First Financial Service Corporation Announces Quarterly Results.

ELIZABETHTOWN, Ky. -- First Financial Service Corporation (the Company) (Nasdaq: FFKY) today announced diluted net income per share of $0.45 for the quarter ended September 30, 2007, compared to $0.53 for the quarter ended September 30, 2006. Return on equity was 11.7% for the quarter ended September 30, 2007 and return on assets was 0.99%. Diluted net income per share for the nine months ended September 30, 2007, was $1.46, compared to $1.57 for the nine months ended September 30, 2006. For the nine months ended September 30, 2007, return on equity was 12.9% and return on assets was 1.1%.

On August 16, 2007, the Company declared a 10% stock dividend payable on September 14, 2007 to shareholders of record at the close of business on August 29, 2007. All per share information has been restated to reflect the 10% stock dividend.

"We experienced a robust $38.5 million in loan growth during the quarter, generating a $63.2 million increase in our total loan portfolio for the year," noted President and Chief Executive Officer, B. Keith Johnson. "The growth was produced across all of our markets as our local economy continued to expand. While we are pleased with the growth we experienced during the quarter, an increase in provision for loan loss expense contributed to a decline in net income. The increase in provision for loan loss expense was largely related growth in the loan portfolio for the quarter as well as a specific reserve set aside for a loan classified during the three months ended September 30, 2007."

The Company's retail branch network continued to generate encouraging results. Total deposits have grown at a 10% compound annual growth rate over the past three years. Total deposits were $697 million at September 30, 2007, an increase of $55.6 million, or 9% for the year. The continued development of the retail branch network in the Louisville market also yielded positive results. The Company had a combined $55.0 million in deposits in its three full-service facilities in the Louisville market experiencing a 41% increase in deposits for the first nine months and a 213% increase from December 31, 2004. The Company opened these facilities in the second quarter of 2004 to support its growing customer base in this market. Twenty-six percent of the Company's loan portfolio and 8% of its deposit portfolio reside in the Louisville market.

The Company's emphasis on commercial lending generated a 10% compound annual growth rate in the total loan portfolio and a 20% compound annual growth rate in commercial loans over the past three years. Commercial loans were $542.4 million at September 30, 2007, an increase of $67.4 million, or 14% for the year. The growth in the Company's commercial loan portfolio has favorably impacted the level of interest income generated by the Company. Year to date average earning assets increased $55.4 million for September 30, 2007, compared to the same period in 2006. Despite the increase in earning assets, the Company's net interest margin realized a slight decline. Net interest margin decreased to 3.91% for the nine months ended September 30, 2007, compared to 4.05% for the same period a year ago. The increase in the volume of earning assets had a positive impact on net interest income, which increased $199,000 and $827,000 for the three and nine months ended September 30, 2007, compared to the respective periods ended September 30, 2006.

Annualized net charge-offs as a percent of average total loans were 0.02% for the quarter ended September 30, 2007. The allowance for loan losses as a percent of total loans, increased to 1.11% at September 30, 2007 compared to 1.09% at December 31, 2006. The percentage of non-performing loans to total loans was 1.00% at September 30, 2007, compared to 0.69% at December 31, 2006.

Provision for loan loss expense increased $491,000 to $740,000 for the three months ended September 30, 2007, compared to the same period ended September 30, 2006. For the nine months ended September 30, 2007, provision for loan loss expense increased $602,000 to $948,000 compared to the nine months ended September 30, 2006. The increase in provision for loan loss expense for the respective periods was largely related growth in the loan portfolio for the year as well as the specific reserve set aside for a loan classified during the three months ended September 30, 2007. In addition, improvements in the Company's security and position of certain classified loans during 2006, resulted in a reduction in the reserves allocated to those loans. Therefore the Company recorded a lower provision for loan loss expense during 2006, resulting in a higher increase in the provision for loan loss expense for the three and nine month periods ended September 30, 2007.

Non-interest income increased $172,000 for the three months ended September 30, 2007, compared to the three months ended September 30, 2006. For the nine months ended September 30, 2007 non-interest income increased $367,000, compared to the nine months ended September 30, 2006. The increase for the nine months ended was primarily the result of a $227,000 gain on the sale of real estate held for development. This real estate was held for development through the Company's wholly owned subsidiary, First Federal Office Park, LLC. Only one other property remains for sale in this development.

Non-interest expense increased $569,000 to $6.0 million for the three months ended September 30, 2007, compared to the same three months ended September 30, 2006. For the nine months ended September 30, 2007, non-interest expense increased $1.7 million compared to the same nine months ended September 30, 2006. Included in the increase for the nine months ended was $229,000 of unamortized issuance cost from redemption of all of the $10.0 million issuance of cumulative trust preferred securities. Contributing to the increase in non-interest expense for the respective three and nine month periods was a $168,000 increase and a $602,000 increase in employee compensation expense. Three commercial lending associates and twenty retail associates have been added with our expansion efforts.

First Financial Service Corporation is the parent bank holding company of First Federal Savings Bank of Elizabethtown, which was chartered in 1923. The Bank serves the needs and caters to the economic strengths of the local communities in which it operates and strives to provide a high level of personal and professional customer service. The Bank offers a variety of financial services to its retail and commercial banking customers. These services include personal and corporate banking services, and personal investment financial counseling services. Today, the Bank serves Central Kentucky through its 15 full-service banking centers and a commercial private banking center.

This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 that are subject to certain risks and uncertainties that could cause actual results to differ materially from historical income and those presently anticipated or projected. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date of this release. Such risks and uncertainties include those detailed in the Company's filings with the Securities and Exchange Commission, risks of adversely changing results of operations, risks related to the Company's acquisition strategy, risk of loans and investments, including the effect of the change of the local economic conditions, risks associated with the adverse effects of the changes in interest rates, and competition for the Company's customers by other providers of financial services, all of which are difficult to predict and many of which are beyond the control of the Company.

First Financial Service Corporation's stock is traded on the Nasdaq Global Market under the symbol "FFKY." Market makers for the stock are:

Keefe, Bruyette & Woods, Inc.            FTN Midwest Securities

J.J.B. Hilliard,
 W.L. Lyons Company, Inc.                Howe Barnes Investments, Inc.

Stifel Nicolaus & Company                Knight Securities, LP
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