First Capital Bancorp (FCVA) 10-Q 2008 Q2 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2008

TRANSITION REPORT UNDER SECTION 13 OR 15(D)

OF THE EXCHANGE ACT

For the transition period from            to            

FIRST CAPITAL BANCORP, INC.

(Name of Small Business Issuer in its charter)

Virginia	001-33543	11-3782033
(State or other jurisdiction of Incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

4222 Cox Road, Suite 200, Glen Allen, Virginia 23060

(Address of principal executive offices)

804-273-1160

(Issuer’s telephone number)

Indicate by check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

Indicate by check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

2,971,171 shares of Common Stock, par value $4.00 per share, were outstanding at August 8, 2008.

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1 –	Financial Statements
	Consolidated Statements of Financial Condition June 30, 2008 (unaudited) and December 31, 2007	3
	Consolidated Statements of Income For the Three and Six Months Ended June 30, 2008 and 2007 (unaudited)	4
	Consolidated Statements of Stockholders’ Equity and Comprehensive Income For the Three and Six Months Ended June 30, 2008 and 2007 (unaudited)	5
	Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2008 and 2007 (unaudited)	6
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2 –	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3 –	Quantitative and Qualitative Disclosures About Market Risk – Not Applicable	19
Item 4 –	Controls and Procedures	19
PART II – OTHER INFORMATION
Item 1 –	Legal Proceedings – None to Report.	19
Item 1A –	Risk Factors – Not Applicable	19
Item 2 –	Unregistered Sales of Equity Securities and Use of Proceeds – Not Applicable.	19
Item 3 –	Defaults Upon Senior Securities – Not Applicable.	19
Item 4 –	Submission of Matters to a Vote of Security Holders	19
Item 5 –	Other Information – None to Report	20
Item 6 –	Exhibits	20
SIGNATURES		21

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PART 1 – FINANCIAL INFORMATION

ITEM 1 – Financial Statements

First Capital Bancorp, Inc. and Subsidiary

Consolidated Statements of Financial Condition

June 30, 2008 and December 31, 2007

	2008			2007
	(Unaudited)
ASSETS
Cash and due from banks	$	11,430,761		$	16,779,538
Short term debt securities		9,999,736			—
Total cash and cash equivalents		21,430,497			16,779,538
Investment securities:
Available for sale, at fair value		29,736,569			32,824,537
Restricted, at cost		3,804,040			3,183,739
Loans, net of allowance for losses		332,409,166			294,234,285
Loans held for sale		299,000			—
Premises and equipment, net		5,647,461			2,077,820
Accrued interest receivable		1,776,752			1,807,939
Deferred tax asset		770,043			319,097
Other assets		588,554			640,013
Total assets	$	396,462,082		$	351,866,968
LIABILITIES
Deposits
Noninterest-bearing	$	38,019,594		$	36,541,568
Interest-bearing		250,201,409			218,566,755
Total deposits		288,221,003			255,108,323
Accrued expenses and other liabilities		2,635,019			3,380,648
Securities sold under repurchase agreements		2,270,491			2,102,939
Federal funds purchased		10,903,000			9,261,000
Subordinated debt		7,155,000			7,155,000
Federal Home Loan Bank advances		50,000,000			40,000,000
Total liabilities		361,184,513			317,007,910
STOCKHOLDERS’ EQUITY
Common stock, $4.00 par value (authorized 5,000,000 shares; shares issued and outstanding, 2,971,171 at June 30, 2008 and December 31, 2007)		11,884,684			11,884,684
Additional paid-in capital		18,571,626			18,492,528
Retained earnings		5,319,586			4,518,278
Accumulated other comprehensive income (loss), net of tax		(498,327	)		(36,432	)
Total stockholders’ equity		35,277,569			34,859,058
Total liabilities and stockholders’ equity	$	396,462,082		$	351,866,968

See notes to unaudited consolidated financial statements.

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First Capital Bancorp Inc. and Subsidiary

Consolidated Statements of Income

Unaudited

	Three Months Ended June 30,				Six Months Ended June 30,
	2008		2007		2008		2007
Interest income
Loans	$	5,394,470	$	4,291,749	$	10,874,456	$	8,256,105
Investments:
Taxable interest income		356,780		353,846		726,339		776,983
Tax exempt interest income		16,342		10,264		29,815		20,528
Dividends		57,784		32,141		105,254		62,742
Federal funds sold		44,670		133,248		157,708		208,060
Total interest income		5,870,046		4,821,248		11,893,572		9,324,418
Interest expense
Deposits		2,557,080		2,194,999		5,172,903		4,229,446
FHLB advances		468,353		264,785		925,418		520,609
Federal funds purchased		6,500		—		32,402		7,023
Subordinated debt and other borrowed money		100,755		146,974		224,620		288,612
Total interest expense		3,132,688		2,606,758		6,355,343		5,045,690
Net interest income		2,737,358		2,214,490		5,538,229		4,278,728
Provision for loan loss		310,000		130,000		635,000		252,000
Net interest income after provision for loan loss		2,427,358		2,084,490		4,903,229		4,026,728
Noninterest income
Fees on deposits		60,472		49,695		124,373		99,326
Other		138,226		139,753		246,565		257,034
Total noninterest income		198,698		189,448		370,938		356,360
Noninterest expenses
Salaries and employee benefits		1,036,924		936,118		2,076,546		1,754,723
Occupancy expense		213,790		187,802		419,069		371,940
Data processing		156,417		135,020		294,544		259,218
Professional services		40,899		28,181		109,361		81,256
Advertising and marketing		69,841		15,645		113,493		43,650
FDIC assessment		51,000		40,767		102,000		61,638
Virginia franchise tax		82,000		45,000		164,000		90,000
Depreciation		87,493		83,914		173,324		169,476
Other expenses		289,321		248,992		580,572		460,782
Total noninterest expense		2,027,685		1,721,439		4,032,909		3,292,683
Net income before provision for income taxes		598,371		552,499		1,241,258		1,090,405
Income tax expense		212,200		190,400		439,950		378,300
Net income	$	386,171	$	362,099	$	801,308	$	712,105
Basic income per share	$	0.13	$	0.19	$	0.27	$	0.38
Diluted income per share	$	0.13	$	0.18	$	0.27	$	0.37

See notes to unaudited consolidated financial statements.

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First Capital Bancorp, Inc. and Subsidiary

Consolidated Statements of Stockholders’ Equity and Comprehensive Income

Six Months Ended June 30, 2008 and 2007

(Unaudited)

	Common Stock		Additional Paid-in Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
Balance January 1, 2007	$	7,184,084	$	6,010,352		$	2,776,277	$	(311,598	)	$	15,659,115
Stock offering		4,080,000		11,985,000			—		—			16,065,000
Cost associated with stock offering		—		(1,071,592	)		—		—			(1,071,592	)
Net income		—		—			712,105		712,105			712,105
Other comprehensive loss
Unrealized holding gain arising during period, (net of tax, $31,230)		—		—			—		(91,217	)		(91,217	)
Total comprehensive income								$	620,888
Stock based compensation expense		—		25,069			—		—			25,069
Balance June 30, 2007	$	11,264,084	$	16,948,829		$	3,488,382	$	(402,815	)	$	31,298,480
Balance January 1, 2008	$	11,884,684	$	18,492,528		$	4,518,278	$	(36,432	)	$	34,859,058
Net income		—		—			801,308		801,308			801,308
Other comprehensive loss
Unrealized holding gain arising during period, (net of tax, $237,946)		—		—			—		(461,895	)		(461,895	)
Total comprehensive income								$	339,413
Stock based compensation expense		—		79,098			—		—			79,098
Balance at June 30, 2008	$	11,884,684	$	18,571,626		$	5,319,586	$	(498,327	)	$	35,277,569

See notes to unaudited consolidated financial statements.

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First Capital Bancorp, Inc. and Subsidiary

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2008 and 2007

(Unaudited)

	2008			2007
Cash flows from operating activities
Net income	$	801,308		$	712,105
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan losses		635,000			252,000
Depreciation of premises and equipment		173,324			169,476
Stock based compensation expense		79,098			25,069
Deferred income taxes		(213,000	)		—
Net accretion of bond premiums/discounts		(37,099	)		(1,472	)
Increase in loans held for sale		(299,000	)		—
Decrease (increase) in other assets		51,459			(329,763	)
Decrease in accrued interest receivable		31,187			27,358
Decrease in accrued expenses and other liabilities		(745,629	)		(48,300	)
Net cash provided by operating activities		476,648			806,473
Cash flows from investing activities
Proceeds from maturities and calls of securities		19,500,000			8,000,000
Proceeds from paydowns of securities available-for-sale		1,318,123			1,501,262
Purchase of securities available-for-sale		(18,392,898	)		(1,497,000	)
Redemption (purchase) of restricted investment securities		(620,300	)		181,150
Purchases of property and equipment		(167,151	)		(197,632	)
Purchase of land and building		(2,301,794	)		—
Construction in process		(1,274,020	)		—
Net increase in loans		(38,809,881	)		(27,007,103	)
Net cash used in investing activities		(40,747,921	)		(19,019,323	)
Cash flows from financing activities
Net (decrease) increase in demand, savings and money market accounts		(10,812,634	)		20,999,615
Net increase in certificates of deposit		43,925,314			3,741,586
Stock offering proceeds, net of related expenses		—			14,993,408
Advances from FHLB		10,000,000			5,000,000
FHLB advances called		—			(10,000,000	)
Increase (decrease) in Federal funds purchased		1,642,000			(6,026,000	)
Net increase in repurchase agreements		167,552			443,224
Net cash provided by financing activities		44,922,232			29,151,833
Net increase in cash and cash equivalents		4,650,959			10,938,983
Cash and cash equivalents, beginning of period		16,779,538			12,032,026
Cash and cash equivalents, end of period	$	21,430,497		$	22,971,009
Supplemental disclosure of cash flow information
Interest paid during the period	$	6,318,398		$	5,090,090
Taxes paid during the period	$	740,000		$	713,533

See notes to unaudited consolidated financial statements.

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First Capital Bancorp, Inc. and Subsidiary

Notes to Unaudited Consolidated Financial Statements

Note 1 – Basis of Presentation

First Capital Bancorp, Inc. (the “Company”) is the holding company of and successor to First Capital Bank (the “Bank”). Effective September 8, 2006, the Company acquired all of the outstanding stock of the Bank in a statutory share exchange transaction (the “Share Exchange”) pursuant to an Agreement and Plan of Reorganization dated September 5, 2006, between the Company and the Bank (the “Agreement”). The Agreement was approved by the shareholders of the Bank at the annual meeting of shareholders held on May 16, 2006. Under the terms of the Agreement, the shares of the Bank’s common stock were exchanged for shares of the Company’s common stock, par value $4.00 per share, on a one-for-one basis. As a result, the Bank became a wholly owned subsidiary of the Company, the Company became the holding company of the Bank and the shareholders of the Bank became shareholders of the Company.

In management’s opinion the accompanying consolidated financial statements, reflect all adjustments, consisting solely of normal recurring accruals, necessary for a fair presentation of the financial information as of June 30, 2008 and December 31, 2007 and for the three months ended June 30, 2008 and 2007, in conformity with accounting principles generally accepted in the United States of America. Results for the six month period ended June 30, 2008 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2008.

The organization and business of the Company, accounting policies followed, and other related information are contained in the notes to the financial statements of the Company as of and for the year ended December 31, 2007 filed as part of the Company’s annual report on Form 10-KSB. These interim financial statements should be read in conjunction with the annual financial statements.

First Capital Bancorp, Inc.’s critical accounting policy relates to the evaluation of the allowance for loan losses which is based on management’s opinion of an amount that is adequate to absorb losses in the Company’s existing portfolio. The allowance for loan losses is established through a provision for loan loss based on available information including the composition of the loan portfolio, historical loan losses (to the extent available due to limited history), specific impaired loans, availability and quality of the collateral, age of the various portfolios, changes in local economic conditions, and loan performance and quality of the portfolio. Different assumptions used in evaluating the adequacy of the Company’s allowance for loan losses could result in material changes in its financial condition and results of operations. The Company’s policies with respect to the methodology for determining the allowance for loan losses involve a high degree of complexity and require management to make subjective judgments that often require assumptions or estimates about certain matters. This critical policy and its assumptions are periodically reviewed with the Company’s Board of Directors.

Note 2 – Use of Estimates

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.

Note 3 – Earnings per share

Basic EPS excludes dilution and is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding for the period.Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, or resulted in the issuance of common stock that then shared in the earnings of the entity.

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The basic and diluted earnings per share calculations are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2008		2007		2008		2007
Net income (numerator, basic and diluted)	$	386,171	$	362,099	$	801,308	$	712,105
Weighted average number of shares outstanding (denominator)		2,971,171		1,919,318		2,971,171		1,858,010
Earnings per common share—basic	$	0.13	$	0.19	$	0.27	$	0.38
Effect of dilutive securities:
Weighted average number of shares outstanding		2,971,171		1,919,318		2,971,171		1,858,010
Effect of stock options		19,738		81,275		27,207		86,259
Diluted average shares outstanding (denominator)		2,990,910		2,000,593		2,998,378		1,944,269
Earnings per common share—assuming dilution	$	0.13	$	0.18	$	0.27	$	0.37

Note 4 – Stock Options

Effective January 1, 2006, the Company adopted SFAS No. 123(R), Share-Based Payment, using the modified prospective method and, accordingly, did not restate the consolidated statements of operations for periods prior to January 1, 2006. This pronouncement amended SFAS No. 123, Accounting for Stock-Based Compensation, and superseded Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees. Under SFAS No. 123(R), the Company measures compensation cost for all stock-based awards at fair value on the date of grant and recognizes compensation expense in the consolidated statements of income over the service period that the awards are expected to vest.

In January 2008, 5,000 options were granted at an exercise price equal to 100% of the fair market value of the common stock on the date of grant. These options vest over three years. The stock based compensation expensed during the quarter was $40,024 and is included in salaries and employee benefits.

Note 5 – Investment Securities

The amortized costs, gross unrealized gains, gross unrealized losses and fair values for securities as of June 30, 2008 and December 31, 2007 are as follows:

	June 30, 2008
	Amortized Costs		Gross Unrealized				Fair Values
			Gains		Losses
Available-for-sale
U.S. Government agencies	$	18,185,009	$	12,796	$	383,078	$	17,814,727
Mortgage-backed securities		7,164,415		6,711		130,003		7,041,123
Corporate bonds		3,382,289		—		233,021		3,149,268
Tax-exempt municipal bonds		1,759,382		—		27,931		1,731,451
	$	30,491,095	$	19,507	$	774,033	$	29,736,569

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	December 31, 2007
	Amortized Costs		Gross Unrealized				Fair Values
			Gains		Losses
Available-for-sale
U.S. Government agencies	$	21,455,876	$	50,543	$	5,590	$	21,500,829
Mortgage-backed securities		8,493,006		27,725		102,396		8,418,335
Corporate bonds		1,921,847		—		26,722		1,895,125
Tax-exempt municipal bonds		1,008,492		3,495		1,739		1,010,248
	$	32,879,221	$	81,763	$	136,447	$	32,824,537

The unrealized losses in the portfolio as of June 30, 2008 are considered temporary and are a result of the current interest rate environment and not increased credit risk. The Company has the ability and intent to hold debt securities in an unrealized loss position for the foreseeable future.

Note 6 – Loans

Major classifications of loans are as follows:

	June 30, 2008				December 31, 2007
	Amount		Percentages		Amount		Percentages
Commercial	$	46,792,129	13.94	%	$	44,366,926	14.94	%
Real estate—residential		94,417,033	28.12	%		83,035,119	27.97	%
Real estate—commercial		99,547,787	29.65	%		86,301,455	29.07	%
Real estate—construction		88,715,358	26.43	%		79,095,777	26.64	%
Consumer		6,247,649	1.86	%		4,105,713	1.38	%
Total loans	$	335,719,956	100.00	%	$	296,904,990	100.00	%
Less:
Allowance for loan losses		3,129,166				2,489,066
Net deferred fees		181,624				181,640
Loans, net	$	332,409,166			$	294,234,284

A summary of the transactions affecting the allowance for loan losses follows:

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Activity in the allowance for loan losses for the three and six month periods ended June 30, 2008 and 2007:

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Beginning balance	$	2,819,166		$	1,955,874		$	2,489,066		$	1,833,604
Provision for loan losses		310,000			130,000			635,000			252,000
Loans charge-offs		—			23,822			—			23,822
Recoveries		—			42			5,100			312
Ending balance	$	3,129,166		$	2,062,094		$	3,129,166		$	2,062,094
Ratio of allowance for loan losses as a percent of loans outstanding at the end of the period.		0.94	%		0.90	%		0.94	%		0.90	%

Note 7 – Premises and equipment

Major classifications of these assets are summarized as follows:

	June 30, 2008		December 31, 2007
Land	$	2,216,554	$	228,005
Building		1,032,679		719,434
Furniture and equipment		1,993,377		1,832,126
Leasehold improvements		717,497		711,598
Construction in progress		1,274,020		—
		7,234,127		3,491,163
Less accumulated depreciation		1,586,666		1,413,343
Premises and equipment, net	$	5,647,461	$	2,077,820

Note 8 – Stock Offering

On June 19, 2007, the Company closed on a public stock offering of 1,020,000 shares of common stock at $15.75 per share. The offering was underwritten by two local brokerage houses. Gross proceeds totaled $16.1 million.

On July 11, 2007, an additional 152,900 shares of common stock were issued as a result of the exercise of the over-allotment option granted to the underwriters of the Company’s public offering of 1,020,000 shares of common stock at $15.75 per share. The gross proceeds to the Company from this exercise of the over-allotment option were $2.4 million.

Total costs of the offerings were $1.4 million. The Company will use the net proceeds from the offering to increase equity and for general corporate purposes, including using the net proceeds to provide additional equity to the Bank to support the growth of its operations.

Note 9 – Fair Value Disclosures

Effective January 1, 2008, the Company adopted FAS 157, Fair Value Measurement. FAS 157 clarifies the definition of fair value and describes methods available to appropriately measure fair value in accordance with generally accepted accounting principles. This statement applies whenever other accounting pronouncements require or permit fair value measurements.

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The fair value hierarchy under FAS 157 prioritizes the inputs to valuation techniques used to measure fair value into three broad levels (Levels 1, 2 and 3). Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability and reflect the reporting entity’s own evaluation about the assumptions that market participants would use in pricing the asset or liability.

SFAS 157 defines fair value as the exchange price that would be received for an asset in the principal or most advantageous market for the asset in an orderly transaction between market participants on the measurement date.

Assets measured at fair value on a recurring basis are summarized below:

	June 30, 2008
	Fair Value Measurements Using						Fair Values
	Level 1		Level 2		Level 3
	(Dollars in thousands)
`
Available-for-sale securities
U.S. Government agencies	$	17,816	$	—	$	—	$	17,816
Mortgage-backed securities		—		7,041		0		7,041
Corporate bonds		—		3,149		0		3,149
Municipal bonds		—		1,731		0		1,731
Total	$	17,816	$	11,921	$	—	$	29,737
Loans held for sale	$	—	$	—	$	299	$	299

Level 1 – Valuations based on quoted prices in active markets for identical assets that the Company has the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Assets utilizing Level 1 inputs include U. S. Government agency securities.

Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Assets utilizing Level 2 inputs include mortgage-backed securities, corporate and municipal bonds.

Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Residential loans held for sale

Loans held for sale are required to be measured at lower of cost or fair value. Under SFAS 157, market value is to represent fair value. Management obtains quotes or bids on all or part of these loans directly from the purchasing financial institutions. Premiums received or to be received on the quotes or bids are indicative of the fact that cost is lower than fair value.

The Bank did not make any changes to its valuation techniques during the six months ended June 30, 2008.

Note 10 – Recently Issued Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141R, “Business Combinations (revised 2007).” SFAS No. 141R improves reporting by creating greater consistency in the accounting and financial reporting of business combinations, resulting in more complete,

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comparable, and relevant information for investors and other users of financial statements. To achieve this goal, the new standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. SFAS No. 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first fiscal year that commences after December 15, 2008.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements.” SFAS No. 160 improves the relevance, comparability, and transparency of financial information provided to investors by requiring all entities to report noncontrolling (minority) interests in subsidiaries in the same way—as equity in the consolidated financial statements. In addition, SFAS No.160 eliminates the diversity that currently exists in accounting for transactions between an entity and noncontrolling interests by requiring that they be treated as equity transactions. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008 and is not expected to have a material impact on the Company’s financial condition or results of operations.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—including an amendment of FASB Statement No. 115.” SFAS No. 159 provides companies with the option of electing fair value as an alternative measurement for most financial assets and liabilities. It also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 requires companies to provide additional information that will help investors and other users of financial statements to more easily understand the effect of a company’s choice to use fair value on its earnings. It also requires entities to display the fair value of those assets and liabilities for which the company has chosen to use fair value on the face of the balance sheet. Under SFAS No. 159, fair value is used for both the initial and subsequent measurement of the designated assets and/or liabilities, with the changes in value recognized in earnings. The Company adopted this statement on January 1, 2008 and did not elect the SFAS No. 159 fair value option for any of its financial assets or liabilities, therefore the adoption did not have an impact on its consolidated financial position, consolidated results of operations, or liquidity.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133.” SFAS No. 161 applies to all derivative instruments and related hedged items accounted for under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” SFAS No. 161 requires entities to provide greater transparency about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, results of operations and cash flows. To meet those objectives, SFAS No. 161 requires (1) qualitative disclosures about objectives for using derivatives by primary underlying risk exposure (e.g., interest rate, credit or foreign exchange rate) and by purpose or strategy (fair value hedge, cash flow hedge, net investment hedge, and non-hedges), (2) information about the volume of derivative activity in a flexible format that the preparer believes is the most relevant and practicable, (3) tabular disclosures about balance sheet location and gross fair value amounts of derivative instruments, income statement and other comprehensive income location of gain and loss amounts on derivative instruments by type of contract, and (4) disclosures about credit-risk related contingent features in derivative agreements. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. Accordingly, the Bank will adopt the provisions of SFAS No. 161 in the first quarter 2009. The Bank does not expect the adoption of the provisions of SFAS No. 161 to have a material effect on the its financial condition and results of operations.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Bank’s financial position, results of operations and cash flows.

12

ITEM 2.

FIRST CAPITAL BANCORP, INC

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The purpose of this discussion is to focus on important factors affecting the Company’s financial condition and results of operations. The discussion and analysis should be read in conjunction with the unaudited Consolidated Financial Statements.

This report contains forward-looking statements with respect to the financial condition, results of operations and business of the Company. There forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of management of the Company and on information available at the time these statements and disclosures were prepared. Factors that may cause actual results to differ materially from those expected included the following:

• General economic conditions may deteriorate and negatively impact the ability of borrowers to repay loans and depositors to maintain balances.

• Changes in interest rates could reduce income.

• Competitive pressures among financial institutions may increase.

• The businesses that the Company is engaged in may be adversely affected by legislative or regulatory changes, including changes in accounting standards.

• New products developed or new methods of delivering products could result in a reduction in business and income for the Company.

• Adverse changes may occur in the securities market.

Earnings Summary

First Capital Bancorp, Inc. reported net income of $801,308 for the six months ending June 30, 2008, compared to $712,105 for the same period in 2007, an increase of $89,203 or 12.5%. Net income for the three months ended June 30, 2008 was $386,171, up $24,072 or 6.7% from $362,099 for the same period in 2007. Net interest income increased 23.6% or $522,868 during the second quarter of 2008, when compared to 2007 and 29.4% or $1,259,501 to $5,538,229 during the first six months of 2008, when compared to 2007. For the second quarter of 2008, noninterest income was $198,698, an increase of 4.9%. Noninterest income increased 4.1% to $370,938 during the six months ended June 30, 2008 when compared to $356,360 for the same period in 2007. Noninterest expenses totaled $2,027,685, an increase of $306,246, or 17.8% for the second quarter of 2008 compared to 2007, and $4,032,909, an increase of $740,226, or 22.5% for the first six months of 2008 compared to 2007. Basic and diluted earnings per share of common stock were $0.13 and $0.13 for the second three months of 2008 compared to $0.19 and $0.18 for 2006. For the first six months of 2008, basic and diluted earnings per share of common stock were $0.27 and $0.27 compared to $0.38 and $0.37 for 2007. The decrease in earnings per share was the result of the issuance of 1,020,000 shares of common stock as the result of a stock offering in 2007.

For the six months ended June 30, 2008, profitability as measured by the Company’s annualized return on average assets (ROA) was 0.43% compared to 0.54% for the same period in 2007. For the second quarter of 2008 ROA was 0.40% compared to 0.53% in 2007. ROA decreased due to the continued rapid growth of the Company. Another measure of the Company’s profitability, the annualized return on average equity (ROE) was 4.39% for the second quarter of 2008 compared to 7.88% for the same period in 2007. For the six months ended June 30, 2008 and 2007, ROE was 4.57% and 8.38%, respectively. ROE was negatively impacted by the public stock offering in 2007 in which $17,076,845 in additional capital was raised.

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Net Interest Income

Net interest income represents a principal source of earnings for the Company. In 2008, increases in net interest income are attributable primarily to the overall growth of the Company, offset by drastic actions of the Federal Reserve Bank’s Open Market Committee (FOMC). The FOMC cut the federal funds targeted rate and the associated prime rate of interest by 200 basis points during the first quarter of 2008 and an additional 25 basis points during the second quarter of 2008, resulting in a significant decline in the key rate that is tied to over 40% of the Company’s loan portfolio having a daily rate change. Although the vast majority of our time deposits are set to reprice in the next twelve months and will lower funding costs, this rapid reduction in rates put pressure on our net interest margin.

Net interest margin decreased 40 basis points for the three months ended June 30, 2008 to 2.96% as compared to 3.36% for the quarter ended June 30, 2007. The yield on earning assets decreased from 7.32% for the quarter ended June 30, 2007 to 6.36% for the quarter ended June 30, 2008. The cost of interest bearing liabilities decreased 74 basis points to 4.01% for the quarter ended June 30, 2008 as compared to 4.75% for the same period in 2007. Net interest margin for the six months ended June 30, 2008 was 3.08%, down 28 basis points from 3.36% for the same period in 2007.

Total interest and fees on loans, the largest component of net interest income, increased 25.7%, or $1,102,721 to $5,394,470 during the second quarter of 2008 compared to $4,291,749 for the same period in 2007. Year-to-date 2008 interest and fees on loans totaled $10,874,456, an increase of 31.7% over the 2007 year-to-date total of $8,256,105.

Interest on investment securities increased 2.5% to $373,122 for the second quarter of 2008 compared to $364,110 for the same period of 2007. Year-to-date, interest on investment securities decreased to $756,154 from $797,511, or 5.2% for the same period of 2008. Interest on federal funds sold decreased $88,578 for the three months ended June 30, 2008 to $44,670 from $133,248 for the same period in 2007. For the six months ended June 30, 2008, interest on federal funds sold decreased $50,352 to $157,708 as compared to $208,060 for the same period in 2007. The reduction in the interest on federal funds sold was due to the reduction in the rate on federal funds sold during the periods.

Dividends on restricted equity securities totaled $57,784 compared to $32,141 in the second three months of 2008, as a result of higher balances in stock of the Federal Reserve and the Federal Home Loan Bank of Atlanta. For the six month period ended June 30, 2008, dividends on restricted equity stocks increased $42,512 to $105,254, a 67.8% increase over the 2007 six month total of $62,742.

Interest expense on deposits increased $362,081 or 16.5% for the second quarter of 2008 and $943,457 or 22.3% year-to date compared to 2007. The increase in deposit expense is due to the increase in average outstanding deposits, arising from the overall growth of the Company and offset by a decrease in the overall rates paid on deposits. Interest expense on borrowings totaled $575,608 for the second quarter of 2008 an increase of $163,849, or 39.8%, over the same period of 2007. Year-to-date, interest on borrowings increased $366,196 or 44.9% to $1,182,440 from $816,244 for the same period of 2007. Increased borrowing needs due to funding loan growth offset by lower rates contributed to the increase.

Average Balances, Income and Expenses, Yields and Rates

Net interest income represents our principal source of earnings. Net interest income is the amount by which interest generated from earning assets exceeds the expense of funding those assets. Changes in volume and mix of interest-earning assets and interest-bearing liabilities, as well as their respective yields and rates, have a significant impact on the level of net interest income

14

Earning assets consist primarily of loans, investment securities and other investments. Interest-bearing liabilities consist principally of deposits, Federal Home Loan Bank advances and other borrowings.

The following table illustrates average balances of total interest-earning assets and total interest-bearing liabilities for the periods indicated, showing the average distribution of assets, liabilities, shareholders’ equity and related income, expense and corresponding weighted-average yields and rates. The average balances used in these tables were calculated using daily average balances.

	Average Balances, Income and Expenses, Yields and Rates
	Three Months Ended June 30,
	2008							2007
	Average Balance			Income/ Expense		Yields/ Rates		Average Balance			Income/ Expense		Yields/ Rates
	(Dollars in thousands)
Earning Assets:
Loans, net of unearned income:	$	326,787		$	5,394	6.64	%	$	219,019		$	4,292	7.86	%
Investment securities:
U.S. Agencies		19,111			227	4.77	%		21,699			247	4.56	%
Mortgage backed securities		7,504			82	4.37	%		10,213			107	4.21	%
Municipal securities		1,761			16	3.73	%		1,010			10	4.07	%
Corporate notes		3,380			48	5.78	%		—			—	0.00	%
Other investments		3,715			58	6.26	%		2,119			32	6.08	%
Total investment securities		35,471			431	4.89	%		35,041			396	4.54	%
Federal funds sold		9,178			45	1.96	%		10,280			133	5.20	%
Total earning assets		371,436			5,870	6.36	%		264,340			4,821	7.32	%
Cash and cash equivalents		9,713							5,728
Allowance for loan losses		(2,954	)						(2,055	)
Other nonearning assets		6,952							4,149
Total assets	$	385,147						$	272,162
Interest bearing liabilities:
Interest checking	$	8,861		$	8	0.39	%	$	7,882		$	21	1.06	%
Money market deposit accounts		40,841			161	1.59	%		44,280			461	4.18	%
Statement savings		594			1	0.46	%		745			3	1.52	%
Certificates of deposit		203,364			2,387	4.72	%		132,861			1,710	5.16	%
Total interest-bearing deposits		253,660			2,557	4.05	%		185,768			2,195	4.74	%
Federal funds purchased		1,088			6	2.40	%		—			—	—
Repurchase agreements		2,326			8	1.47	%		1,992			22	4.51	%
Subordinated debt		7,155			92	5.19	%		7,155			125	6.98	%
FHLB Advances		50,000			468	3.77	%		25,000			265	4.25	%
Total interest bearing liabilities		314,229			3,131	4.01	%		219,915			2,607	4.75	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		32,128							31,078
Other noninterest-bearing liabilities		3,412							2,738
Shareholders’ equity		35,378							18,431
Total liabilities and shareholders’ equity	$	385,147						$	272,162
Net interest income / spread						2.35	%						2.56	%
Impact of noninterest-bearing sources						0.61	%						0.80	%
Net interest income / margin				$	2,739	2.96	%				$	2,214	3.36	%
Ratio of average interest earning assets to average interest-bearing liabilities						118.21	%						120.20	%

15

Average Balances, Income and Expenses, Yields and Rates

	Six Months Ended June 30,
	2008							2007
	Average Balance			Income/ Expense		Yields/ Rates		Average Balance			Income/ Expense		Yields/ Rates
	(Dollars in thousands)
Assets:
Loans, net of unearned income:	$	316,755		$	10,874	6.94	%	$	212,032		$	8,256	7.85	%
Investment securities:
U.S. Agencies		18,504			470	5.14	%		23,346			553	4.78	%
Mortgage backed securities		7,840			170	4.39	%		10,590			224	4.26	%
Corporate bonds		3,009			86	5.78	%
Municipal securities		1,586			30	3.80	%		1,011			20	4.10	%
Other investments		3,580			105	5.94	%		2,108			63	6.00	%
Total investment securities		34,519			861	5.05	%		37,055			860	4.68	%
Federal funds sold		12,860			158	2.48	%		8,067			208	5.20	%
Total earning assets		364,134			11,893	6.60	%		257,154			9,324	7.31	%
Cash and cash equivalents		9,994							5,479
Allowance for loan losses		(2,797	)						(1,984	)
Other nonearning assets		6,582							4,113
Total assets	$	377,913						$	264,762
Liabilities and Stockholders’ Equity:
Interest bearing liabilities:
Interest checking	$	9,187		$	28	0.61	%	$	7,959		$	33	0.85	%
Money market deposit accounts		42,454			433	2.06	%		40,230			820	4.11	%
Statement savings		637			2	0.77	%		934			7	1.52	%
Certificates of deposit		195,984			4,710	4.86	%		132,249			3,369	5.14	%
Total interest-bearing deposits		248,262			5,173	4.21	%		181,372			4,229	4.70	%
Federal funds purchased		1,689			32	3.88	%		268			7	5.30	%
Repurchase agreements		2,228			19	1.74	%		1,826			41	4.57	%
Subordinated debt		7,155			205	5.81	%		7,155			247	6.97	%
FHLB Advances		48,764			926	3.84	%		24,983			521	4.20	%
Total interest bearing liabilities		308,098			6,355	4.17	%		215,604			5,045	4.72	%
Noninterest-bearing liabilities:
Noninterest-bearing demand deposits		32,379							29,352
Other noninterest bearing liabilities		2,201							2,660
Shareholders’ equity		35,235							17,146
Total liabilities and shareholders’ equity	$	377,913						$	264,762
Net interest income / spread						2.43	%						2.59	%
Impact of noninterest-bearing sources						0.01	%						0.76	%
Net interest income / margin				$	5,538	3.08	%				$	4,279	3.36	%
Ratio of average interest earning assets to average interest-bearing liabilities						118.19	%						119.27	%

Noninterest Income

Total noninterest income was $198,698 for the second quarter of 2008, compared to $189,448 for the same period of 2007. Noninterest income totaled $370,938 for the first six months of 2008 compared to $356,360 for the same period in 2007, a 4.1% increase. Fees on deposits increased $10,777, or a 21.7% increase to $60,472 for the second quarter of 2008 compared to the same period in 2007 and $25,047, a 25.2% to $124,373 year-to-date. This increase is attributable to increases in charges on deposit accounts of $10,777 for the second quarter of 2008 and for the year-to-date, fees on deposits accounts increased $17,970 and NSF and returned check charges increased $7,311. Other noninterest income decreased $1,527 and $10,469 for the second quarter and year-to-date, respectively. This decrease in other noninterest income is the result in decreases in mortgage loan production. Gains and fees on loans decreased $11,697 in the second quarter of 2008 as compared to the same period in 2007 and $45,700 year-to-date in 2008 as compared to the same period in 2007.

16

Noninterest Expense

Total noninterest expenses for the second quarter of 2008 totaled $2,027,685, an increase of $306,246, or 17.8%, compared to $1,721,439 for the same period in 2007. Noninterest expenses totaled $4,032,909 in the first six months of 2008 compared to $3,293,683 for the same period in 2007, an increase of 22.5% or $740,226. These increases are attributable to the following factors: 1) an increase in salaries and benefits of $100,806 for the quarter, $321,823 year-to-date, primarily arising from additional salaries due to a new banking office in Bon Air, higher employee benefit costs, additional retirement expense and additional administrative staff; 2) an increase of $25,988 for the quarter, and $47,129 year-to-date in occupancy costs related to the additional banking office and additional space leased at the corporate headquarters; 3) an 82.2% increase in the Virginia Franchise tax for the quarter and year-to-date as the result of the additional equity raised in 2007; 4) an increase in data processing expenses related to additional branches and services provided and 5) an increase in advertising and marketing costs as promotional and branding advertising are utilized in 2008.

Income Taxes

The income tax provision was $212,200 for the second quarter of 2008 and $439,950 year-to-date compared to $190,400 and $378,300, respectively for the prior year. The effective tax rate for the second quarter of 2008 was 35.5%, compared to 34.5% for the same period in 2007. Year-to-date 2008, the effective tax rate is 35.4% compared to 34.7% in 2007.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

General

Total assets increased 12.7% to $396,462,082 at June 30, 2008 when compared to assets of $351,866,968 at December 31, 2007. On an annual basis total assets increased 38.1% when compared to assets of $286,990,135 at June 30, 2007. Total loans as of June 30, 2008 were $335,719,956, an increase of $38,814,966, or 13.1%, from $296,904,990 at year-end 2007. On an annual basis total loans increased $107,062,922 or 46.8%, from $228,657,922 in June 2007. Investment securities were $29,736,569 at June 30, 2008, compared to $32,824,537 at year-end 2007. On an annual basis, investment securities decreased $853,409, or 2.8% over June 2007. Cash and cash equivalents were $21,430,497, an increase of $4,650,959, or 27.7% from $16,779,538 at December 31, 2007.

Deposits increased $33,112,680, or 13.0%, during the six months ended June 30, 2008. On an annualized basis deposits increased $69,177,367 or 31.6%. Noninterest-bearing demand deposit accounts increased $1,478,026 to $38,019,594, a 4.0% increase over December 31, 2007 and $339,231 on an annual basis when compared to June 30, 2007. Interest-bearing deposits totaled $250,201,409 at June 30, 2008, compared to $218,566,755 at year-end 2007. Certificates of deposits are the major category of our interest-bearing deposits.

Stockholders’ equity was $35,277,569 at June 30, 2008, compared to $34,859,058 at December 31, 2007. Components of the change in stockholders’ equity include net income of $801,308, increases in net unrealized losses on available-for-sale securities totaling $461,895 and stock based compensation totaling $79,098.

Asset Quality

The Company’s allowance for loan losses is an estimate of the amount needed to provide for possible losses in the loan portfolio. In determining adequacy of the allowance, management considers the Company’s historical loss experience, the size and composition of the loan portfolio, specific impaired loans, the overall level of nonperforming loans, the value and adequacy of collateral and guarantors, experience and depth of lending staff, effects of credit concentrations and economic conditions. Because the risk of loan loss includes general economic trends as well as conditions affecting individual borrowers, the allowance for loan losses can only be an estimate.

While the Company believes it has sufficient allowance for its existing portfolio, there can be no assurances that an additional allowance for losses on existing loans may not be necessary in the future. The allowance for loan losses totaled $3,129,166 and $2,062,094 at June 30, 2008 and 2007, respectively. The ratio of the allowance for loan losses to total loans outstanding at June 30, 2008 and 2007 was 0.94% and 0.90%, respectively. There were no loans delinquent more than 30 days but less than 89 days at June 30, 2008. Non-performing assets totaled $81,105 and represented .02% of total assets as of June 30, 2008.

17

During the first six months of 2008 and 2007, the Company recorded $635,000 and $252,000 in provision expense, respectively. There were no loans charged-off during the first half of 2008 and two loans charged-off totaling $23,822 for the same period in 2007. Charge-offs are charged directly to the allowance when they occur. Recoveries in the first six months of 2008 and 2007 totaled $5,100 and $312, respectively. The increase in provision for loan losses over the last year is due to increases in impaired loans and growth in the loan portfolio. Impaired loans increased from $3.0 million at December 31, 2007 to $9.3 million at June 30, 2008. Of this increase, $3.8 million was related to 1 – 4 Family Residential Construction and Lot loans as the construction business has slowed appreciably in the first six months of 2008. In addition, impaired Commercial and Industrial loans increased from $789 thousand at December 31, 2007 to $1.6 million at June 30, 2008. These loans were also dependent (in various ways) on real estate or the real estate construction business. Net new loan growth for the six months ended June 30, 2008 was $38.8 million as compared to $27.0 million for the same period of 2007. The table below summarizes the activity in the allowance for loans losses for the three and six month periods ending June 30, 2008 and 2007.

Activity in the allowance for loan losses for the three and six month periods ended June 30, 2008 and 2007:

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Beginning balance	$	2,819,166		$	1,955,874		$	2,489,066		$	1,833,604
Provision for loan losses		310,000			130,000			635,000			252,000
Loans charge-offs		—			23,822			—			23,822
Recoveries		—			42			5,100			312
Ending balance	$	3,129,166		$	2,062,094		$	3,129,166		$	2,062,094
Ratio of allowance for loan losses as a percent of loans outstanding at the end of the period.		0.94	%		0.90	%		0.94	%		0.90	%

Liquidity

Management monitors and plans the Company’s liquidity position for future periods. Liquidity is provided from cash, interest-bearing deposits in other banks, repayments of loans, increases in deposits, lines of credit from two correspondent banks and federal agency bank and maturing investments. Management is committed to maintaining liquidity at a level sufficient to protect depositors, provide for reasonable growth, and fully comply with all regulatory requirements.

At June 30, 2008, cash and cash equivalents totaled $21,430,497. Investment securities available-for-sale and not pledged totaled $13,740,772, for a total of 8.9% of total assets, which management believe is adequate to meet short-term liquidity needs. Management also has alternative sources of funding available, including lines of credit, purchases of federal funds, term loans through the Federal Home Loan Bank and correspondent banks.

Off-Balance Sheet Arrangements

In the normal course of business there are outstanding commitments for the extension of credit which are not reflected in the financial statements. At June 30, 2008 and December 31, 2007, pre-approved but unused lines of credit for loans totaled approximately $96.9 million and $138.6 million, respectively. In addition, we had approximately $8.9 million in financial and performance standby letters of credit at June 30, 2008 and December 31, 2007, respectively. These commitments represent no more than the normal lending risk that we commit to borrowers. If these commitments are drawn, we will obtain collateral if it is deemed necessary based on our credit evaluation of the counterparty.

18

Capital Adequacy

The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Management reviews the adequacy of the Company’s capital on an ongoing basis with reference to the size, composition, and quality of the Company’s resources and compliance with regulatory requirements and industry standards. Management seeks to maintain a capital structure that will assure an adequate level of capital to support anticipated asset growth and absorb potential losses.

Federal regulatory risk-based capital ratio guidelines require percentages to be applied to various assets including off-balance sheet assets in relation to their perceived risk. Tier 1 capital consists of stockholders’ equity and minority interests in consolidated subsidiaries, less net unrealized gains on available-for-sale securities. Tier 2 capital, a component of total capital, consists of a portion of the allowance for loan losses, certain components of nonpermanent preferred stock and subordinated debt. The $5 million in trust preferred securities issued by the Company in September 2006 qualified as Tier 1 capital. First Capital Bank’s ratios exceed regulatory requirements. As of June 30, 2008 First Capital Bank had a Tier 1 risk-based capital ratio of 9.47% and a Total risk-based capital ratio of 10.92%. At December 31, 2007 these ratios were 10.13% and 12.01%, respectively.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

N/A

ITEM 4. CONTROLS AND PROCEDURES

We maintain a system of internal controls and procedures designed to provide reasonable assurance as to the reliability of our published financial statements and other disclosures included in this report. Within the 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in periodic SEC filings. There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date the Company carries out its evaluation.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings – None to report

Item 1A. Risk Factors – Not Applicable

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds – Not Applicable

Item 3. Defaults Upon Senior Securities – Not Applicable

Item 4. Submission of Matters to a Vote of Security Holders

19

The Company held its 2008 Annual Meeting of Stockholders on Wednesday, May 21, 2008 at 10:00 a.m. at the Comfort Suites, 4051 Innslake Drive, Glen Allen, Virginia.

There were 2,214,042 shares represented in person or by proxy at the meeting, which represented 74.5% of the outstanding shares. There was a quorum for all purposes.

The shareholders were asked to vote on the election of four directors of the Company to serve until the 2011 Annual Meeting of Stockholders and to ratify the appointment of Cherry, Bekaert & Holland, L.L.P. as the independent registered public accountant for the Company for the year ended December 31, 2008.

The votes cast for or withheld for the election of directors were as follows:

	For	Withheld
Gerald Blake	2,192,939	21,103
Dr. Kamlesh N. Dave	2,122,361	91,681
Grant S. Grayson	2,199,339	14,703
Gerald H. Yospin	2,192,164	21,878

The votes cast to ratify the appointment of Cherry, Bekaert & Holland, L.L.P. as the independent registered public accountant were as follows:

For	Withheld
2,196,880	17,162

Item 5. Other Information – None to report

Item 6. Exhibits

Exhibit No.	Description of Exhibit
3.1	Articles of Incorporation of First Capital Bancorp, Inc.(1)
3.2	Bylaws of First Capital Bancorp, Inc.(1)
31.1	Certification of Robert G. Watts, Jr. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated August 14, 2008.
31.2	Certification of William W. Ranson Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated August 14, 2008.
32	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated August 14, 2008.

⁽¹⁾ Expressly incorporated by reference from the Company’s Report on Form 10-QSB filed with the Securities and Exchange Commission on November 13, 2006. The Exhibit number set forth above corresponds to the exhibit number in such Form 10-QSB.

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SIGNATURES

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 thereunto duly authorized.

First Capital Bancorp, Inc.

Date: August 14, 2008	By:	/s/ Robert G. Watts, Jr.
		Robert G. Watts, Jr.
		President and Chief Executive Officer
	By:	/s/ William W. Ranson
		William W. Ranson
		Chief Financial Officer, Treasurer and Secretary

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Index of Exhibits

Exhibit No.	Description of Exhibit
3.1	Articles of Incorporation of First Capital Bancorp, Inc.(1)
3.2	Bylaws of First Capital Bancorp, Inc.(1)
31.1	Certification of Robert G. Watts, Jr. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated August 14, 2008.
31.2	Certification of William W. Ranson Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated August 14, 2008.
32	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated August 14, 2008.

⁽¹⁾ Expressly incorporated by reference from the Company’s Report on Form 10-QSB filed with the Securities and Exchange Commission on November 13, 2006. The Exhibit number set forth above corresponds to the exhibit number in such Form 10-QSB.

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