FFKY First Financial Service Corp.

NOTE 1 - PLAN DESCRIPTION

The following brief description of the First Financial Service Corporation 401(k)/Employee Stock Ownership Plan (the “Plan”) provides only general information. Participants should refer to the Plan Agreement for a complete description of the Plan’s provisions. The sponsor of the Plan is First Financial Service Corporation (the “Company” or “Employer”).

General : The Plan is a defined contribution plan covering substantially all employees of First Financial Service Corporation, a bank holding company and its subsidiaries, which include First Federal Savings Bank, First Service Corporation of Elizabethtown, Heritage Properties, LLC and First Federal Office Park, LLC (collectively the “Company”).

Employees of the Company are eligible to contribute to the Plan upon the completion of at least two months of service. The employee becomes a participant on the first day of the month following fulfillment of this requirement. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).

Within the Plan, there are two parts, the Employee Stock Ownership Plan (“ESOP”) and a 401(k) portion. The Company makes contributions to these parts as determined by the Plan document, the Company’s Board of Directors, and within the guidelines of ERISA and the regulations of the Internal Revenue Service.

Contributions : Participants may contribute up to 50% of their compensation up to the maximum amount allowed by the IRS through regular payroll deductions under the 401(k) provisions of the Plan. Participants may also make contributions after taxes are withheld. The employer matches 100% of the employee contributions up to 4% of the employee’s compensation. If the employee does not contribute at least 2% of their compensation, then the employer makes a minimum contribution of 2% of the employee’s compensation. To be eligible to receive an Employer contribution, a participant must work 1,000 hours in the plan year. Employer contributions under the ESOP are at the discretion of the Employer’s Board of Directors. ESOP contributions are allocated based on the participant’s allocable share of the Company contribution, which is based on compensation. Effective December 2011, the Employer’s Board of Directors suspended the annual ESOP contribution.

Participant Accounts : Each participant’s account is credited with the participant’s contributions and an allocation of the Employer contributions and Plan earnings, and is charged with his or her withdrawals and an allocation of administrative expenses. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account. All participants are eligible to diversify their Employer ESOP contributions immediately.

Retirement, Death and Disability : A participant is entitled to 100% of their account balance upon retirement, death or disability.

Vesting : Participants are immediately vested in the Employer’s ESOP contributions, their voluntary contributions and the matching contributions plus actual earnings thereon.

Payment of Benefits : Upon retirement, permanent disability or death, a participant or his or her designated beneficiary may elect to receive the amount credited to his or her account in a lump-sum distribution, or in equal installments over a period not exceeding the life expectancy of the participant. If a participant’s account balance exceeds $5,000, no portion of the account balance will be distributed as a lump-sum without the participant’s consent.

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NOTE 1 - PLAN DESCRIPTION (Continued)

Investment Options : Each participant may direct their contributions and the Company’s matching contribution to any of the investment options available under the Plan, including the Company’s common stock. Employer ESOP contributions are made in the form of First Financial Service Corporation common stock.

Effective January 1, 2007, the Plan was amended to allow transfers out of the First Financial Service Corporation common stock for all types of contribution accounts which hold Qualifying Employer Securities—including the ESOP Contribution Account. This rule applies to all participants for their entire account invested in Employer Stock, and to any beneficiary who has an account under the Plan and is entitled to exercise the rights of a participant. If the participant elects to transfer some or all of their account out of First Financial Service Corporation common stock, they can then direct the investment of that amount into other investment options offered by the Plan.

Voting Rights : While the Plan entitles its trustee to vote Company shares held by the Plan, the Company currently permits participants to vote Company shares allocated to their account. Participants are notified by the trustee prior to the time such votes are to be executed.

Notes Receivable from Participants : Participants may borrow up to the lesser of $50,000 or 50% of the vested portion of their account balance, subject to certain restrictions, in accordance with interest rates and collateral requirements established by the Plan. Principal and interest are paid through payroll deductions.

Administrative and Investment Management Expenses : Loan origination fees associated with notes receivable from participants and the Plan’s record keeping and trustee fees are paid by the Plan and are reflected in the financial statements as administrative expenses of the Plan. Investment management fees are charged to the Plan as a reduction of investment return and included in the investment income (loss) reported by the Plan. All other expenses of the Plan are paid by the Company.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting : The financial statements of the Plan are prepared under the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

Use of Estimates : The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures, and actual results may differ from these estimates.

Risks and Uncertainties for Investments : The Plan provides for certain investment options. The underlying investment securities are exposed to various risks, such as interest rate, market, liquidity and credit risks. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes will occur in the near term and that such changes could materially affect the amounts reported in the statement of net assets available for benefits and participants’ individual account balances. The Plan has an investment in First Financial Service Corporation common stock amounting to $319,562 and $346,571 as of December 31, 2012 and 2011 respectively. These amounts represent 3% of net assets available for benefits as of December 31, 2012 and 2011.

Notes Receivable from Participants: Notes receivable from participants are reported at their unpaid principal balance plus any accrued but unpaid interest, with no allowance for credit losses, as repayments of principal and interest are received through payroll deductions and the notes are collateralized by the participants’ account balances.

Payment of Benefits : Benefits are recorded when paid.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Investment Valuation and Income Recognition : The Plan’s investments are reported at fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation (depreciation) includes the Plan’s gains and losses on investments bought and sold as well as held during the year.

NOTE 3 – FAIR VALUE MEASUREMENTS

Fair value is the price that would be received by the Plan for an asset or paid by the Plan to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date in the Plan’s principal or most advantageous market for the asset or liability. The effect of a change in valuation technique or its application on a fair value estimate is accounted for prospectively as a change in accounting estimate. When evaluating indications of fair value resulting from the use of multiple valuation techniques, the Plan is to select the point within the resulting range of reasonable estimates of fair value that is most representative of fair value under current market conditions. Fair value measurements are determined by maximizing the use of observable inputs and minimizing the use of unobservable inputs. The hierarchy places the highest priority on unadjusted quoted market prices in active markets for identical assets or liabilities (level 1 measurements) and gives the lowest priority to unobservable inputs (level 3 measurements). The three levels of inputs within the fair value hierarchy are defined as follows:

Level 1 : Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Plan has the ability to access as of the measurement date.

Level 2 : Significant other observable inputs other than level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 : Significant unobservable inputs that reflect the Plan’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

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NOTE 3 – FAIR VALUE MEASUREMENTS (Continued)

In some cases, a valuation technique used to measure fair value may include inputs from multiple levels of the fair value hierarchy. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.

The following descriptions of the valuation methods and assumptions used by the Plan to estimate the fair values of investments apply to investments held directly by the Plan.

Mutual funds : The fair values of mutual fund investments are determined by obtaining quoted prices on nationally recognized securities exchanges (level 1 inputs).

Common stock: The fair values of common stock, including First Financial Service Corporation common stock, are determined by obtaining quoted prices from a nationally recognized exchange (level 1 inputs).

Money market deposit accounts: Fair values of money market deposit account balances have been determined based upon their quoted redemption prices and recent transaction prices of $1.00 per share (level 2 inputs), with no discounts for credit quality or liquidity restrictions, even though net asset values per share may fluctuate from the $1.00 targeted redemption price. The Plan’s investments in money market deposit accounts occasionally exceed federally insured balances.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

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There were no transfers between Level 1 and Level 2 during 2012.

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FIRST FINANCIAL SERVICE CORPORATION

401(K)/EMPLOYEE STOCK OWNERSHIP PLAN

NOTES TO FINANCIAL STATEMENTS

* As of December 31, 2012, the Plan’s position in American Capital Income Builder, Inc. R3 was not 5% or more of the Plan’s net assets available for benefits.

During the year ended December 31, 2012, the Plan’s investments (including investments bought, sold and held during the year) appreciated in value as follows:

Dividends and interest for the year ended December 31, 2012 were $210,634.

NOTE 5 - INCOME TAX STATUS

The Internal Revenue Service has determined and informed the Company by a letter dated January 24, 2008, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). Although the Plan has been amended since receiving the determination letter, Management believes the Plan is qualified under the appropriated requirements of the IRC. During 2012, management applied for a new determination letter. A response from the Internal Revenue Service has not yet been received.

NOTE 6 - PLAN TERMINATION

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA and its related regulations.

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FIRST FINANCIAL SERVICE CORPORATION

401(K)/EMPLOYEE STOCK OWNERSHIP PLAN

NOTES TO FINANCIAL STATEMENTS

NOTE 7 - PARTY-IN-INTEREST TRANSACTIONS

Parties-in-interest are defined under the Department of Labor’s Rules and Regulations as any fiduciary of the Plan, any party rendering service to the Plan, the employer and certain others. Investment management fees and operating expenses charged to the Plan for investments are deducted from income earned on investments and are not separately reflected. Consequently, investment management fees and operating expenses paid to parties in interest are reflected as a reduction of investment return for such investments. Professional fees of $26,764 were paid by the Plan to McCready and Keene, Inc. and $7,390 were paid by the Plan to TD Ameritrade for the administration of the Plan and the custodian of plan assets for the year ended December 31, 2012. McCready and Keene, Inc. is the record keeper of the Plan and is considered a party-in-interest. TD Ameritrade holds certain Plan assets and is considered a party-in-interest. Notes receivable from participants also qualify as party-in-interest transactions.

The Plan has an investment in First Financial Service Corporation common stock amounting to $319,562 and $346,571 as of December 31, 2012 and 2011, respectively. The Plan held 162,214 and 226,517 shares of First Financial Service Corporation common stock at December 31, 2012 and 2011, respectively, and recognized dividend income of $0 during 2012 from its investments in the Employer common stock.

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FIRST FINANCIAL SERVICE CORPORATION

401(K)/EMPLOYEE STOCK OWNERSHIP PLAN

Schedule H, Line 4i-Schedule of Assets (Held at End of Year)

December 31, 2012

Name of Plan Sponsor: First Financial Service Corporation

Employer Identification Number: 61-1168311

Three-digit Plan Number: 003

FIRST FINANCIAL SERVICE CORPORATION

401(K)/EMPLOYEE STOCK OWNERSHIP PLAN

FORM 11-K

DECEMBER 31, 2012