NOTE 11 – NOTES PAYABLE AND OTHER BORROWED FUNDS

On April 30, 2008, the Company executed and delivered to First Guaranty Bank of Hammond, Louisiana a Promissory Note and Business Loan Agreement dated April 30, 2008 for the principal amount of $11,550, bearing interest floating daily at the "Wall Street Journal" prime rate (the "Index") minus 1.00% and requiring 59 monthly principal payments of $50 and one final payment of $8.6 million due at maturity on April 30, 2013. On December 31, 2009, the Company executed and delivered to First Guaranty Bank a modification agreement whereby the interest rate would fixed at 3.96% through the remaining maturity of the note. The note is secured by a pledge of 25% of Premier's interest in Premier Bank (a wholly owned subsidiary) under Commercial Pledge Agreement modified on May 3, 2011. The proceeds of this note were used to fund the $9,000 of cash needed to purchase Traders Bankshares, Inc. and to refinance the remaining $2,550 balance of Premier's outstanding note with First Guaranty Bank dated January 31, 2006. At the time of origination, Premier's chairman owned approximately 27.6% of the voting stock of First Guaranty Bank and was the chairman of its board of directors. Premier's board of directors reviewed the loan terms and authorized the Company to enter into the loan transaction. The outstanding principal balance on the borrowing at December 31, 2012 was $7,449.

In conjunction with the modification agreement with First Guaranty Bank, the Company executed and delivered a Promissory Note and Business Loan Agreement dated December 31, 2009 establishing a line of credit in the principal amount of $1,000, bearing interest floating daily at the "Wall Street Journal" prime rate (initially 3.25%), with a floor of 4.50%. Under the terms of the Promissory Note, the Company may request and receive advances from First Guaranty Bank from time to time, but the aggregate outstanding principal balance under the Promissory Note at any time shall not exceed $1,000, and the right to request and receive monies from First Guaranty Bank shall cease and terminate on June 30, 2011. Since June 30, 2011, the line of credit has been extended to June 30, 2013 and the principal amount has been increased to $2,000. Accrued interest on any amounts outstanding is payable monthly, and any amounts outstanding are payable on demand or on June 30, 2013. The Promissory Note is also secured by the pledge of 25% of Premier's interest in Premier Bank (a wholly owned subsidiary) under a Commercial Pledge Agreement modified on June 30, 2012. At December 31, 2012, the Company had no outstanding debt on this line of credit from First Guaranty Bank.

On September 8, 2010, the Company executed and delivered to The Bankers' Bank of Kentucky, Inc. of Frankfort, Kentucky ("Bankers' Bank") a Term Note and Business Loan Agreement dated September 8, 2010 in the principal amount of $11,300, bearing interest floating daily at the "JP Morgan Chase" prime rate with a minimum rate of 4.50% (initially 4.50%) and requiring 120 monthly principal payments of $94 plus interest. The note is secured by a pledge of Premier's 100% interest in Citizens Deposit Bank and Trust, Inc. (a wholly owned subsidiary) under a Stock Pledge and Security Agreement dated September 8, 2010. The proceeds of this note were used to pay off the remaining $2,904 balance on Premier's $6,500 Term Note with the Bankers' Bank, pay off the $2,400 balance on Premier's $4,300 Line of Credit with the Bankers' Bank and provide a $6,000 capital injection into Citizens Deposit Bank and Trust ("Citizens"), Premier's wholly owned subsidiary, to facilitate Citizens' purchase of four branches from Integra Bank National Association. The outstanding principal balance on the borrowing at December 31, 2012 was $8,600.

On September 7, 2012, Premier Financial Bancorp, Inc. ("Premier") executed and delivered to The Bankers' Bank of Kentucky, Inc. of Frankfort, Kentucky ("Bankers' Bank") a Promissory Note and Loan Agreement dated September 7, 2012 establishing a line of credit in the principal amount of $5,000, bearing interest floating daily at the "JP Morgan Chase" prime rate (initially 3.25%), with a floor of 4.50%. Under the terms of the Promissory Note, Premier may request and receive advances from Bankers' Bank from time to time, but the aggregate outstanding principal balance under the Promissory Note at any time shall not exceed $5,000, and the right to request and receive monies from Bankers' Bank shall cease and terminate on September 7, 2013. Accrued interest on amounts outstanding is payable quarterly, and any amounts outstanding are payable on demand or on September 7, 2013. The Promissory Note is secured by a pledge of Premier's 100% interest in Citizens Deposit Bank and Trust, Inc. (a wholly owned subsidiary) under a Stock Pledge and Security Agreement dated September 7, 2012. This line of credit replaces a $5,000 line of credit Premier had with First Sentry Bank, of Huntington, West Virginia. At the time of the execution of these agreements, Premier had no outstanding debt to First Sentry Bank. At December 31, 2011 Premier had no outstanding balance on this line of credit with Bankers' Bank

Scheduled principal payments due on the bank borrowings subsequent to December 31, 2012 are as follows:

2013	$	8,579
2014		1,130
2015		1,130
2016		1,130
2017		1,130
Thereafter		2,950
	$	16,049