8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) December 11, 2009

PREMIER FINANCIAL BANCORP, INC.

(Exact name of registrant as specified in its charter)

Kentucky	61-1206757
(State or other jurisdiction of incorporation organization)	(I.R.S. Employer Identification No.)
2883 Fifth Avenue Huntington, West Virginia	25702
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number    (304) 525-1600

Not Applicable

Former name or former address, if changes since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

o      Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

(17 CFR 240.14d-2(b))

o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

(17 CFR 240.13e-4(c))

PREMIER FINANCIAL BANCORP, INC,

INFORMATION TO BE INCLUDED IN THE REPORT

Item 2.03.  Creation of a Direct Financial Obligation

On December 11, 2009, Premier Financial Bancorp, Inc. (“Premier”) executed and delivered to The Bankers’ Bank of Kentucky, Inc. of Frankfort, Kentucky (“Bankers’ Bank”) a Modification and Extension Agreement (the “Agreement”) and a fully revised Promissory Note whereby Premier may request and receive monies from Bankers’ Bank from time to time, but the aggregate outstanding principal balance under the Promissory Note at any time shall not exceed $4,500,000 principal amount.  The right to request and receive monies from Bankers’ Bank under the Promissory Note shall cease and terminate on December 11, 2010.  Any outstanding principal balance under this Promissory Note shall bear an annual interest rate floating daily at the JP Morgan Chase Co. prime rate, and contains an interest rate floor of 4.00%.  Interest on the Promissory Note shall be due and payable on the 11th day of each, March, June, September and December during the term of this Promissory Note, and at the maturity date thereof.  Any outstanding principal amount loaned to Premier under this Promissory Note, and not previously repaid, shall be due on December 11, 2010.  At the date of execution of the Agreement, a balance of $2,400,000 was outstanding under the Promissory Note.

Item 9.01.   Financial Statements and Exhibits

(c) Exhibit 10.1 – Modification and Extension Agreement between Premier Financial Bancorp, Inc. and The Kentucky Bankers’ Bank, Inc. dated December 11, 2009.

(c) Exhibit 10.2 – Promissory Note between Premier Financial Bancorp, Inc. and The Kentucky Bankers’ Bank, Inc. dated December 11, 2009.

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 hereunto duly authorized.

PREMIER FINANCIAL BANCORP, INC.

(Registrant)

/s/ Brien M. Chase                                                           

Date: December 15, 2009                                        Brien M. Chase, Senior Vice President

  and Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
10.1	Modification and Extension Agreement between Premier Financial Bancorp, Inc. and The Kentucky Bankers’ Bank, Inc. dated December 11, 2009.
10.2	Promissory Note between Premier Financial Bancorp, Inc. and The Kentucky Bankers’ Bank, Inc. dated December 11, 2009.

EX-10.1

EXHIBIT 10.1

 LOAN AGREEMENT MODIFICATION

Note #Line of Credit

This MODIFICATION AND EXTENSION AGREEMENT (the “Agreement”) is made this 11th day of December the year 2009 by and between:

                    THE BANKERS’ BANK OF KENTUCKY

                    107 Progress Drive

P.O. Box 713

                        Frankfort, Ky. 40601                                       (“Lender”)

And

                    PREMIER FINANCIAL BANCORP, INC.

                    2883 5TH Avenue

                    Huntington, WV 25702                                  (“Borrower”)

Whereas, Borrower is indebted to Lender as of the date hereof in the amount of two million four hundred thousand and 00/100 dollars ($2,400,000) evidenced by a promissory note from Borrower to Lender in the original face amount of four million five hundred thousand and 00/100 dollars ($4,500,000.00), dated December 11, 2009 (the “Note”), which is secured by 559,800 shares of Citizens Deposit Bank & Trust (Vanceburg) stock and 18,750 shares of Farmers Deposit Bank (Eminence) stock.

Now, Therefore, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Lender and Borrower hereby agree as follows:

1.Amendment of Loan Agreement

The terms thereof as follows, to be effective from and after the date hereof:

I. The loan

(a) The line of credit borrowing limit shall be increased to $4,500,000.

IV.  Covenants

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

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

2.Acknowledgements and Waivers of Borrower.  Borrower acknowledges that it has no defense to repayment of the Note in full and Borrower further acknowledges that it is not aware of any claim or cause of action it currently has against Lender. Borrower hereby fully, finally and forever releases Lender from and against any and all claims Borrower has or may have against Lender directly or indirectly arising out of the negotiation, closing or administration of the loan evidenced by the Note or directly or indirectly arising out of the negotiation or execution of this Agreement. Borrower further acknowledges and agrees that any other waivers of rights or defenses contained in the Note or any of the Security Documents shall remain in full force and effect and are hereby remade and affirmed as if set forth in full herein.

3.No Novation.  Lender and Borrower specifically agree that this Agreement represents a continuation and modification of credit previously extended and is not intended to constitute a novation. Except as expressly modified or amended herein, all of the terms and conditions of the Note shall remain in full force and effect

4.LATE CHARGE AND DEFAULT RATE OF INTEREST. IF ANY PAYMENT DUE UNDER THE NOTE, AS AMENDED HEREBY, IS NOT RECEIVED BY LENDER WITHIN 20 DAYS OF THE DATE IT IS DUE, THEN A LATE CHARGE OF 3.00% MAY BE CHARGED BY THE LENDER. UPON MATURITY OF THE NOTE, WHETHER BY ACCELERATION OR OTHERWISE, OR UPON THE OCCURRENCE OF AN EVENT OF DEFAULT UNDER THE NOTE, IN ADDITION TO ANY AND ALL OTHER REMEDIES TO WHICH THE LENDER MAY BE ENTITLED, THE APPLICABLE RATE OF INTEREST ON THIS NOTE SHALL BE INCREASED TO 5.00% PER ANNUM IN EXCESS OF THE RATE SET FORTH IN PARAGRAPH 1, ABOVE.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above

LENDER

BANKERS’ BANK OF KENTUCKY

By /s/ John B. Clark

John B. Clark, Executive Vice President

BORROWER

PREMIER FINANCIAL BANCORP, INC.

By   /s/ Robert W. Walker

Robert Walker, President and CEO

Notary Acknowledgement:

State:  West Virginia                       County:  Cabell

The foregoing instrument was acknowledged before me this 11th day of December,2009

by  Robert Walker

By:  Arlene Napier                                                                                

My Commission Expires:   4/15/2013                                         

EX-10.2

EXHIBIT 10.2

PROMISSORY NOTE

$4,500,000  December 11, 2009

(1)  For value received, the undersigned, Premier Financial Bancorp, Inc., a Kentucky corporation with principal offices in Huntington, West Virginia (“Borrower”) hereby promises to pay in lawful money of the United States of America to the order of The Bankers’ Bank of Kentucky, Inc., a Kentucky banking organization, with main offices in Frankfort, Kentucky (“Lender”), at the main offices of Lender, 107 Progress Drive, Frankfort, Kentucky, 40602,  on December 11 of 2010, the outstanding principal amount loaned to Borrower under this Promissory Note, and not previously repaid, together with interest due and owing as of such date upon such outstanding principal amount, as reflected by the books and records of the Lender.  The Parties agree and acknowledge that the Borrower may request and receive monies from Lender under this Promissory Note from time to time, but the aggregate outstanding principal balance at any time shall not exceed Four Million Five Hundred Thousand ($4,500,000) Dollars, and that the right to request and receive monies from Lender hereunder shall cease and terminate on December 11, 2010.

(2)  The outstanding principal balance under this Promissory Note shall bear annual interest at the rate of the Prime Rate,  as announced from time to time by J.P. Morgan Chase Bank, New York, New York,  adjusted daily, with a floor (minimum) rate of four (4%) percent.  In addition to the interest payments required under Paragraph (1) above, interest on this Promissory Note shall be due and payable on the 11th day of each March, June, September and December during the term of this Promissory Note, and at the maturity date hereof.  The Prime Rate of J.P. Morgan Chase Bank will function only as a tool for setting the rate on this Promissory Note and Lender does not represent that such rate has any relationship to the rate it charges its other customers.

(3)  All payments on account of indebtedness evidenced by this Promissory Note shall be first applied to interest, costs and expenses, and then to principal, and interest shall be computed on the basis of a 360/365-day year.

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

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

(ii)  The occurrence of any other Default or Event of Default under the Loan Agreement or the Stock Pledge and Security Agreement dated November 10, 2006 or the Promissory Note executed of even date herewith by Lender and Borrower.

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

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

(7)  If there is any Default or Event of Default under this Promissory Note and Lender consults with an attorney regarding the enforcement of any of its rights hereunder or under the Stock Pledge and Security Agreement or the Loan Agreement dated November 10, 2006 or the Promissory Note executed of even date herewith, or if this Promissory Note is placed in the hands of an attorney for collection, or if suit be brought to enforce this Promissory Note, Loan Agreement or the Stock Pledge and Security Agreement, Borrower promises and agrees to pay all costs thereof, including reasonable attorneys fee’s.  Such costs and attorneys fees shall include, without limitation, costs and attorneys fee’s in any appeal or in any proceeding under any present or future federal bankruptcy act, state receivership law or federal or state banking agency proceedings.

(8)  This Promissory Note is secured by a pledge under the Stock Pledge and Security Agreement dated November 10, 2006 of one hundred (100%) percent of the outstanding common stock of Citizens Deposit Bank and Trust, Vanceburg, Kentucky, and one hundred (100%) percent of the outstanding common stock of Farmers Deposit Bank, Eminence, Kentucky.

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

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

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

Premier Financial Bancorp, Inc.

A Kentucky Corporation

By   /s/ Robert W. Walker

Title:   President and CEO

Notary Acknowledgement:

State:  West Virginia                       County:  Cabell

The foregoing instrument was acknowledged before me this 11th day of December,2009

by  Robert Walker

By:  Arlene Napier                                                                                

My Commission Expires:   4/15/2013