with the
related change in cash surrender value and proceeds  received under the policies
reported on the consolidated statement of income as tax-free noninterest income,
which  totaled $265  thousand for the current  quarter.  The Company is the sole
beneficiary of proceeds  received under the policies.  Expected  income from the
purchase of the  insurance  policies  will be used to offset the rising costs of
the  Company's  various  benefit  plans  as  well  as the  additional  costs  of
implementing  a new  postretirement  health  insurance  program.  Under  the new
postretirement  health  insurance  plan,  any  employee  that meets the  service
requirements  upon  retirement  would  be  eligible  to  continue  their  health
insurance  coverage,  identical  to the  coverage  that  is  offered  to  active
employees.  The employee  will pay 50% of the cost and the Company will pay 50%.
It is currently  estimated  that the expense  related to the new  postretirement
health  insurance plan will be  approximately  $114 thousand per quarter for the
remainder of 2003.

DEPOSITS
--------

Total  deposits  were  $960.2  million at March 31,  2003,  an  increase of $2.8
million or 0.3% from year-end 2002. Noninterest bearing deposits increased $23.5
million  or 16.7% in the  comparison.  This  increase  is  primarily  due to the
relationship  between the Company's principal subsidiary and the Commonwealth of
Kentucky  as  described  in  preceding  sections  of this  report.  On  average,
noninterest  bearing  deposits were $153.9 million during the current period,  a
decrease  of $3.1  million  or 2.1%.  End of  period  interest  bearing  deposit
balances  decreased  $20.8 million  during the three months ended March 31, 2003
due to decreases in interest  bearing checking  accounts of $5.8 million,  money
market deposit accounts of $18.3 million,  and savings accounts of $4.2 million.
Time  deposits  increased  $7.5  million  in the end of period  comparisons.  On
average, interest bearing deposits were $810.6 million in the current period, an
increase of $23.2 million from year-end 2002.  The increase in average  interest
bearing  deposits  is  attributable  to  increases  in interest  bearing  demand
deposits of $7.1 million,  time deposits of $12.9 million,  money market deposit
accounts of $1.8 million,  and savings accounts of $1.3 million.  Total deposits
averaged  $964.6  million,  an increase of $26.3  million or 2.8% from  year-end
2002.

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

Borrowed  funds  totaled  $121.6  million at March 31, 2003, a decrease of $60.7
million or 33.3% from $182.3 million at year-end  2002. A $1.0 million  increase
in long-term  borrowings  was offset by a $61.7  million  decrease in short-term
borrowings,  which  account for the total  decrease in borrowed  funds.  Federal
funds  purchased and securities  sold under  agreements to repurchase  decreased
$61.1 million or 52.7% due primarily to the  relationship  between the Company's
principal  subsidiary and the Commonwealth of Kentucky as described in preceding
sections of this report.  Other  short-term  borrowings  decreased $566 thousand
mainly due to  repayments  of  borrowed  funds from the  Federal  Home Loan Bank
("FHLB"). The $1.0 million increase in long-term borrowings is mainly attributed
to the funding of new data  processing  equipment  financed  over a term of four
years.  Total  borrowed  funds  averaged  $146.4  million,  an increase of $10.4
million or 7.7% from year-end 2002.

LIQUIDITY

The Parent  Company's  primary use of cash consists of dividend  payments to its
common shareholders,  purchases of its common stock, 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 March
31, 2003 combined  retained earnings of the subsidiary banks were $62.0 million,
of which $9.2 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 other 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 2003  sufficient
to meet its  liquidity  needs.  The Parent  Company  had cash  balances  of $6.9
million at March 31, 2003.

The Company's  objective as it relates to liquidity is to insure that 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 banks have several  sources of funds available on a daily basis,
which can be used for  liquidity  purposes.  These  sources  of funds  primarily
include the  subsidiary  banks' core  deposits,  consisting of both business and
nonbusiness  deposits;  cash flow  generated by repayment of loan  principal and
interest;  and federal funds purchased and securities  sold under  agreements to
repurchase.  The  terms  of the  recent  FHLB  advances  have  been  taken  into
consideration in relation to the overall funding needs of the Company.

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  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 March 31, 2003, such assets totaled $395.6 million, a decrease of $84.5
million or 17.6% from year-end 2002. The decrease in liquid assets is attributed
to the overall funding position of the Company and the purchase of company-owned
life insurance on key employees during the current quarter. Net cash provided by
operating  activities  was $446  thousand in the first three  months of 2003,  a
decrease of $5.0  million or 91.8%  compared  to the same period last year.  Net
cash provided by investing  activities was $92.4  million,  an increase of $80.1
million due primarily to a $118.1 million  increase from  investment  securities
transactions  offset by the  purchase of  company-owned  life  insurance  on key
employees of $23.9  million and a decrease in net loan  principal  repayments of
$13.6  million  during  the  three-month  periods.  Net cash  used in  financing
activities  was $62.2 million for the period ended March 31, 2003 as a result of
a $61.1 million net decrease in federal  funds  purchased  and  securities  sold
under  agreements  to  repurchase  attributed  to the  Commonwealth  of Kentucky
deposit  activity.  In the same period of the prior year,  financing  activities
provided $7.6 million primarily due to additional FHLB borrowing activity.

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 $124.4  million on March 31,  2003, a decrease of $1.4
thousand or 1.1% from year-end  2002 and due  primarily to  additional  treasury
stock  purchases.  The Company  purchased 68 thousand  shares of its outstanding
common  stock  during  the first  three  months of 2003 for a total cost of $2.1
million.

The  Company  issued 3 thousand  shares of common  stock  during the first three
months pursuant to its nonqualified stock option plan. Dividends of $2.2 million
or $.32 per share  were  declared  during  the first  three  months of 2003,  an
increase  of 3.2% per  share  compared  to the  prior  year.  Accumulated  other
comprehensive  income,  consisting of unrealized  holding gains on available for
sale investment  securities (net of tax),  decreased $854 thousand from year-end
2002 due to a combination of recognized  gains on the sale of available for sale
investment  securities  during  the  current  quarter,  maturities  and calls of
securities  during the  quarter,  and a general  decline in the market  value of
securities held in the portfolio at March 31, 2003.

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 March 31, 2003, 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           15.31%                 4.00%               6.00%
Total risk based            16.56%                 8.00%              10.00%
Leverage                     9.78%                 4.00%               5.00%
--------------------------------------------------------------------------------

As of March 31, 2003,  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 March 31, 2003, the model indicated that if rates were to gradually  increase
by 150 basis points during the calendar year,  then net interest  income and net
income would increase 0.99% and 2.08%, respectively for the year ending December
31, 2003. The model  indicated  that if rates were to gradually  decrease by 150
basis points over the same period, then net interest income and net income would
decrease 2.44% and 5.38%, respectively.

In the current low interest rate environment, it is not practical or possible to
reduce certain  deposit rates by the same magnitude as rates on earning  assets.
The average rate paid on some of the Company's deposits is well below 1.5%. This
situation  magnifies the model's  predicted  results when modeling a decrease in
interest rates, as earning assets with higher yields have more of an opportunity
to reprice at lower rates than lower-rate deposits.

ITEM 4.  CONTROLS AND PROCEDURES
--------------------------------

The Company's Chief Executive  Officer and Chief Financial Officer have reviewed
and evaluated the Company's disclosure controls and procedures within 90 days of
the filing of this report,  and have  concluded  that the  Company's  disclosure
controls and procedures  were adequate and effective to ensure that  information
required to be disclosed is recorded,  processed,  summarized, and reported in a
timely manner.

There were no significant changes in the Company'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 significant  deficiencies or material weaknesses in the controls which
required corrective action.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS
--------------------------

In September  1992,  Farmers Bank & Capital Trust Company (the "Bank") was named
as a defendant in Case No.  92CIO5734 in Jefferson  Circuit  Court,  Louisville,
Kentucky,  in a case styled  Shilling  et al. v.  Farmers  Bank & Capital  Trust
Company.  Details of this case have been disclosed in previous Annual Reports on
Form 10-K and  subsequent  10-Q  filings.  The  named  plaintiffs  purported  to
represent a class  consisting  of all present and former owners of the County of
Jefferson,  Kentucky,  Nursing Home  Refunding  Revenue  Bonds (Filson Care Home
Project)  Series  1986A  and  County  of  Jefferson,   Kentucky,   Nursing  Home
Improvement  Revenue Bonds (Filson Care Home Project) Series 1986B (collectively
"the Bonds").  The plaintiffs  alleged that the class had been damaged through a
reduction in the value of the Bonds and a loss of interest on the Bonds  because
of the  actions  of the  Bank  in its  capacity  as  indenture  trustee  for the
Bondholders. The plaintiffs demanded compensatory and punitive damages.

On July 6, 1993, the Court denied the plaintiffs'  motion to certify the case as
a class action.  Subsequently,  the plaintiffs  amended their  complaint to join
additional  Bondholders as plaintiffs.  The plaintiffs  claimed to hold Bonds in
the aggregate  principal  amount of $480,000.  Before trial, the Court dismissed
thirty-nine of the  plaintiffs  because they were unable or unwilling to present
testimony to support their claims.

The case was tried to a jury  beginning  on March 28, 2000 on the claims of four
plaintiffs holding Bonds in the aggregate principal amount of $80,000. The Court
granted a directed  verdict in favor of the Bank on the  plaintiffs'  claim that
the Bank had  engaged in  commercial  bribery  and that the legal fees that were
paid by the Bank should be disgorged  because of an alleged conflict of interest
of the Bank's  counsel.  The jury found for the plaintiffs on the claim that the
Bank had  breached  its  fiduciary  duty and awarded the  plaintiffs  $99,875 in
compensatory damages and $600,000 in punitive damages.

The Bank filed a motion for  judgment  notwithstanding  the  verdict  or, in the
alternative,  for a new trial,  asserting  that the jury's verdict that the Bank
breached its fiduciary duty was not supported by sufficient  evidence,  that the
jury's award of damages was  speculative  and was not supported by the evidence,
and that the jury's award of punitive  damages was not  supported by  sufficient
evidence.  The Bank also asserted that a new trial was warranted  because of the
erroneous admission of evidence concerning legal fees paid by the Bank.

Plaintiffs filed an appeal contending that the denial of class certification was
erroneous,  that the individual  plaintiffs  should not have been dismissed from
the  lawsuit,  that  certain  evidence was  erroneously  excluded,  and that the
directed  verdict  regarding the  disgorgement  of legal fees and the commercial
bribery claims was  erroneous.  On August 1, 2000, the Kentucky Court of Appeals
dismissed the appeal as having been prematurely filed.

On January 3, 2001, the Jefferson Circuit Court entered judgment in favor of the
Bank notwithstanding the jury's verdict in favor of the plaintiffs, holding that
the Bank  reasonably  relied in good  faith on the advice of its  counsel,  that
there  was no  evidence  that  the  Bank  breached  its  fiduciary  duty  to the
plaintiffs,  and that there was no evidence that the Bank caused the plaintiffs'
losses.

On January 31, 2001,  the  plaintiff  bondholders  appealed,  and on February 9,
2001, defendant Bank cross-appealed, the judgment of the Jefferson Circuit Court
to the Kentucky Court of Appeals.

In their appeal,  the  Bondholders  claim that the trial court's denial of class
certification was erroneous,  that certain individual plaintiffs should not have
been dismissed  from the lawsuit,  that the trial court  erroneously  directed a
verdict  against  them on the  issue of a  conflict  of  interest,  and that the
judgment  notwithstanding  the  verdict  was  erroneously  granted  because  the
evidence was sufficient to support the jury's verdict.

In its cross-appeal, the Bank claims that the trial court erroneously bifurcated
the trial on the issue of liability and damages,  that certain  witnesses should
have been  excluded  from the  trial,  that the Bank  should  have been  granted
summary judgment,  and that certain evidence and testimony regarding  attorneys'
fees should have been excluded.

On May 10, 2002,  the Kentucky Court of Appeals  affirmed the Jefferson  Circuit
Court's judgment in favor of the Bank. The plaintiff  bondholders filed a motion
for discretionary review to the Kentucky Supreme Court on June 7, 2002.

On June 7, 2002, the plaintiffs  filed with the Kentucky  Supreme Court a motion
for  discretionary  review.  The Bank filed a response  opposing the plaintiffs'
motion

On April 17, 2003 the  Kentucky  Supreme  Court  denied  plaintiffs'  motion for
discretionary  review.  The judgment in favor of the Bank is therefore now final
and subject to no further appeal or judicial review.

As of March 31,  2003,  there were  various  other  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  adverse  effect  upon  the  consolidated  financial
statements of the Company.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------

a)       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  (page
               23)

          99.1 CEO Certification  Pursuant to Section 906 of the  Sarbanes-Oxley
               Act of 2002 (page 24)

          99.2 CFO Certification  Pursuant to Section 906 of the  Sarbanes-Oxley
               Act of 2002 (page 25)

b)       Reports on Form 8-K
         -------------------

          On January 28, 2003, the  Registrant  filed a report on Form 8-K under
          Item 5 disclosing  its  intention to purchase up to 300,000  shares of
          its  outstanding  common  stock.  The  purchases  will be dependent on
          market  conditions and there is no guarantee as to the exact number of
          shares to be purchased.  There were no financial statements filed with
          this Form 8-K.

          On March 31,  2003,  the  Registrant  filed a report on Form 8-K under
          Item  4  disclosing   the  change  in  the   Registrant's   certifying
          accountant.  There were no financial  statements  filed with this Form
          8-K.

          On April 21,  2003,  the  Registrant  filed a report on Form 8-K under
          Item 9 (furnished  under Item 12) in  accordance  with SEC release No.
          33-8216  reporting its earnings for the first  quarter of 2003.  There
          were no financial statements filed with this Form 8-K.
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: May-13, 2003               /s/ G. Anthony Busseni
--------------------             -----------------------------------------------
                                 G. Anthony Busseni,
                                 President and CEO
                                 (Principal Executive Officer)

Date:  5-13-03                   /s/ C Douglas Carpenter
--------------------             -----------------------------------------------
                                 C. Douglas Carpenter,
                                 Vice President, Secretary, and CFO
                                 (Principal Financial and Accounting Officer)
CERTIFICATIONS

I, G. Anthony Busseni, certify that:

1.   I have reviewed this quarterly  report on Form 10-Q of Farmers Capital Bank
     Corporation;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a)
     designed such  disclosure  controls and  procedures to ensure that material
     information   relating  to  the  registrant,   including  its  consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the period in which  this  quarterly  report is being
     prepared;  b) evaluated the  effectiveness of the  registrant's  disclosure
     controls  and  procedures  as of a date  within 90 days prior to the filing
     date of this quarterly report (the "Evaluation  Date"); and c) presented in
     this  quarterly  report  our  conclusions  about the  effectiveness  of the
     disclosure  controls  and  procedures  based  on our  evaluation  as of the
     Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent  function):  a) all  significant  deficiencies  in the design or
     operation  of  internal   controls   which  could   adversely   affect  the
     registrant's  ability to record,  process,  summarize and report  financial
     data  and  have  identified  for the  registrant's  auditors  any  material
     weaknesses in internal controls; and b) any fraud, whether or not material,
     that involves  management or other employees who have a significant role in
     the registrant's internal controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  Mayt 13, 2003                                 /s/ G. Anthony Busseni
----------------------                               --------------------------
                                                     G. Anthony Busseni
                                                     President and CEO
I, C. Douglas Carpenter, certify that:

1.   I have reviewed this quarterly  report on Form 10-Q of Farmers Capital Bank
     Corporation;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a)
     designed such  disclosure  controls and  procedures to ensure that material
     information   relating  to  the  registrant,   including  its  consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the period in which  this  quarterly  report is being
     prepared;  b) evaluated the  effectiveness of the  registrant's  disclosure
     controls  and  procedures  as of a date  within 90 days prior to the filing
     date of this quarterly report (the "Evaluation  Date"); and c) presented in
     this  quarterly  report  our  conclusions  about the  effectiveness  of the
     disclosure  controls  and  procedures  based  on our  evaluation  as of the
     Evaluation Date;

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent  function):  a) all  significant  deficiencies  in the design or
     operation  of  internal   controls   which  could   adversely   affect  the
     registrant's  ability to record,  process,  summarize and report  financial
     data  and  have  identified  for the  registrant's  auditors  any  material
     weaknesses in internal controls; and b) any fraud, whether or not material,
     that involves  management or other employees who have a significant role in
     the registrant's internal controls; and

6.   The  registrant's  other  certifying  officer and I have  indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date: 5-13-03                               /s/ C Douglas Carpenter
---------------                             -----------------------------------
                                            C. Douglas Carpenter
                                            Vice President, Secretary, and CFO
Exhibit 3iia

            AMENDMENTS TO BY-LAWS OF FARMERS CAPITAL BANK CORPORATION
            ---------------------------------------------------------

RESOLVED, that the first sentence of Section 2.11 of the Corporation's Bylaws is
hereby amended so that said sentence shall henceforth read as follows:

Each outstanding share of common stock authorized by the Corporation's  Articles
of  Incorporation  to have voting  power shall be entitled to one vote upon each
matter submitted to a vote at a meeting of shareholders.

RESOLVED,  that Section 2.13 of the  Corporation's  Bylaws is hereby  amended so
that said Section 2.13 shall henceforth read in its entirety as follows:

2.13 Voting for Directors. Corporation directors shall be elected by a plurality
of votes cast by the shares  entitled  to vote in the  election  at a meeting of
shareholders  at  which a  quorum  is  present.  A  "plurality"  means  that the
individuals  with the largest number of votes are elected as directors up to the
maximum number of directors to be chosen at the election.
Exhibit 99.1

                        CERTIFICATION OF PERIODIC REPORT
                        --------------------------------

I, G. Anthony Busseni,  President and Chief Executive Officer of Farmers Capital
Bank Corporation,  certify, pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section 1350, that:

1)   the Quarterly  Report on Form 10-Q of the Company for the quarterly  period
     ended March 31, 2003 (the "Report") fully complies with the requirements of
     Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2)   the information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and results of operations of the Company.

Date:  May 13, 2003                                  /s/ G. Anthony Busseni
---------------------                                --------------------------
                                                     G. Anthony Busseni
                                                     President and CEO
Exhibit 99.2

                        CERTIFICATION OF PERIODIC REPORT
                        --------------------------------

I, C. Douglas Carpenter, Vice President,  Secretary, and Chief Financial Officer
of Farmers  Capital Bank  Corporation,  certify,  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1)   the Quarterly  Report on Form 10-Q of the Company for the quarterly  period
     ended March 31, 2003 (the "Report") fully complies with the requirements of
     Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2)   the information  contained in the Report fairly  presents,  in all material
     respects, the financial condition and results of operations of the Company.

Date:  5-13-03                              /s/ C Douglas Carpenter
----------------                            -----------------------------------
                                            C. Douglas Carpenter
                                            Vice President, Secretary, and CFO