FCVA (MM)

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this report may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, predictions, expectations or beliefs about future events or results or otherwise are not statements of historical fact. Such statements are often characterized by the use of qualified words (and their derivatives) such as “expect,” “believe,” “estimate,” “plan,” “project,” “anticipate” or other statements concerning opinions or judgment of the First Capital Bancorp, Inc. (the “Company”) and its management about future events. Although the Company believes that its expectations with respect to certain forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual future results and trends may differ materially from historical results or those anticipated depending on a variety of factors, including, but not limited to, the effects of and changes in: general economic conditions, the interest rate environment, legislative and regulatory requirements, competitive pressures, new products and delivery systems, inflation, changes in the stock and bond markets, technology, and consumer spending and savings habits. The Company does not update any forward-looking statements that may be made from time to time by or on behalf of the Company.

GENERAL

The Company was organized under the laws of the Commonwealth of Virginia as a bank holding company whose activities consist of an investment in its wholly-owned subsidiary, First Capital Bank (the “Bank”). The Bank is a Virginia state-chartered bank headquartered in Glen Allen, Virginia. A member of the Federal Reserve System, it began operations in late 1998. The Bank is a community oriented financial institution that offers a full range of banking and related financial services to small and medium-sized businesses, professionals and individuals located in its market area, which encompasses western Henrico County, Ashland, western City of Richmond, Chesterfield County and the City of Petersburg. The Bank’s goal is to provide its customers with high quality, responsive and technologically advanced banking services. In addition, the Bank strives to develop personal, knowledgeable relationships with its customers, while at the same time offering products comparable to statewide regional banks located in its market area. Management believes that the marketing of customized banking services has enabled the Bank it to establish a niche in the financial services marketplace in the Richmond metropolitan area.

The operating results of the Bank depend primarily upon its net interest income, which is determined by the difference between (i) interest and dividend income on interest earning assets, which consist primarily of loans, investment securities and other investments, and (ii) interest expense on interest-bearing liabilities, which consist principally of deposits, advances from the Federal Home Loan Bank of Atlanta and junior subordinated debt. Net income is also affected by its provision for loan loss, as well as the level of its other operating income, including loan fees and service charges, and its other operating expenses, including salaries and employee benefits, occupancy expense, miscellaneous other expenses, franchise taxes and income taxes.

The Bank currently serves its customers through the following six full-service offices: the main office located at 4101 Dominion Boulevard in Glen Allen, Virginia, a branch located at 409 South Washington Highway in Ashland, Virginia, a branch located at 1580 Koger Center Boulevard in Chesterfield County, Virginia, a branch located at 1776 Staples Mill Road near the Richmond / Henrico County boundary, a branch located in Forest Office Park in Henrico County and its newest branch at 901 E. Cary Street in the James Center in Richmond, Virginia.

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The following discussion represents management’s discussion and analysis of the financial condition and results of operations for the Company as of September 30, 2007 and December 31, 2006 and for the three months and nine months ended September 30, 2007 and 2006. It should be read in conjunction with the financial statements included elsewhere herein.

SUMMARY OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

Financial Condition Summary

September 30, 2007 as Compared to December 31, 2006

Total assets increased $53.8 million for the first nine months of 2007 to $311.0 million compared with $257.2 million at December 31, 2006. The 20.9% increase in total assets during the nine months ended September 30, 2007 resulted from the growth of our business and customer base and the closing of a public offering in which the Company issued 1,172,900 shares at $15.75. The Company increased its net worth by $17.1 million due to the stock offering. Net loans increased $52.1 million to $251.9 million at September 30, 2007, an increase of 26.0% over net loans of $199.8 million at December 31, 2006. Deposits increased $29.6 million to $223.9 million or 15.2% for the first nine months of 2007. Federal Home Loan Bank (“FHLB”) advances totaled $35.0 million at September 30, 2007, an increase of $5.0 million from year end 2006. Federal funds purchased increased $1.1 million from December 31, 2006 to $7.1 million at September 30, 2007.

As of September 30, 2007 and December 31, 2006, our regulatory capital levels exceeded those established for well-capitalized institutions.

Results of Operations

Comparison of the Three Months Ended September 30, 2007 and 2006

Net income for the three months ended September 30, 2007 increased to $501 thousand, or $0.17 per diluted share compared to $404 thousand for the three months ended September 30, 2006, or $0.21 per diluted share. The increase in net income was due primarily to growth and increases in the net interest margin of the Company. In addition, the Company closed a public offering in June of 1,020,000 shares at $15.75 and closed on the underwriters’ exercise of the over-allotment option consisting of an additional 152,900 shares at $15.75 in July, resulting in increases in the net worth of the Company totaling of $17.1 million

Net interest income increased by $712 thousand, or 36.8%, from $1.9 million in the third quarter of 2006 to $2.6 million in the third quarter of 2007. This increase in net interest income is a direct result of our growth in loans and deposits. Average net loans outstanding for the three months ended September 30, 2007 increased $57.4 million over the average net loans outstanding for the quarter ended September 30, 2006. Over the same period, average deposits increased $20.9 million. During the third quarter of 2007, the financial markets experienced significant turmoil, primarily resulting from the problems in the sub prime mortgage market. The Company has no exposure to the sub prime market as it neither owns nor originates any sub prime mortgage instruments. The turmoil resulted in the Federal Reserve’s decision to lower the federal funds target rate by 50 basis points during September. Although the Company has not realized the full impact of the rate cut, it was able to benefit from lower costs in funding opportunities during the quarter. Lower funding cost opportunities, significant loan growth and the closing of the Company’s public offering in June, including the exercise of the over-allotment option in July, contributed to continued improvement in the Company’s net interest margin during the third quarter, resulting in a net interest margin of 3.73% for the three ended September 30, 2007. The net interest margin increased 41 basis points for the three months ended September 30, 2007 as compared to 3.32% for the three months ended September 30, 2006. The yield on interest earning assets increased from 6.93% for the quarter ended September 30, 2006 to 7.44% for the quarter ended September 30, 2007. The cost of interest bearing liabilities increased 37 basis points from 4.35% for the quarter ended September 30, 2006 to 4.72% for the quarter ended September 30, 2007. Cost of deposits increased from 4.39% for the quarter ended September 30, 2006 to 4.71% for the quarter ended September 30, 2007. Money market accounts had the largest increase in interest expense. Money market accounts increased 86 basis points with the introduction of the Capital Reserve Account which is tied to federal funds rate less 25 basis points.

Noninterest income was $175 thousand for the third quarter, compared to $118 thousand for the third quarter of 2006. Fees on mortgage loans originated for others were $40 thousand for the third quarter of 2007. This is a new product

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which the Company did not offer during the three months ended September 30, 2006. Fees on deposits continue to increase as deposits grow and additional services are added. Fees on deposits accordingly increased 16.3% for the quarter to $58 thousand as compared $50 thousand for the third quarter of 2006.

Noninterest expense increased $480 thousand or 34.6% for the three months ended September 30, 2007 to $1.9 million as compared to $1.4 million for the same period in 2006. The majority of the increase is attributable to the expanded branch franchise and the key additions to the lending team in the first quarter of 2007. Consequently, the largest increases in noninterest expense occurred in salaries and employee benefits of $234 thousand for the three months ended September 30, 2007 as compared to the comparable periods in 2006. With the addition of two new branches since September 30, 2006, occupancy expense increased $39 thousand for the quarter ended September 30, 2007. The Virginia capital stock tax increased 150.6% to $99 thousand for the three months ended September 30, 2007 due to the infusion of capital into the Bank.

Provision for loan losses increased from $55 thousand for the third quarter of 2006 to $186 thousand for the three months ended September 30, 2007 primarily due to volume increases. Loan quality continues to remain strong. Delinquent loans at September 30, 2007, more than 30 days but less than 89 days, totaled $162 thousand. One relationship totaling $1.1 million was more than 90 days contractually delinquent but was not on nonaccrual status. The collateral properties were under contract with a nonrefundable $100 thousand deposit held by the Company. The related sales transaction subsequently settled in October 2007 and the Company was paid-off in full. The allowance for loan losses totaled $2.2 million at September 30, 2007.

Net interest income

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

Earning assets consist primarily of loans, investment securities and other investments. Interest-bearing liabilities consist principally of deposits, FHLB advances and other borrowings. During September 2007, the Board of Governors of the Federal Reserve decreased short-term interest rates by .50% after increasing short-term rates 3.00% in twelve 25 basis point increases starting in January 1, 2005.

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.

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Results of Operations

Comparison of the Nine Months Ended September 30, 2007 and 2006

Net income for the nine months ended September 30, 2007 increased $31 thousand to $1.2 million, or $0.53 per diluted share. Net income for the nine months ended September 30, 2007 was negatively impacted by the additional costs associated with the growth of the bank which includes the opening and staffing of two new branches, one in the third quarter of 2006, and one in the first quarter of 2007, coupled with the hiring in the first quarter of 2007 of a Private Client Group Leader and a Business Banking Group Leader, both of whom have established relationships in the Richmond market.

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Net interest income increased by $1.4 million, or 24.2%, from $5.6 million for the nine months ended September 30, 2006 to $6.9 million for the same period in 2007. This increase in net interest income is a direct result of our growth in loans and deposits and the Company’s public stock offering which netted $17.1 million in cash. Average net loans outstanding for the nine months ended September 30, 2007 increased $48.9 million over the average net loans outstanding for the comparable period in 2006. Over the same period, average deposits increased $33.6 million and Trust Preferred Securities as subordinated debt increased $5.0 million. The net interest margin increased 7 basis points for the nine months ended September 30, 2007 to 3.49% as compared to 3.42% for the comparable period in 2006. The yield on interest earning assets increased from 6.77% for the nine months ended September 30, 2006 to 7.36% for the nine months ended September 30, 2007. The cost of interest bearing liabilities increased 66 basis points from 4.06% for 2006 period to 4.72% for the comparable period in 2007. Cost of deposits increased from 4.03% for the three quarters ended September 30, 2006 to 4.70% for the three quarters ended September 30, 2007. Money market accounts had the largest increase in interest expense as they increased 142 basis points with the introduction of the Bank’s Capital Reserve Account which is tied to federal funds rate less 25 basis points.

Noninterest income increased by $232 thousand, or 77.5%, from $299 thousand for the nine months ended September 30, 2006 to $531 thousand in the comparable period of 2007. This increase in noninterest income is attributable to increases in service charges and fees on deposits and loans, and fees on mortgage loans which began in the fourth quarter of 2006.

Noninterest expense increased $1.4 million, or 35.6%, from $3.8 million for the nine months ended September 30, 2006 to $5.2 million in the comparable period in 2007. This increase in noninterest expense is primarily attributable to the growth and expansion of the Company, with the addition of two new branches, staffing for those branches and the hiring of two key lending personnel in the first quarter of 2007. Accordingly, the largest increases in noninterest income occurred in salaries and employee benefits of $853 thousand, $111 thousand in occupancy and $75 thousand in Virginia capital stock tax. The increase in Virginia capital stock tax is the result of additional equity in the Bank.

The provision for loan losses increased 54.0% from $284 thousand for the first nine months of 2006 to $438 thousand for the comparable period in 2007. This increase reflects the growth of the loans outstanding at September 30, 2007 as compared to September 30, 2006.

Net interest income

Net interest income represents the Company’s 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

Earning assets consist primarily of loans, investment securities and other investments. Interest-bearing liabilities consist principally of deposits, FHLB 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.

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