Summary of POAGE BANKSHARES, INC.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Miles R. Armentrout Employment Agreement

Poage Bankshares, Inc. (the "Company") hired Miles R. Armentrout as Executive Vice President and Chief Credit Officer of the Company and its subsidiary, Home Federal Savings and Loan Association (the "Association"), effective June 25, 2012. Mr. Armentrout is, in effect, replacing Robert Curtis, who previously supervised the Company's lending function and who is retiring at year end.

Mr. Armentrout entered into an employment agreement with the Company and the Association on June 25, 2012 in connection with his hire. The employment agreement provides for a one-year term and may be extended on an annual basis, unless written notice of non-renewal is given by the Board of Directors of the Association.

Under the agreement, the base salary for Mr. Armentrout is $140,000. In addition to base salary, the agreement provides for, among other things, the executive's right to participate in employee benefit plans, and to receive reimbursements for housing relocation expenses. Upon termination of the executive's employment for cause, as defined in the agreement, the executive would have no right to receive compensation or other benefits for any period after termination.

In the event of the executive's involuntary termination or resignation following a good reason, as such term is defined in the agreement, Mr. Armentrout would be entitled to receive a cash severance payment equal to his base salary. Section 409A of the Internal Revenue Code of 1986, as amended, may require that the severance payment cannot be made until six months after termination of employment.

In the event of a change in control, followed within 18 months by the executive's involuntary termination for a reason other than for cause or if the executive terminates voluntarily for a good reason, as defined in the agreement, Mr. Armentrout will receive an amount equal to three times his base salary. In addition, the Association will continue to pay Mr. Armentrout's health and dental coverage for up to three years.

The foregoing description of the employment agreement is qualified in its entirety by reference to the agreement attached hereto as Exhibit 10.1 of this Current Report, and is incorporated by reference into this Item 5.02.

Changes in Base Salary for Ralph E. Coffman, Jr. and James King

The Board of Directors of the Company and the Association (the "Board") determined that Ralph E. Coffman, Jr., President and Chief Executive Officer of the Company and the Association, and James W. King, Executive Vice President and Chief Information Officer of the Company and the Association, will no longer receive separate fees for their service on the Board. To offset this reduction in their overall compensation, the Board determined to increase the base salaries of Messrs. Coffman and King by $18,200 which represents the approximate amount of the annual Board fees

that would have been earned by Messrs. Coffman and King for their service on the Board. As a result, Mr. Coffman's base salary will increase from $185,000 to $203,200 and Mr. King's base salary will increase from $100,000 to $118,200, effective June 29, 2012.