First Capital Bancorp, Inc. Reports Earnings Increase for the Second Quarter of 2008

First Capital Bancorp, Inc. Reports Earnings Increase for the Second Quarter
of 2008

GLEN ALLEN, Va., July 22 /PRNewswire-FirstCall/ -- First Capital Bancorp,
Inc. (the "Company") (Nasdaq: FCVA), the bank holding company for First
Capital Bank, announced today a 6.7% increase in earnings for the three months
ended June 30, 2008 to $386 thousand or $0.13 per diluted share, compared to
$362 thousand or $0.18 per diluted share for the same period in 2007.
Earnings for the first six months of 2008 increased 12.5% to $801 thousand or
$0.27 per diluted share, compared to earnings of $712 thousand or $0.37 per
diluted share for the same period in 2007. The decrease in diluted 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.
Total assets at June 30, 2008 were $396.5 million, up $44.6 million, or
12.7%, from total assets at December 31, 2007 and up $109.5 million, or 38.1%,
from the same period in 2007. Total loans increased $107.0 million to $335.5
million, up 46.8% from the same period in 2007. Deposits increased $69.2
million to $288.2 million, up 31.6% from the same period in 2007. Federal
Home Loan Bank advances increased $25.0 million to $50.0 million, up 100.0%
from the same period in 2007. The Company's capital position remains strong
as Stockholders Equity increased $4.0 million, up 12.7% from June 30, 2007 as
earnings over the last twelve months totaled $1.8 million and the Company
exercised an over-allotment in July 2007, increasing net worth by $2.1
million. At June 30, 2008, the Company exceeded all regulatory capital
requirements.
Net interest income increased 29.4% to $5.5 million from $4.3 million for
the six months ended June 30, 2007. This increase in net interest income is
attributable to the 46.8% growth of the loan portfolio from $228.6 million at
June 30, 2007 to $335.5 million at June 30, 2008, offset by the effects of
drastic reductions in the prime lending rate. The Federal Reserve Bank
dropped the federal funds target rate and the associated prime rate of
interest 300 basis points late in 2007 and the first quarter of 2008. An
additional 25 basis point drop occurred in the second quarter of 2008
resulting in a decrease of 325 basis points for the last twelve months. At
June 30, 2008, approximately 39.5% of the Bank's loan portfolio is tied to
this key rate. Although the vast majority of our time deposits are set to
reprice in the next six months and will continue to lower funding costs, this
rapid reduction in rates put pressure on our net interest margin during the
first and second quarter. The net interest margin for the second quarter of
2008 was 2.96%, a decline from 3.36% in the second quarter of 2007. For the
six months ended June 30, 2008, the net interest margin was 3.07% down from
3.36% for the first six months of 2007.
Noninterest expense increased $306 thousand or 17.8% for the three months
ended June 30, 2008 as compared to the same period in 2007 and $740 thousand
or 22.5% for the six months ended June 30, 2008. The majority of the increase
is attributable to the expanded branch franchise and the key additions to the
lending team. Consequently, the largest increases in noninterest expense
occurred in salaries and employee benefits of $101 thousand for the three
months ended June 30, 2008 and $322 thousand for the six months ended June 30,
2008 as compared to the comparable periods in 2007. With the addition of one
new branch in June 2008, occupancy expense has increased $26 thousand for the
quarter ended June 30, 2008 and $47 thousand for the six months ended June 30,
2008.
The Company's asset quality continues to remain strong. The Company
expensed $310 thousand in provision for loan losses from second quarter
earnings, compared to only $130 thousand in the same period of 2007. Asset
quality on the $335.5 million loan portfolio remained strong and we feel our
underwriting and client selection should differentiate our loan portfolio from
our competitors. There were no loans delinquent more than 30 days but less
than 89 days at June 30, 2008. Non-performing assets totaled $81 thousand and
represented .02% of total assets. The reserve for loan losses of $3.1 million
represents 0.93% of total loans as of June 30, 2008 up from 0.84% at December
31, 2007.
First Capital Bancorp, Inc. President and CEO, Bob Watts, noted, "While
these are clearly some of the most challenging times our industry has dealt
with in decades, we're confident it is exactly this environment that will
bring our company's strengths to the forefront. We've stuck to our knitting,
remained conservative in our underwriting and loan structures, grown through
attracting experienced lenders and known relationships, and have been
selective in the opening and geographic diversity of our new offices. We're
well capitalized with uniquely strong asset quality and operate in a market
with a proven history of stability. In addition, we have no sub-prime
mortgage exposure."
The Company currently operates seven branches in Innsbrook, Chesterfield
Towne Center, near Willow Lawn on Staples Mill Road, in Ashland, in the Forest
Office Park in Henrico County, at the James Center in downtown, Richmond, and
our newest branch in Bon Air, Chesterfield County. The Company will relocate
the Innsbrook Branch across the street to a free standing location in the
third quarter of 2008. The Company will also relocate our Forest Office Park
branch to a free standing location at 7100 Three Chopt Road in the City of
Richmond in the fourth quarter.
Readers are cautioned that this press release contains forward-looking
statements made pursuant to safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are based on
management's current knowledge, assumptions, and analyses, which it believes
are appropriate in the circumstances regarding future events, and may address
issues that involve significant risks including, but not limited to: changes
in interest rates; changes in accounting principles, policies, or guidelines;
significant changes in general economic, competitive, and business conditions;
significant changes in or additions to laws and regulatory requirements; and
significant changes in securities markets. Additionally, such aforementioned
uncertainties, assumptions, and estimates, may cause actual results to differ
materially from the anticipated results or other expectations expressed in the
forward-looking statements.
First Capital Bank ... Where People Matter.

First Capital Bancorp, Inc.
Financial Highlights
(Dollars in thousands, except per share amounts)

Balance Sheet Data:

June 30 December 31,
2008 2007

Total assets $396,462 $351,867
Loans, net 332,409 294,234
Deposits 288,221 255,108
Borrowings 70,328 58,519
Stockholders' equity 35,278 34,859
Book value per share $11.87 $11.73
Total shares outstanding 2,971,171 2,971,171

Asset Quality Ratios
Allowance for loan losses to loans 0.93% 0.84%
Nonperforming assets to assets 0.02% 0.01%

Selected Operating Data:
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007

Interest income $5,870 $4,821 $11,893 $9,324
Interest expense 3,133 2,607 6,355 5,045
Net interest income 2,737 2,214 5,538 4,279
Provision for loan
losses 310 130 635 252
Noninterest income 199 189 371 356
Noninterest expense 2,028 1,721 4,033 3,293
Income before income
tax 598 552 1,241 1,090
Income tax expense 212 190 440 378
Net income $386 $362 $801 $712
Income per share
Basic $0.13 $0.19 $0.27 $0.38
Diluted $0.13 $0.18 $0.27 $0.37

Selected Performance
Ratios:
Return on average
assets 0.40% 0.53% 0.43% 0.54%
Return on average
equity 4.39% 7.88% 8.38% 8.38%
Net interest margin 2.96% 3.36% 3.07% 3.36%
Efficiency 69.1% 71.6% 68.25% 71.04%
Equity to assets 8.90% 10.91% 8.90% 10.91%

SOURCE First Capital Bancorp, Inc.

William W. Ranson, Senior Vice President & CFO of First Capital Bancorp, Inc.,
+1-804-273-1160, wranson@1capitalbank.com