# UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

# Washington, D.C. 20549

# FORM 10-QSB

|[X] | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|--- | ---------------------------------------------------------------------------------
|    | For the quarterly report ended June 30, 2004                                     

|[   ] | Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|----- | ----------------------------------------------------------------------------------
|      | For the transition period from ___________ to _____________                       

Commission file number
000-30297

First Capital Bank Holding Corporation(Exact name of registrant as specified in its charter)

|Florida                  |  | 59-3532208                          
|------------------------ |  | ------------------------------------
|(State of Incorporation) |  | (I.R.S. Employer Identification No.)

1891 South 14th StreetFernandina Beach, Florida  32034
(Address of principal executive offices)   (Zip Code)

904-321-0400(Telephone Number)

Not Applicable(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act
during the past 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

State the number of shares outstanding  of each of the  issuer's  classes of common  equity,  as of the latest
practicable  date:  1,182,200 shares of common stock,  par value $.01 per share,  were issued and outstanding as of
July 27, 2004.

Transitional Small Business Disclosure
Format (check one):   Yes    NoX

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FIRST CAPITAL BANK
HOLDING CORPORATION

PART I. FINANCIAL
INFORMATION

Item 1.   Financial Statements

| | The
financial statements of First Capital Bank Holding Corporation (the Company)
are set forth in the following pages.
| | ------------------------------------------------------------------------------------------------------------------------

2

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First Capital Bank
Holding Corporation Consolidated Balance
Sheets

|                                                            | June 30, 2004 | December 31, 2003
|----------------------------------------------------------- | ------------- | -----------------
|
|Assets                                                      |               |                  
|Cash and due from banks                                     |               |                  
|Federal funds sold                                          |               |                  
|Interest bearing deposits in other banks                    |               |                  
|                                                            |               |                  
|Cash and cash equivalents                                   |               |                  
|Investment securities available-for-sale                    |               |                  
|Investment securities held to maturity                      |               |                  
|Other investments                                           |               |                  
|Loans, net                                                  |               |                  
|Loans available-for-sale                                    |               |                  
|Premises and equipment, net                                 |               |                  
|Accrued interest receivable and other assets                |               |                  
|                                                            |               |                  
|Total assets                                                |               |                  
|                                                            |               |                  
|Liabilities and Shareholders' Equity                        |               |                  
|Deposits:                                                   |               |                  
|Non interest bearing demand                                 |               |                  
|Interest bearing demand                                     |               |                  
|Savings                                                     |               |                  
|Time                                                        |               |                  
|Time over $100,000                                          |               |                  
|                                                            |               |                  
|Total deposits                                              |               |                  
|Warehouse line of credit                                    |               |                  
|Federal Home Loan Bank advances                             |               |                  
|Accrued interest payable and other liabilities              |               |                  
|                                                            |               |                  
|Total liabilities                                           |               |                  
|                                                            |               |                  
|Commitments                                                 |               |                  
|Shareholders' equity:                                       |               |                  
|Preferred stock, par value $.01, 10,000,000 shares          |               |                  
|authorized, no shares issued and outstanding                |               |                  
|Common stock, par value $.01; 10,000,000 shares authorized; |               |                  
|1,024,700 issued and outstanding June 30, 2004              |               |                  
|1,008,000 issued and outstanding December 31, 2003          |               |                  
|Additional paid-in capital                                  |               |                  
|Retained earnings                                           |               |                  
|Accumulated other comprehensive income                      |               |                  
|                                                            |               |                  
|Total shareholders' equity                                  |               |                  
|                                                            |               |                  
|                                                            |               |                  
|                                                            |               |                  
|                                                            |               |                  

See accompanying notes to financial statements.

3

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First Capital Bank
Holding Corporation Statements of EarningsFor the Three Months and the Six Months Ended June 30, 2004 and 2003 (Unaudited)

|                                                    | Three Months Ended | Six Months Ended |  
|--------------------------------------------------- | ------------------ | ---------------- | -
|
|
|Interest income:                                    |                    |                  |  
|Interest and fees on loans                          |                    |                  | $
|Interest income on investment securities            |                    |                  |  
|Interest income on federal funds sold               |                    |                  |  
|Interest income on deposits in other banks          |                    |                  |  
|                                                    |                    |                  |  
|Total interest income                               |                    |                  |  
|                                                    |                    |                  |  
|Interest expense:                                   |                    |                 
|Interest bearing deposits                           |                    |                  |  
|Interest on FHLB borrowings                         |                    |                  |  
|Interest on other borrowings                        |                    |                  |  
|                                                    |                    |                  |  
|Total interest expense                              |                    |                  |  
|Net interest income                                 |                    |                  |  
|                                                    |                    |                  |  
|Provision for loan losses                           |                    |                  |  
|                                                    |                    |                  |  
|Net interest income after provision for loan losses |                    |                  |  
|                                                    |                    |                  |  
|Noninterest income:                                 |                    |                 
|Service charges on deposit accounts                 |                    |                  |  
|Mortgage and SBA related fees and income            |                    |                  |  
|Gain on sales of loans                              |                    |                  |  
|Gain on sales of securities                         |                    |                  |  
|Other                                               |                    |                  |  
|                                                    |                    |                  |  
|Total noninterest income                            |                    |                  |  
|                                                    |                    |                  |  
|Noninterest expense:                                |                    |                 
|Salaries and employee benefits                      |                    |                  |  
|Occupancy                                           |                    |                  |  
|Other                                               |                    |                  |  
|                                                    |                    |                  |  
|Total noninterest expense                           |                    |                  |  
|                                                    |                    |                  |  
|Net earnings before provision for income taxes      |                    |                  |  
|                                                    |                    |                  |  
|Provision for income taxes:                         |                    |                  |  
|                                                    |                    |                  |  
|Net income:                                         |                    |                  | $
|                                                    |                    |                  |  
|Earnings Per Share:                                 |                    |                 
|Basic                                               |                    |                  | $
|                                                    |                    |                  |  
|Diluted                                             |                    |                  | $
|                                                    |                    |                  |  

See
accompanying notes to financial statements.

4

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Statements of
Comprehensive Income (Loss)For the Three and Six
Months Ended June 30, 2004 and 2003 (Unaudited)

|                                             | Three Months Ended | Six Months Ended |  
|-------------------------------------------- | ------------------ | ---------------- | -
|
|
|Net earnings                                 |                    |                  | $
|                                             |                    |                  |  
|Other comprehensive income, net of tax:      |                    |                 
|Unrealized (losses) gains on investment      |                    |                 
|Securities available for sale:               |                    |                  |  
|Unrealized (losses) gains arising during the |                    |                 
|period                                       |                    |                  |  
|                                             |                    |                  |  
|Associated  (taxes) benefit                  |                    |                 
|Reclassification adjustment for gains        |                    |                  |  
|Associated taxes                             |                    |                  |  
|                                             |                    |                  |  
|Other comprehensive income (loss)            |                    |                  |  
|Comprehensive income (loss)                  |                    |                  | $
|                                             |                    |                  |  

5

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First Capital Bank
Holding Corporation

Statements of Cash Flows

For the Six Months Ended
June 30, 2004 and 2003 (Unaudited)

|                                                                      | 2004 | 2003
|--------------------------------------------------------------------- | ---- | ----
|Cash flows from operating activities:                                 |      |     
|Net income                                                            |      |     
|Adjustments to reconcile net income to net cash:                      |      |     
|Operating activities:                                                 |      |     
|Depreciation, amortization and accretion                              |      |     
|Provision for loan losses                                             |      |     
|Gain on sale of securities                                            |      |     
|Net change in loans held for sale                                     |      |     
|Change in other assets                                                |      |     
|Change in other liabilities                                           |      |     
|                                                                      |      |     
|Net cash provided (used) by operating activities                      |      |     
|                                                                      |      |     
|Cash flows from investing activities:                                 |      |     
|Proceeds from maturities, calls, and paydowns of securities available |      |     
|for sale                                                              |      |     
|Proceeds from maturities, calls, and paydowns of securities available |      |     
|for sale                                                              |      |     
|Purchase of investment securities available for sale                  |      |     
|Purchase of investment securities held to maturity                    |      |     
|Purchase (redemption) of other investments                            |      |     
|Net change in portfolio loans                                         |      |     
|Purchase of premises and equipment                                    |      |     
|                                                                      |      |     
|Net cash (used) provided by investing activities                      |      |     
|                                                                      |      |     
|Cash flows provided by financing activities                           |      |     
|Net change in deposits                                                |      |     
|Net change in repurchase agreements                                   |      |     
|Net change in warehouse line of credit                                |      |     
|Net change in Federal Home Loan Bank advances                         |      |     
|Proceeds from stock options exercised                                 |      |     
|                                                                      |      |     
|Net cash provided by financing activities                             |      |     
|                                                                      |      |     
|Net increase in cash                                                  |      |     
|Cash and cash equivalents at the beginning of the period              |      |     
|                                                                      |      |     
|Cash and cash equivalents at the end of the period                    |      |     
|                                                                      |      |     
|Supplemental cash flow information:                                   |      |     
|Interest paid                                                         |      |     
|                                                                      |      |     
|Taxes paid                                                            |      |     
|                                                                      |      |     

See
accompanying notes to financial statements.

6

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First Capital Bank
Holding Corporation Notes to Financial Statements (Unaudited)

Note 1  Critical
Accounting Policies

We
have adopted various accounting policies, which govern the application of accounting
principles generally accepted in the United States in the preparation of our financial
statements. Our significant accounting policies are described in the footnotes to the
consolidated financial statements at December 31, 2003 as filed on our annual report on
Form 10-KSB.

Certain
accounting policies involve significant judgments and assumptions by us, which have a
material impact on the carrying value of certain assets and liabilities. We consider these
accounting policies to be critical accounting policies. The judgments and assumptions we
use are based on historical experience and other factors, which we believe to be
reasonable under the circumstances. Because of the nature of the judgments and assumptions
we make, actual results could differ from these judgments and estimates which could have a
material impact on our carrying values of assets and liabilities and our results of
operations.

Many
of our assets and liabilities are recorded using various valuation techniques that require
significant judgment as to recoverability. We believe the allowance for loan losses is a
critical accounting policy that requires the most significant judgments and estimates used
in preparation of our consolidated financial statements. Refer to the portion of this
discussion that addresses our allowance for loan losses for a description of our processes
and methodology for determining our allowance for loan losses. In addition, investment
securities and mortgage loans held for sale are reflected at their estimated fair value in
the consolidated financial statements. Such amounts are based on either quoted market
prices or estimated values derived by using dealer quotes or market comparisons.

In
our opinion, all accounting adjustments necessary to accurately reflect the financial
position and results of operations on the accompanying financial statements have been
made. These adjustments are considered normal and recurring accruals are considered
necessary for a fair and accurate presentation. The results for interim periods are not
necessarily indicative of results for the full year or any other interim periods.

Stock Compensation Plans

We
have elected not to expense stock options and, as such, have provided pro forma
disclosures of net earnings and earnings per share, as if the fair value method of
accounting had been applied. Had compensation cost for the plan been determined based upon
the fair value of the options at the grant dates, our net earnings and net earnings per
share for the quarter and six months ended June 30, 2004 and 2003, would have been reduced
to the pro forma amounts indicated below:

|                           |  | Quarter Ended | Six Months Ended | 
|-------------------------- |  | ------------- | ---------------- | 
|
|
|Net earnings               |  |               | As reported      | 
|                           |  |               | Pro forma        | 
|Basic earnings per share   |  |               | As reported      | 
|                           |  |               | Pro forma        | 
|Diluted earnings per share |  |               | As reported      | 
|                           |  |               | Pro forma        | 

The
fair value of each option is estimated on the date of grant using the Minimum Value
pricing model with the following assumptions used for grants in 2004: no dividend yield; a
risk free interest rate of 4.35%; and an expected life of 10 years. The difference between
the net earnings as reported and pro forma is the expense associated with the grants,
which would have been earned in the period. In May 2004, the Board of Directors elected to
proceed with an additional employee equity incentive plan to be finalized in the third
quarter of 2004 after the completion of a third party stock valuation. The directors
approved 21,500 options to be granted at a strike price equal to fair market value, as
determined by the third party valuation. This expense was calculated based on the number
of options vested during the period multiplied by the fair value at the time of grant net
of the related tax effect.

7

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Significant accounting policies
continued

Note 2  Earnings
per share

Basic
earnings per share is based on the weighted average number of common shares outstanding
during the period while the effects of potential common shares outstanding during the
period are included in diluted earnings per share. The average market price during the
year is used to compute equivalent shares. Reconciliation of the amounts used in the
computation of both basic earnings per share and diluted earnings per
share for the quarter and the six month period ended June 30, 2004 and 2003 are as
follows:

|                                                           | For the six months ended June 30, 2004 | 
|---------------------------------------------------------- | -------------------------------------- | 
|
|
|Basic earnings per share                                   |                                        | 
|Effect of dilutive securities - Stock Options and Warrants |                                        | 
|                                                           |                                        | 
|Diluted earnings per share                                 |                                        | 
|                                                           |                                        | 

|                                                           | For the Quarter ended June 30, 2004 | 
|---------------------------------------------------------- | ----------------------------------- | 
|
|
|Basic earnings per share                                   |                                     | 
|Effect of dilutive securities - Stock Options and Warrants |                                     | 
|                                                           |                                     | 
|Diluted earnings per share                                 |                                     | 
|                                                           |                                     | 

|                                                           | For the six months ended June 30, 2003 | 
|---------------------------------------------------------- | -------------------------------------- | 
|
|
|Basic earnings per share                                   |                                        | 
|Effect of dilutive securities - Stock Options and Warrants |                                        | 
|                                                           |                                        | 
|Diluted earnings per share                                 |                                        | 
|                                                           |                                        | 

|                                                           | For the Quarter ended June 30, 2003 | 
|---------------------------------------------------------- | ----------------------------------- | 
|
|
|Basic earnings per share                                   |                                     | 
|Effect of dilutive securities - Stock Options and Warrants |                                     | 
|                                                           |                                     | 
|Diluted earnings per share                                 |                                     | 
|                                                           |                                     | 

Note 3  Sale of
Assets

On
April 16, 2004, the bank sold the assets of the wholesale mortgage division to American
Mortgage Express, a Pennsylvania corporation. As consideration, the acquiror agreed to
assume certain liabilities and continue to perform post-closing services for all loans
produced by the wholesale mortgage operations. All employees associated with the wholesale
operation were retained by the acquiror.

Note 4  Subsequent
Events

By
July 26, 2004, directors and former directors exercised 157,500 warrants for common stock
of First Capital Bank Holding Corporation. All outstanding warrants have been exercised or
allowed to expire.

8

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Item 2     Management's Discussion and Analysis of Financial Condition and Results of Operations
For the Quarters Ended and Six Month Periods Ended June 30, 2004 and 2003FORWARD-LOOKING
STATEMENTS

The
following is our discussion and analysis of certain significant factors that have affected
our financial position and operating results and those of our subsidiary, First National
Bank of Nassau County, during the periods included in the accompanying financial
statements. This commentary should be read in conjunction with the financial statements
and the related notes and the other statistical information included in this report.

This
report contains forward-looking statements relating to, without limitation,
future economic performance, plans and objectives of management for future operations, and
projections of revenues and other financial items that are based on the beliefs of
management, as well as assumptions made by and information currently available to
management. The words may, will, anticipate,
should, would, believe, contemplate,
expect, estimate, continue, may, and
intend, as well as other similar words and expressions of the future, are
intended to identify forward-looking statements. Our actual results may differ materially
from the results discussed in the forward-looking statements, and our operating
performance each quarter is subject to various risks and uncertainties that are discussed
in detail in our filings with the Securities and Exchange Commission, including, without
limitation:

| | o | significant increases in competitive pressure in the banking and financial services industries;
| | - | -----------------------------------------------------------------------------------------------

| | o | changes in the interest rate environment which could reduce anticipated or actual margins;
| | - | ------------------------------------------------------------------------------------------

| | o | changes in political conditions or the legislative or regulatory environment;
| | - | -----------------------------------------------------------------------------

| | o | general economic conditions, either nationally or regionally and especially in our primary
service area, becoming less favorable than expected resulting in, among other things, a
deterioration in credit quality;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | changes occurring in business conditions and inflation;
| | - | -------------------------------------------------------

| | o | changes in technology;
| | - | ----------------------

| | o | the level of allowance for loan loss;
| | - | -------------------------------------

| | o | the rate of delinquencies and amounts of charge-offs;
| | - | -----------------------------------------------------

| | o | the rates of loan growth;
| | - | -------------------------

| | o | adverse changes in asset quality and resulting credit risk-related losses and expenses;
| | - | ---------------------------------------------------------------------------------------

| | o | changes in monetary and tax policies;
| | - | -------------------------------------

| | o | loss of consumer confidence and economic disruptions resulting from terrorist activities;
| | - | -----------------------------------------------------------------------------------------

| | o | changes in the securities markets; and
| | - | --------------------------------------

| | o | other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission
| | - | -------------------------------------------------------------------------------------------------------------------

9

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Item 2     Management's Discussion and Analysis of Financial Condition and Results of Operations,
                continued

Overview

The
following discussion describes our results of operations for the quarter ended June 30,
2004 as compared to the quarter ended June 30, 2003 as well as results for the six months
ended June 30, 2004 and 2003, and also analyzes our financial condition as of June 30,
2004 as compared to December 31, 2003. Like most community banks, we derive most of our
income from interest we receive on our loans and investments. Our primary source of funds
for making these loans and investments is our deposits, on which we pay interest.
Consequently, one of the key measures of our success is our amount of net interest income,
or the difference between the income on our interest-earning assets, such as loans and
investments, and the expense on our interest-bearing liabilities, such as deposits.
Another key measure is the spread between the yield we earn on these interest-earning
assets and the rate we pay on our interest-bearing liabilities.

Of
course, there are risks inherent in all loans, so we maintain an allowance for loan losses
to absorb probable losses on existing loans that may become uncollectible. We establish
and maintain this allowance by charging a provision for loan losses against our operating
earnings. In the following section we have included a detailed discussion of this process.

In
addition to earning interest on our loans and investments, we earn income through fees and
other expenses we charge to our customers. We describe the various components of this
non-interest income, as well as our non-interest expense, in the following discussion.

The
following discussion and analysis also identifies significant factors that have affected
our financial position and operating results during the periods included in the
accompanying financial statements. We encourage you to read this discussion and analysis
in conjunction with the financial statements and the related notes and the other
statistical information also included in this report.

Financial Condition

As
we discussed in our annual report to shareholders and the first quarter 10QSB, in the
fourth quarter of 2003 we decided to reposition our resources. We recognized the cyclical
nature of income derived from wholesale mortgage banking activities and reflected on the
greater than two years of success in this area. However, we noted that the volume in the
industry had begun to slow significantly and volumes approached historical norms. In
response to this change, we decided to discontinue wholesale mortgage banking activities
through the sale of the assets and refocus attention to the commercial lending market. We
completed the transaction in April of 2004. We have concentrated our focus on expanding
our core banking activities and attracting quality loans in the rapidly growing markets of
Nassau County and Savannah, Georgia. We continued geographic expansion by opening a loan
production office in Jacksonville, Florida in June.

As
of June 30, 2004, we had total assets of $133.5 million, an increase of 25% when compared
to December 31, 2003. The significant factors were increases in portfolio loans of $24.0
million, or 45%, and investment securities of $11.6 million, or 44%. The increase is
indicative of our commitment to focus on core banking activities. New loan demand and
production was strong at our Fernandina location and our recently expanded loan production
office in Savannah, Georgia. As expected, the production of mortgage loans continued to be
slow. However, this decrease was partially offset by production of SBA loans held for sale
to secondary markets, which remained strong as a result of the expanded marketing efforts
from loan officers. As a result of the sale of the assets of the wholesale division,
mortgage loans held for sale were funded by investors and liquidated in the second
quarter. Mortgage loans held for sale were primarily funded through short-term bank
deposits and alternative sources such as FHLB advances and warehouse lines of credit. When
compared to December 31, 2003, deposits for the six months ended June 30, 2004 increased
$17.0 million, or 20%, warehouse line advances of $5.1 million were repaid, and FHLB
advances increased to $18.0 million from $3.0 million. No overnight bank advances or
repurchase agreements were outstanding at June 30, 2004. Repurchase agreements and
warehouse line advances are short-term borrowings and fluctuate according to loan demand.

Our
portfolio loan to deposit ratios were 78% and 57%, as of June 30, 2004 and 2003,
respectively. Our long-term target for portfolio loans to deposit ratio is 80%. We are
making a concerted effort to develop a quality portfolio loan business in the local market
and to manage the deposit growth consistent with expected loan demand.

The
deposit mix at June 30, 2004 was as follows: $11.6 million (12% of total deposits) in
noninterest bearing demand deposits; $13.2 million (13% of total deposits) in interest
checking accounts; $29.1 million (29% of total deposits) in savings accounts; and $46.9
million (46% of total deposits) in time deposits. The deposit mix remains

10

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weighted towards
higher costing time deposits. We expect this trend to continue with emphasis on time
deposits, thus increasing the average cost of funds and potentially reducing the
banks net interest margin.

At
June 30, 2004, total investment securities were $38 million, $23.6 million in securities
classified as available for sale, and $14.4 million in securities classified as held to
maturity. In the second quarter, we determined that liquidity was sufficient to support
the current operating needs and growth opportunities of the bank. As a result, purchases
of investments in the second quarter were classified as held to maturity. The current
investment portfolio strategy is primarily to provide liquidity for funding loans and
earnings enhancement. Accordingly, all investment securities are pledgeable to raise
funding through public deposits, secured borrowing, or repurchase agreements.

At
June 30, 2004, retained earnings totaled $4.5 million, including $447,000 net earnings for
the six months ended June 30, 2004.

11

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Item 2     Management's Discussion and Analysis of Financial Condition and Results of Operations,
                continued

Results of Operations

Net
income for the six months ended June 30, 2004 was $447,000, as compared to $1.1 million
for the same period in 2003. For the quarters ended June 30, 2004 and 2003, net income was
$234,000 and $642,000, respectively. The decrease in our results was due to decreases in
noninterest income generated from the sale of the assets of the wholesale mortgage
division. As anticipated, changes in the interest rate environment impacted the mortgage
refinancing market and mortgage loan volumes. Activities from our wholesale banking
operations produced a net loss of $39,000 for the period ended June 30, 2004, compared to
income of $788,000 for the same period in 2003. Net income from core banking activities
for the six month period ended June 30, 2004 was $486,000 compared to $341,000 for the
same period in 2003. The improvement in our results was due to improved net interest
income. We expect income from the growth of our core banking unit to continue to improve.
However, we will no longer generate income associated with our wholesale mortgage
activities.

Core
bank earnings for the six months ended June 30, 2004 were $485,905, compared to $341,418
for the same period in 2003, an increase of 42%. Core bank earnings exclude earnings or
loss related to our wholesale residential mortgage operations. As described above, we
discontinued our wholesale residential mortgage operations in April 2004. The residential
mortgage division was primarily a wholesale operation and the division relied heavily on
the refinancing market. During the six months ended June 30, 2004, we incurred a loss of
$38,515 related to the discontinuation of the wholesale mortgage operations, as compared
to net income during the six months ended June 30, 2003 of $787,834 related to the
operation of the wholesale mortgage division.

12

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Item 2     Management's Discussion and Analysis of Financial Condition and Results of Operations,
                continued

Net Interest Income

Net
interest income for the six months ended June 30, 2004 was $2.2 million, compared to $1.9
million for the six months ended June 30, 2003. Total interest income for the first six
months of 2004 was $3.0 million, compared to $2.8 million for the same period in 2003.
Included in interest income is interest and fees on loans totaling $2.5 million for the
six months ended June 30, 2004 and 2003. Interest income also included interest income on
investments of $543,000 and $230,000 for the six months ended June 30, 2004 and 2003,
respectively. The growth in interest income in core banking activities reflects the growth
in our core interest-earning assets. Interest income on loans as a percentage of total
interest income decreased to 82% at June 30, 2004, as compared to 91% for the same period
last year. The decrease is due to the increase in average investment securities and lower
yields in the loan portfolio. We incurred interest expense on interest bearing deposits of
$643,000 for the six months ended June 30, 2004, as compared to $801,000 for the same
period in 2003. Additionally, we recognized $145,000 and $101,000 of interest expense from
FHLB term and warehouse advances for the six months ended June 30, 2004 and 2003,
respectively.

Our
earning assets are principally floating rate while the funding sources are primarily money
market and short-term time deposits. The net interest margins as of June 30, 2004 and 2003
were 4.02% and 4.03%, respectively. Our margins have remained consistent due to the
repricing of certificates of deposit which reduced the overall cost of funds. We expect
interest margins to remain consistent or decrease slightly as our funding sources increase
our cost of funds.

The
following table details the relationship between interest income and expense and the
average balances of interest-earning assets and interest-bearing liabilities for the three
months ended June 30, 2004 and 2003.

|                             |  | 2004 |   |             | 2003 | 
|---------------------------- |  | ---- | - | ----------- | ---- | 
|
|
|
|Loans                        |  |      | $ | 79,106,695  |      | 
|Federal funds sold and       |  |     
|deposits with banks          |  |      |   | 1,954,838   |      | 
|Investments                  |  |      |   | 29,228,237  |      | 
|                             |  |      |   |             |      | 
|Interest earning assets      |  |      |   | 110,289,770 |      | 
|                             |  |      |   |             |      | 
|Interest bearing deposits    |  |      |   | 77,162,839  |      | 
|FHLB borrowings              |  |      |   | 9,869,880   |      | 
|Other borrowings             |  |      |   | 2,940,877   |      | 
|                             |  |      |   |             |      | 
|Interest bearing liabilities |  |      |   | 89,973,596  |      | 
|                             |  |      |   |             |      | 
|Net interest income          |  |      |   |             |      | 
|                             |  |      |   |             |      | 
|Net interest spread          |  |      |   |             |      | 
|                             |  |      |   |             |      | 
|Net interest margin          |  |      |   |             |      | 
|                             |  |      |   |             |      | 

For
the quarters ending June 30, 2004 and 2003, respectively, net income was $234,000 and
$642,000, while net interest income after provision for loan losses was $1.0 million and
$955,000.

13

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Item 2     Management's Discussion and Analysis of Financial Condition and Results of Operations,
                continued

Allowance and Provision
for Loan Losses

There
are risks inherent in making all loans, including risks with respect to the period of time
over which loans may be repaid, risks resulting from changes in economic and industry
conditions, risks inherent in dealing with individual borrowers, and, in the case of a
collateralized loan, risks resulting from uncertainties about the future value of the
collateral. To address these risks, we have developed policies and procedures to evaluate
the overall quality of our credit portfolio and the timely identification of potential
problem loans. We maintain an allowance for possible loan losses which we establish
through charges in the form of a provision for loan losses. We charge loan losses and
credit recoveries directly to this allowance.

We
attempt to maintain the allowance at a level that will be adequate to provide for
potential losses in our loan portfolio. To maintain the allowance at an adequate level, we
periodically make additions to the allowance by charging an expense to the provision for
loan losses on our statement of income.

The
provision for loan losses was $188,000 and $33,000 for the six months ended June 30, 2004
and 2003, respectively. Our judgment in determining the adequacy of the allowance is based
on evaluations of the collectibility of loans. These evaluations take into consideration
such factors as changes in the nature and volume of the loan portfolio, current economic
conditions that may affect the borrowers ability to pay, overall portfolio quality,
and review of specific problem loans. In determining the adequacy of the allowance for
loan losses, we use a loan grading system that rates loans in different categories.
Certain grades representing criticized or classified loans are assigned allocations of
loss based on our estimate of potential loss that is generally based on historical losses
and/or collateral deficiencies. Other loans are graded by type and allocated loss ranges
based on our perceived inherent loss for the loan type. The combination of these results
are compared monthly to the recorded allowance for loan losses and material differences
are adjusted by increasing or decreasing the provision for loan losses. We use an
independent third party loan reviewer to challenge and corroborate the loan grading system
and provide additional analysis in determining the adequacy of the allowance for loan
losses and the future provisions for estimated loans.

At
June 30, 2004, the allowance for loan losses was $917,575 compared to $789,344 at December
31, 2003, which represented 1.17% and 1.49% of outstanding portfolio loans, respectively.
The decrease in the percentage of allowance to portfolio loans is reflective of the lower
level of adversely rated credits. We believe that the allowance for loan losses is
adequate, based on internal reviews and external reviews of the quality of the loan
portfolio and bank peer group data. Our evaluation is inherently subjective as it requires
estimates that are susceptible to significant change. Our losses will undoubtedly vary
from our estimates, and there is a possibility that charge-offs in future periods will
exceed the allowance for loan losses as estimated at any point in time. Due to the rapid
growth of our bank over the past several years and our short operating history, a large
portion of the loans in our loan portfolio and of our lending relationships are of
relatively recent origin. In general, loans do not begin to show signs of credit
deterioration or default until they have been outstanding for some period of time, a
process we refer to as seasoning. As a result, a portfolio of older loans will
usually behave more predictably than a newer portfolio. Because our loan portfolio is
relatively new, the current level of delinquencies and defaults may not be representative
of the level that will prevail when the portfolio becomes more seasoned, which may be
higher than current levels. If delinquencies and defaults increase, we may be required to
increase our provision for loan losses, which would adversely affect our results of
operations and financial condition. While we do use available information to recognize
losses on loans, future additions to the allowance may be necessary based on changes in
economic conditions. In addition, various regulatory agencies, as an integral part of
their examination process, periodically review the banks allowance for loan losses.
These agencies may require the bank to recognize additions to the allowance based on
judgments different than those of management.

The following is a summary of our
loan loss history;

|                                       | June 30, 2004 | June 30, 2003
|-------------------------------------- | ------------- | -------------
|Balance January 1,                     |               |              
|Year to date provision for loan losses |               |              
|Charged off loans                      |               |              
|Recoveries                             |               |              
|                                       |               |              
|Balance, end of period                 |               |              
|                                       |               |              

14

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Item 2     Management's Discussion and Analysis of Financial Condition and Results of Operations,
                continued

As
of June 30, 2004, we had no non-accrual loans. At December 31, 2003, we had one
non-accrual loan totaling $550,000, which was partially guaranteed by the Small Business
Administration. We have no loans past due 90 days or more accruing interest.

Noninterest Income and
Expense

Noninterest
income was $1.2 million and $3.5 million for the six month periods ended June 30, 2004 and
2003, respectively, and $415,000 and $2.0 million for the quarters ended June 30, 2004 and
2003, respectively. This decrease consists primarily from decreases in gains on sales of
mortgage loans as a result of the discontinuation of our wholesale residential mortgage
operations in April 2004. Mortgage customers continued to take advantage of low interest
rates, driving mortgage loan volume and revenues through the third quarter of 2003.
Mortgage volumes decreased in the fourth quarter of 2003 and first two quarters of 2004,
reflecting recent changes in the interest rate environment and ultimately our
discontinuation of our wholesale mortgage operations. As we noted in previous filings, we
expected noninterest income to decrease significantly compared to 2003 as a result of the
discontinuation of our wholesale mortgage activities.

Noninterest
expense was $2.5 million and $3.6 million for the six month periods ended June 30, 2004
and 2003, respectively, and $1.1 million and $2.0 million for the quarters ended June 30,
2004 and 2003, respectively. Salaries and benefits for the six months ended June 30, 2004
and 2003 totaled $1.4 million and $2.4 million, respectively. The decrease is primarily
due to reduction in incentive compensation at our wholesale mortgage operations related to
mortgage production. The remainder of the increase in noninterest expense is related
primarily to mortgage loan expenses and associated costs for data processing, ATM
processing and advertising.

15

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Item 2     Management's Discussion and Analysis of Financial Condition and Results of Operations,
                continued

Segment Information

Until
we discontinued our wholesale residential mortgage operations in April 2004, our company
operated two business segments: community banking and mortgage banking. These segments are
primarily identified by the products or services offered and the channels through which
they are offered. The community banking segment consists of our full-service bank that
offers customers traditional banking products and services through various delivery
channels. The mortgage banking segment consisted of mortgage brokerage facilities that
originate, acquire, and sell mortgage products. Information as of June 30, 2004, for each
of the segments is included below:

|Six months ended                    | Community | Mortgage |   |             |  
|----------------------------------- | --------- | -------- | - | ----------- | -
|
|Net interest income                 |           |          | $ | 2,080,268   |  
|Provision for loan losses           |           |          |   | (188,000    | )
|                                    |           |          |   |             |  
|Net interest income after provision |           |         
|for loan losses                     |           |          |   | 1,892,268   |  
|Noninterest income                  |           |          |   | 560,539     |  
|Noninterest expense                 |           |          |   | 1,559,074   |  
|                                    |           |          |   |             |  
|Income (loss) before income taxes   |           |          |   | 893,733     |  
|Income tax expense (benefit)        |           |          |   | 331,000     |  
|                                    |           |          |   |             |  
|Net income (loss)                   |           |          | $ | 562,733     |  
|                                    |           |          |   |             |  
|Average assets                      |           |          | $ | 106,980,544 |  
|                                    |           |          |   |             |  

|Six months ended                    | Community | Mortgage |   |            |  
|----------------------------------- | --------- | -------- | - | ---------- | -
|
|Net interest income                 |           |          | $ | 1,575,922  |  
|Provision for loan losses           |           |          |   | (33,000    | )
|                                    |           |          |   |            |  
|Net interest income after provision |           |         
|for loan losses                     |           |          |   | 1,542,922  |  
|Noninterest income                  |           |          |   | 457,813    |  
|Noninterest expense                 |           |          |   | 1,391,328  |  
|                                    |           |          |   |            |  
|Income (loss) before income taxes   |           |          |   | 609,407    |  
|Income tax expense (benefit)        |           |          |   | 225,000    |  
|                                    |           |          |   |            |  
|Net income (loss)                   |           |          | $ | 384,407    |  
|                                    |           |          |   |            |  
|Average assets                      |           |          | $ | 76,289,623 |  
|                                    |           |          |   |            |  

16

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Item 2     Management's Discussion and Analysis of Financial Condition and Results of Operations,
                continued

Liquidity and Capital

Liquidity
represents the ability of a company to convert assets into cash or cash equivalents
without significant loss, and the ability to raise additional funds by increasing
liabilities. Liquidity management involves monitoring our sources and uses of funds in
order to meet our day-to-day cash flow requirements while maximizing profits. Liquidity
management is made more complicated because different balance sheet components are subject
to varying degrees of management control. For example, the timing of maturities of our
investment portfolio is fairly predictable and subject to a high degree of control at the
time investment decisions are made. However, net deposit inflows and outflows are far less
predictable and are not subject to the same degree of control.

The
bank has established short-term federal funds purchase lines of credit with its
correspondent banks, which total $6.7 million. These lines are unsecured and are designed
to provide the bank with short-term liquidity. These lines may be revoked at any time by
the correspondent banks and are available to the bank simply as an accommodation for
short-term (two weeks or less) liquidity needs. Additionally, the bank has cash and cash
equivalents of $8.2 million and investments available for sale of $23.6 million to fund
operations and loan growth.

Currently,
we limit investments to highly liquid overnight investments in correspondent banks and
bank-qualified securities. In May 2004, we purchased $15 million of securities classified
as held to maturity to employ capital, adding to the amount of our earning assets. The
purchase was funded by Federal Home Loan Bank advances structured to compliment the
current cash flows of the investment portfolio. For the foreseeable future, we will
consider our investment portfolio primarily as a source for liquidity and a source for
earnings.

Bank
holding companies and their banking subsidiaries are required by banking regulators to
meet certain minimum levels of capital adequacy, which are expressed in the form of
certain ratios. The Federal Reserve guidelines also contain an exemption from the capital
requirements for bank holding companies with less than $150 million in consolidated
assets. Because we have less than $150 million in assets, our holding company is not
currently subject to these guidelines. However, the bank falls under these rules as set by
bank regulatory agencies. Capital is separated into Tier 1 capital (essentially common
shareholders equity less intangible assets) and Tier 2 capital (essentially the
allowance for loan losses limited to 1.25% of risk-weighted assets). The first two ratios,
which are based on the degree of credit risk in our assets, provide the weighting of
assets based on assigned risk factors and include off-balance sheet items such as loan
commitments and stand-by letters of credit. The ratio of Tier 1 capital to risk-weighted
assets must be at least 4.0% and the ratio of total capital (Tier 1 capital plus Tier 2
capital) to risk-weighted assets must be at least 8.0%. The capital leverage ratio
supplements the risk-based capital guidelines.

Banks
and bank holding companies are required to maintain a minimum ratio of Tier 1 capital to
adjusted quarterly average total assets of 3.0%.

The
following table summarizes the banks risk-based capital ratios at June 30, 2004:

|                                         | Amount | %
|---------------------------------------- | ------ | -
|Total capital (to risk weighted assets)  |        |  
|Tier 1 capital (to risk weighted assets) |        |  
|Tier 1 capital (to average assets)       |        |  

Off Balance Sheet Risk

Through
the operations of our bank, we have made contractual commitments to extend credit in the
ordinary course of our business activities. These commitments are legally binding
agreements to lend money to our customers at predetermined interest rates for a specified
period of time. At June 30, 2004, we had issued commitments to extend credit of $17.6
million through various types of commercial lending arrangements, of which $6.4 million
was at fixed rates and $11.2 million was at variable rates. We evaluate each
customers credit worthiness on a case-by-case basis. The amount of collateral
obtained, if deemed necessary by us upon extension of credit, is based on our credit
evaluation of the

17

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borrower. Collateral varies but may include accounts receivable,
inventory, property, plant and equipment, commercial and residential real estate.

Item 3. Controls and
Procedures

As
of the end of the period covered by this report, we carried out an evaluation, under the
supervision and with the participation of our management, including our Chief Executive
Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and
procedures as defined in Exchange Act Rule 13a-15(e). Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer have concluded that our current
disclosure controls and procedures are effective as of June 30, 2004. There have been no
significant changes in our internal controls over financial reporting during the fiscal
quarter ended June 30, 2004 that have materially affected, or are reasonably likely to
materially affect, our internal controls over financial reporting.

The
design of any system of controls and procedures is based in part upon certain assumptions
about the likelihood of future events. There can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions, regardless of
how remote.

18

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PART II.     OTHER INFORMATION

Item 1.         Legal Proceedings

There
are no material pending legal proceedings to which we are a party or of which any of our
property is the subject.

Item 2.         Changes in
Securities      
               None.

Item 3.         Defaults Upon Senior Securities and Use of Proceeds      
               None.

IItem 4.         Submission of Matters to a Vote of Security Holders      
               None.

| |  | The
only matter submitted to a vote of security holders during the three months ended June 30,
2004 at the companys annual meeting of shareholders held on May 19, 2004 was the
election of five members of the board of directors as Class II directors for a three-year
term. The following paragraph describes the matter voted upon at the annual meeting and
sets forth the number of votes cast for, against or withheld and the number of abstentions
as to the matter (except as provided below, there were no broker non-votes).
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Our
board of directors is divided into three classes with each class to be as nearly equal in
number as possible. The three classes of directors have staggered terms, so that the terms
of only approximately one-third of the board members expire at each annual meeting of
shareholders. The current Class I directors are Christina H. Bryan, Suellen Rodeffer
Garner, Michael G. Sanchez, and Marshall E. Wood. The current Class II directors are Ron
Anderson, C. Brett Carter, Dr. William K. Haley, and David F. Miller. Lorie L. Chism
resigned as a Class II director on May 19, 2004. The current Class III directors are
Marlene J. Murphy, Robert L. Peters, Lawrence Piper, and Edward E. Wilson. The terms of
the Class II directors expired at the annual meeting. Each of the five current Class II
directors was nominated for re-election and stood for election at the annual meeting on
May 19, 2004 for a three-year term. The number of votes for the election of the Class II
directors was as follows: For Mr. Anderson  675,579 votes; for Mr. Carter 
676,179 votes; for Mr. Haley  675,879 votes; for Ms. Chism  676,679 votes; and
for Mr. Miller  676,879 votes. The number of votes, which withheld authority for Mr.
Anderson  0; withheld authority for Mr. Carter  0; withheld authority for Mr.
Haley  0; withheld authority for Ms. Chism  0; and withheld authority for Mr.
Miller  0. The number of votes against the election of directors was as follows:
against Mr. Anderson  1,300; against Mr. Carter  700; against Mr. Haley 
1,000; against Ms. Chism  200; and against Mr. Miller  900. The terms of the
Class II directors will expire at the 2007 annual meeting of shareholders. The terms of
the Class III directors will expire at the 2005 annual meeting of shareholders. The terms
of the Class I directors will expire at the 2006 annual meeting of shareholders.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The
above matter was approved and recorded in our minute book from the annual meeting of
shareholders. There were no other matters voted on by our shareholders at our annual
meeting held on May 19, 2004.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Item 5.         Other Information

| |  | Lorie
L. Chism resigned as a director of the company and Chairman of the Audit Committee on May
19, 2004. Robert L. Peters was appointed Chairman of the audit committee.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Item 6.          Exhibits and
Reports

| | (a) | Exhibits:
| | --- | ---------

| |  | Exhibit          Description
| |  | ----------------------------

| | 10.1 | Employment Agreement dated April 14, 2004 between First Capital Bank Holding Corporation, First National         Bank of
Nassau County, and Michael G. Sanchez
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

19

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| | 31.1 | Rule 13a-14(a) Certification of the Chief Executive Officer.
| | ---- | ------------------------------------------------------------

| | 31.2 | Rule 13a-14(a) Certification of the Chief Financial Officer.
| | ---- | ------------------------------------------------------------

| | 32 | Section 1350
Certifications.
| | -- | ----------------------------

| | (b) | Exhibits:
| | --- | ---------

No
reports were filed by the company during the quarter ended June 30, 2004.

20

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SIGNATURES

In accordance
with the requirements of the Exchange Act, the registrant caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

| |  | FIRST CAPITAL BANK HOLDING COMPANY (Registrant)By:    /s/ Michael G. Sanchez    
         Michael G. Sanchez         President and Chief
Executive Officer
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

Date:    August 14, 2004

| |  | By:    /s/ Timothy S. Ayers    
          Timothy S. Ayers          Principal Accounting and Chief Financial Officer
| |  | --------------------------------------------------------------------------------------------------------------------

Date:    May 14, 2004

21

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INDEX TO EXHIBITS

ExhibitNumber    Description

10.1      Employment Agreement dated April 14, 2004 between First Capital Bank Holding Corporation, First National
             Bank of Nassau County, and Michael G. Sanchez

31.1      Rule 13a-14(a) Certification of the Chief Executive Officer.

31.2      Rule 13a-14(a) Certification of the Chief Financial Officer.

32         Section 1350
Certifications.

22