<PAGE>

                                                                    Exhibit 4.20

                    CAPITAL SECURITIES SUBSCRIPTION AGREEMENT

                                October 16, 2002

     THIS CAPITAL SECURITIES SUBSCRIPTION AGREEMENT (this "Subscription
Agreement") is made among Resource Capital Trust III, a statutory trust created
under the laws of the State of Delaware (the "Trust"), Resource Bankshares
Corporation (the "Company" and, collectively with the Trust, the "Offerors") and
TPref Funding II, Ltd., a newly formed exempted company with limited liability
established under the laws of the Cayman Islands (the "Purchaser").

                                    RECITALS:

     A. The Trust desires to issue $3,000,000 of its Floating Rate TP Securities
(the "Capital Securities"), with a liquidation amount of $1,000 per Capital
Security, representing undivided beneficial interests in the assets of the Trust
(the "Offering"), to be issued pursuant to an Amended and Restated Declaration
of Trust (the "Declaration"), by the Company, as Sponsor, Wells Fargo Bank,
National Association, as Institutional Trustee and Wells Fargo Delaware Trust
Company, as Delaware Trustee, the Administrators named therein, and the holders,
from time to time, of the Capital Securities, which Capital Securities are to be
guaranteed by the Company with respect to distributions and payments upon
liquidation, redemption and otherwise to the extent provided in and pursuant to
the terms of a Guarantee Agreement between the Company and Wells Fargo Bank,
National Association as Guarantee Trustee (the "Guarantee"); and

     B. The proceeds from the sale of the Capital Securities will be combined
with the proceeds from the sale of the Common Securities by the Trust to the
Company and will be used by the Trust to purchase an equivalent aggregate
principal amount of Floating Rate Junior Subordinated Debentures due November 7,
2032 of the Company (the "Debentures"), to be issued by the Company pursuant to
an Indenture to be executed by the Company, as Issuer, and Wells Fargo Bank,
National Association, as Debenture Trustee (the "Indenture"); and

     C. The Purchaser intends to complete an offering of its notes (the "CBO
Offering") on or about October 29, 2002 or such other business day as may be
agreed upon (the "Closing Date") by the Offerors and the placement agent
("Placement Agent") identified in the Placement Agreement and to use the
proceeds of the CBO Offering to, among other things, acquire the Capital
Securities from the Trust and other subordinated debt and capital securities in
a quantity and with other particular characteristics, in the aggregate,
sufficient to permit the successful completion of the CBO Offering; and

     D. In consideration of the premises and the mutual representations and
covenants hereinafter set forth, the parties hereto agree as follows:

                                   ARTICLE I

                     PURCHASE AND SALE OF CAPITAL SECURITIES

     1.1. Upon the execution of this Subscription Agreement, subject to the
conditions precedent set forth in Section 1.5, the Purchaser hereby agrees to
purchase from the Trust 3,000 Capital Securities at a price equal to $1,000 per
Capital Security (the "Purchase Price") and the Trust agrees to sell such number
of Capital Securities with a liquidation amount of $1,000 per Capital Security
to the Purchaser for the Purchase Price. The rights and preferences of the

<PAGE>

Capital Securities will be set forth in the Declaration in form and substance
reasonably acceptable to the Purchaser. The Purchase Price is payable by the
Purchaser on the Closing Date in immediately available funds to the account
designated by Wells Fargo Bank, National Association.

     1.2.   The certificate for the Capital Securities shall be delivered in
definitive form by the Trust on the Closing Date to the Purchaser or its
designee, and shall be registered in the name of the Purchaser and shall
represent the aggregate liquidation amount of the Capital Securities being
purchased by the Purchaser.

     1.2.1. The Purchaser acknowledges and the Offerors agree that they will not
register any transfer of the Capital Securities not made in accordance with
Regulation S, pursuant to registration under the Securities Act of 1933, as
amended (the "Securities Act"), or pursuant to an available exemption from
registration.

     1.3.   The Placement Agreement, dated October 16, 2002 (the "Placement
Agreement"), among the Offerors and the Placement Agent identified therein
includes certain representations and warranties, covenants and conditions to
closing and certain other matters governing the issuance and sale of the Capital
Securities by the Trust to the Purchaser. Each of the provisions of the
Placement Agreement, including the definitions therein, are hereby incorporated
by reference into this Subscription Agreement. In addition, to the extent
provided for in the Placement Agreement, the Purchaser shall be entitled to the
benefits of the Placement Agreement and shall be entitled to enforce such
obligations of the Offerors under the Placement Agreement as fully as if the
Purchaser were a party to such Placement Agreement, it being agreed between the
parties that any and all representations made by the Offerors to the Placement
Agent in the Placement Agreement shall be deemed to have also been made to the
Purchaser.

     1.4.   If any condition specified herein or in the Placement Agreement
shall not have been fulfilled when and as required to be fulfilled by, on behalf
of or in respect of the Offerors or the Capital Securities, this Subscription
Agreement may be terminated by the Purchaser by notice to the Offerors at any
time at or prior to the Closing Date, and such termination shall be without
liability of any party to any other party except that Section 4, 8 and 16 of the
Placement Agreement shall survive any such termination and remain in full force
and effect.

     1.5.   If the CBO Offering is not successfully completed for any reason,
including, without limitation, as a result of the inability of the Purchaser to
acquire sufficient subordinated debt and capital securities from the Trust and
other issuers and sellers in a quantity and with other particular
characteristics, in the aggregate, sufficient to satisfy rating agency criteria
with respect to expected ratings on the notes to be issued by the Purchaser and
other criteria deemed necessary or advisable by the Purchaser, all obligations
of the Purchaser hereunder shall terminate and be extinguished.

     1.6.   Notwithstanding any other provision of this Subscription Agreement,
the obligations of the Purchaser hereunder are limited recourse obligations of
the Purchaser, payable solely from the proceeds of the CBO Offering, and if the
CBO Offering is not completed or the

                                       2

<PAGE>

proceeds of the CBO Offering are insufficient to satisfy the obligations of the
Purchaser, any claims hereunder shall be extinguished. The Trust, Wells Fargo
Bank, National Association (on behalf of the Trust) and the Company further
agree (i) not to take any action in respect of any claims hereunder against any
subscriber, officer, director, employee or administrator of the Purchaser and
(ii) not to institute against the Purchaser any insolvency, bankruptcy,
reorganization, liquidation or similar proceedings in any jurisdiction until one
year and one day or, if longer, the applicable preference period then in effect,
shall have elapsed since the final payments to the holders of the notes issued
by the Purchaser in connection with the CBO Offering.

                                   ARTICLE II

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

     2.1.   The Purchaser understands and acknowledges that none of the Capital
Securities, the Debentures or the Guarantee have been registered under the
Securities Act, or any other applicable securities laws, and are being offered
for sale by the Trust in a transaction not requiring registration under the
Securities Act, and the Capital Securities may not be offered, sold, pledged or
otherwise transferred by the Purchaser except in compliance with the
registration requirements of the Securities Act, or any other applicable
securities laws, pursuant to an exemption therefrom or in a transaction not
subject thereto.

     2.1.1. The Purchaser represents and warrants and certifies that it is not a
"U.S. person" (as such term is defined in Rule 902 under the Securities Act),
that it is not acquiring the securities for the account or benefit of any U.S.
person, and that the offer and sale of Capital Securities to the Purchaser
constitutes an "offshore transaction" under Regulation S under the Securities
Act.

     2.2.   The Purchaser represents and warrants that it is purchasing the
Capital Securities for its own account, for investment and not with a view to,
or for offer or sale in connection with, any distribution thereof in violation
of the Securities Act or other applicable securities laws, subject to any
requirement of law that the disposition of its property be at all times within
its control and subject to its ability to resell such Capital Securities
pursuant to an effective registration statement under the Securities Act or
under Rule 144A under the Securities Act or any other exemption from
registration available under the Securities Act, and the Purchaser agrees to the
legends and transfer restrictions applicable to the Capital Securities contained
in the Declaration.

     2.2.1. The Purchaser represents and warrants that until one year after the
Closing Date, it will not offer, sell, pledge or otherwise transfer the Capital
Securities within the United States or to, or for the account or benefit of, any
U.S. Person (as defined in Regulation S under the Securities Act).

     2.2.2. The Purchaser represents and warrants that it will not engage in
hedging transactions with regard to the Capital Securities unless in compliance
with the Securities Act.

                                       3

<PAGE>

     2.3.   The Purchaser has full power and authority to execute and deliver
this Subscription Agreement, to make the representations and warranties
specified herein, and to consummate the transactions contemplated herein and it
has full right and power to subscribe for the Capital Securities and perform its
obligations pursuant to this Subscription Agreement.

     2.4.   The Purchaser, a Cayman Islands company whose business includes the
issuance of certain notes and acquiring the Capital Securities and other similar
securities, has had the opportunity to ask questions of, and receive answers and
request additional information from, the Offerors and is aware that it may be
required to bear the economic risk of an investment in the Capital Securities.

     2.5.   No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any governmental body, agency or court
having jurisdiction over the Purchaser, other than those that have been made or
obtained, is necessary or required for the performance by the Purchaser of its
obligations under this Subscription Agreement or to consummate the transactions
contemplated herein.

     2.6.   This Subscription Agreement has been duly authorized, executed and
delivered by the Purchaser.

     2.7.   The Purchaser is not in violation of or default under any term of
its Memorandum of Association or Articles of Association, of any provision of
any mortgage, indenture, contract, agreement, instrument or contract to which it
is a party or by which it is bound or of any judgment, decree, order, writ or,
to its knowledge, any statute, rule or regulation applicable to the Purchaser
which would prevent the Purchaser from performing any material obligation set
forth in this Subscription Agreement. The execution, delivery and performance of
and compliance with this Subscription Agreement, and the consummation of the
transactions contemplated herein, will not, with or without the passage of time
or giving of notice, result in any such material violation, or be in conflict
with or constitute a default under any such term, or the suspension, revocation,
impairment, forfeiture or non-renewal of any permit, license, authorization or
approval applicable to the Purchaser, its business or operations or any of its
assets or properties which would prevent the Purchaser from performing any
material obligations set forth in this Subscription Agreement.

     2.8.   The Purchaser is an exempted company with limited liability duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction where it is organized, with full power and authority to perform its
obligations under this Subscription Agreement.

     2.9.   The Purchaser understands and acknowledges that the Company will
rely upon the truth and accuracy of the foregoing acknowledgments,
representations, warranties and agreements and agrees that, if any of the
acknowledgments, representations, warranties or agreements deemed to have been
made by it by its purchase of the Capital Securities are no longer accurate, it
shall promptly notify the Company.

                                       4

<PAGE>

     2.10.  The Purchaser understands that no public market exists for any of
the Capital Securities, and that it is unlikely that a public market will ever
exist for the Capital Securities.

                                   ARTICLE III

                                  MISCELLANEOUS

     3.1.   Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, international courier, or delivered by hand against written
receipt therefor, or by facsimile transmission and confirmed by telephone, to
the following addresses, or such other address as may be furnished to the other
parties as herein provided:

            To the Offerors:  Resource Bankshares Corporation
                              3720 Virginia Beach Boulevard
                              Virginia Beach, VA 23452
                              Attention: James M. Miller
                              Telephone: 757-463-2265
                              Fax: 757-431-2441

            To the Purchaser: TPref Funding II, Ltd.
                              c/o QSPV Limited
                              P.O. Box 1093 GT
                              Queensgate House
                              South Church Street
                              George Town, Grand Cayman
                              Cayman Islands
                              Attention: Directors
                              Telephone: 345-945-7099
                              Fax: 345-945-7100

     Unless otherwise expressly provided herein, notices shall be deemed to have
been given when received.

     3.2.   This Subscription Agreement shall not be changed, modified or
amended except by a writing signed by the parties to be charged.

     3.3.   Upon the execution and delivery of this Subscription Agreement by
the parties hereto, this Subscription Agreement shall become a binding
obligation of each such party with respect to the matters covered herein,
including those incorporated by reference from the Placement Agreement.

     3.4.   NOTWITHSTANDING THE PLACE WHERE THIS SUBSCRIPTION AGREEMENT MAY BE
EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT ALL THE
TERMS AND PROVISIONS HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE

                                       5

<PAGE>

STATE OF NEW YORK. EACH OF THE TRUST, PURCHASER AND THE COMPANY, ON BEHALF OF
ITSELF AND ITS SUBSIDIARIES (INCLUDING, WITHOUT LIMITATION, THE TRUST), HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK
STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY SUIT, ACTION
OR PROCEEDING RELATED TO THIS SUBSCRIPTION AGREEMENT OR ANY OF THE MATTERS
CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL
JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. EACH OF THE
TRUST, PURCHASER AND THE COMPANY, ON BEHALF OF ITSELF AND ITS SUBSIDIARIES
(INCLUDING, WITHOUT LIMITATION, THE TRUST), IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

     3.5.   The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this
Subscription Agreement.

     3.6.   This Subscription Agreement may be executed in one or more
counterparts each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.

                     Signatures appear on the following page

                                       6

<PAGE>

     IN WITNESS WHEREOF, this Subscription Agreement is agreed to and accepted
as of the day and year first written above.

                                              RESOURCE BANKSHARES CORPORATION

                                              By: ______________________________
                                                  Name:  Lawrence N. Smith
                                                  Title: Chief Executive Officer


                                              RESOURCE CAPITAL TRUST III

                                              By: ______________________________
                                                  Name:  James M. Miller
                                                  Title: Administrator

Capital Securities Subscription Agreement

                                       7

<PAGE>

     IN WITNESS WHEREOF, I have set my hand the day and year first written
above.

TPREF FUNDING II, LTD.

By:  _________________________________
Print Name:  _________________________
Title: Director

Capital Securities Subscription Agreement

                                       8