Back to GetFilings.com

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 2003

Commission file number 005-62335

Hampton Roads Bankshares, Inc.

(Exact name of registrant as specified in its charter)

201 Volvo Parkway, Chesapeake, Virginia 23320

(Address of principal executive offices)

Registrant’s telephone number, including area code (757) 436-1000

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, Par Value $.625 per share

(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days    Yes  x    No  ¨.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is an accelerated filer.    Yes  ¨    No  x

The aggregate market value of the 6,829,231 shares held by non-affiliates as of June 30, 2003 based on the last sales price of $9.50 as recorded by the Bank of Hampton Roads (Transfer Agent) was $64,877,695.

The number of shares outstanding of the issuer’s common stock as of March 1, 2004 was 7,914,912 shares of its $0.625 par value Common Stock.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report for the year ended December 31, 2003 are incorporated by reference into Part II, which Annual Report is filed herewith as Exhibit 13.

Portions of the proxy statement for the annual shareholders’ meeting to be held April 27, 2004 are incorporated by reference into Part III.

Table of Contents

Hampton Roads, Bankshares, Inc.

Form 10-K Annual Report

For the Year Ended December 31, 2003

Table of Contents

2

Table of Contents

PART 1

ITEM 1 - DESCRIPTION OF BUSINESS

A. General Development of Business:

Hampton Roads Bankshares, Inc., a Virginia corporation (the Company), was incorporated under the laws of the Commonwealth of Virginia on February 28, 2001, primarily to serve as a holding company for Bank of Hampton Roads (the Bank). On July 1, 2001, all Bank of Hampton Roads common stock, $0.625 par value, was converted to the common stock, $0.625 par value, of Hampton Roads Bankshares, Inc. on a share for share exchange basis, making the Bank a wholly owned subsidiary of the Company. This reorganization was accounted for in a manner similar to a pooling of interests. Accordingly, the prior period consolidated financial statements of the Company are identical to the prior period consolidated financial statements of the Bank.

The Bank is a Virginia state-chartered commercial bank with 15 full service offices in the Hampton Roads region of southeastern Virginia. The Bank was organized in March 1987 and commenced operations in December 1987. The Bank’s principal executive office is located at 201 Volvo Parkway, Chesapeake, Virginia 23320 and its telephone number is (757) 436-1000.

On January 31, 2003, the Northwest branch, located at 4507 Relay Road, Chesapeake, VA 23322, was closed and accounts at that branch were transferred to the nearby Moyock branch, reducing the branch locations to 15 offices.

B. Financial Information about Industry Segments:

The Company does not participate in any industry segments outside of the financial services industry.

C. Narrative Description of Business:

Principal Products or Services:

The Company, through the Bank, engages in a general community and commercial banking business, targeting the banking needs of individuals and small to medium sized businesses in its primary service area which includes Chesapeake, Suffolk, Norfolk, and Virginia Beach, Virginia. The principal business of the Company is to attract deposits and to loan or invest those deposits on profitable terms. The Company offers all traditional loan and deposit banking services as well as newer services, such as telephone banking, internet banking, and debit cards. The Company accepts both commercial and consumer deposits. These deposits are in varied forms of both demand and time accounts including checking accounts, interest checking, money market accounts, savings accounts, certificates of deposit, and IRA accounts.

The Company is heavily involved in the construction and real estate lending market and actively extends both personal and commercial credit. Loans consist of varying terms and can be secured or unsecured. Loans to individuals are for personal, household, and family purposes. Loans to businesses are for such purposes as working capital, plant expansion, and equipment purchases. See Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Annual Report included as Exhibit 13 to this Form 10-K (Annual Report) for the breakdown of loans by classification.

3

Table of Contents

Competition:

Federal and state legislative changes have significantly increased competition among financial institutions, and current trends toward deregulation are expected to increase competition even further. In its market area, the Company operates in a competitive banking environment that includes multiple commercial banks, savings banks and credit unions. Many of these institutions have substantially greater assets and capital than the Company. In many instances, these institutions have greater lending limits than the Company. As of December 31, 2003, the Bank’s legal lending limit to one borrower was $5.56 million, unless the Bank could sell participations in such a loan to other financial institutions. Finally, the Company faces competition for deposits from short-term money market mutual funds and other corporate and government securities funds. In summary, the Company competes with many institutions which are larger in size and, therefore, can offer more products than the Company at very competitive rates. The Company believes that its pricing of products has remained competitive, but that the Company’s historical success is primarily attributable to high quality service and community involvement.

Supervision and Regulations:

The Bank

The Bank operates as a state bank subject to supervision and regulation by the Bureau of Financial Institutions of the Virginia State Corporation Commission (SCC). The Bureau of Financial Institutions regulates all areas of a Virginia state bank’s commercial banking operations, including reserves, loans, mergers, payment of dividends, establishment of branches and other aspects of operations.

Additionally, the Bank is a member of the Federal Reserve Bank (FRB) system and is subject to the regulations of the FRB. The Bank is also insured by the FDIC, which insures that member banks pay depositors to the extent provided by law in the event an insured bank is closed without adequately providing for the claims of depositors.

The earnings and growth of the banking industry are affected by the general conditions of the economy and by the fiscal and monetary policies of the federal government and its agencies, including the FRB. The Board of Governors of the FRB regulates money and credit conditions and, as a result, has a strong influence on interest rates and on general economic conditions. The effect of such policies in the future on the business and earnings of the Bank cannot be predicted with certainty.

International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001. On October 26, 2001, the USA Patriot Act of 2001 was signed into law. This act contains the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001 (the IMLAFA). The IMLAFA contains anti-money laundering measures affecting insured depository institutions, broker-dealers and certain other financial institutions. The IMLAFA requires U.S. financial institutions to adopt new policies and procedures to fight money laundering and grant the Secretary of the Treasury broad authority to establish regulations and to impose requirements and restriction on financial institutions’ operations.

The Holding Company

General. The Company is registered with the FRB as a financial holding company under the Bank Holding Company Act of 1956 (the BHCA), as amended by the Gramm-Leach-Bliley Act and is subject to ongoing regulation, supervision and examination by the FRB. The Holding Company is required to file with the FRB periodic and annual reports and other information concerning its own business operations and those of its subsidiaries. In addition, the BHCA requires a bank holding company to obtain FRB approval before it

4

Table of Contents

acquires, directly or indirectly, ownership or control of any voting shares of a second or subsequent bank if, after such acquisition, it would own or control more that 5% of such shares, unless it already owns or controls a majority of such voting shares. FRB approval must also be obtained before a bank holding company acquires all or substantially all of the assets of another bank or merges or consolidates with another bank holding company.

A bank holding company may not, without providing prior notice to the FRB, purchase or redeem its own stock if the gross consideration to be paid, when added to the net consideration paid by the company for all purchases or redemptions by the company if its equity securities within the preceding 12 months, will equal 10% or more of the company’s consolidated net worth unless it meets the requirements of a well-capitalized and well-managed organization.

Under certain amendments to the Virginia Financial Institutions Holding Company Act that became effective July 1, 1983, no corporation, partnership or other business entity may acquire, or make any public offer to acquire, more than 5% of the stock of any Virginia financial institution, or any Virginia financial institution holding company, unless it first files an application with the SCC. The SCC is directed by the statute to solicit the views of the affected financial institution, or financial institution holding company, with respect to such stock acquisition, and is empowered to conduct an investigation during the 60 days following receipt of such an application. If the SCC takes no action within the prescribed period, or if during the prescribed period it issues notice of its intent not to disapprove an application, the acquisition may be completed.

Sarbanes-Oxley Act of 2002. On July 30, 2002, the Sarbanes-Oxley Act of 2002 (SOX) was signed into law. The SOX represents a comprehensive revision of laws affecting corporate governance, accounting obligations and corporate reporting. The SOX is applicable to all companies with equity or debt securities registered under the Securities Exchange Act of 1934. In particular, the SOX establishes: (1) new requirements for audit committees, including independence, expertise, and responsibilities; (2) additional responsibilities regarding financial statements for the Chief Executive Officer and Chief Financial Officer of the reporting company; (3) new standards for auditors and regulation of audits; (4) increased disclosure and reporting obligations for the reporting company and their directors and executive officers; and (5) new increased civil and criminal penalties for violation of the securities laws.

Financial Holding Companies. Effective March 11, 2000, pursuant to authority granted under the Gramm-Leach-Bliley Act, a bank holding company may elect to become a financial holding company and thereby engage in a broader range of financial and other activities than are permissible for traditional bank holding companies. In order to qualify for the election, all of the depository institution subsidiaries of the bank holding company must be well-capitalized and well-managed, as defined by regulation, and all of its depository institution subsidiaries must have achieved a rating of satisfactory or better with respect to meeting community credit needs.

Pursuant to the Gramm-Leach-Bliley Act, financial holding companies are permitted to engage in activities that are “financial in nature” or incidental or complementary thereto, as determined by the FRB. The Gramm-Leach-Bliley Act identifies several activities as “financial in nature,” including, among others, insurance underwriting and agency, investment advisory services, merchant banking and underwriting, and dealing or making a market in securities. Being designated a financial holding company allows insurance companies, securities brokers and other types of financial companies to affiliate with and/or acquire depository institutions. To preserve the flexibility afforded by this new legislation, the Holding Company became a financial holding company on December 1, 2001.

5

Table of Contents

Employees:

The Company, as of December 31, 2003, employed 154 people, of whom 146 were full time employees, including the Bank’s President and nine Senior Vice Presidents.

Acquisitions:

There have been no acquisitions in the three years ended December 31, 2003.

Other:

The Company has no patents, trademarks, licenses, franchises or other concessions which are considered to be material to the operation of the business. The Company’s logo is a United States registered servicemark.

The Company has not invested any funds during the past year which would be considered material for research activities relating to the development of services or improvements to existing services.

No significant part of its business is dependent upon a single customer or a base of a few customers. The loss of any one customer would not have a material adverse effect on the Company’s business.

The business of the Company is not considered seasonal in nature.

There has been no public announcement of programs regarding new services to be offered.

D. Financial Information About Geographic Areas:

The Company is a community bank with no foreign operations.

E. Available Information

In addition to the filings required by the FRB as discussed above, the Holding Company is required to make certain periodic filings with the Securities and Exchange Commission (SEC) as well as file certain reports on the occurrence of certain material events specified in the Exchange Act. The Holding Company is required to file quarterly and annual reports with the SEC under Section 13 of the Exchange Act, furnish annual reports to shareholders prior to the annual meetings of shareholders, and send proxy statements to shareholders prior to any shareholders’ meeting, all of which must comply with the provisions of the Exchange Act. In addition, directors, officers and certain shareholders must make detailed disclosures under the Exchange Act regarding their ownership of Holding Company Common Stock.

Any materials the Company files with the SEC are available to be read and copied by the public at the SEC’s Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet site that contains reports, proxy information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.

ITEM 2 - PROPERTIES

The Company’s main office is located at 201 Volvo Parkway, Chesapeake, Virginia 23320. In addition to the main office location, the Bank owns eight other branch offices: four in the City of Chesapeake, one in the City of Norfolk, one in the City of Suffolk, and two in the City of Virginia Beach. The Bank leases the land

6

Table of Contents

and/or buildings in which its remaining six branches and its loan processing department are located. For additional information about leased properties, see Footnote No. 4 in the Notes to Financial Statements included in the Annual Report which is filed as Exhibit 13.

ITEM 3 - LEGAL PROCEEDINGS

There are no material legal proceedings in which the Company is involved at the present time.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of shareholders during the fourth quarter of 2003.

PART II

ITEM 5 - MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

A. Market Information

On April 30, 2002, the Company’s common stock began trading on the Over-the-Counter Bulletin Board (OTCBB), which is operated by the NASDAQ Stock Market. The Company’s symbol on OTCBB is “HMPR.” Prior to listing the Company’s stock on the OTCBB, trading of the Company’s common stock was limited to isolated private transactions and could not be characterized as amounting to an established public trading market. The Bank acts as the Company’s transfer agent. To the best knowledge of management, the price ranges for stock trades that did take place during 2003 and 2002 are listed below. For periods since the common stock has been listed on the OTCBB, the information set forth below reflects inter-dealer prices without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions.

Stock transfers made subsequent to December 31, 2003 through March 1, 2004, for which management had information regarding price paid per share were as follows: 74,576 shares were traded at an average price per share of $11.78. The highest price paid per share during this period was $12.25 and the low price was $11.35.

B. Holders of Stock

As of March 1, 2004, there were 7,914,912 shares of common stock outstanding, held by 4,200 shareholders of record.

7

Table of Contents

C. Dividends

A $0.15 per share dividend was declared on January 13, 2004, payable on March 15, 2004 to shareholders of record as of February 14, 2004. A $0.15 per share dividend was declared on July 8, 2003, payable on September 15, 2003 to shareholders of record as of August 15, 2003. A $0.27 per share dividend was declared on January 14, 2003, payable on March 15, 2003 to shareholders of record as of February 15, 2003. On February 26, 2002, the Company’s Board declared a $0.26 per share dividend payable on April 15, 2002 to shareholders of record on March 15, 2002. The Company expects to continue its policy of paying regular cash dividends, although there is no assurance as to future dividends because they depend on future earnings, capital requirements, and financial condition.

Bank regulatory agencies place certain restrictions on dividends paid to the Company by the Bank, which in turn limit the ability of the Company to pay dividends to its shareholders. The amount of dividends the Bank may pay to the Company, without prior regulatory approval, is limited to current year earnings plus retained net profits for the two preceding years. At December 31, 2003, the amount available was approximately $2.2 million.

D. Securities Authorized for Issuance Under Equity Compensation Plans

A summary of the information related to the Company’s existing equity compensation plans as of December 31, 2003, is given below:

E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

In December 2001, the Company implemented a Stock Repurchase Program, where the Company offered to buy back up to 375,000 shares of its common stock at a price of $8.00 per share during the time frame of December 17, 2001 to February 14, 2002. At the end of the repurchase period, 64,918 shares had been tendered to the Company pursuant to the Program.

8

Table of Contents

During 2003, the Company repurchased a total of 71,549 shares of its common stock in open market and privately negotiated transactions. Detail for these transactions conducted during the last quarter of 2003 appear below.

ITEM 6 - SELECTED FINANCIAL DATA

Selected Financial Data on page 4 of the Annual Report for the year ended December 31, 2003 is incorporated herein by reference.

ITEM 7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations on pages 5 through 17 of the Annual Report for the year ended December 31, 2003 is incorporated herein by reference.

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information on the Quantitative and Qualitative Disclosures About Market Risk included in the Interest Rate Sensitivity section on pages 15 and 16 of the Annual Report for the year ended December 31, 2003 is incorporated herein by reference.

9

Table of Contents

The following tables set forth the amounts of interest earning assets and interest bearing liabilities outstanding at December 31, 2003 and 2002 that are subject to re-pricing or that mature in each of the future time periods shown. Loans and securities with call or balloon provisions are included in the period in which they balloon or may first be called. Except as stated above, the amount of assets and liabilities shown that re-price or mature during a particular period were determined in accordance with the contractual terms of the asset or liability.

Interest Sensitivity Analysis

December 31, 2003

10

Table of Contents

Interest Sensitivity Analysis

December 31, 2002

11

Table of Contents

The following tables provide information about the Company’s financial instruments that are sensitive to changes in interest rates as of December 31, 2003 and 2002, based on maturity dates. The Company had no derivative financial instruments, foreign currency exposure, or trading portfolio as of December 31, 2003 or 2002.

On-Balance Sheet Financial Instruments

December 31, 2003

Principle Amount Maturing or Re-pricing in:

12

Table of Contents

On-Balance Sheet Financial Instruments

December 31, 2002

Principle Amount Maturing or Re-pricing in:

13

Table of Contents

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following consolidated financial statements of the Company and the Independent Auditors’ Reports set forth on pages 18 through 37 of the Annual Report for the year ended December 31, 2003 are incorporated herein by reference or as noted and included as part of this form 10-K.

All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There were no changes in or disagreements with accountants on accounting and financial disclosures during 2003.

ITEM 9A - CONTROLS AND PROCEDURES

14

Table of Contents

PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information concerning the Directors and Executive Officers in the proxy statement for the annual shareholders meeting to be held April 27, 2004, filed on March 15, 2004, is incorporated herein by reference.

ITEM 11 - EXECUTIVE COMPENSATION

Information concerning executive compensation in the proxy statement for the annual shareholders meeting to be held April 27, 2004, filed on March 15, 2004, is incorporated herein by reference.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

Information concerning security ownership of certain beneficial owners and management and related shareholder matters in the proxy statement for the annual shareholders meeting to be held April 27, 2004, filed on March 15, 2004, is incorporated herein by reference.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information concerning certain relationships and related transactions in the proxy statement for the annual shareholders meeting to be held April 27, 2004, filed on March 15, 2004, is incorporated herein by reference.

ITEM 14 – PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information concerning principal accountant fees and services in the proxy statement for the annual shareholders meeting to be held April 27, 2004, filed on March 15, 2004, is incorporated herein by reference.

PART IV

ITEM 15 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

15

Table of Contents

Form 8-K related to third quarter 2003 earnings was filed on October 14, 2003.

The exhibits listed on the accompanying Exhibit Index are filed or incorporated by reference as part of this Form 10-K and such Exhibit Index is incorporated herein by reference.

Not applicable.

16

Table of Contents

SIGNATURES

In accordance with Section 13 or 15(d) 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.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

17

Table of Contents

Exhibit Index

Hampton Roads Bankshares, Inc.

Exhibit 2 - Agreement and Plan of Reorganization

The Agreement and Plan of Reorganization dated March 13, 2001 between the Company and Bank of Hampton Roads filed with the Company’s Form 8-K dated July 2, 2001, is incorporated herein by reference.

Exhibit 3 - Articles of Incorporation and Bylaws

The Articles of Incorporation and Bylaws of Hampton Roads Bankshares, Inc. filed with the Company’s Form 8-K dated July 2, 2001, are incorporated herein by reference.

Exhibit 3.1 - Amended Bylaws

The Bylaws of Hampton Roads Bankshares, Inc. as amended, filed with the 2002 Form 10-K dated March 25, 2003, are incorporated herein by reference.

Exhibit 3.2 - Amended Bylaws

The Bylaws of Bank of Hampton Roads as amended, filed with the 2002 Form 10-K dated March 25, 2003, are incorporated herein by reference.

Exhibit 10 - Material Contracts

The two employment contracts, filed as Exhibit 7 of the F-1 Statement dated March 28, 1988, are incorporated herein by reference.

Exhibit 10.1 - 10.4 - Employment Agreements with Bank Officers

The Employment Agreements with Bank Officers, filed with the 1993 Form 10-K dated March 31, 1994, are incorporated herein by reference.

Exhibit 10.5 - Supplemental Retirement Agreement

The Supplemental Retirement Agreement, filed with the 1993 Form 10-K dated March 31, 1994, is incorporated herein by reference.

Exhibit 10.6 - Non-Qualified Limited Stock Option Plan for Directors and Employees

The Non-Qualified Limited Stock Option Plan for Directors and Employees, filed with the 1993 Form 10-K dated March 31, 1994, is incorporated herein by reference.

The Agreement and Plan of Share Exchange with Coastal Virginia Bank, filed with the 1993 Form 10-K dated March 31, 1994, is incorporated herein by reference.

18

Table of Contents

Exhibit 10.8 - Purchase and Assumption Agreement with the Federal Deposit Insurance Corporation

The Purchase and Assumption Agreement with the Federal Deposit Insurance Corporation, filed with the 1993 Form 10-K dated March 31, 1994, is incorporated herein by reference.

Exhibit 10.9 - Non-Qualified Stock Option Plan

The Non-Qualified Stock Option Plan, filed with the 1993 Form 10-K dated March 31, 1994, is incorporated herein by reference.

Exhibit 10.10-10.13 - Employment Agreements with Bank Officers and Amendments to Employment Agreements with Bank Officers

Employment Agreements with Bank Officers and Amendments to Employment Agreements with Bank Officers entered into in 1996, filed with the 1996 Form 10-KSB dated March 31, 1997, are incorporated herein by reference.

Exhibit 10.14-10.15 - Employment Agreements with Bank Officers

Employment Agreements with Bank Officers entered into in 1999, filed with the 1999 Form 10-K dated March 27, 2000, are incorporated herein by reference.

Exhibit 10.16 - Tender Offer Agreement

The Tender Offer to purchase the Company’s Common Stock dated December 17, 2001, filed with the Company’s Schedule TO-1, filed December 14, 2001, as amended, is incorporated herein by reference.

Exhibit 10.17 - Dividend Reinvestment and Stock Purchase Plan

The Dividend Reinvestment and Stock Purchase Plan dated March 14, 2002 filed with the Company’s Form S-3 dated March 14, 2002, is incorporated herein by reference.

Exhibit 10.18 - Employment Agreement with Bank Officer

Employment Agreement with Bank Officer entered into in 2001, filed with the 2001 Form 10-K dated March 22, 2002, is incorporated herein by reference.

Exhibit 10.19-10.21 - Employment Agreement with Bank Officer and Amendment to Employment Agreement with Bank Officer

Employment Agreement with Bank Officer and Amendment to Employment Agreement with Bank Officer entered into in 2002, filed with the 2002 Form 10-K dated March 25, 2003, are incorporated herein by reference.

Exhibit 10.22-10.29 – Employment Agreement with Bank Officer and Amendments to Employment Agreements with Bank Officers

Employment Agreement with Bank Officer and Amendments to Employment Agreements with Bank Officers entered into in 2003 are attached as a part of this Form 10-K.

19

Table of Contents

Exhibit 13 - Annual Report to Security Holders

The Annual Report for the year ended December 31, 2003, except to the extent incorporated herein by reference, is being furnished for informational purposes only and is not deemed to be filed as part of the Report on Form 10-K.

Exhibit 21 - Subsidiaries of the Registrant

Bank of Hampton Roads, a Virginia corporation, is a wholly owned subsidiary of Hampton Roads Bankshares, Inc.

Hampton Roads Bankshares, Inc. owns a 10% interest in Tidewater Home Funding, LLC which was organized in Virginia.

Exhibit 23.1 - Consent of Experts

Consent of KPMG LLP is attached as part of this Form 10-K.

Exhibit 31.1 - Certification (under Section 302) of Chief Financial Officer

Exhibit 31.2 - Certification (under Section 302) of Chief Financial Officer

Exhibit 32 - Certification under Section 906 of the Sarbanes-Oxley Act of 2002

20