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 September 30, 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 $0.125 per share
                6,711,771 shares outstanding at November 10, 2003

<PAGE>



                                TABLE OF CONTENTS


Part I - Financial Information                                          Page No.
------------------------------                                          --------

     Item 1 - Financial Statements                                            3

         Unaudited Consolidated Balance Sheets -
             September 30, 2003 and December 31, 2002                         3

         Unaudited Consolidated Statements of Income -
             For the Three Months and Nine Months Ended
             September 30, 2003 and September 30, 2002                        4

         Unaudited Consolidated Statements of Comprehensive Income -
             For the Three Months and Nine Months Ended
             September 30, 2003 and September 30, 2002                        5

         Unaudited Consolidated Statements of Cash Flows -
             For the Nine Months Ended
             September 30, 2003 and September 30, 2002                        6

         Unaudited Consolidated Statements of Changes in
             Shareholders' Equity -
             For the Nine Months Ended
             September 30, 2003 and September 30, 2002                        7

         Notes to Unaudited Consolidated Financial Statements                 8

     Item 2 - Management's Discussion and Analysis of Financial
                Condition and Results of Operations                          11

     Item 3 - Quantitative and Qualitative Disclosures About Market Risk     25

     Item 4 - Controls and Procedures                                        26

Part II - Other Information

     Item 1 - Legal Proceedings                                              26

     Item 6 - Exhibits and Reports on Form 8-K                               26

     Signatures                                                              27



<PAGE>


PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

UNAUDITED CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------------------------------------------------------------------
                                                                                         September 30,       December 31,
(In thousands, except share data)                                                                2003               2002
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                        <C>                <C>
ASSETS
Cash and cash equivalents:
     Cash and due from banks                                                               $   105,700        $    44,083
     Interest bearing deposits in other banks                                                    3,449              3,947
     Federal funds sold and securities purchased under
          agreements to resell                                                                  26,810             19,071
------------------------------------------------------------------------------------------------------------------------------------
          Total cash and cash equivalents                                                      135,959             67,101
------------------------------------------------------------------------------------------------------------------------------------
Investment securities:
     Available for sale, amortized cost of $313,774 (2003) and $407,560 (2002)                 315,899            413,038
     Held to maturity, fair value of $25,933 (2003) and $30,312 (2002)                          24,223             28,519
------------------------------------------------------------------------------------------------------------------------------------
          Total investment securities                                                          340,122            441,557
------------------------------------------------------------------------------------------------------------------------------------
Loans, net of unearned income                                                                  739,298            738,639
Allowance for loan losses                                                                      (11,127)           (11,061)
------------------------------------------------------------------------------------------------------------------------------------
          Loans, net                                                                           728,171            727,578
------------------------------------------------------------------------------------------------------------------------------------
Premises and equipment, net                                                                     24,121             24,155
Company-owned life insurance                                                                    25,090
Other assets                                                                                    15,384             15,211
------------------------------------------------------------------------------------------------------------------------------------
          Total assets                                                                     $ 1,268,847        $ 1,275,602
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Deposits:
     Noninterest bearing                                                                   $   198,851        $   141,238
     Interest bearing                                                                          812,035            816,242
------------------------------------------------------------------------------------------------------------------------------------
          Total deposits                                                                     1,010,886            957,480
------------------------------------------------------------------------------------------------------------------------------------

Federal funds purchased and securities sold under agreements to repurchase                      64,230            115,979
Other short-term borrowings                                                                      1,116              9,207
Long-term debt                                                                                  56,649             57,152
Dividends payable                                                                                2,149              2,191
Other liabilities                                                                                8,617              7,820
------------------------------------------------------------------------------------------------------------------------------------
          Total liabilities                                                                  1,143,647          1,149,829
------------------------------------------------------------------------------------------------------------------------------------
Commitments and contingencies

SHAREHOLDERS' EQUITY
Common stock, par value $.125 per share
     9,608,000 shares authorized; 8,150,028 and 8,135,977
     shares issued at September 30, 2003 and December 31, 2002, respectively                     1,019              1,017
Capital surplus                                                                                 18,284             17,623
Retained earnings                                                                              145,261            141,199
Treasury stock, at cost
     1,442,294 and 1,344,463 shares at September 30, 2003 and
     December 31, 2002, respectively                                                           (40,745)           (37,627)
Accumulated other comprehensive income                                                           1,381              3,561
------------------------------------------------------------------------------------------------------------------------------------
          Total shareholders' equity                                                           125,200            125,773
------------------------------------------------------------------------------------------------------------------------------------
          Total liabilities and shareholders' equity                                       $ 1,268,847        $ 1,275,602
------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
------------------------------------------------------------------------------------------------------------------------------------
                                                                               Three Months                      Nine Months
                                                                                  Ended                             Ended
                                                                              September 30,                      September 30,
(In thousands, except per share data)                                     2003           2002               2003           2002
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>            <C>                <C>            <C>
INTEREST INCOME
Interest and fees on loans                                            $ 11,921       $ 12,880           $ 36,289       $ 38,583
Interest on investment securities:
     Taxable                                                             1,318          2,578              4,818          7,921
     Nontaxable                                                            809            850              2,392          2,699
Interest on deposits in other banks                                         12             17                 49            170
Interest on federal funds sold and securities
     purchased under agreements to resell                                  129            317                506            772
------------------------------------------------------------------------------------------------------------------------------------
          Total interest income                                         14,189         16,642             44,054         50,145
------------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits                                                     4,033          5,550             12,996         17,302
Interest on federal funds purchased and securities
     sold under agreements to repurchase                                   182            411                684          1,318
Interest on other borrowed funds                                           542            411              1,649          1,164
------------------------------------------------------------------------------------------------------------------------------------
          Total interest expense                                         4,757          6,372             15,329         19,784
------------------------------------------------------------------------------------------------------------------------------------
          Net interest income                                            9,432         10,270             28,725         30,361
------------------------------------------------------------------------------------------------------------------------------------
Provision for loan losses                                                  642            869              1,378          1,978
------------------------------------------------------------------------------------------------------------------------------------
          Net interest income after provision for loan losses            8,790          9,401             27,347         28,383
------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST INCOME
Service charges and fees on deposits                                     1,951          2,088              5,804          5,867
Other service charges, commissions, and fees                               909            897              2,682          2,627
Data processing income                                                     337            340              1,071          1,063
Trust income                                                               385            368              1,197          1,096
Investment securities gains, net                                           822            440                966          1,433
Gain on sale of mortgage loans                                             276            140                788            325
Income from company-owned life insurance                                   416                             1,089
Other                                                                       55             68                198            192
------------------------------------------------------------------------------------------------------------------------------------
          Total noninterest income                                       5,151          4,341             13,795         12,603
------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits                                           5,188          5,033             15,469         14,984
Occupancy expenses, net                                                    621            623              1,921          1,782
Equipment expenses                                                         934            845              2,795          2,685
Bank franchise tax                                                         330            308                995            921
Other                                                                    2,136          2,234              6,636          6,399
------------------------------------------------------------------------------------------------------------------------------------
          Total noninterest expense                                      9,209          9,043             27,816         26,771
------------------------------------------------------------------------------------------------------------------------------------
          Income before income taxes                                     4,732          4,699             13,326         14,215
------------------------------------------------------------------------------------------------------------------------------------
Income tax expense                                                         831          1,173              2,806          3,591
------------------------------------------------------------------------------------------------------------------------------------
          Net income                                                  $  3,901       $  3,526           $ 10,520       $ 10,624
------------------------------------------------------------------------------------------------------------------------------------
NET INCOME PER COMMON SHARE
     Basic                                                            $    .58       $    .51           $   1.56       $   1.54
     Diluted                                                               .58            .51               1.55           1.53
------------------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE SHARES OUTSTANDING
     Basic                                                               6,712          6,850              6,733          6,880
     Diluted                                                             6,761          6,898              6,773          6,925
------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
------------------------------------------------------------------------------------------------------------------------------------
                                                                        Three Months Ended        Nine Months Ended
                                                                            September 30,             September 30,
 (In thousands)                                                         2003           2002       2003           2002
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>           <C>        <C>             <C>
NET INCOME                                                            $ 3,901       $ 3,526    $ 10,520        $10,624
Other comprehensive income:
     Unrealized holding (loss) gain on available for sale
     securities arising during the period, net of tax
     of $719, $1,329, $512, and $1,636, respectively                   (1,335)        2,468        (950)         3,038
Reclassification adjustment for prior period
     unrealized gain recognized during current period,
     net of tax of $601, $111, $662, and $337, respectively            (1,116)         (207)     (1,230)          (625)
------------------------------------------------------------------------------------------------------------------------------------
Other comprehensive income                                             (2,451)        2,261      (2,180)         2,413

------------------------------------------------------------------------------------------------------------------------------------
Comprehensive Income                                                  $ 1,450       $ 5,787     $ 8,340       $ 13,037
------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
------------------------------------------------------------------------------------------------------------------------------------
Nine months ended September 30, (In thousands)                                                         2003            2002
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                               <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                                                                   $  10,520       $  10,624
     Adjustments to reconcile net income to net cash provided by operating
          activities:
          Depreciation and amortization                                                               2,257           2,147
          Net amortization of investment security premiums and (discounts):
                Available for sale                                                                    2,578             394
                Held to maturity                                                                        (52)            (49)
          Provision for loan losses                                                                   1,378           1,978
          Noncash compensation expense                                                                  319             427
          Mortgage loans originated for sale                                                        (53,405)        (26,768)
          Proceeds from sale of mortgage loans                                                       54,724          25,159
          Deferred income tax expense                                                                   144               3
          Gain on sale of mortgage loans                                                               (788)           (325)
          Gain on sale of premises and equipment                                                         (2)             (2)
          Gain on sale of available for sale investment securities, net                                (966)         (1,433)
          Decrease in accrued interest receivable                                                       170             768
          (Increase) decrease in other assets                                                        (1,432)             74
          Decrease in accrued interest payable                                                         (445)           (272)
          Increase in other liabilities                                                               2,271             949
------------------------------------------------------------------------------------------------------------------------------------
             Net cash provided by operating activities                                               17,271          13,674
------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
     Proceeds from maturities and calls of investment securities:
          Available for sale                                                                        316,365         270,455
          Held to maturity                                                                            4,348           7,159
     Proceeds from sale of available for sale investment securities                                 108,975         147,229
     Purchase of available for sale investment securities                                          (333,166)        (368,437)
     Loans originated for investment, net of principal collected                                     (2,502)         (17,430)
     Purchase of company-owned life insurance                                                       (24,001)
     Purchase of premises and equipment                                                              (2,230)           (897)
     Proceeds from sale of equipment                                                                      9             116
------------------------------------------------------------------------------------------------------------------------------------
             Net cash provided by investing activities                                               67,798           38,195
------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
     Net increase in deposits                                                                        53,406          72,890
     Net decrease in federal funds purchased and securities sold under
          agreements to repurchase                                                                  (51,749)         (1,232)
     Proceeds from long-term debt                                                                     3,874          16,500
     Repayments of long-term debt                                                                    (4,377)         (1,511)
     Net (decrease) increase in other short-term borrowings                                          (8,091)          6,672
     Dividends paid                                                                                  (6,500)         (6,427)
     Purchase of common stock                                                                        (3,118)         (4,338)
     Stock options exercised                                                                            344           1,516
------------------------------------------------------------------------------------------------------------------------------------
             Net cash (used in) provided by financing activities                                    (16,211)         84,070
------------------------------------------------------------------------------------------------------------------------------------
             Net increase in cash and cash equivalents                                               68,858         135,939
------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of year                                                       67,101         106,385
------------------------------------------------------------------------------------------------------------------------------------
             Cash and cash equivalents at end of period                                           $ 135,959       $ 242,324
------------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
     Interest                                                                                     $  15,774       $  20,056
     Income taxes                                                                                       500           3,840
Cash dividend declared and unpaid                                                                     2,149           2,123
------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
------------------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share data)                                                                   Accumulated
                                                                                                           Other           Total
Nine months ended                         Common Stock      Capital    Retained      Treasury Stock    Comprehensive   Shareholders'
September 30, 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                                                               10,520                                             10,520
Other comprehensive income                                                                                  (2,180)         (2,180)
Cash dividends declared,
  $.96 per share                                                         (6,458)                                            (6,458)
Purchase of common stock                                                              98     (3,118)                        (3,118)
Stock options exercised                   14          2         342                                                            344
Noncash compensation expense
  attributed to stock option grants                             319                                                            319
------------------------------------------------------------------------------------------------------------------------------------
  Balance at September 30, 2003        8,150     $1,019     $18,284    $145,261    1,442   $(40,745)        $1,381        $125,200
------------------------------------------------------------------------------------------------------------------------------------




------------------------------------------------------------------------------------------------------------------------------------
  Balance at January 1, 2002           8,058     $1,007     $15,179    $137,227    1,153   $(31,077)        $1,224        $123,560

Net income                                                               10,624                                             10,624
Other comprehensive income                                                                                   2,413           2,413
Cash dividends declared,
  $.93 per share                                                         (6,398)                                            (6,398)
Purchase of common stock                                                             126     (4,338)                        (4,338)
Stock options exercised                   62          8       1,508                                                          1,516
Noncash compensation expense
  attributed to stock option grants                             427                                                            427
------------------------------------------------------------------------------------------------------------------------------------
  Balance at September 30, 2002        8,120     $1,015     $17,114    $141,453    1,279   $(35,415)        $3,637        $127,804
------------------------------------------------------------------------------------------------------------------------------------
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  financial
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.  Such
reclassifications   have  no  effect  on  previously   reported  net  income  or
shareholders' equity.

3.    RECENTLY ISSUED ACCOUNTING STANDARDS

Please refer to the caption "Recently Issued Accounting Standards" under Part I,
Item 2 on page 24 of this document.

4.    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".

5.    NET INCOME PER COMMON SHARE

Basic net income per common  share is  determined  by dividing net income by the
weighted average total number of shares of common stock outstanding. Diluted net
income  per  common  share is  determined  by  dividing  net income by the total
weighted  average number of shares of common stock  outstanding,  plus the total
weighted average number of shares that would be issued upon exercise of dilutive
stock options  assuming  proceeds are used to repurchase  shares pursuant to the
treasury stock method.  Net income per common share computations were as follows
at September 30, 2003 and 2002.


<TABLE>
--------------------------------------------------------------------------------------------------------
                                                       Three Months Ended         Nine Months Ended
                                                          September 30,             September 30,
(In thousands, except per share data)                     2003       2002           2003       2002
--------------------------------------------------------------------------------------------------------
<S>                                                    <C>        <C>           <C>        <C>
Net income, basic and diluted                          $ 3,901    $ 3,526       $ 10,520   $ 10,624
--------------------------------------------------------------------------------------------------------

Average shares outstanding                               6,712      6,850          6,733      6,880
Effect of dilutive stock options                            49         48             40         45
--------------------------------------------------------------------------------------------------------
Average diluted shares outstanding                       6,761      6,898          6,773      6,925
--------------------------------------------------------------------------------------------------------

Net income per share, basic                            $   .58    $   .51       $   1.56   $   1.54
Net income per share, diluted                              .58        .51           1.55<F1>   1.53
--------------------------------------------------------------------------------------------------------
<FN>
<F1>
The sum of diluted  earnings  per common  share of each of the quarters in 2003
does not add to the year-to-date figure reported due to rounding.
</FN>
</TABLE>


6.    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 fair market
value of the  Company's  stock was  $24.50  and  $39.66  on the  grant  date and
measurement date, respectively.

The  Company  granted  54,000  options  during  2000.  The  grant  date  and the
measurement  date for these options are the same,  with the fair market value of
$29.75.  Pursuant  to  APB  No.  25,  there  is no  compensation  expense  being
recognized for this grant.  Had  compensation  expense been determined under the
fair  value  method  described  in 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.

<TABLE>
-----------------------------------------------------------------------------------------------------------------
                                                                   Three Months Ended         Nine Months Ended
                                                                     September 30,              September 30,
(In thousands, except per share data)                              2003          2002         2003          2002
-----------------------------------------------------------------------------------------------------------------
<S>                                                             <C>           <C>         <C>           <C>
NET INCOME
  As reported                                                   $ 3,901       $ 3,526     $ 10,520      $ 10,624
  Add:  Stock-based employee compensation expense
        included in reported net income under the
        intrinsic value method, net of related tax effects           69           166          207           358
  Less: Stock-based compensation expense determined
        under fair value based method for all awards,
        net of related tax effects                                  (85)         (249)        (253)         (475)
-----------------------------------------------------------------------------------------------------------------
Proforma                                                        $ 3,885       $ 3,443     $ 10,474      $ 10,507
-----------------------------------------------------------------------------------------------------------------
NET INCOME PER COMMON SHARE
  Basic, as reported                                            $   .58       $   .51     $   1.56      $   1.54
  Basic, proforma                                                   .58           .50         1.56          1.53

  Diluted, as reported                                              .58           .51         1.55          1.53
  Diluted, proforma                                                 .57           .50         1.55          1.52
-----------------------------------------------------------------------------------------------------------------
</TABLE>

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 options under the plan.

<PAGE>
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS
-------------

FORWARD-LOOKING STATEMENTS

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

RESULTS OF OPERATIONS

                    THIRD QUARTER 2003 VS. THIRD QUARTER 2002
                    -----------------------------------------

The Company  reported net income of $3.9 million for the third  quarter of 2003,
an increase  of $375  thousand  or 10.6%  compared to $3.5  million for the same
period in 2002. On a basic and diluted per share basis, net income was $0.58 for
the current  three  months,  an  increase of $.07 or 13.7%  compared to the same
period in the prior year.

A decrease in net interest income had a significant  effect on net income in the
reporting periods.  The continued low interest rate environment,  prepayments of
certain  investment  securities,  and the sales  and  maturities  of  investment
securities  that were replaced at generally  lower yields  resulted in lower net
interest income in the quarterly comparison.  Net interest income decreased $838
thousand  or 8.2% in the  current  three  months  compared to the same period in
2002.  The decline in net  interest  income for the current  quarter is mainly a
result of continued  declines in the overall market  interest rate  environment.
Interest  rates  earned on earning  assets have  declined  more rapidly than the
interest rates paid on interest paying  liabilities  since many of the Company's
funding sources, particularly deposits, have approached their repricing floors.

The  provision  for loan losses  decreased  $227  thousand or 26.1% in the three
month comparison. The improvement in the provision for loan losses is attributed
to changes in the general  risk  characteristics  of the  Company's  entire loan
portfolio  from the previous  period and can not be  attributed  directly to any
particular individual credit.


Total  noninterest  income  increased  $810 thousand or 18.7% in the three month
comparison. Income from the purchase of company-owned life insurance, instituted
in the  first  quarter  of 2003 to  offset  the  rising  costs of the  Company's
employee  benefit  plans,  totaled $416  thousand for the current  three months.
Securities gains increased $382 thousand in the current three month  comparison.
Gains on the sale of mortgage loans  increased $136 thousand as the low interest
rate environment  continued to fuel the Company's secondary market mortgage loan
originations.

Total  noninterest  expenses  increased $166 thousand or 1.8% in the three month
comparison.  Noninterest  expenses  increased  primarily  due to an  increase in
salaries and employee  benefits of $155 thousand or 3.1%. These increases mainly
represent   employee  benefits  and  normal  salary  increases.   A  decline  in
correspondent  banking  fees of $172  thousand  favorably  impacted  noninterest
expenses in the three  month  comparison.  Other  operating  expenses  generally
increased in the comparison, including depreciation increases of $86 thousand or
12.7% and bank franchise taxes of $22 thousand or 7.1%. The effective income tax
rate  declined 740 basis  points to 17.56% for the three months ended  September
30,  2003  compared  to the same  period a year  earlier.  The  decrease  in the
effective  income  tax rate is due  primarily  to  lower  revenue  from  taxable
sources,  an increased  amount of credits  derived from  qualified  zone academy
bonds,  and the addition of nontaxable  income accrued from the increase in cash
surrender value on company-owned life insurance purchased on key employees.

Return on average assets ("ROA") was 1.24% for the current quarter,  an increase
of 8 basis  points  compared  to 1.16%  reported  for the same  period  in 2002.
Negatively  impacting ROA was a 44 basis point decline in net interest margin to
3.53%.  Offsetting the decline in net interest margin that  positively  effected
ROA was an increase in noninterest income relative to average assets of 20 basis
points and declines in expenses  relative to average assets that include 9 basis
points for the  provision  for loan losses,  7 basis points for other  operating
expenses,  and 15 basis  points  attributed  to income  tax  expense.  Return on
average  equity  ("ROE")  was 12.44% for the third  quarter of 2003  compared to
11.26% in the same  period of 2002.  The  increase  is due to higher  net income
reported in the  current  period  coupled  with a slight  increase in  financial
leverage compared to the same period a year ago.

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

The interest rate  environment has continued to trend downward after a period of
relative  stability  throughout  much of 2002 and has  negatively  impacted  the
Company's net interest income.  Additional  actions taken by the Federal Reserve
Board (the "Fed") in the fourth  quarter of 2002 and the second  quarter of 2003
have  resulted  in a  general  reduction  in  short-term  interest  rates in the
reporting  periods.  Short-term  interest  rates,  left unchanged since December
2001, were reduced 50 basis points by the Fed in November 2002 and an additional
25 basis  points in June 2003.  The prime rate as  reported  in The Wall  Street
Journal was lowered in an identical  manner  shortly  following the Fed changes.
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 5.2%,  a reduction  of 109 basis  points from 6.3% in the same
period a year ago.  The cost of funds for the current  three  months was 2.0%, a
decline of 77 basis points compared to 2.7% 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.  However,  many  of the  Company's  funding  sources,  particularly
deposits,  have  approached  their  repricing  floors.  Average  earning  assets
increased  $33.4  million or 3.1% to $1.1 billion in the  quarterly  comparison.
However,  as a percentage of total average assets,  earning assets  decreased 97
basis points to 88.97% from 89.94%.

Interest  income totaled $14.2 million for the third quarter of 2003, a decrease
of $2.5 million or 14.7% compared to the same period in the prior year. Interest
expense totaled $4.8 million,  a decrease of $1.6 million or 25.3%. Net interest
income fell $838 thousand or 8.2% in the comparison and totaled $9.4 million for
the three months ended September 30, 2003.

Interest and fees on loans totaled $11.9 million, a decrease of $959 thousand or
7.4%  mainly  due to a  decrease  in the  average  rate  earned.  Average  loans
increased  $33.7  million  or 4.8% to $740.2  million in the  comparison  due to
higher  loan demand in a lower rate  environment.  The tax  equivalent  yield on
loans  decreased  87 basis  points to 6.4% from 7.3% and offset  the  effects of
higher average balances on interest income.  Interest on taxable  securities was
$1.3 million, a decrease of $1.3 million or 48.9% due primarily to a decrease in
the  average  rate  earned  and the  effect of higher  premium  amortization  on
mortgage-backed  securities.  Prepayments  on  mortgage-backed  securities  have
increased greatly due to corresponding  refinancing of home mortgages that serve
as  collateral  for these  investment  securities.  The  increase in activity is
directly related to the lower interest rate environment. The average rate earned
on taxable  securities  decreased  237 basis  points to 2.2% from 4.6% while the
average balance  increased 6.0% to $237.4 million from $224.0 million.  Interest
on nontaxable  securities was $809  thousand,  a decline of $41 thousand or 4.8%
due to a 28 basis point decrease in the tax equivalent  yield to 6.3% from 6.6%.
Interest on  short-term  investments,  including  time  deposits in other banks,
federal  funds  sold,  and  securities  purchased  under  agreements  to resell,
decreased $193 thousand.  This decline was due to a decrease in the average rate
earned on these  investments  of 85 basis  points to .9% from 1.8%  along with a
$14.0 million or 18.8% decrease in the average balance.

Interest expense on deposits  decreased $1.5 million or 27.3% to $4.0 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 a general  increase in average  balances.  The
decline in interest  expense on  deposits  was as follows:  time  deposits  $1.2
million or 26.0%;  interest  bearing demand deposits $143 thousand or 34.2%; and
savings deposits $184 thousand or 33.3%. The average rate paid on time deposits,
the largest  component  of  interest  bearing  deposits,  was 3.2% for the third
quarter  of 2003  compared  to 4.5% for the same  period  of 2002.  The  average
balance of time deposits increased $19.2 million or 4.7% to $426.0 million.  The
average rate paid on interest  bearing demand deposits  declined 29 basis points
to .5% from .8% while the average  balance  increased  $12.3  million or 5.7% to
$227.6  million.  The average rate paid on savings  deposits  decreased 46 basis
points to .9% from 1.3% while the average balance increased $3.1 million or 1.9%
to $167.8  million.  Interest  expense on overnight  borrowings,  consisting  of
federal funds  purchased and  securities  sold under  agreements to  repurchase,
decreased $229 thousand or 55.7% due to an 86 basis point decline in the average
rate paid along with a $14.8 million  decline in the average  balance.  Interest
expense  on  other  borrowed  funds  increased  $131  thousand  or  31.9% 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 $61.9 million,  an increase of $16.5 million or 36.5% in the comparison.
The average rate paid on other  borrowed  funds declined 13 basis points to 3.5%
from 3.6%.


The net interest margin (TE) decreased 44 basis points to 3.53% during the third
quarter of 2003 compared to 3.97% in the third quarter of 2002.  The decrease in
net interest  margin is primarily  attributed to a 32 basis point decline in the
spread  between  rates  earned on earning  assets and the rates paid on interest
bearing  liabilities  to 3.25% in the  current  quarter  from 3.57% in the third
quarter of 2002. The effect of noninterest  bearing sources of funds contributed
an additional 12 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 September 30.
<TABLE>
<CAPTION>

DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY:  INTEREST RATES AND INTEREST DIFFERENTIAL
----------------------------------------------------------------------------------------------------------------------------------
Quarter Ended September 30,                                    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                                 $   237,389        $  1,318         2.20%      $   224,006     $  2,578         4.57%
  Nontaxable<F1>                               75,434           1,195         6.29            75,110        1,244         6.57
Time deposits with banks,
  federal funds sold and
  securities purchased
  under agreements to resell                   60,342             141          .93            74,335          334         1.78
Loans <F1><F2><F3>                            740,215          11,991         6.43           706,562       13,009         7.30
----------------------------------------------------------------------------------------------------------------------------------
     Total earning assets                   1,113,380        $ 14,645         5.22%        1,080,013     $ 17,165         6.31%
----------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses                     (11,204)                                       (11,164)
----------------------------------------------------------------------------------------------------------------------------------
     Total earning assets, net
     of allowance for loan losses           1,102,176                                      1,068,849
----------------------------------------------------------------------------------------------------------------------------------
NONEARNING ASSETS
Cash and due from banks                        89,302                                         96,373
Premises and equipment, net                    24,260                                         23,777
Other assets                                   35,626                                         11,818
----------------------------------------------------------------------------------------------------------------------------------
     Total assets                         $ 1,251,364                                    $ 1,200,817
----------------------------------------------------------------------------------------------------------------------------------
INTEREST BEARING LIABILITIES
Deposits
  Interest bearing demand                 $   227,607        $    275          .48%      $   215,260     $    418          .77%
  Savings                                     167,827             369          .87           164,679          553         1.33
  Time                                        426,007           3,389         3.16           406,770        4,579         4.47
Federal funds purchased
  and securities sold
  under agreements to repurchase               74,362             182          .97            89,165          411         1.83
Other borrowed funds                           61,893             542         3.47            45,352          411         3.60
----------------------------------------------------------------------------------------------------------------------------------
     Total interest bearing liabilities       957,696        $  4,757         1.97%          921,226     $  6,372         2.74%
----------------------------------------------------------------------------------------------------------------------------------
NONINTEREST BEARING LIABILITIES
Commonwealth of Kentucky deposits              30,810                                         30,146
Other demand deposits                         131,681                                        117,403
Other liabilities                               6,763                                          7,793
----------------------------------------------------------------------------------------------------------------------------------
     Total liabilities                      1,126,950                                      1,076,568
----------------------------------------------------------------------------------------------------------------------------------
     Shareholders' equity                     124,414                                        124,249
----------------------------------------------------------------------------------------------------------------------------------
     Total liabilities and
     shareholders' equity                 $ 1,251,364                                    $ 1,200,817
----------------------------------------------------------------------------------------------------------------------------------
Net interest income                                             9,888                                      10,793
TE basis adjustment                                              (456)                                       (523)
----------------------------------------------------------------------------------------------------------------------------------
     Net interest income                                       $9,432                                    $ 10,270
----------------------------------------------------------------------------------------------------------------------------------
Net interest spread                                                           3.25%                                       3.57%
Impact of noninterest bearing
  sources of funds                                                             .28                                         .40
----------------------------------------------------------------------------------------------------------------------------------
Net interest margin                                                           3.53%                                       3.97%
----------------------------------------------------------------------------------------------------------------------------------
<FN>
<F1>
Income  and yield  stated at a fully tax  equivalent  basis  using the  marginal
corporate Federal tax rate of 35%.
<F2>
Loan balances include principal balances on nonaccrual loans.
<F3>
Loan fees included in interest  income amount to $563 thousand and $518 thousand
in 2003 and 2002, respectively.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ANALYSIS OF CHANGES IN NET INTEREST INCOME (TAX EQUIVALENT BASIS)
-----------------------------------------------------------------------------------------------------------
(In thousands)                                                   Variance      Variance Attributed to
Quarter Ended September 30,                                     2003/2002<F1>   Volume          Rate
-----------------------------------------------------------------------------------------------------------
<S>                                                               <C>         <C>           <C>
INTEREST INCOME
Taxable investment securities                                     $(1,260)    $   967       $(2,227)
Nontaxable investment securities<F2>                                  (49)         34           (83)
Time deposits with banks, federal funds sold and
   securities purchased under agreements to resell                   (193)        (55)         (138)
Loans2                                                             (1,018)      3,220        (4,238)
-----------------------------------------------------------------------------------------------------------
     Total interest income                                         (2,520)      4,166        (6,686)
-----------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest bearing demand deposits                                     (143)        146          (289)
Savings deposits                                                     (184)         70          (254)
Time deposits                                                      (1,190)      1,316        (2,506)
Federal funds purchased and securities sold under
   agreements to repurchase                                          (229)        (60)         (169)
Other borrowed funds                                                  131         227           (96)
-----------------------------------------------------------------------------------------------------------
     Total interest expense                                        (1,615)      1,699        (3,314)
-----------------------------------------------------------------------------------------------------------
Net interest income                                               $  (905)    $ 2,467       $(3,372)
-----------------------------------------------------------------------------------------------------------
Percentage change                                                   100.0%     (272.6)%       372.6%
-----------------------------------------------------------------------------------------------------------
<FN>
<F1>
The  changes  that are not  solely  due to rate or  volume  are  allocated  on a
percentage  basis using the  absolute  values of rate and volume  variances as a
basis for allocation.
<F2>
Income stated at fully tax equivalent basis using the marginal corporate Federal
tax rate of 35%.
</FN>
</TABLE>

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

Noninterest income was $5.2 million for the current quarter, an increase of $810
thousand  or 18.7%  compared  to the third  quarter of the prior  year.  Service
charges and fees on  deposits,  the largest  component  of  noninterest  income,
decreased  $137  thousand or 6.6% to $2.0 million.  Overdraft  fees declined $15
thousand or 1.2% and service  charges on demand  deposit  accounts  declined $12
thousand  or 5.0% in the  comparison.  Fees  related to deposit  accounts of the
Commonwealth of Kentucky also declined $123 thousand or 65.0% and corresponds to
the decrease in correspondent bank fees included in noninterest  expense.  Other
service  charges,  commissions,  and fees were up $12  thousand  or 1.3% to $909
thousand.  Data processing  fees were $337 thousand,  a decline of less than 1%.
Trust income totaled $385 thousand, an increase of $17 thousand or 4.6% compared
to $368  thousand a year  earlier.  Net gains on the sale of available  for sale
securities totaled $822 thousand, an increase of $382 thousand or 86.8% compared
to the  comparable  period  a year  ago as the  Company  sought  to  manage  the
composition of its balance sheet in a continuing difficult economic environment.
Net gains on the sale of mortgage loans were $276 thousand,  an increase of $136
thousand  or 97.1%  from $140  thousand  in the  prior  year as  mortgage  loans
originated  for sale  increased  $6.1 million in the  comparison  due to the low
interest rate environment.  Income from company-owned life insurance,  purchased
near the end of the first  quarter of 2003,  was $416  thousand  in the  current
three-month period. Other noninterest income totaled $55 thousand, a decrease of
$13 thousand compared to the same period in the prior year.

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

Total noninterest expenses were $9.2 million for the third quarter of 2003, an
increase of $166 thousand or 1.8% from the third quarter of 2002. Salaries and
employee benefits account for a significant portion of the total increase in
noninterest expense. Total salaries and benefits increased $155 thousand or 3.1%
to $5.2 million in the quarterly comparison. Employee benefit expenses increased
$55 thousand or 5.8%. Salary and related payroll expenses increased $126
thousand or 3.2% in the comparison while noncash compensation expense related to
the Company's nonqualified stock option plan declined $26 thousand or 19.6% due
to the structure of the vesting schedule and forfeitures. The number of full
time equivalent employees decreased to 450 from 452 reported in the prior
period. Occupancy expense, net of rental income, was virtually unchanged in the
comparison and totaled $621 thousand for the current quarter. Equipment expense
totaled $934 thousand in the current quarter, an increase of $89 thousand or
10.5% due primarily to increased depreciation expense. Other noninterest
expenses, including bank franchise taxes, decreased $76 thousand or 3.0% to $2.5
million. This decrease is due mainly to a $172 thousand decline in correspondent
bank fees related to activity attributed to the Commonwealth of Kentucky.

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

Income tax expense for the third quarter of 2003 was $831  thousand,  a decrease
of $342 thousand or 29.2% from the same period a year earlier. The effective tax
rate decreased 740 basis points to 17.56% from 24.96% in 2002. The change in the
effective tax rate is due to a combination of factors, primarily including lower
revenue from taxable  sources,  increased  credits  derived from  qualified zone
academy bonds,  and the addition of nontaxable  income accrued from the increase
in cash surrender value on life insurance purchased on key employees.

             FIRST NINE MONTHS OF 2003 VS. FIRST NINE MONTHS OF 2002
             -------------------------------------------------------

The Company  reported  net income of $10.5  million  for the nine  months  ended
September  30,  2003,  a decrease  of $104  thousand  or 1.0%  compared to $10.6
million for the same period in 2002. Basic and diluted net income per share were
$1.56 and $1.55,  respectfully,  for the current nine months. This represents an
increase of $.02 or 1.3% on both a basic and diluted  per share  basis.  The per
share  earnings  increase  is  a  result  of  fewer  common  shares  outstanding
attributed to the Company's share buy back program.

A decrease in net interest income had a significant  effect on net income in the
reporting periods.  The continued low interest rate environment,  prepayments of
certain  investment  securities,  and the sales  and  maturities  of  investment
securities  that were replaced at generally  lower yields  resulted in lower net
interest income in the nine month comparison. Net interest income decreased $1.6
million or 5.4% in the current nine months  compared to the same period in 2002.
The decline in net interest  income for the current period is mainly a result of
lower  revenues  earned on  earning  assets  due to a  continued  decline in the
overall  market  interest  rate  environment.  Interest  rates earned on earning
assets have  declined  more  rapidly  than the  interest  rates paid on interest
paying  liabilities  since many of the Company's  funding sources,  particularly
deposits, have approached their repricing floors.

The provision for loan losses decreased $600 thousand or 30.3% in the nine month
period  ended  September  30,  2003  compared  to the same  period in 2002.  The
improvement  in the  provision  for loan losses is  attributed to changes in the
general risk  characteristics  of the Company's  entire loan  portfolio from the
previous period and can not be attributed directly to any particular  individual
credit.

Total  noninterest  income  increased  $1.2  million  or 9.5% in the nine  month
comparison despite lower gains reported on the sale of investment  securities of
$467 thousand in the current period.  Income from the purchase of  company-owned
life  insurance,  instituted  in the first  quarter of 2003 to offset the rising
costs of the Company's  employee  benefits  plans,  totaled $1.1 million for the
current nine months.  Gains on the sale of mortgage  loans also  increased  $463
thousand in the  comparison  as the low interest rate  environment  continued to
fuel the Company's secondary market mortgage loan originations.

Offsetting  the increase in  noninterest  income were  increases in  noninterest
expenses totaling $1.0 million or 3.9% for the current nine months.  Noninterest
expenses  increased  primarily due to higher  salaries and employee  benefits of
$485 thousand or 3.2%. These increases relate primarily to increases in employee
benefits and normal salary increases.  An increase in correspondent banking fees
totaling $104 thousand also contributed to the increase in noninterest expenses.
The  effective  income tax rate declined 420 basis points to 21.06% for the nine
months ended September 30, 2003 compared to the same period a year earlier.

ROA was 1.13% for the nine months  ended  September  30,  2003,  a decrease of 5
basis  points from the same period in 2002.  Negatively  impacting  ROA was a 38
basis  point  decline  in net  interest  margin  to  3.58%  and an  increase  in
noninterest expenses of 2 basis points. Partially offsetting these declines that
positively  effected ROA was an increase in earning  assets that  contributed  7
basis points,  a decrease in the  provision  for loan losses that  contributed 7
basis points, an increase in noninterest income contributing 8 basis points, and
a decrease in income tax  expense  that  contributed  13 basis  points.  ROE was
11.27% for the first nine months of 2003  compared to 11.42% 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
-------------------

Continuing  weaknesses in the overall  economic  environment  remain present and
have impacted the Company's net interest  income.  The interest rate environment
has continued to trend downward after a period of relative stability  throughout
much of 2002.  Additional actions taken by the Fed in the fourth quarter of 2002
and  the  second  quarter  of 2003  have  resulted  in a  general  reduction  in
short-term  interest rates in the reporting periods.  Short-term interest rates,
left unchanged  since December 2001,  were reduced 50 basis points by the Fed in
November 2002 and an additional 25 basis points in June 2003.  The prime rate as
reported in The Wall Street  Journal was lowered in an identical  manner shortly
following the Fed changes. 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 yield on earning assets for the current nine months
was 5.4%,  a reduction  of 101 basis  points from 6.4% in the same period a year
ago.  The cost of funds for the current  nine  months was 2.2%,  a decline of 72
basis points  compared to 2.9% 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.  However,
many of the Company's funding sources,  particularly  deposits,  have approached
their repricing  floors.  Average earning assets increased $46.6 million or 4.3%
to $1.1 billion in the  comparison.  As a percentage  of total  average  assets,
earning assets increased to 90.57% from 89.76%.  This increase had the effect of
adding an additional 7 basis points to ROA in the comparison.

Interest  income  totaled  $44.1  million for the first nine  months of 2003,  a
decrease of $6.1 million or 12.1% compared to the same period in the prior year.
Interest expense totaled $15.3 million, a decrease of $4.5 million or 22.5%. Net
interest  income fell $1.6 million or 5.4% in the  comparison  and totaled $28.7
million at September 30, 2003.

Interest and fees on loans  totaled  $36.3  million,  a decrease of $2.3 million
mainly due to a decrease in the average rate  earned.  Average  loans  increased
$42.8  million or 6.2% to $739.5  million in the  comparison  due to higher loan
demand in a lower rate environment.  The tax equivalent yield on loans decreased
87 basis  points to 6.6% from 7.5% and  offset  the  effects  of higher  average
balances on interest income.  Interest on taxable securities was $4.8 million, a
decrease  of $3.1  million or 39.2% due  primarily  to a decrease in the average
rate earned and the effect of higher  premium  amortization  on  mortgage-backed
securities. Prepayments on mortgage-backed securities have increased greatly due
to  corresponding  refinancing  of home  mortgages  that serve as collateral for
these investment securities. The increase in activity is directly related to the
lower interest rate environment.  The average rate earned on taxable  securities
decreased 187 basis points to 2.6% from 4.4% while the average balance increased
$11.7 million or 4.9%. Interest on nontaxable  securities declined $307 thousand
or 11.4% due to a $7.2 million or 9.1% decrease in the average  balance to $72.4
million from $79.6 million.  Interest on short-term investments,  including time
deposits in other banks,  federal funds sold,  and  securities  purchased  under
agreements to resell, decreased $387 thousand due primarily to a decrease in the
average rate earned on these investments of 79 basis points to 1.2% from 1.9%.

Interest expense on deposits decreased $4.3 million or 24.9% to $13.0 million in
the nine month 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 a general  increase in average  balances.  The
decline in interest  expense on  deposits  was as follows:  time  deposits  $3.3
million or 23.3%;  interest  bearing demand deposits $518 thousand or 34.5%; and
savings deposits $524 thousand or 29.7%. The average rate paid on time deposits,
the largest component of interest bearing deposits, was 3.4% for the nine months
ended  September  30, 2003  compared  to 4.7% for the same  period of 2002.  The
average  balance  of time  deposits  increased  $20.0  million or 5.0% to $423.3
million.  The average rate paid on interest bearing demand deposits  declined 34
basis points to .6% from .9% while the average balance increased $7.9 million or
3.7% to $223.2 million.  The average rate paid on savings deposits  decreased 44
basis points to 1.0% from 1.4% while the average balance  increased $2.6 million
or 1.6% to $167.0  million from $164.4  million.  Interest  expense on overnight
borrowings,  consisting of federal funds  purchased  and  securities  sold under
agreements  to  repurchase,  decreased  $634  thousand  due to a 60 basis  point
decline  in the  average  rate paid along  with a $22.4  million  decline in the
average  balance.  Interest  expense  on other  borrowed  funds  increased  $485
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 $64.8  million,  an increase of $22.7 million or 53.9% in
the comparison.  The average rate paid on other borrowed funds declined 30 basis
points to 3.4% from 3.7%.

The net interest  margin (TE) decreased 38 basis points to 3.58% during the nine
months ended  September  30, 2003  compared to 3.96% in the same period of 2002.
The decrease in net interest margin is primarily  attributed to a 29 basis point
decline in the spread  between rates earned on earning assets and the rates paid
on interest  bearing  liabilities to 3.25% in the current nine months from 3.54%
in the same period in 2002. The effect of noninterest  bearing  sources of funds
contributed an additional 9 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 nine
months ended September 30.
<TABLE>
<CAPTION>
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY:  INTEREST RATES AND INTEREST DIFFERENTIAL
-----------------------------------------------------------------------------------------------------------------------------------
Nine Months Ended September 30,                              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                                 $   250,403     $     4,818          2.57%  $   238,733       $   7,921         4.44%
  Nontaxable<F1>                               72,405           3,523          6.51        79,621           3,943         6.62
Time deposits with banks,
  federal funds sold and
  securities purchased under
  agreements to resell                         64,310             555          1.15        64,964             942         1.94
Loans<F1><F2><F3>                             739,505          36,575          6.61       696,679          38,977         7.48
-----------------------------------------------------------------------------------------------------------------------------------
     Total earning assets                   1,126,623     $    45,471          5.40%    1,079,997       $  51,783         6.41%
-----------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses                     (11,244)                                    (10,705)
-----------------------------------------------------------------------------------------------------------------------------------
     Total earning assets, net
     of allowance for loan losses           1,115,379                                   1,069,292
-----------------------------------------------------------------------------------------------------------------------------------
NONEARNING ASSETS
Cash and due from banks                        74,655                                      98,272
Premises and equipment, net                    24,206                                      24,261
Other assets                                   29,634                                      11,386
-----------------------------------------------------------------------------------------------------------------------------------
     Total assets                         $ 1,243,874                                 $ 1,203,211
-----------------------------------------------------------------------------------------------------------------------------------
INTEREST BEARING LIABILITIES
Deposits
  Interest bearing demand                 $   223,166     $       982           .59%  $   215,263       $   1,500          .93%
  Savings                                     167,014           1,240           .99       164,443           1,764         1.43
  Time                                        423,319          10,774          3.40       403,358          14,038         4.65
Federal funds purchased
  and securities sold under
  agreements to repurchase                     74,668             684          1.22        97,079           1,318         1.82
Other borrowed funds                           64,750           1,649          3.40        42,071           1,164         3.70
-----------------------------------------------------------------------------------------------------------------------------------
     Total interest bearing liabilities       952,917     $    15,329          2.15%      922,214       $  19,784         2.87%
-----------------------------------------------------------------------------------------------------------------------------------
NONINTEREST BEARING LIABILITIES
Commonwealth of Kentucky deposits              34,130                                      33,479
Other demand deposits                         125,224                                     115,741
Other liabilities                               6,843                                       7,344
-----------------------------------------------------------------------------------------------------------------------------------
     Total liabilities                      1,119,114                                   1,078,778
-----------------------------------------------------------------------------------------------------------------------------------
     Shareholders' equity                     124,760                                     124,433
-----------------------------------------------------------------------------------------------------------------------------------
     Total liabilities and
     shareholders' equity                 $ 1,243,874                                 $ 1,203,211
-----------------------------------------------------------------------------------------------------------------------------------
Net interest income                                            30,142                                      31,999
TE basis adjustment                                            (1,417)                                     (1,638)
-----------------------------------------------------------------------------------------------------------------------------------
     Net interest income                                  $    28,725                                   $  30,361
-----------------------------------------------------------------------------------------------------------------------------------
Net interest spread                                                            3.25%                                      3.54%
Impact of noninterest bearing
  sources of funds                                                              .33                                        .42
-----------------------------------------------------------------------------------------------------------------------------------
Net interest margin                                                            3.58%                                      3.96%
-----------------------------------------------------------------------------------------------------------------------------------
<FN>
<F1>
Income  and yield  stated at a fully tax  equivalent  basis  using the  marginal
corporate Federal tax rate of 35%.
<F2>
Loan balances include principal balances on nonaccrual loans.
<F3>
Loan fees included in interest income amount to $1.7 million and $1.4 million in
2003 and 2002, respectively.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

ANALYSIS OF CHANGES IN NET INTEREST INCOME (TAX EQUIVALENT BASIS)
---------------------------------------------------------------------------------------------
(In thousands)                                       Variance       Variance Attributed to
Nine Months Ended September 30,                     2003/2002<F1>    Volume           Rate
---------------------------------------------------------------------------------------------
<S>                                                    <C>           <C>           <C>
INTEREST INCOME
Taxable investment securities                          $(3,103)      $   606       $(3,709)
Nontaxable investment securities<F2>                      (420)         (355)          (65)
Time deposits with banks, federal funds sold and
   securities purchased under agreements to resell        (387)          (10)         (377)
Loans2                                                  (2,402)        3,361        (5,763)
---------------------------------------------------------------------------------------------
     Total interest income                              (6,312)        3,602        (9,914)
---------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest bearing demand deposits                          (518)           86          (604)
Savings deposits                                          (524)           45          (569)
Time deposits                                           (3,264)        1,060        (4,324)
Federal funds purchased and securities sold under
   agreements to repurchase                               (634)         (261)         (373)
Other borrowed funds                                       485           641          (156)
---------------------------------------------------------------------------------------------
     Total interest expense                             (4,455)        1,571        (6,026)
---------------------------------------------------------------------------------------------
Net interest income                                    $(1,857)      $ 2,031       $(3,888)
---------------------------------------------------------------------------------------------
Percentage change                                        100.0%       (109.4)%       209.4%
---------------------------------------------------------------------------------------------
<FN>
<F1>
The  changes  that are not  solely  due to rate or  volume  are  allocated  on a
percentage  basis using the  absolute  values of rate and volume  variances as a
basis for allocation.
<F2>
Income stated at fully tax equivalent basis using the marginal corporate Federal
tax rate of 35%.
</FN>
</TABLE>

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

Noninterest  income  was $13.8  million  for the first nine  months of 2003,  an
increase  of $1.2  million  or 9.5%  compared  to the same  period in 2002.  The
largest component of noninterest  income,  service charges and fees on deposits,
decreased  $63 thousand or 1.1% to $5.8  million.  Overdraft  fees declined $121
thousand or 3.2% and service  charges on demand  deposit  accounts  declined $56
thousand or 7.6% in the comparison. Offsetting these declines was an increase in
fees  related to the  Commonwealth  of  Kentucky  of $61  thousand  or 22.5% and
corresponds to the increase in  correspondent  bank fees included in noninterest
expense. Other service charges,  commissions, and fees increased $55 thousand or
2.1% to $2.7 million.  Data processing  fees were  relatively  unchanged at $1.1
million.  Trust fees increased $101 thousand or 9.2% to $1.1 million.  Net gains
on the sale of available for sale  securities  was $966 thousand for the current
nine months,  a decrease of $467  thousand or 32.6%  compared to $1.4 million in
the comparable period a year ago as the Company sought to manage the composition
of its balance sheet in a continuing difficult economic  environment.  Net gains
on the sale of mortgage loans were $788  thousand,  an increase of $463 thousand
from $325  thousand  in the prior year as  mortgage  loans  originated  for sale
increased  $26.7  million  in  the  comparison  due  to the  low  interest  rate
environment. Income from company-owned life insurance, purchased near the end of
the first quarter of 2003, was $1.1 million.  Other  noninterest  income totaled
$198 thousand, relatively unchanged from $192 thousand in the prior year.

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

Noninterest expenses totaled $27.8 million for the first nine months of 2003, an
increase of $1.0 million or 3.9%  compared to the same period in 2002.  Salaries
and employee benefits,  the largest component of noninterest expense,  increased
$485 thousand or 3.2% and totaled $15.5 million at September 30, 2003.  Employee
benefit expenses increased $237 thousand primarily due to the new postretirement
health insurance coverage initiated during the first quarter of 2003. Salary and
related payroll expenses increased $362 thousand or 3.0% in the comparison while
noncash compensation expense related to the Company's  nonqualified stock option
plan  declined  $115  thousand  or 26.6%  due to the  structure  of the  vesting
schedule and forfeitures. The number of full time equivalent employees decreased
to 450 from 452 reported in the prior period.  Occupancy expense,  net of rental
income,  increased $139 thousand or 7.8% and totaled $1.9 million.  The increase
in net occupancy  expense is attributed to increases in maintenance and repairs,
utilities  costs,  and  depreciation.  Equipment  expense was $2.8  million,  an
increase of $110  thousand or 4.1% due to higher  depreciation  and  maintenance
related to additional asset purchases.  Other  noninterest  expenses,  including
bank franchise taxes, increased $311 thousand or 4.2% to $7.6 million mainly due
to a $104  thousand  increase  in  correspondent  bank fees  related to activity
attributed to the Commonwealth of Kentucky.

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

Income  tax  expense  for the  first  nine  months of 2003 was $2.8  million,  a
decrease  of $785  thousand or 21.9% from the same  period a year  earlier.  The
effective tax rate decreased 420 basis points to 21.06% from 25.26% in 2002. The
change in the effective tax rate is due to a combination  of factors,  primarily
including  lower revenue from taxable  sources,  increased  credits derived from
qualified zone academy bonds, and the addition of nontaxable income accrued from
the  increase  in cash  surrender  value  on  life  insurance  purchased  on key
employees.

FINANCIAL CONDITION

Total assets were $1.3 billion on September 30, 2003, a decrease of $6.8 million
or .5% from December 31, 2002. The decrease in assets  includes a $101.4 million
lower balance in the securities portfolio, offset by a $68.9 million increase in
cash and cash  equivalents  and a $25.8  million  increase  in all other  assets
resulting primarily from the purchase of company-owned life insurance during the
first quarter of 2003. Fed funds purchased and securities sold under  agreements
to repurchase  declined  $51.7  million while net deposits and other  borrowings
increased $44.8 million.  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
important to understanding the financial condition of the Company. On an average
basis,  total  assets were $1.2  billion  for the first nine months of 2003,  an
increase of $37.5 million or 3.1% from year-end 2002.  Average  earning  assets,
primarily  loans and  securities,  were $1.1 billion at September  30, 2003,  an
increase of $36.2 million or 3.3% from year-end  2002.  Average  earning  assets
represent  90.57% of total average  assets on September 30, 2003, an increase of
18 basis points compared to 90.39% at year-end 2002.

LOANS
-----

Loans, net of unearned income,  totaled $739.3 million at September 30, 2003, an
increase of $659 thousand or .1% from year-end 2002. The composition of the loan
portfolio is summarized in the table below.

--------------------------------------------------------------------------------
                                  September 30, 2003        December 31, 2002
(Dollars in thousands)             Amount        %           Amount        %
--------------------------------------------------------------------------------

Commercial, financial,
  and agriculture                $  105,331    14.3%       $  110,056    14.9%
Real estate - construction           52,926     7.1            55,896     7.6
Real estate - mortgage              473,900    64.1           459,620    62.2
Installment                          71,588     9.7            76,162    10.3
Lease financing                      35,553     4.8            36,905     5.0
--------------------------------------------------------------------------------
     Total                       $  739,298   100.0%       $  738,639   100.0%
--------------------------------------------------------------------------------

On average,  loans  represented  65.6% of earning assets during the current nine
month period compared to 64.7% for year-end 2002. As loan demand fluctuates, the
available  funds are  reallocated  between  loans and  lower  earning  temporary
investments  or investment  securities,  which  typically  involve a decrease in
credit risk and lower yields.

ALLOWANCE FOR LOAN LOSSES

The  allowance  for loan losses was $11.1  million at  September  30,  2003,  an
increase of $66 thousand or .6% from the prior year-end.  The allowance for loan
losses was 1.51% of loans net of  unearned  income at  September  30,  2003,  an
increase of 1 basis point from 1.50% at December 31,  2002.  The  provision  for
loan losses decreased $227 thousand and $600 thousand in the current three-month
and nine-month periods, respectively,  compared to the same periods in 2002. The
improvement  in the  provision  for loan losses is  attributed to changes in the
general risk  characteristics  of the Company's  entire loan  portfolio from the
previous periods and cannot be attributed directly to any particular  individual
credit. The Company had net charge-offs of $671 thousand and $1.3 million in the
current three and nine months of 2003, respectively, compared to net charge-offs
of $277 thousand and $909 thousand in the same periods of 2002.  Annualized  net
charge-offs  represent  .36% and .24% of  average  net  loans for three and nine
months  ended  September  30, 2003,  respectively,  compared to .60% at year-end
2002.  The  allowance  for loan losses as a percentage  of  nonperforming  loans
totaled   80.5%  and  57.3%  at  September  30,  2003  and  December  31,  2002,
respectively.  The increase is primarily reflective of the decline in nonaccrual
loans of $4.7  million in the  comparison.  Management  continues  to  emphasize
collection  efforts  and  evaluation  of risks  within  the loan  portfolio.  In
management's  opinion,  the provision for loan losses represents incurred credit
losses  during  the  periods  presented  and 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 $15.5 million at
September 30, 2003, a decrease of $4.3 million or 21.9% from the prior year-end.
Nonperforming  loans  totaled  $13.8 million at September 30, 2003 a decrease of
$5.5 million or 28.4% 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 $9.4 million at September 30, 2003.
Interest  income  lost on this  group of loans  due to their  nonaccrual  status
totaled $154 thousand and $520  thousand  during the three and nine months ended
September 30, 2003,  respectively.  At its current  outstanding  balance,  it is
estimated that a total of $137 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 1.9% at  September  30,
2003, a decrease of 74 basis points from 2.6% compared to year-end 2002.

Other  real  estate  owned  ("OREO"),  which had a balance of $385  thousand  at
year-end 2002, increased $916 thousand and totaled $1.3 million at September 30,
2003.  The  increase  in OREO is mainly due to the  transfer  to the  Company of
approximately  $1.2  million in real  estate  that  served as  collateral  for a
portion of the pool of construction loans identified in the preceding paragraph.

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

Temporary  investments  consist of interest  bearing  deposits with other banks,
federal funds sold,  and  securities  purchased  under  agreements to resell and
totaled $30.3 million at September 30, 2003. This represents an increase of $7.2
million  or 31.5% from  year-end  2002.  Temporary  investments  averaged  $64.3
million  for the first nine  months of 2003,  a decrease  of $4.6  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 $340.1 million on September 30, 2003, a decrease of
$101.4  million  or 23.0% from  year-end  2002.  Available  for sale and held to
maturity  securities  were  $315.9  million  and  $24.2  million,  respectively.
Investment securities averaged $322.8 million for the first nine months of 2003,
an increase of $6.4 million or 2.0% 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 $2.1 million at
September  30, 2003 compared to $5.5 million at year-end  2002.  The decrease is
primarily  the result of a lower  balance in the  available  for sale  portfolio
attributed to the sale of investment securities during the current period.

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

The Company  purchased  life insurance  policies on certain key employees,  with
their knowledge and consent, during the current year at a cost of $24.0 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 $1.1 million for the current  nine-month period. 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 $1.0 billion at September  30, 2003,  an increase of $53.4
million or 5.6% from year-end 2002. Noninterest bearing deposits increased $57.6
million  or 40.8% 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 $159.4 million during the current period,  an
increase  of $8.5  million  or 5.7%.  End of  period  interest  bearing  deposit
balances  decreased  $4.2 million or .5% during the nine months ended  September
30, 2003 due primarily to a decrease in money market  deposit  accounts of $11.5
million or 10.0%.  Other  savings and  interest  bearing  demand  accounts  were
relatively  unchanged at $65.5 million and $223.2  million,  respectively.  Time
deposits  increased  $7.4 million or 1.8% in the end of period  comparisons.  On
average, interest bearing deposits were $813.5 million in the current period, an
increase of $26.0  million or 3.3% from year-end  2002.  The increase in average
interest  bearing  deposits is  attributable  to increases  in interest  bearing
demand deposits of $7.4 million or 3.4%, time deposits of $18.7 million or 4.6%,
and savings  accounts of $3.0  million or 5.0%.  Average  money  market  deposit
accounts  declined  $3.1  million  or 2.9%  in the  comparison.  Total  deposits
averaged  $972.9  million,  an increase of $34.6  million or 3.7% from  year-end
2002.

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

Borrowed funds totaled $122.0 million at September 30, 2003, a decrease of $60.3
million or 33.1% from  $182.3  million at  year-end  2002.  A $59.8  million net
decrease in short term  borrowings  coupled  with a net  decrease  in  long-term
borrowings of $503 thousand  account for the total  decrease in borrowed  funds.
Federal funds  purchased and  securities  sold under  agreements to  repurchase,
which are included in short-term  borrowings,  decreased  $51.7 million or 44.6%
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,  primarily short-term  borrowings from the Federal
Home Loan Bank ("FHLB") declined $8.1 million to $1.1 million from $9.2 million.
Total  borrowed funds averaged  $139.4  million,  an increase of $3.4 million or
2.5% 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
September 30, 2003 combined retained earnings of the subsidiary banks were $45.6
million, of which $4.0 million was available for the payment of dividends to the
Parent Company without  obtaining prior approval from bank regulatory  agencies.
As a  practical  matter,  payment  of future  dividends  is also  subject to the
maintenance of other capital ratio requirements.  During the current nine months
ended September 30, 2003 the Parent Company received dividends of $30.8 million.
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 $26.3 million at September 30, 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 September 30, 2003, such assets totaled $451.9  million,  a decrease of
$28.3  million or 5.9% from  year-end  2002.  The  decrease in liquid  assets is
attributed  to the overall  funding  position of the Company  combined  with the
purchase of  company-owned  life  insurance on key employees  during the current
nine months. Net cash provided by operating  activities was $17.3 million in the
first nine  months of 2003,  an increase  of $3.6  million or 26.3%  compared to
$13.7  million in the same period  last year.  Net cash  provided  by  investing
activities  was $67.8  million,  an increase of $29.6 million due primarily to a
$40.1 million increase from investments securities transactions, lower net loans
originated for  investment in the current nine months of $14.9 million,  and the
purchase of company-owned life insurance on key employees of $24.0 million.  Net
cash used in financing  activities  was $16.2  million for the nine months ended
September  30, 2003. In the prior  nine-month  comparison  financing  activities
provided  $84.1  million.  The  change is mainly due to lower  funding  activity
during the current nine-month period compared to the activity in the same period
a year earlier.

CAPITAL RESOURCES

Shareholders'  equity was $125.2  million on  September  30, 2003, a decrease of
$573 thousand or .5% from year-end 2002.  Treasury stock  purchases along with a
decline in unrealized gains on available for sale investment  securities  offset
increases in other equity components.

The Company purchased 98 thousand shares of its outstanding  common stock during
the first nine  months of 2003 for a total  cost of $3.1  million.  The  Company
issued 14 thousand  shares of common stock  during this same period  pursuant to
its nonqualified stock option plan.  Dividends of $6.5 million or $.96 per share
were  declared  during the first nine  months of 2003,  an  increase of 3.2% per
share  compared  to the prior  year.  Accumulated  other  comprehensive  income,
consisting  of the  unrealized  holding  gain on available  for sale  investment
securities (net of tax) decreased $2.2 million from year-end 2002 primarily as a
result  of a lower  balance  in the  available  for  sale  investment  portfolio
attributed to the sale of investment securities during the current period.

Consistent with the objective of operating a sound financial  organization,  the
Company's goal is to maintain  capital ratios well above the regulatory  minimum
requirements.  The  Company's  capital  ratios as of  September  30,  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                 15.42%               4.00%            6.00%
Total risk based                  16.67%               8.00%           10.00%
Leverage                           9.95%               4.00%            5.00%

The capital ratios of all the subsidiary  banks, on an individual basis, were in
excess of the  applicable  minimum  regulatory  capital  ratio  requirements  at
September 30, 2003.

RECENTLY ISSUED ACCOUNTING STANDARDS

In January 2003,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Interpretation  No.  46,   CONSOLIDATION  OF  VARIABLE  INTEREST  ENTITIES,   AN
INTERPRETATION OF ARB NO. 51. This Interpretation  provides new guidance for the
consolidation of variable  interest entities ("VIEs") and requires such entities
to be  consolidated  by  their  primary  beneficiaries  if the  entities  do not
effectively  disperse risk among parties involved.  The Interpretation also adds
disclosure  requirements  for investors  that are involved  with  unconsolidated
VIEs. The  consolidation  requirements  apply  immediately to VIEs created after
January 31, 2003 and are effective  for the first fiscal year or interim  period
ending after  December 15, 2003 for VIEs acquired  before  February 1, 2003. The
adoption of this interpretation is not expected have a significant impact on the
Company's financial condition of results of operations.

In April 2003,  The FASB issued  Statement  of  Financial  Accounting  Standards
("SFAS") No. 149,  AMENDMENT  OF STATEMENT  133 ON  DERIVATIVE  INSTRUMENTS  AND
HEDGING ACTIVITIES.  SFAS No. 149 amends and clarifies financial  accounting and
reporting for derivative  instruments,  including certain derivative instruments
embedded  in other  contracts  and for  hedging  activities  under SFAS No. 133,
ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES.  This statement is
effective for contracts  entered into or modified  after June 30, 2003.  Because
the Company does not have these  instruments  or is only  nominally  involved in
these  instruments,  management  expects the adoption of this statement will not
have a material effect on the Company's consolidated financial statements.

In May 2003,  the FASB  issued SFAS No. 150,  ACCOUNTING  FOR CERTAIN  FINANCIAL
INSTRUMENTS WITH  CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY. This statement
affects the accounting for certain  financial  instruments  that, under previous
guidance,  issuers could  account for as equity.  This  statement  requires that
freestanding  financial  instruments  that embody  obligations for the issuer be
classified  as  liabilities  on the balance  sheet.  Most of this  statement  is
effective for financial instruments entered into or modified after May 31, 2003,
and  otherwise  is  effective  at the  beginning  of the  first  interim  period
beginning  after  June 15,  2003.  Because  the  Company  does  not  have  these
instruments  or is only  nominally  involved  in these  instruments,  management
expects the adoption of this  statement  will not have a material  effect on the
Company's consolidated financial statements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------

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

At  September  30,  2003,  the model  indicated  that if rates were to gradually
increase by 75 basis points during the calendar year,  then net interest  income
and net income would  increase .11% and .25%,  respectively  for the year ending
December 31, 2003. The model indicated that if rates were to gradually  decrease
by 75 basis points over the same period, then net interest income and net income
would decrease .07% and .13%, 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  rates paid on some of the Company's  deposits are below 1.0%.  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 as of the end of
the  period  covered  by 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
--------------------------

Previously  filed in Part  II,  Item 1 of  Farmers  Capital  Bank  Corporation's
quarterly  report  on  Form  10-Q  for  the  period  ended  June  30,  2003  and
incorporated herein by reference.

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
               (incorporated  by reference to Quarterly  Report of Form 10-Q for
               the quarterly period ended March 31, 2003).

          31.1 CEO Certification (page 28)

          31.2 CFO Certification (page 29)

          32   CEO  &  CFO  Certifications   Pursuant  to  Section  906  of  the
               Sarbanes-Oxley Act of 2002 (page 30)


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

          On October 20, 2003, the  Registrant  filed a report on Form 8-K under
          Item 12 reporting  its earnings for the third  quarter of 2003.  There
          were no financial statements filed with this Form 8-K.

          On October 28, 2003, the  Registrant  filed a report on Form 8-K under
          item 5 reporting an increase in its quarterly dividend.  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:      11/12/03                 /s/ G. Anthony Busseni
      --------------------          --------------------------------------------
                                    G. Anthony Busseni,
                                    President and CEO
                                    (Principal Executive Officer)


Date:      11-12-03                 /s/ C Douglas Carpenter
      --------------------          --------------------------------------------
                                    C. Douglas Carpenter,
                                    Vice President, Secretary, and CFO
                                    (Principal Financial and Accounting Officer)
[{"type": "10-Q", "sequence": "1", "filename": "a10q093003.txt", "description": "FORM 10-Q SEPTEMBER 30, 2003", "secsgml_size_bytes": 122732}]
{"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": "03994154"}, "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 September 30, 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 $0.125 per share
                6,711,771 shares outstanding at November 10, 2003
TABLE OF CONTENTS

Part I - Financial Information                                          Page No.
------------------------------                                          --------

     Item 1 - Financial Statements                                            3

         Unaudited Consolidated Balance Sheets -
             September 30, 2003 and December 31, 2002                         3

         Unaudited Consolidated Statements of Income -
             For the Three Months and Nine Months Ended
             September 30, 2003 and September 30, 2002                        4

         Unaudited Consolidated Statements of Comprehensive Income -
             For the Three Months and Nine Months Ended
             September 30, 2003 and September 30, 2002                        5

         Unaudited Consolidated Statements of Cash Flows -
             For the Nine Months Ended
             September 30, 2003 and September 30, 2002                        6

         Unaudited Consolidated Statements of Changes in
             Shareholders' Equity -
             For the Nine Months Ended
             September 30, 2003 and September 30, 2002                        7

         Notes to Unaudited Consolidated Financial Statements                 8

     Item 2 - Management's Discussion and Analysis of Financial
                Condition and Results of Operations                          11

     Item 3 - Quantitative and Qualitative Disclosures About Market Risk     25

     Item 4 - Controls and Procedures                                        26

Part II - Other Information

     Item 1 - Legal Proceedings                                              26

     Item 6 - Exhibits and Reports on Form 8-K                               26

     Signatures                                                              27
PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
UNAUDITED CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------------------------------------------------------------------
                                                                                         September 30,       December 31,
(In thousands, except share data)                                                                2003               2002
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Cash and cash equivalents:
     Cash and due from banks                                                               $   105,700        $    44,083
     Interest bearing deposits in other banks                                                    3,449              3,947
     Federal funds sold and securities purchased under
          agreements to resell                                                                  26,810             19,071
------------------------------------------------------------------------------------------------------------------------------------
          Total cash and cash equivalents                                                      135,959             67,101
------------------------------------------------------------------------------------------------------------------------------------
Investment securities:
     Available for sale, amortized cost of $313,774 (2003) and $407,560 (2002)                 315,899            413,038
     Held to maturity, fair value of $25,933 (2003) and $30,312 (2002)                          24,223             28,519
------------------------------------------------------------------------------------------------------------------------------------
          Total investment securities                                                          340,122            441,557
------------------------------------------------------------------------------------------------------------------------------------
Loans, net of unearned income                                                                  739,298            738,639
Allowance for loan losses                                                                      (11,127)           (11,061)
------------------------------------------------------------------------------------------------------------------------------------
          Loans, net                                                                           728,171            727,578
------------------------------------------------------------------------------------------------------------------------------------
Premises and equipment, net                                                                     24,121             24,155
Company-owned life insurance                                                                    25,090
Other assets                                                                                    15,384             15,211
------------------------------------------------------------------------------------------------------------------------------------
          Total assets                                                                     $ 1,268,847        $ 1,275,602
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Deposits:
     Noninterest bearing                                                                   $   198,851        $   141,238
     Interest bearing                                                                          812,035            816,242
------------------------------------------------------------------------------------------------------------------------------------
          Total deposits                                                                     1,010,886            957,480
------------------------------------------------------------------------------------------------------------------------------------

Federal funds purchased and securities sold under agreements to repurchase                      64,230            115,979
Other short-term borrowings                                                                      1,116              9,207
Long-term debt                                                                                  56,649             57,152
Dividends payable                                                                                2,149              2,191
Other liabilities                                                                                8,617              7,820
------------------------------------------------------------------------------------------------------------------------------------
          Total liabilities                                                                  1,143,647          1,149,829
------------------------------------------------------------------------------------------------------------------------------------
Commitments and contingencies

SHAREHOLDERS' EQUITY
Common stock, par value $.125 per share
     9,608,000 shares authorized; 8,150,028 and 8,135,977
     shares issued at September 30, 2003 and December 31, 2002, respectively                     1,019              1,017
Capital surplus                                                                                 18,284             17,623
Retained earnings                                                                              145,261            141,199
Treasury stock, at cost
     1,442,294 and 1,344,463 shares at September 30, 2003 and
     December 31, 2002, respectively                                                           (40,745)           (37,627)
Accumulated other comprehensive income                                                           1,381              3,561
------------------------------------------------------------------------------------------------------------------------------------
          Total shareholders' equity                                                           125,200            125,773
------------------------------------------------------------------------------------------------------------------------------------
          Total liabilities and shareholders' equity                                       $ 1,268,847        $ 1,275,602
------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
------------------------------------------------------------------------------------------------------------------------------------
                                                                               Three Months                      Nine Months
                                                                                  Ended                             Ended
                                                                              September 30,                      September 30,
(In thousands, except per share data)                                     2003           2002               2003           2002
------------------------------------------------------------------------------------------------------------------------------------
INTEREST INCOME
Interest and fees on loans                                            $ 11,921       $ 12,880           $ 36,289       $ 38,583
Interest on investment securities:
     Taxable                                                             1,318          2,578              4,818          7,921
     Nontaxable                                                            809            850              2,392          2,699
Interest on deposits in other banks                                         12             17                 49            170
Interest on federal funds sold and securities
     purchased under agreements to resell                                  129            317                506            772
------------------------------------------------------------------------------------------------------------------------------------
          Total interest income                                         14,189         16,642             44,054         50,145
------------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest on deposits                                                     4,033          5,550             12,996         17,302
Interest on federal funds purchased and securities
     sold under agreements to repurchase                                   182            411                684          1,318
Interest on other borrowed funds                                           542            411              1,649          1,164
------------------------------------------------------------------------------------------------------------------------------------
          Total interest expense                                         4,757          6,372             15,329         19,784
------------------------------------------------------------------------------------------------------------------------------------
          Net interest income                                            9,432         10,270             28,725         30,361
------------------------------------------------------------------------------------------------------------------------------------
Provision for loan losses                                                  642            869              1,378          1,978
------------------------------------------------------------------------------------------------------------------------------------
          Net interest income after provision for loan losses            8,790          9,401             27,347         28,383
------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST INCOME
Service charges and fees on deposits                                     1,951          2,088              5,804          5,867
Other service charges, commissions, and fees                               909            897              2,682          2,627
Data processing income                                                     337            340              1,071          1,063
Trust income                                                               385            368              1,197          1,096
Investment securities gains, net                                           822            440                966          1,433
Gain on sale of mortgage loans                                             276            140                788            325
Income from company-owned life insurance                                   416                             1,089
Other                                                                       55             68                198            192
------------------------------------------------------------------------------------------------------------------------------------
          Total noninterest income                                       5,151          4,341             13,795         12,603
------------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee benefits                                           5,188          5,033             15,469         14,984
Occupancy expenses, net                                                    621            623              1,921          1,782
Equipment expenses                                                         934            845              2,795          2,685
Bank franchise tax                                                         330            308                995            921
Other                                                                    2,136          2,234              6,636          6,399
------------------------------------------------------------------------------------------------------------------------------------
          Total noninterest expense                                      9,209          9,043             27,816         26,771
------------------------------------------------------------------------------------------------------------------------------------
          Income before income taxes                                     4,732          4,699             13,326         14,215
------------------------------------------------------------------------------------------------------------------------------------
Income tax expense                                                         831          1,173              2,806          3,591
------------------------------------------------------------------------------------------------------------------------------------
          Net income                                                  $  3,901       $  3,526           $ 10,520       $ 10,624
------------------------------------------------------------------------------------------------------------------------------------
NET INCOME PER COMMON SHARE
     Basic                                                            $    .58       $    .51           $   1.56       $   1.54
     Diluted                                                               .58            .51               1.55           1.53
------------------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE SHARES OUTSTANDING
     Basic                                                               6,712          6,850              6,733          6,880
     Diluted                                                             6,761          6,898              6,773          6,925
------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
------------------------------------------------------------------------------------------------------------------------------------
                                                                        Three Months Ended        Nine Months Ended
                                                                            September 30,             September 30,
 (In thousands)                                                         2003           2002       2003           2002
------------------------------------------------------------------------------------------------------------------------------------
NET INCOME                                                            $ 3,901       $ 3,526    $ 10,520        $10,624
Other comprehensive income:
     Unrealized holding (loss) gain on available for sale
     securities arising during the period, net of tax
     of $719, $1,329, $512, and $1,636, respectively                   (1,335)        2,468        (950)         3,038
Reclassification adjustment for prior period
     unrealized gain recognized during current period,
     net of tax of $601, $111, $662, and $337, respectively            (1,116)         (207)     (1,230)          (625)
------------------------------------------------------------------------------------------------------------------------------------
Other comprehensive income                                             (2,451)        2,261      (2,180)         2,413

------------------------------------------------------------------------------------------------------------------------------------
Comprehensive Income                                                  $ 1,450       $ 5,787     $ 8,340       $ 13,037
------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to unaudited consolidated financial statements.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
------------------------------------------------------------------------------------------------------------------------------------
Nine months ended September 30, (In thousands)                                                         2003            2002
------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                                                                   $  10,520       $  10,624
     Adjustments to reconcile net income to net cash provided by operating
          activities:
          Depreciation and amortization                                                               2,257           2,147
          Net amortization of investment security premiums and (discounts):
                Available for sale                                                                    2,578             394
                Held to maturity                                                                        (52)            (49)
          Provision for loan losses                                                                   1,378           1,978
          Noncash compensation expense                                                                  319             427
          Mortgage loans originated for sale                                                        (53,405)        (26,768)
          Proceeds from sale of mortgage loans                                                       54,724          25,159
          Deferred income tax expense                                                                   144               3
          Gain on sale of mortgage loans                                                               (788)           (325)
          Gain on sale of premises and equipment                                                         (2)             (2)
          Gain on sale of available for sale investment securities, net                                (966)         (1,433)
          Decrease in accrued interest receivable                                                       170             768
          (Increase) decrease in other assets                                                        (1,432)             74
          Decrease in accrued interest payable                                                         (445)           (272)
          Increase in other liabilities                                                               2,271             949
------------------------------------------------------------------------------------------------------------------------------------
             Net cash provided by operating activities                                               17,271          13,674
------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
     Proceeds from maturities and calls of investment securities:
          Available for sale                                                                        316,365         270,455
          Held to maturity                                                                            4,348           7,159
     Proceeds from sale of available for sale investment securities                                 108,975         147,229
     Purchase of available for sale investment securities                                          (333,166)        (368,437)
     Loans originated for investment, net of principal collected                                     (2,502)         (17,430)
     Purchase of company-owned life insurance                                                       (24,001)
     Purchase of premises and equipment                                                              (2,230)           (897)
     Proceeds from sale of equipment                                                                      9             116
------------------------------------------------------------------------------------------------------------------------------------
             Net cash provided by investing activities                                               67,798           38,195
------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
     Net increase in deposits                                                                        53,406          72,890
     Net decrease in federal funds purchased and securities sold under
          agreements to repurchase                                                                  (51,749)         (1,232)
     Proceeds from long-term debt                                                                     3,874          16,500
     Repayments of long-term debt                                                                    (4,377)         (1,511)
     Net (decrease) increase in other short-term borrowings                                          (8,091)          6,672
     Dividends paid                                                                                  (6,500)         (6,427)
     Purchase of common stock                                                                        (3,118)         (4,338)
     Stock options exercised                                                                            344           1,516
------------------------------------------------------------------------------------------------------------------------------------
             Net cash (used in) provided by financing activities                                    (16,211)         84,070
------------------------------------------------------------------------------------------------------------------------------------
             Net increase in cash and cash equivalents                                               68,858         135,939
------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of year                                                       67,101         106,385
------------------------------------------------------------------------------------------------------------------------------------
             Cash and cash equivalents at end of period                                           $ 135,959       $ 242,324
------------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES
Cash paid during the period for:
     Interest                                                                                     $  15,774       $  20,056
     Income taxes                                                                                       500           3,840
Cash dividend declared and unpaid                                                                     2,149           2,123
------------------------------------------------------------------------------------------------------------------------------------
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
Nine months ended                         Common Stock      Capital    Retained      Treasury Stock    Comprehensive   Shareholders'
September 30, 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                                                               10,520                                             10,520
Other comprehensive income                                                                                  (2,180)         (2,180)
Cash dividends declared,
  $.96 per share                                                         (6,458)                                            (6,458)
Purchase of common stock                                                              98     (3,118)                        (3,118)
Stock options exercised                   14          2         342                                                            344
Noncash compensation expense
  attributed to stock option grants                             319                                                            319
------------------------------------------------------------------------------------------------------------------------------------
  Balance at September 30, 2003        8,150     $1,019     $18,284    $145,261    1,442   $(40,745)        $1,381        $125,200
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
  Balance at January 1, 2002           8,058     $1,007     $15,179    $137,227    1,153   $(31,077)        $1,224        $123,560

Net income                                                               10,624                                             10,624
Other comprehensive income                                                                                   2,413           2,413
Cash dividends declared,
  $.93 per share                                                         (6,398)                                            (6,398)
Purchase of common stock                                                             126     (4,338)                        (4,338)
Stock options exercised                   62          8       1,508                                                          1,516
Noncash compensation expense
  attributed to stock option grants                             427                                                            427
------------------------------------------------------------------------------------------------------------------------------------
  Balance at September 30, 2002        8,120     $1,015     $17,114    $141,453    1,279   $(35,415)        $3,637        $127,804
------------------------------------------------------------------------------------------------------------------------------------
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  financial
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.  Such
reclassifications   have  no  effect  on  previously   reported  net  income  or
shareholders' equity.

3.    RECENTLY ISSUED ACCOUNTING STANDARDS

Please refer to the caption "Recently Issued Accounting Standards" under Part I,
Item 2 on page 24 of this document.

4.    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".

5.    NET INCOME PER COMMON SHARE

Basic net income per common  share is  determined  by dividing net income by the
weighted average total number of shares of common stock outstanding. Diluted net
income  per  common  share is  determined  by  dividing  net income by the total
weighted  average number of shares of common stock  outstanding,  plus the total
weighted average number of shares that would be issued upon exercise of dilutive
stock options  assuming  proceeds are used to repurchase  shares pursuant to the
treasury stock method.  Net income per common share computations were as follows
at September 30, 2003 and 2002.

--------------------------------------------------------------------------------------------------------
                                                       Three Months Ended         Nine Months Ended
                                                          September 30,             September 30,
(In thousands, except per share data)                     2003       2002           2003       2002
--------------------------------------------------------------------------------------------------------
Net income, basic and diluted                          $ 3,901    $ 3,526       $ 10,520   $ 10,624
--------------------------------------------------------------------------------------------------------

Average shares outstanding                               6,712      6,850          6,733      6,880
Effect of dilutive stock options                            49         48             40         45
--------------------------------------------------------------------------------------------------------
Average diluted shares outstanding                       6,761      6,898          6,773      6,925
--------------------------------------------------------------------------------------------------------

Net income per share, basic                            $   .58    $   .51       $   1.56   $   1.54
Net income per share, diluted                              .58        .51           1.55
1.53
--------------------------------------------------------------------------------------------------------
The sum of diluted  earnings  per common  share of each of the quarters in 2003
does not add to the year-to-date figure reported due to rounding.
6.    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 fair market
value of the  Company's  stock was  $24.50  and  $39.66  on the  grant  date and
measurement date, respectively.

The  Company  granted  54,000  options  during  2000.  The  grant  date  and the
measurement  date for these options are the same,  with the fair market value of
$29.75.  Pursuant  to  APB  No.  25,  there  is no  compensation  expense  being
recognized for this grant.  Had  compensation  expense been determined under the
fair  value  method  described  in 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.

-----------------------------------------------------------------------------------------------------------------
                                                                   Three Months Ended         Nine Months Ended
                                                                     September 30,              September 30,
(In thousands, except per share data)                              2003          2002         2003          2002
-----------------------------------------------------------------------------------------------------------------
NET INCOME
  As reported                                                   $ 3,901       $ 3,526     $ 10,520      $ 10,624
  Add:  Stock-based employee compensation expense
        included in reported net income under the
        intrinsic value method, net of related tax effects           69           166          207           358
  Less: Stock-based compensation expense determined
        under fair value based method for all awards,
        net of related tax effects                                  (85)         (249)        (253)         (475)
-----------------------------------------------------------------------------------------------------------------
Proforma                                                        $ 3,885       $ 3,443     $ 10,474      $ 10,507
-----------------------------------------------------------------------------------------------------------------
NET INCOME PER COMMON SHARE
  Basic, as reported                                            $   .58       $   .51     $   1.56      $   1.54
  Basic, proforma                                                   .58           .50         1.56          1.53

  Diluted, as reported                                              .58           .51         1.55          1.53
  Diluted, proforma                                                 .57           .50         1.55          1.52
-----------------------------------------------------------------------------------------------------------------
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 options under the plan.
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS
-------------

FORWARD-LOOKING STATEMENTS

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

RESULTS OF OPERATIONS

                    THIRD QUARTER 2003 VS. THIRD QUARTER 2002
                    -----------------------------------------

The Company  reported net income of $3.9 million for the third  quarter of 2003,
an increase  of $375  thousand  or 10.6%  compared to $3.5  million for the same
period in 2002. On a basic and diluted per share basis, net income was $0.58 for
the current  three  months,  an  increase of $.07 or 13.7%  compared to the same
period in the prior year.

A decrease in net interest income had a significant  effect on net income in the
reporting periods.  The continued low interest rate environment,  prepayments of
certain  investment  securities,  and the sales  and  maturities  of  investment
securities  that were replaced at generally  lower yields  resulted in lower net
interest income in the quarterly comparison.  Net interest income decreased $838
thousand  or 8.2% in the  current  three  months  compared to the same period in
2002.  The decline in net  interest  income for the current  quarter is mainly a
result of continued  declines in the overall market  interest rate  environment.
Interest  rates  earned on earning  assets have  declined  more rapidly than the
interest rates paid on interest paying  liabilities  since many of the Company's
funding sources, particularly deposits, have approached their repricing floors.

The  provision  for loan losses  decreased  $227  thousand or 26.1% in the three
month comparison. The improvement in the provision for loan losses is attributed
to changes in the general  risk  characteristics  of the  Company's  entire loan
portfolio  from the previous  period and can not be  attributed  directly to any
particular individual credit.

Total  noninterest  income  increased  $810 thousand or 18.7% in the three month
comparison. Income from the purchase of company-owned life insurance, instituted
in the  first  quarter  of 2003 to  offset  the  rising  costs of the  Company's
employee  benefit  plans,  totaled $416  thousand for the current  three months.
Securities gains increased $382 thousand in the current three month  comparison.
Gains on the sale of mortgage loans  increased $136 thousand as the low interest
rate environment  continued to fuel the Company's secondary market mortgage loan
originations.

Total  noninterest  expenses  increased $166 thousand or 1.8% in the three month
comparison.  Noninterest  expenses  increased  primarily  due to an  increase in
salaries and employee  benefits of $155 thousand or 3.1%. These increases mainly
represent   employee  benefits  and  normal  salary  increases.   A  decline  in
correspondent  banking  fees of $172  thousand  favorably  impacted  noninterest
expenses in the three  month  comparison.  Other  operating  expenses  generally
increased in the comparison, including depreciation increases of $86 thousand or
12.7% and bank franchise taxes of $22 thousand or 7.1%. The effective income tax
rate  declined 740 basis  points to 17.56% for the three months ended  September
30,  2003  compared  to the same  period a year  earlier.  The  decrease  in the
effective  income  tax rate is due  primarily  to  lower  revenue  from  taxable
sources,  an increased  amount of credits  derived from  qualified  zone academy
bonds,  and the addition of nontaxable  income accrued from the increase in cash
surrender value on company-owned life insurance purchased on key employees.

Return on average assets ("ROA") was 1.24% for the current quarter,  an increase
of 8 basis  points  compared  to 1.16%  reported  for the same  period  in 2002.
Negatively  impacting ROA was a 44 basis point decline in net interest margin to
3.53%.  Offsetting the decline in net interest margin that  positively  effected
ROA was an increase in noninterest income relative to average assets of 20 basis
points and declines in expenses  relative to average assets that include 9 basis
points for the  provision  for loan losses,  7 basis points for other  operating
expenses,  and 15 basis  points  attributed  to income  tax  expense.  Return on
average  equity  ("ROE")  was 12.44% for the third  quarter of 2003  compared to
11.26% in the same  period of 2002.  The  increase  is due to higher  net income
reported in the  current  period  coupled  with a slight  increase in  financial
leverage compared to the same period a year ago.

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

The interest rate  environment has continued to trend downward after a period of
relative  stability  throughout  much of 2002 and has  negatively  impacted  the
Company's net interest income.  Additional  actions taken by the Federal Reserve
Board (the "Fed") in the fourth  quarter of 2002 and the second  quarter of 2003
have  resulted  in a  general  reduction  in  short-term  interest  rates in the
reporting  periods.  Short-term  interest  rates,  left unchanged since December
2001, were reduced 50 basis points by the Fed in November 2002 and an additional
25 basis  points in June 2003.  The prime rate as  reported  in The Wall  Street
Journal was lowered in an identical  manner  shortly  following the Fed changes.
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 5.2%,  a reduction  of 109 basis  points from 6.3% in the same
period a year ago.  The cost of funds for the current  three  months was 2.0%, a
decline of 77 basis points compared to 2.7% 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.  However,  many  of the  Company's  funding  sources,  particularly
deposits,  have  approached  their  repricing  floors.  Average  earning  assets
increased  $33.4  million or 3.1% to $1.1 billion in the  quarterly  comparison.
However,  as a percentage of total average assets,  earning assets  decreased 97
basis points to 88.97% from 89.94%.

Interest  income totaled $14.2 million for the third quarter of 2003, a decrease
of $2.5 million or 14.7% compared to the same period in the prior year. Interest
expense totaled $4.8 million,  a decrease of $1.6 million or 25.3%. Net interest
income fell $838 thousand or 8.2% in the comparison and totaled $9.4 million for
the three months ended September 30, 2003.

Interest and fees on loans totaled $11.9 million, a decrease of $959 thousand or
7.4%  mainly  due to a  decrease  in the  average  rate  earned.  Average  loans
increased  $33.7  million  or 4.8% to $740.2  million in the  comparison  due to
higher  loan demand in a lower rate  environment.  The tax  equivalent  yield on
loans  decreased  87 basis  points to 6.4% from 7.3% and offset  the  effects of
higher average balances on interest income.  Interest on taxable  securities was
$1.3 million, a decrease of $1.3 million or 48.9% due primarily to a decrease in
the  average  rate  earned  and the  effect of higher  premium  amortization  on
mortgage-backed  securities.  Prepayments  on  mortgage-backed  securities  have
increased greatly due to corresponding  refinancing of home mortgages that serve
as  collateral  for these  investment  securities.  The  increase in activity is
directly related to the lower interest rate environment. The average rate earned
on taxable  securities  decreased  237 basis  points to 2.2% from 4.6% while the
average balance  increased 6.0% to $237.4 million from $224.0 million.  Interest
on nontaxable  securities was $809  thousand,  a decline of $41 thousand or 4.8%
due to a 28 basis point decrease in the tax equivalent  yield to 6.3% from 6.6%.
Interest on  short-term  investments,  including  time  deposits in other banks,
federal  funds  sold,  and  securities  purchased  under  agreements  to resell,
decreased $193 thousand.  This decline was due to a decrease in the average rate
earned on these  investments  of 85 basis  points to .9% from 1.8%  along with a
$14.0 million or 18.8% decrease in the average balance.

Interest expense on deposits  decreased $1.5 million or 27.3% to $4.0 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 a general  increase in average  balances.  The
decline in interest  expense on  deposits  was as follows:  time  deposits  $1.2
million or 26.0%;  interest  bearing demand deposits $143 thousand or 34.2%; and
savings deposits $184 thousand or 33.3%. The average rate paid on time deposits,
the largest  component  of  interest  bearing  deposits,  was 3.2% for the third
quarter  of 2003  compared  to 4.5% for the same  period  of 2002.  The  average
balance of time deposits increased $19.2 million or 4.7% to $426.0 million.  The
average rate paid on interest  bearing demand deposits  declined 29 basis points
to .5% from .8% while the average  balance  increased  $12.3  million or 5.7% to
$227.6  million.  The average rate paid on savings  deposits  decreased 46 basis
points to .9% from 1.3% while the average balance increased $3.1 million or 1.9%
to $167.8  million.  Interest  expense on overnight  borrowings,  consisting  of
federal funds  purchased and  securities  sold under  agreements to  repurchase,
decreased $229 thousand or 55.7% due to an 86 basis point decline in the average
rate paid along with a $14.8 million  decline in the average  balance.  Interest
expense  on  other  borrowed  funds  increased  $131  thousand  or  31.9% 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 $61.9 million,  an increase of $16.5 million or 36.5% in the comparison.
The average rate paid on other  borrowed  funds declined 13 basis points to 3.5%
from 3.6%.

The net interest margin (TE) decreased 44 basis points to 3.53% during the third
quarter of 2003 compared to 3.97% in the third quarter of 2002.  The decrease in
net interest  margin is primarily  attributed to a 32 basis point decline in the
spread  between  rates  earned on earning  assets and the rates paid on interest
bearing  liabilities  to 3.25% in the  current  quarter  from 3.57% in the third
quarter of 2002. The effect of noninterest  bearing sources of funds contributed
an additional 12 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 September 30.
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY:  INTEREST RATES AND INTEREST DIFFERENTIAL
----------------------------------------------------------------------------------------------------------------------------------
Quarter Ended September 30,                                    2003                                         2002
                                              Average                        Average         Average                    Average
(In thousands)                                Balance        Interest          Rate          Balance      Interest        Rate
----------------------------------------------------------------------------------------------------------------------------------
EARNING ASSETS
Investment securities
  Taxable                                 $   237,389        $  1,318         2.20%      $   224,006     $  2,578         4.57%
  Nontaxable
75,434           1,195         6.29            75,110        1,244         6.57
Time deposits with banks,
  federal funds sold and
  securities purchased
  under agreements to resell                   60,342             141          .93            74,335          334         1.78
Loans
740,215          11,991         6.43           706,562       13,009         7.30
----------------------------------------------------------------------------------------------------------------------------------
     Total earning assets                   1,113,380        $ 14,645         5.22%        1,080,013     $ 17,165         6.31%
----------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses                     (11,204)                                       (11,164)
----------------------------------------------------------------------------------------------------------------------------------
     Total earning assets, net
     of allowance for loan losses           1,102,176                                      1,068,849
----------------------------------------------------------------------------------------------------------------------------------
NONEARNING ASSETS
Cash and due from banks                        89,302                                         96,373
Premises and equipment, net                    24,260                                         23,777
Other assets                                   35,626                                         11,818
----------------------------------------------------------------------------------------------------------------------------------
     Total assets                         $ 1,251,364                                    $ 1,200,817
----------------------------------------------------------------------------------------------------------------------------------
INTEREST BEARING LIABILITIES
Deposits
  Interest bearing demand                 $   227,607        $    275          .48%      $   215,260     $    418          .77%
  Savings                                     167,827             369          .87           164,679          553         1.33
  Time                                        426,007           3,389         3.16           406,770        4,579         4.47
Federal funds purchased
  and securities sold
  under agreements to repurchase               74,362             182          .97            89,165          411         1.83
Other borrowed funds                           61,893             542         3.47            45,352          411         3.60
----------------------------------------------------------------------------------------------------------------------------------
     Total interest bearing liabilities       957,696        $  4,757         1.97%          921,226     $  6,372         2.74%
----------------------------------------------------------------------------------------------------------------------------------
NONINTEREST BEARING LIABILITIES
Commonwealth of Kentucky deposits              30,810                                         30,146
Other demand deposits                         131,681                                        117,403
Other liabilities                               6,763                                          7,793
----------------------------------------------------------------------------------------------------------------------------------
     Total liabilities                      1,126,950                                      1,076,568
----------------------------------------------------------------------------------------------------------------------------------
     Shareholders' equity                     124,414                                        124,249
----------------------------------------------------------------------------------------------------------------------------------
     Total liabilities and
     shareholders' equity                 $ 1,251,364                                    $ 1,200,817
----------------------------------------------------------------------------------------------------------------------------------
Net interest income                                             9,888                                      10,793
TE basis adjustment                                              (456)                                       (523)
----------------------------------------------------------------------------------------------------------------------------------
     Net interest income                                       $9,432                                    $ 10,270
----------------------------------------------------------------------------------------------------------------------------------
Net interest spread                                                           3.25%                                       3.57%
Impact of noninterest bearing
  sources of funds                                                             .28                                         .40
----------------------------------------------------------------------------------------------------------------------------------
Net interest margin                                                           3.53%                                       3.97%
----------------------------------------------------------------------------------------------------------------------------------
Income  and yield  stated at a fully tax  equivalent  basis  using the  marginal
corporate Federal tax rate of 35%.
Loan balances include principal balances on nonaccrual loans.
Loan fees included in interest  income amount to $563 thousand and $518 thousand
in 2003 and 2002, respectively.
ANALYSIS OF CHANGES IN NET INTEREST INCOME (TAX EQUIVALENT BASIS)
-----------------------------------------------------------------------------------------------------------
(In thousands)                                                   Variance      Variance Attributed to
Quarter Ended September 30,                                     2003/2002
Volume          Rate
-----------------------------------------------------------------------------------------------------------
INTEREST INCOME
Taxable investment securities                                     $(1,260)    $   967       $(2,227)
Nontaxable investment securities
(49)         34           (83)
Time deposits with banks, federal funds sold and
   securities purchased under agreements to resell                   (193)        (55)         (138)
Loans2                                                             (1,018)      3,220        (4,238)
-----------------------------------------------------------------------------------------------------------
     Total interest income                                         (2,520)      4,166        (6,686)
-----------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest bearing demand deposits                                     (143)        146          (289)
Savings deposits                                                     (184)         70          (254)
Time deposits                                                      (1,190)      1,316        (2,506)
Federal funds purchased and securities sold under
   agreements to repurchase                                          (229)        (60)         (169)
Other borrowed funds                                                  131         227           (96)
-----------------------------------------------------------------------------------------------------------
     Total interest expense                                        (1,615)      1,699        (3,314)
-----------------------------------------------------------------------------------------------------------
Net interest income                                               $  (905)    $ 2,467       $(3,372)
-----------------------------------------------------------------------------------------------------------
Percentage change                                                   100.0%     (272.6)%       372.6%
-----------------------------------------------------------------------------------------------------------
The  changes  that are not  solely  due to rate or  volume  are  allocated  on a
percentage  basis using the  absolute  values of rate and volume  variances as a
basis for allocation.
Income stated at fully tax equivalent basis using the marginal corporate Federal
tax rate of 35%.
NONINTEREST INCOME
------------------

Noninterest income was $5.2 million for the current quarter, an increase of $810
thousand  or 18.7%  compared  to the third  quarter of the prior  year.  Service
charges and fees on  deposits,  the largest  component  of  noninterest  income,
decreased  $137  thousand or 6.6% to $2.0 million.  Overdraft  fees declined $15
thousand or 1.2% and service  charges on demand  deposit  accounts  declined $12
thousand  or 5.0% in the  comparison.  Fees  related to deposit  accounts of the
Commonwealth of Kentucky also declined $123 thousand or 65.0% and corresponds to
the decrease in correspondent bank fees included in noninterest  expense.  Other
service  charges,  commissions,  and fees were up $12  thousand  or 1.3% to $909
thousand.  Data processing  fees were $337 thousand,  a decline of less than 1%.
Trust income totaled $385 thousand, an increase of $17 thousand or 4.6% compared
to $368  thousand a year  earlier.  Net gains on the sale of available  for sale
securities totaled $822 thousand, an increase of $382 thousand or 86.8% compared
to the  comparable  period  a year  ago as the  Company  sought  to  manage  the
composition of its balance sheet in a continuing difficult economic environment.
Net gains on the sale of mortgage loans were $276 thousand,  an increase of $136
thousand  or 97.1%  from $140  thousand  in the  prior  year as  mortgage  loans
originated  for sale  increased  $6.1 million in the  comparison  due to the low
interest rate environment.  Income from company-owned life insurance,  purchased
near the end of the first  quarter of 2003,  was $416  thousand  in the  current
three-month period. Other noninterest income totaled $55 thousand, a decrease of
$13 thousand compared to the same period in the prior year.

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

Total noninterest expenses were $9.2 million for the third quarter of 2003, an
increase of $166 thousand or 1.8% from the third quarter of 2002. Salaries and
employee benefits account for a significant portion of the total increase in
noninterest expense. Total salaries and benefits increased $155 thousand or 3.1%
to $5.2 million in the quarterly comparison. Employee benefit expenses increased
$55 thousand or 5.8%. Salary and related payroll expenses increased $126
thousand or 3.2% in the comparison while noncash compensation expense related to
the Company's nonqualified stock option plan declined $26 thousand or 19.6% due
to the structure of the vesting schedule and forfeitures. The number of full
time equivalent employees decreased to 450 from 452 reported in the prior
period. Occupancy expense, net of rental income, was virtually unchanged in the
comparison and totaled $621 thousand for the current quarter. Equipment expense
totaled $934 thousand in the current quarter, an increase of $89 thousand or
10.5% due primarily to increased depreciation expense. Other noninterest
expenses, including bank franchise taxes, decreased $76 thousand or 3.0% to $2.5
million. This decrease is due mainly to a $172 thousand decline in correspondent
bank fees related to activity attributed to the Commonwealth of Kentucky.

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

Income tax expense for the third quarter of 2003 was $831  thousand,  a decrease
of $342 thousand or 29.2% from the same period a year earlier. The effective tax
rate decreased 740 basis points to 17.56% from 24.96% in 2002. The change in the
effective tax rate is due to a combination of factors, primarily including lower
revenue from taxable  sources,  increased  credits  derived from  qualified zone
academy bonds,  and the addition of nontaxable  income accrued from the increase
in cash surrender value on life insurance purchased on key employees.

             FIRST NINE MONTHS OF 2003 VS. FIRST NINE MONTHS OF 2002
             -------------------------------------------------------

The Company  reported  net income of $10.5  million  for the nine  months  ended
September  30,  2003,  a decrease  of $104  thousand  or 1.0%  compared to $10.6
million for the same period in 2002. Basic and diluted net income per share were
$1.56 and $1.55,  respectfully,  for the current nine months. This represents an
increase of $.02 or 1.3% on both a basic and diluted  per share  basis.  The per
share  earnings  increase  is  a  result  of  fewer  common  shares  outstanding
attributed to the Company's share buy back program.

A decrease in net interest income had a significant  effect on net income in the
reporting periods.  The continued low interest rate environment,  prepayments of
certain  investment  securities,  and the sales  and  maturities  of  investment
securities  that were replaced at generally  lower yields  resulted in lower net
interest income in the nine month comparison. Net interest income decreased $1.6
million or 5.4% in the current nine months  compared to the same period in 2002.
The decline in net interest  income for the current period is mainly a result of
lower  revenues  earned on  earning  assets  due to a  continued  decline in the
overall  market  interest  rate  environment.  Interest  rates earned on earning
assets have  declined  more  rapidly  than the  interest  rates paid on interest
paying  liabilities  since many of the Company's  funding sources,  particularly
deposits, have approached their repricing floors.

The provision for loan losses decreased $600 thousand or 30.3% in the nine month
period  ended  September  30,  2003  compared  to the same  period in 2002.  The
improvement  in the  provision  for loan losses is  attributed to changes in the
general risk  characteristics  of the Company's  entire loan  portfolio from the
previous period and can not be attributed directly to any particular  individual
credit.

Total  noninterest  income  increased  $1.2  million  or 9.5% in the nine  month
comparison despite lower gains reported on the sale of investment  securities of
$467 thousand in the current period.  Income from the purchase of  company-owned
life  insurance,  instituted  in the first  quarter of 2003 to offset the rising
costs of the Company's  employee  benefits  plans,  totaled $1.1 million for the
current nine months.  Gains on the sale of mortgage  loans also  increased  $463
thousand in the  comparison  as the low interest rate  environment  continued to
fuel the Company's secondary market mortgage loan originations.

Offsetting  the increase in  noninterest  income were  increases in  noninterest
expenses totaling $1.0 million or 3.9% for the current nine months.  Noninterest
expenses  increased  primarily due to higher  salaries and employee  benefits of
$485 thousand or 3.2%. These increases relate primarily to increases in employee
benefits and normal salary increases.  An increase in correspondent banking fees
totaling $104 thousand also contributed to the increase in noninterest expenses.
The  effective  income tax rate declined 420 basis points to 21.06% for the nine
months ended September 30, 2003 compared to the same period a year earlier.

ROA was 1.13% for the nine months  ended  September  30,  2003,  a decrease of 5
basis  points from the same period in 2002.  Negatively  impacting  ROA was a 38
basis  point  decline  in net  interest  margin  to  3.58%  and an  increase  in
noninterest expenses of 2 basis points. Partially offsetting these declines that
positively  effected ROA was an increase in earning  assets that  contributed  7
basis points,  a decrease in the  provision  for loan losses that  contributed 7
basis points, an increase in noninterest income contributing 8 basis points, and
a decrease in income tax  expense  that  contributed  13 basis  points.  ROE was
11.27% for the first nine months of 2003  compared to 11.42% 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
-------------------

Continuing  weaknesses in the overall  economic  environment  remain present and
have impacted the Company's net interest  income.  The interest rate environment
has continued to trend downward after a period of relative stability  throughout
much of 2002.  Additional actions taken by the Fed in the fourth quarter of 2002
and  the  second  quarter  of 2003  have  resulted  in a  general  reduction  in
short-term  interest rates in the reporting periods.  Short-term interest rates,
left unchanged  since December 2001,  were reduced 50 basis points by the Fed in
November 2002 and an additional 25 basis points in June 2003.  The prime rate as
reported in The Wall Street  Journal was lowered in an identical  manner shortly
following the Fed changes. 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 yield on earning assets for the current nine months
was 5.4%,  a reduction  of 101 basis  points from 6.4% in the same period a year
ago.  The cost of funds for the current  nine  months was 2.2%,  a decline of 72
basis points  compared to 2.9% 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.  However,
many of the Company's funding sources,  particularly  deposits,  have approached
their repricing  floors.  Average earning assets increased $46.6 million or 4.3%
to $1.1 billion in the  comparison.  As a percentage  of total  average  assets,
earning assets increased to 90.57% from 89.76%.  This increase had the effect of
adding an additional 7 basis points to ROA in the comparison.

Interest  income  totaled  $44.1  million for the first nine  months of 2003,  a
decrease of $6.1 million or 12.1% compared to the same period in the prior year.
Interest expense totaled $15.3 million, a decrease of $4.5 million or 22.5%. Net
interest  income fell $1.6 million or 5.4% in the  comparison  and totaled $28.7
million at September 30, 2003.

Interest and fees on loans  totaled  $36.3  million,  a decrease of $2.3 million
mainly due to a decrease in the average rate  earned.  Average  loans  increased
$42.8  million or 6.2% to $739.5  million in the  comparison  due to higher loan
demand in a lower rate environment.  The tax equivalent yield on loans decreased
87 basis  points to 6.6% from 7.5% and  offset  the  effects  of higher  average
balances on interest income.  Interest on taxable securities was $4.8 million, a
decrease  of $3.1  million or 39.2% due  primarily  to a decrease in the average
rate earned and the effect of higher  premium  amortization  on  mortgage-backed
securities. Prepayments on mortgage-backed securities have increased greatly due
to  corresponding  refinancing  of home  mortgages  that serve as collateral for
these investment securities. The increase in activity is directly related to the
lower interest rate environment.  The average rate earned on taxable  securities
decreased 187 basis points to 2.6% from 4.4% while the average balance increased
$11.7 million or 4.9%. Interest on nontaxable  securities declined $307 thousand
or 11.4% due to a $7.2 million or 9.1% decrease in the average  balance to $72.4
million from $79.6 million.  Interest on short-term investments,  including time
deposits in other banks,  federal funds sold,  and  securities  purchased  under
agreements to resell, decreased $387 thousand due primarily to a decrease in the
average rate earned on these investments of 79 basis points to 1.2% from 1.9%.

Interest expense on deposits decreased $4.3 million or 24.9% to $13.0 million in
the nine month 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 a general  increase in average  balances.  The
decline in interest  expense on  deposits  was as follows:  time  deposits  $3.3
million or 23.3%;  interest  bearing demand deposits $518 thousand or 34.5%; and
savings deposits $524 thousand or 29.7%. The average rate paid on time deposits,
the largest component of interest bearing deposits, was 3.4% for the nine months
ended  September  30, 2003  compared  to 4.7% for the same  period of 2002.  The
average  balance  of time  deposits  increased  $20.0  million or 5.0% to $423.3
million.  The average rate paid on interest bearing demand deposits  declined 34
basis points to .6% from .9% while the average balance increased $7.9 million or
3.7% to $223.2 million.  The average rate paid on savings deposits  decreased 44
basis points to 1.0% from 1.4% while the average balance  increased $2.6 million
or 1.6% to $167.0  million from $164.4  million.  Interest  expense on overnight
borrowings,  consisting of federal funds  purchased  and  securities  sold under
agreements  to  repurchase,  decreased  $634  thousand  due to a 60 basis  point
decline  in the  average  rate paid along  with a $22.4  million  decline in the
average  balance.  Interest  expense  on other  borrowed  funds  increased  $485
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 $64.8  million,  an increase of $22.7 million or 53.9% in
the comparison.  The average rate paid on other borrowed funds declined 30 basis
points to 3.4% from 3.7%.

The net interest  margin (TE) decreased 38 basis points to 3.58% during the nine
months ended  September  30, 2003  compared to 3.96% in the same period of 2002.
The decrease in net interest margin is primarily  attributed to a 29 basis point
decline in the spread  between rates earned on earning assets and the rates paid
on interest  bearing  liabilities to 3.25% in the current nine months from 3.54%
in the same period in 2002. The effect of noninterest  bearing  sources of funds
contributed an additional 9 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 nine
months ended September 30.
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY:  INTEREST RATES AND INTEREST DIFFERENTIAL
-----------------------------------------------------------------------------------------------------------------------------------
Nine Months Ended September 30,                              2003                                         2002
-----------------------------------------------------------------------------------------------------------------------------------
                                             Average                        Average       Average                       Average
(In thousands)                               Balance         Interest        Rate         Balance        Interest         Rate
-----------------------------------------------------------------------------------------------------------------------------------
EARNING ASSETS
Investment securities
  Taxable                                 $   250,403     $     4,818          2.57%  $   238,733       $   7,921         4.44%
  Nontaxable
72,405           3,523          6.51        79,621           3,943         6.62
Time deposits with banks,
  federal funds sold and
  securities purchased under
  agreements to resell                         64,310             555          1.15        64,964             942         1.94
Loans
739,505          36,575          6.61       696,679          38,977         7.48
-----------------------------------------------------------------------------------------------------------------------------------
     Total earning assets                   1,126,623     $    45,471          5.40%    1,079,997       $  51,783         6.41%
-----------------------------------------------------------------------------------------------------------------------------------
Allowance for loan losses                     (11,244)                                    (10,705)
-----------------------------------------------------------------------------------------------------------------------------------
     Total earning assets, net
     of allowance for loan losses           1,115,379                                   1,069,292
-----------------------------------------------------------------------------------------------------------------------------------
NONEARNING ASSETS
Cash and due from banks                        74,655                                      98,272
Premises and equipment, net                    24,206                                      24,261
Other assets                                   29,634                                      11,386
-----------------------------------------------------------------------------------------------------------------------------------
     Total assets                         $ 1,243,874                                 $ 1,203,211
-----------------------------------------------------------------------------------------------------------------------------------
INTEREST BEARING LIABILITIES
Deposits
  Interest bearing demand                 $   223,166     $       982           .59%  $   215,263       $   1,500          .93%
  Savings                                     167,014           1,240           .99       164,443           1,764         1.43
  Time                                        423,319          10,774          3.40       403,358          14,038         4.65
Federal funds purchased
  and securities sold under
  agreements to repurchase                     74,668             684          1.22        97,079           1,318         1.82
Other borrowed funds                           64,750           1,649          3.40        42,071           1,164         3.70
-----------------------------------------------------------------------------------------------------------------------------------
     Total interest bearing liabilities       952,917     $    15,329          2.15%      922,214       $  19,784         2.87%
-----------------------------------------------------------------------------------------------------------------------------------
NONINTEREST BEARING LIABILITIES
Commonwealth of Kentucky deposits              34,130                                      33,479
Other demand deposits                         125,224                                     115,741
Other liabilities                               6,843                                       7,344
-----------------------------------------------------------------------------------------------------------------------------------
     Total liabilities                      1,119,114                                   1,078,778
-----------------------------------------------------------------------------------------------------------------------------------
     Shareholders' equity                     124,760                                     124,433
-----------------------------------------------------------------------------------------------------------------------------------
     Total liabilities and
     shareholders' equity                 $ 1,243,874                                 $ 1,203,211
-----------------------------------------------------------------------------------------------------------------------------------
Net interest income                                            30,142                                      31,999
TE basis adjustment                                            (1,417)                                     (1,638)
-----------------------------------------------------------------------------------------------------------------------------------
     Net interest income                                  $    28,725                                   $  30,361
-----------------------------------------------------------------------------------------------------------------------------------
Net interest spread                                                            3.25%                                      3.54%
Impact of noninterest bearing
  sources of funds                                                              .33                                        .42
-----------------------------------------------------------------------------------------------------------------------------------
Net interest margin                                                            3.58%                                      3.96%
-----------------------------------------------------------------------------------------------------------------------------------
Income  and yield  stated at a fully tax  equivalent  basis  using the  marginal
corporate Federal tax rate of 35%.
Loan balances include principal balances on nonaccrual loans.
Loan fees included in interest income amount to $1.7 million and $1.4 million in
2003 and 2002, respectively.
ANALYSIS OF CHANGES IN NET INTEREST INCOME (TAX EQUIVALENT BASIS)
---------------------------------------------------------------------------------------------
(In thousands)                                       Variance       Variance Attributed to
Nine Months Ended September 30,                     2003/2002
Volume           Rate
---------------------------------------------------------------------------------------------
INTEREST INCOME
Taxable investment securities                          $(3,103)      $   606       $(3,709)
Nontaxable investment securities
(420)         (355)          (65)
Time deposits with banks, federal funds sold and
   securities purchased under agreements to resell        (387)          (10)         (377)
Loans2                                                  (2,402)        3,361        (5,763)
---------------------------------------------------------------------------------------------
     Total interest income                              (6,312)        3,602        (9,914)
---------------------------------------------------------------------------------------------
INTEREST EXPENSE
Interest bearing demand deposits                          (518)           86          (604)
Savings deposits                                          (524)           45          (569)
Time deposits                                           (3,264)        1,060        (4,324)
Federal funds purchased and securities sold under
   agreements to repurchase                               (634)         (261)         (373)
Other borrowed funds                                       485           641          (156)
---------------------------------------------------------------------------------------------
     Total interest expense                             (4,455)        1,571        (6,026)
---------------------------------------------------------------------------------------------
Net interest income                                    $(1,857)      $ 2,031       $(3,888)
---------------------------------------------------------------------------------------------
Percentage change                                        100.0%       (109.4)%       209.4%
---------------------------------------------------------------------------------------------
The  changes  that are not  solely  due to rate or  volume  are  allocated  on a
percentage  basis using the  absolute  values of rate and volume  variances as a
basis for allocation.
Income stated at fully tax equivalent basis using the marginal corporate Federal
tax rate of 35%.
NONINTEREST INCOME
------------------

Noninterest  income  was $13.8  million  for the first nine  months of 2003,  an
increase  of $1.2  million  or 9.5%  compared  to the same  period in 2002.  The
largest component of noninterest  income,  service charges and fees on deposits,
decreased  $63 thousand or 1.1% to $5.8  million.  Overdraft  fees declined $121
thousand or 3.2% and service  charges on demand  deposit  accounts  declined $56
thousand or 7.6% in the comparison. Offsetting these declines was an increase in
fees  related to the  Commonwealth  of  Kentucky  of $61  thousand  or 22.5% and
corresponds to the increase in  correspondent  bank fees included in noninterest
expense. Other service charges,  commissions, and fees increased $55 thousand or
2.1% to $2.7 million.  Data processing  fees were  relatively  unchanged at $1.1
million.  Trust fees increased $101 thousand or 9.2% to $1.1 million.  Net gains
on the sale of available for sale  securities  was $966 thousand for the current
nine months,  a decrease of $467  thousand or 32.6%  compared to $1.4 million in
the comparable period a year ago as the Company sought to manage the composition
of its balance sheet in a continuing difficult economic  environment.  Net gains
on the sale of mortgage loans were $788  thousand,  an increase of $463 thousand
from $325  thousand  in the prior year as  mortgage  loans  originated  for sale
increased  $26.7  million  in  the  comparison  due  to the  low  interest  rate
environment. Income from company-owned life insurance, purchased near the end of
the first quarter of 2003, was $1.1 million.  Other  noninterest  income totaled
$198 thousand, relatively unchanged from $192 thousand in the prior year.

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

Noninterest expenses totaled $27.8 million for the first nine months of 2003, an
increase of $1.0 million or 3.9%  compared to the same period in 2002.  Salaries
and employee benefits,  the largest component of noninterest expense,  increased
$485 thousand or 3.2% and totaled $15.5 million at September 30, 2003.  Employee
benefit expenses increased $237 thousand primarily due to the new postretirement
health insurance coverage initiated during the first quarter of 2003. Salary and
related payroll expenses increased $362 thousand or 3.0% in the comparison while
noncash compensation expense related to the Company's  nonqualified stock option
plan  declined  $115  thousand  or 26.6%  due to the  structure  of the  vesting
schedule and forfeitures. The number of full time equivalent employees decreased
to 450 from 452 reported in the prior period.  Occupancy expense,  net of rental
income,  increased $139 thousand or 7.8% and totaled $1.9 million.  The increase
in net occupancy  expense is attributed to increases in maintenance and repairs,
utilities  costs,  and  depreciation.  Equipment  expense was $2.8  million,  an
increase of $110  thousand or 4.1% due to higher  depreciation  and  maintenance
related to additional asset purchases.  Other  noninterest  expenses,  including
bank franchise taxes, increased $311 thousand or 4.2% to $7.6 million mainly due
to a $104  thousand  increase  in  correspondent  bank fees  related to activity
attributed to the Commonwealth of Kentucky.

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

Income  tax  expense  for the  first  nine  months of 2003 was $2.8  million,  a
decrease  of $785  thousand or 21.9% from the same  period a year  earlier.  The
effective tax rate decreased 420 basis points to 21.06% from 25.26% in 2002. The
change in the effective tax rate is due to a combination  of factors,  primarily
including  lower revenue from taxable  sources,  increased  credits derived from
qualified zone academy bonds, and the addition of nontaxable income accrued from
the  increase  in cash  surrender  value  on  life  insurance  purchased  on key
employees.

FINANCIAL CONDITION

Total assets were $1.3 billion on September 30, 2003, a decrease of $6.8 million
or .5% from December 31, 2002. The decrease in assets  includes a $101.4 million
lower balance in the securities portfolio, offset by a $68.9 million increase in
cash and cash  equivalents  and a $25.8  million  increase  in all other  assets
resulting primarily from the purchase of company-owned life insurance during the
first quarter of 2003. Fed funds purchased and securities sold under  agreements
to repurchase  declined  $51.7  million while net deposits and other  borrowings
increased $44.8 million.  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
important to understanding the financial condition of the Company. On an average
basis,  total  assets were $1.2  billion  for the first nine months of 2003,  an
increase of $37.5 million or 3.1% from year-end 2002.  Average  earning  assets,
primarily  loans and  securities,  were $1.1 billion at September  30, 2003,  an
increase of $36.2 million or 3.3% from year-end  2002.  Average  earning  assets
represent  90.57% of total average  assets on September 30, 2003, an increase of
18 basis points compared to 90.39% at year-end 2002.

LOANS
-----

Loans, net of unearned income,  totaled $739.3 million at September 30, 2003, an
increase of $659 thousand or .1% from year-end 2002. The composition of the loan
portfolio is summarized in the table below.

--------------------------------------------------------------------------------
                                  September 30, 2003        December 31, 2002
(Dollars in thousands)             Amount        %           Amount        %
--------------------------------------------------------------------------------

Commercial, financial,
  and agriculture                $  105,331    14.3%       $  110,056    14.9%
Real estate - construction           52,926     7.1            55,896     7.6
Real estate - mortgage              473,900    64.1           459,620    62.2
Installment                          71,588     9.7            76,162    10.3
Lease financing                      35,553     4.8            36,905     5.0
--------------------------------------------------------------------------------
     Total                       $  739,298   100.0%       $  738,639   100.0%
--------------------------------------------------------------------------------

On average,  loans  represented  65.6% of earning assets during the current nine
month period compared to 64.7% for year-end 2002. As loan demand fluctuates, the
available  funds are  reallocated  between  loans and  lower  earning  temporary
investments  or investment  securities,  which  typically  involve a decrease in
credit risk and lower yields.

ALLOWANCE FOR LOAN LOSSES

The  allowance  for loan losses was $11.1  million at  September  30,  2003,  an
increase of $66 thousand or .6% from the prior year-end.  The allowance for loan
losses was 1.51% of loans net of  unearned  income at  September  30,  2003,  an
increase of 1 basis point from 1.50% at December 31,  2002.  The  provision  for
loan losses decreased $227 thousand and $600 thousand in the current three-month
and nine-month periods, respectively,  compared to the same periods in 2002. The
improvement  in the  provision  for loan losses is  attributed to changes in the
general risk  characteristics  of the Company's  entire loan  portfolio from the
previous periods and cannot be attributed directly to any particular  individual
credit. The Company had net charge-offs of $671 thousand and $1.3 million in the
current three and nine months of 2003, respectively, compared to net charge-offs
of $277 thousand and $909 thousand in the same periods of 2002.  Annualized  net
charge-offs  represent  .36% and .24% of  average  net  loans for three and nine
months  ended  September  30, 2003,  respectively,  compared to .60% at year-end
2002.  The  allowance  for loan losses as a percentage  of  nonperforming  loans
totaled   80.5%  and  57.3%  at  September  30,  2003  and  December  31,  2002,
respectively.  The increase is primarily reflective of the decline in nonaccrual
loans of $4.7  million in the  comparison.  Management  continues  to  emphasize
collection  efforts  and  evaluation  of risks  within  the loan  portfolio.  In
management's  opinion,  the provision for loan losses represents incurred credit
losses  during  the  periods  presented  and 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 $15.5 million at
September 30, 2003, a decrease of $4.3 million or 21.9% from the prior year-end.
Nonperforming  loans  totaled  $13.8 million at September 30, 2003 a decrease of
$5.5 million or 28.4% 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 $9.4 million at September 30, 2003.
Interest  income  lost on this  group of loans  due to their  nonaccrual  status
totaled $154 thousand and $520  thousand  during the three and nine months ended
September 30, 2003,  respectively.  At its current  outstanding  balance,  it is
estimated that a total of $137 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 1.9% at  September  30,
2003, a decrease of 74 basis points from 2.6% compared to year-end 2002.

Other  real  estate  owned  ("OREO"),  which had a balance of $385  thousand  at
year-end 2002, increased $916 thousand and totaled $1.3 million at September 30,
2003.  The  increase  in OREO is mainly due to the  transfer  to the  Company of
approximately  $1.2  million in real  estate  that  served as  collateral  for a
portion of the pool of construction loans identified in the preceding paragraph.

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

Temporary  investments  consist of interest  bearing  deposits with other banks,
federal funds sold,  and  securities  purchased  under  agreements to resell and
totaled $30.3 million at September 30, 2003. This represents an increase of $7.2
million  or 31.5% from  year-end  2002.  Temporary  investments  averaged  $64.3
million  for the first nine  months of 2003,  a decrease  of $4.6  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 $340.1 million on September 30, 2003, a decrease of
$101.4  million  or 23.0% from  year-end  2002.  Available  for sale and held to
maturity  securities  were  $315.9  million  and  $24.2  million,  respectively.
Investment securities averaged $322.8 million for the first nine months of 2003,
an increase of $6.4 million or 2.0% 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 $2.1 million at
September  30, 2003 compared to $5.5 million at year-end  2002.  The decrease is
primarily  the result of a lower  balance in the  available  for sale  portfolio
attributed to the sale of investment securities during the current period.

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

The Company  purchased  life insurance  policies on certain key employees,  with
their knowledge and consent, during the current year at a cost of $24.0 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 $1.1 million for the current  nine-month period. 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 $1.0 billion at September  30, 2003,  an increase of $53.4
million or 5.6% from year-end 2002. Noninterest bearing deposits increased $57.6
million  or 40.8% 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 $159.4 million during the current period,  an
increase  of $8.5  million  or 5.7%.  End of  period  interest  bearing  deposit
balances  decreased  $4.2 million or .5% during the nine months ended  September
30, 2003 due primarily to a decrease in money market  deposit  accounts of $11.5
million or 10.0%.  Other  savings and  interest  bearing  demand  accounts  were
relatively  unchanged at $65.5 million and $223.2  million,  respectively.  Time
deposits  increased  $7.4 million or 1.8% in the end of period  comparisons.  On
average, interest bearing deposits were $813.5 million in the current period, an
increase of $26.0  million or 3.3% from year-end  2002.  The increase in average
interest  bearing  deposits is  attributable  to increases  in interest  bearing
demand deposits of $7.4 million or 3.4%, time deposits of $18.7 million or 4.6%,
and savings  accounts of $3.0  million or 5.0%.  Average  money  market  deposit
accounts  declined  $3.1  million  or 2.9%  in the  comparison.  Total  deposits
averaged  $972.9  million,  an increase of $34.6  million or 3.7% from  year-end
2002.

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

Borrowed funds totaled $122.0 million at September 30, 2003, a decrease of $60.3
million or 33.1% from  $182.3  million at  year-end  2002.  A $59.8  million net
decrease in short term  borrowings  coupled  with a net  decrease  in  long-term
borrowings of $503 thousand  account for the total  decrease in borrowed  funds.
Federal funds  purchased and  securities  sold under  agreements to  repurchase,
which are included in short-term  borrowings,  decreased  $51.7 million or 44.6%
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,  primarily short-term  borrowings from the Federal
Home Loan Bank ("FHLB") declined $8.1 million to $1.1 million from $9.2 million.
Total  borrowed funds averaged  $139.4  million,  an increase of $3.4 million or
2.5% 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
September 30, 2003 combined retained earnings of the subsidiary banks were $45.6
million, of which $4.0 million was available for the payment of dividends to the
Parent Company without  obtaining prior approval from bank regulatory  agencies.
As a  practical  matter,  payment  of future  dividends  is also  subject to the
maintenance of other capital ratio requirements.  During the current nine months
ended September 30, 2003 the Parent Company received dividends of $30.8 million.
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 $26.3 million at September 30, 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 September 30, 2003, such assets totaled $451.9  million,  a decrease of
$28.3  million or 5.9% from  year-end  2002.  The  decrease in liquid  assets is
attributed  to the overall  funding  position of the Company  combined  with the
purchase of  company-owned  life  insurance on key employees  during the current
nine months. Net cash provided by operating  activities was $17.3 million in the
first nine  months of 2003,  an increase  of $3.6  million or 26.3%  compared to
$13.7  million in the same period  last year.  Net cash  provided  by  investing
activities  was $67.8  million,  an increase of $29.6 million due primarily to a
$40.1 million increase from investments securities transactions, lower net loans
originated for  investment in the current nine months of $14.9 million,  and the
purchase of company-owned life insurance on key employees of $24.0 million.  Net
cash used in financing  activities  was $16.2  million for the nine months ended
September  30, 2003. In the prior  nine-month  comparison  financing  activities
provided  $84.1  million.  The  change is mainly due to lower  funding  activity
during the current nine-month period compared to the activity in the same period
a year earlier.

CAPITAL RESOURCES

Shareholders'  equity was $125.2  million on  September  30, 2003, a decrease of
$573 thousand or .5% from year-end 2002.  Treasury stock  purchases along with a
decline in unrealized gains on available for sale investment  securities  offset
increases in other equity components.

The Company purchased 98 thousand shares of its outstanding  common stock during
the first nine  months of 2003 for a total  cost of $3.1  million.  The  Company
issued 14 thousand  shares of common stock  during this same period  pursuant to
its nonqualified stock option plan.  Dividends of $6.5 million or $.96 per share
were  declared  during the first nine  months of 2003,  an  increase of 3.2% per
share  compared  to the prior  year.  Accumulated  other  comprehensive  income,
consisting  of the  unrealized  holding  gain on available  for sale  investment
securities (net of tax) decreased $2.2 million from year-end 2002 primarily as a
result  of a lower  balance  in the  available  for  sale  investment  portfolio
attributed to the sale of investment securities during the current period.

Consistent with the objective of operating a sound financial  organization,  the
Company's goal is to maintain  capital ratios well above the regulatory  minimum
requirements.  The  Company's  capital  ratios as of  September  30,  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                 15.42%               4.00%            6.00%
Total risk based                  16.67%               8.00%           10.00%
Leverage                           9.95%               4.00%            5.00%

The capital ratios of all the subsidiary  banks, on an individual basis, were in
excess of the  applicable  minimum  regulatory  capital  ratio  requirements  at
September 30, 2003.

RECENTLY ISSUED ACCOUNTING STANDARDS

In January 2003,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Interpretation  No.  46,   CONSOLIDATION  OF  VARIABLE  INTEREST  ENTITIES,   AN
INTERPRETATION OF ARB NO. 51. This Interpretation  provides new guidance for the
consolidation of variable  interest entities ("VIEs") and requires such entities
to be  consolidated  by  their  primary  beneficiaries  if the  entities  do not
effectively  disperse risk among parties involved.  The Interpretation also adds
disclosure  requirements  for investors  that are involved  with  unconsolidated
VIEs. The  consolidation  requirements  apply  immediately to VIEs created after
January 31, 2003 and are effective  for the first fiscal year or interim  period
ending after  December 15, 2003 for VIEs acquired  before  February 1, 2003. The
adoption of this interpretation is not expected have a significant impact on the
Company's financial condition of results of operations.

In April 2003,  The FASB issued  Statement  of  Financial  Accounting  Standards
("SFAS") No. 149,  AMENDMENT  OF STATEMENT  133 ON  DERIVATIVE  INSTRUMENTS  AND
HEDGING ACTIVITIES.  SFAS No. 149 amends and clarifies financial  accounting and
reporting for derivative  instruments,  including certain derivative instruments
embedded  in other  contracts  and for  hedging  activities  under SFAS No. 133,
ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES.  This statement is
effective for contracts  entered into or modified  after June 30, 2003.  Because
the Company does not have these  instruments  or is only  nominally  involved in
these  instruments,  management  expects the adoption of this statement will not
have a material effect on the Company's consolidated financial statements.

In May 2003,  the FASB  issued SFAS No. 150,  ACCOUNTING  FOR CERTAIN  FINANCIAL
INSTRUMENTS WITH  CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY. This statement
affects the accounting for certain  financial  instruments  that, under previous
guidance,  issuers could  account for as equity.  This  statement  requires that
freestanding  financial  instruments  that embody  obligations for the issuer be
classified  as  liabilities  on the balance  sheet.  Most of this  statement  is
effective for financial instruments entered into or modified after May 31, 2003,
and  otherwise  is  effective  at the  beginning  of the  first  interim  period
beginning  after  June 15,  2003.  Because  the  Company  does  not  have  these
instruments  or is only  nominally  involved  in these  instruments,  management
expects the adoption of this  statement  will not have a material  effect on the
Company's consolidated financial statements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------

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

At  September  30,  2003,  the model  indicated  that if rates were to gradually
increase by 75 basis points during the calendar year,  then net interest  income
and net income would  increase .11% and .25%,  respectively  for the year ending
December 31, 2003. The model indicated that if rates were to gradually  decrease
by 75 basis points over the same period, then net interest income and net income
would decrease .07% and .13%, 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  rates paid on some of the Company's  deposits are below 1.0%.  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 as of the end of
the  period  covered  by 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
--------------------------

Previously  filed in Part  II,  Item 1 of  Farmers  Capital  Bank  Corporation's
quarterly  report  on  Form  10-Q  for  the  period  ended  June  30,  2003  and
incorporated herein by reference.

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
               (incorporated  by reference to Quarterly  Report of Form 10-Q for
               the quarterly period ended March 31, 2003).

          31.1 CEO Certification (page 28)

          31.2 CFO Certification (page 29)

          32   CEO  &  CFO  Certifications   Pursuant  to  Section  906  of  the
               Sarbanes-Oxley Act of 2002 (page 30)

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

          On October 20, 2003, the  Registrant  filed a report on Form 8-K under
          Item 12 reporting  its earnings for the third  quarter of 2003.  There
          were no financial statements filed with this Form 8-K.

          On October 28, 2003, the  Registrant  filed a report on Form 8-K under
          item 5 reporting an increase in its quarterly dividend.  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:      11/12/03                 /s/ G. Anthony Busseni
      --------------------          --------------------------------------------
                                    G. Anthony Busseni,
                                    President and CEO
                                    (Principal Executive Officer)

Date:      11-12-03                 /s/ C Douglas Carpenter
      --------------------          --------------------------------------------
                                    C. Douglas Carpenter,
                                    Vice President, Secretary, and CFO
                                    (Principal Financial and Accounting Officer)