exhibit8-2.htm

You have requested our opinion as to certain federal income tax consequences with respect to the consummation of the proposed merger (“Merger”) of Traders Bankshares, Inc., a West Virginia corporation (“Traders”) into TB Acquisition, Inc., a West Virginia corporation (the “Interim Company”), pursuant to an Agreement of Merger and related Plan of Merger, dated November 27, 2007 (the “Agreement”), by and among Traders, the Interim Company and Premier Financial Bancorp, Inc., a Kentucky corporation (“Premier”).

The relevant facts concerning the Merger are set forth in the Agreement and related Plan of Merger executed by the above parties. A description of the transaction set forth therein is incorporated herein reference.

In addition to the general statement of facts set forth in the Registration Statement, and exhibits attached thereto, you have made the following representations concerning the Merger:

1. The Merger will be consummated in compliance with the material terms of the Agreement and related Plan of Merger and none of the material terms and conditions therein have been waived or modified and the parties have no plan or intention to waive or modify any such material condition.

2. The ratio for the exchange of shares of stock of Traders for common stock of Premier and other consideration in the Merger was negotiated through arm’s length bargaining. Accordingly, the fair market value of the Premier common stock and other consideration to be received by Traders stockholders in the Merger will be approximately equal to the fair market value of the Traders stock surrendered by such stockholders in exchange therefor.

3. At least 40% of the proprietary interest in Traders will be exchanged for Premier common stock and will be preserved within the meaning of Treasury Regulation Section 1.368-1(e).

4. Neither Premier nor any “related person” with respect to Premier within the meaning of Treasury Regulation Section 1.368-1(e)(4): (i) has purchased or will purchase any Traders common stock with consideration other than Premier common stock (other than as required by the Agreement and related Plan of Merger), or has furnished cash or other property directly or indirectly in connection with redemptions of Traders common stock or distributions by Traders to Traders shareholders, in connection with or in contemplation of the Merger or (ii) except for cash paid in lieu of fractional interests of Premier common stock pursuant to the Merger, has any plan or intention to purchase, redeem or otherwise reacquire any of the Premier common stock issued in connection with the Merger.

5. Prior to and in connection with the Merger, (i) Traders has not redeemed (and will not redeem) any Traders common stock and has not made (and will not make) any extraordinary distributions with respect thereto and (ii) the persons that are related to Traders within the meaning of Treasury Regulation Section 1.368-1(e)(4) (determined without regard to Treasury Regulation Section 1.368-1(e)(4)(i)(A)), have not acquired (and will not acquire) Traders common stock from any holder thereof with consideration other than either Traders stock or Premier stock (other than as required by the Agreement and related Plan of Merger).

6. As a result of the Merger, Traders will transfer to Interim Company at least ninety percent (90%) of the fair market value of the net assets and at least seventy percent (70%) of the fair market value of the gross assets of Traders held by it immediately prior to the Merger. For this purpose, amounts used to pay dissenters or to pay reorganization expenses, and all redemptions and distributions (except for regular, normal dividends) made by Traders immediately prior to the Merger will be considered as assets held by Traders immediately prior to the Merger. Traders has not redeemed any of the Traders stock, made any distribution with respect to any of the Traders stock, or disposed of any of its assets in anticipation of or as a part of a plan for the acquisition of Traders by Interim Company.

8. Premier has no plan or intention to cause Interim Company after the Merger to issue additional shares of the stock of Interim Company that would result in Premier losing control of Interim Company within the meaning of Section 368(c) of the Code.

9. Premier is the owner of all of the outstanding stock of Interim Company. Premier has no plan or intention after the Merger to liquidate Interim Company; to merge Interim Company into another corporation; to make any extraordinary distribution in respect of its stock in Interim Company; to sell or otherwise dispose of the stock of Interim Company or to cause Interim Company to sell or otherwise dispose of any of the assets of Traders acquired in the Merger, except for dispositions made in the ordinary course of business or transfers described in Section 368(a)(2)(C) of the Code.

10. The assumption by Interim Company of the liabilities of Traders pursuant to the Merger is for a bona fide business purpose and the principal purpose of such assumption is not the avoidance of federal income tax on the transfer of assets of Traders to Interim Company pursuant to the Merger.

11. The liabilities of Traders assumed by Interim Company and the liabilities to which the transferred assets of Traders are subject were incurred by Traders in the ordinary course of its business. No liabilities of any person other than Traders will be assumed by Interim Company or Premier in the Merger, and none of the shares of Traders to be surrendered in exchange for Premier common stock in the Merger will be subject to any liabilities.

12. Immediately after the Merger, Premier intends to cause members of Premier’s “qualified group” (as defined in Treasury Regulation Section 1.368-1(d)(4)) to continue the historic business of Traders or use a significant portion of the historic business assets of Traders in a business.

13. Premier, Interim Company and Traders will pay their respective expenses, if any, incurred in connection with the Merger. Neither Premier, Interim Company nor Traders will pay any of the expenses of the stockholders of Traders incurred in connection with the Merger.

19. The payment of cash in lieu of fractional shares of stock of Traders was not separately bargained for consideration and is being made for the purpose of saving Premier the expense and inconvenience of issuing fractional shares.

20. None of the compensation received by any stockholder-employee of Traders pursuant to any employment, consulting or similar arrangement is or will be separate consideration for, or allocable to, any of his/her shares of Traders stock. None of the shares of common stock of Premier received by any stockholder-employee of Traders pursuant to the Merger (other than any such shares received in connection with the termination in the Merger of certain stock options to purchase Traders common stock) are or will be separate consideration for, or allocable to, any such employment, consulting or similar arrangement. The compensation paid to any stockholder-employee of Traders pursuant to any such employment, consulting or similar arrangement is or will be for services actually rendered and will be commensurate with amounts paid to third parties bargaining at arm’s length for similar services.

1. Provided the Merger qualifies as a statutory merger in accordance with applicable state law, the Merger will constitute and qualify as a reorganization within the meaning of Section 368 of the Code and Premier, Interim Company and Traders will each qualify as "a party to a reorganization" as that term is defined in the Code;

2. No gain or loss will be recognized by the shareholders of Traders who exchange their Traders common stock solely for Premier common stock pursuant to the Merger, except that gain or loss may be recognized as to cash received as Merger Consideration, as defined in the Agreement, and cash received in lieu of fractional share interests;

4. The holding period of Premier common stock received by Traders shareholders in exchange for Premier common stock will include the holding period of the shares of Traders common stock so exchanged, provided that the Premier common stock is held as a capital asset at the Effective Time, as defined in the Agreement.

The opinions expressed in this letter are based upon statutory, judicial and administrative authority as of the date of this opinion. There can be no assurance that such authority will not be changed in the future, or that such changes will not be made retroactively applicable to the transactions described herein. Moreover, the above-stated opinions are based upon the facts as we understand them and upon the representations set forth herein. If the facts turn out to be different in any material respect from the facts or representations stated herein, or if the laws or regulations applicable to the proposed transactions are changed or reinterpreted by competent tribunals, some or all of the opinions expressed in this letter may become inapplicable.

This opinion is solely for the benefit of Premier, Interim Company and Traders in connection with the Merger and may not be used or relied upon in any other matter by any other person without our prior written consent. We hereby consent to the use of this opinion as an exhibit to the S-4 registration statement to be filed in connection with the Merger.