# 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, 2005

# [   ]    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 preceding 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: 1,182,700 shares of common stock, $.01 par value per share, issued and
outstanding as of July 27, 2005.

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

---

# 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-

---

# FIRST CAPITAL BANK
HOLDING CORPORATION

# Consolidated Balance Sheets

|                                                                | June 30, 2005 | December 31, 2004
|--------------------------------------------------------------- | ------------- | -----------------
|
|Assets                                                          |               |                  
|                                                                |               |                  
|Cash and due from banks, including cash reserve requirements of |               |                  
|$395,000 and $427,000 respectively                              |               |                  
|Federal funds sold                                              |               |                  
|Interest bearing deposits in other banks                        |               |                  
|                                                                |               |                  
|Cash and cash equivalents                                       |               |                  
|                                                                |               |                  
|Certificate of deposit                                          |               |                  
|Investment securities available-for-sale                        |               |                  
|Investment securities held to maturity, estimated fair value of |               |                  
|$13,135,495 and $14,350,154, respectively                       |               |                  
|Other investments                                               |               |                  
|Loans available-for-sale                                        |               |                  
|Loans, net of allowance of $1,295,767 and $1,103,403            |               |                  
|Premises and equipment, net                                     |               |                  
|Accrued interest receivable and other assets                    |               |                  
|                                                                |               |                  
|                                                                |               |                  
|                                                                |               |                  
|Liabilities and Shareholders' Equity                            |               |                  
|Deposits:                                                       |               |                  
|Noninterest bearing demand                                      |               |                  
|Interest bearing demand                                         |               |                  
|Savings                                                         |               |                  
|Time                                                            |               |                  
|Time over $100,000                                              |               |                  
|                                                                |               |                  
|Total deposits                                                  |               |                  
|                                                                |               |                  
|Federal funds purchased and securities sold                     |               |                  
|under agreements to repurchase                                  |               |                  
|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;     |               |                  
|1,182,700 and 1,024,700 issued and outstanding in 2005 and      |               |                  
|2004, respectively                                              |               |                  
|Additional paid-in capital                                      |               |                  
|Retained earnings                                               |               |                  
|Accumulated other comprehensive (loss) /  income                |               |                  
|                                                                |               |                  
|Total shareholders' equity                                      |               |                  
|                                                                |               |                  
|                                                                |               |                  
|                                                                |               |                  

See accompanying notes to financial statements.

-3-

---

# FIRST CAPITAL BANK
HOLDING CORPORATION Statements of Earnings

# For the Three Months and
Six Months Ended June 30, 2005 and 2004 (Unaudited)

|                                                      | Three Months Ended | Six Months Ended
|----------------------------------------------------- | ------------------ | ----------------
|
|
|Interest income:                                      |                    |                 
|Interest and fees on loans                            |                    |                 
|Interest income on investment securities - taxable    |                    |                 
|Interest income on investment securities - tax-exempt |                    |                 
|Interest on federal funds sold and interest-bearing   |                    |                 
|                                                      |                    |                 
|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   |                    |                 
|                                                      |                    |                 
|Non interest 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 non interest income                             |                    |                 
|                                                      |                    |                 
|Non interest expense:                                 |                    |                 
|Salaries and employee benefits                        |                    |                 
|Occupancy                                             |                    |                 
|Other                                                 |                    |                 
|                                                      |                    |                 
|Total non interest 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-

---

# FIRST CAPITAL BANK
HOLDING CORPORATION Statements of Operations and Comprehensive Income (Loss)

# For the Three and Six
Months Ended June 30, 2005 and 2004 (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)                  |                    |                 
|                                             |                    |                 

See accompanying notes to financial statements.

-5-

---

# FIRST CAPITAL BANK
HOLDING CORPORATION Statements of Cash Flows

# For the Six Months
Ended June 30, 2005 and 2004 (Unaudited)

|                                                                               | 2005 | 2004
|------------------------------------------------------------------------------ | ---- | ----
|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 available for sale                                         |      |     
|Change in cash surrender value of bank owned life insurance                    |      |     
|Change in other assets                                                         |      |     
|Change in other liabilities                                                    |      |     
|                                                                               |      |     
|Net cash provided (used) by operating activities                               |      |     
|                                                                               |      |     
|Cash flows from investing activities:                                          |      |     
|Proceeds from sale of investment securities available-for-sale                 |      |     
|Proceeds from maturities, calls, and paydowns of securities available for sale |      |     
|Proceeds from maturities, calls, and paydowns of securities held to maturity   |      |     
|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-

---

# 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, 2004 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 our 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 proforma 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 three
and six months ended June 30, 2005 and 2004, would have been reduced to the proforma
amounts indicated below:

| |  |  | Quarter Ended              | Six Months Ended
| |  |  | -------------------------- | ----------------
|
|
|
| |  |  | Net earnings               |                 
| |  |  |                            |                 
| |  |  | Basic earnings per share   |                 
| |  |  |                            |                 
| |  |  | Diluted earnings per share |                 
| |  |  |                            |                 

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 issued in 2003: 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 proforma is the expense associated with the grants, which would have been
earned in the period. No options were granted during the second quarter of 2005. 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-

---

# FIRST CAPITAL BANK
HOLDING CORPORATION

# Notes to Financial
Statements (Unaudited)

# Significant accounting
policies continued

# Employee Benefits

In 2004, the Company commenced a
Phantom Stock Appreciation Rights (PSAR) plan for the benefit of certain
employees designated by the Board of Directors. Under the plan, participants will be due
an amount representing the incremental value of the underlying stock as compared to the
strike price of the PSAR at the time of grant. The vesting of the option is determined at
the time of the grant and is at the discretion of the Company. During 2004, the Company
issued 21,500 PSARs with a strike price of $17.35, which approximated the fair value of
underlying stock at the time of grant. During 2005, the Company granted an additional
14,000 PSARs at a strike price of $18.37. There were 6,000 PSARs forfeited in the first
quarter of 2005. There were 29,500 PSARs outstanding as of June 30, 2005.

# 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, 2005 and 2004 are as
follows:

| |  | For the six months ended June 30, 2005
| |  | --------------------------------------
|
|
|
|
| |  |                                       
| |  |                                       
| |  |                                       
| |  |                                       
| |  |                                       

| |  | For the Quarter ended June 30, 2005
| |  | -----------------------------------
|
|
|
|
| |  |                                    
| |  |                                    
| |  |                                    
| |  |                                    
| |  |                                    

| |  | For the six months ended June 30, 2004
| |  | --------------------------------------
|
|
|
|
| |  |                                       
| |  |                                       
| |  |                                       
| |  |                                       
| |  |                                       

| |  | For the Quarter ended June 30, 2004
| |  | -----------------------------------
|
|
|
|
| |  |                                    
| |  |                                    
| |  |                                    
| |  |                                    
| |  |                                    

-8-

---

# Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations
For the Three and Six Months Ended June 30, 2005 and 2004

# FORWARD-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:

| |  | the businesses of Coastal Banking Company,  Inc. and First Capital may not be integrated  successfully pursuant
         to our proposed merger described below, or such integration may take longer to accomplish than expected;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | the  expected  cost  savings and any revenue  synergies  from the merger may not be fully  realized  within the
         expected timeframes;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------

| |  | disruption from the merger may make it more difficult to maintain  relationships  with  customers,  associates,
         or suppliers;
| | - | --------------------------------------------------------------------------------------------------------------------------------------

| |  | the required governmental approvals of the merger may not be obtained on the proposed terms and schedule;
| | - | ---------------------------------------------------------------------------------------------------------

| |  | shareholders may not approve the merger;
| | - | ----------------------------------------

| |  | changes in economic conditions;
| | - | -------------------------------

| |  | movements in interest rates;
| | - | ----------------------------

| |  | competitive pressures on product pricing and services;
| | - | ------------------------------------------------------

| |  | success and timing of other business strategies;
| | - | ------------------------------------------------

| |  | the  nature,  extent,  and timing of  governmental  actions  and  reforms;  and  extended  disruption  of vital
         infrastructure; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------

| |  | other factors described in our 2005 Annual Report on Form 10-KSB, the Joint Proxy
Statement/Prospectus for the merger filed by Coastal on a Form S-4, and documents
subsequently filed by us with the Securities and Exchange Commission.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

-9-

---

# 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,
2005 as compared to the quarter ended June 30, 2004 as well as results for the six months
ended June 30, 2005 and 2004, and also analyzes our financial condition as of June 30,
2005 as compared to December 31, 2004. 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.

On
April 6, 2005, we entered into an agreement and plan of merger with Coastal Banking
Company, Inc., the parent holding company for Lowcountry National Bank. Pursuant to the
agreement, we will be merged with and into Coastal. Lowcountry National Bank and First
National Bank of Nassau County will be wholly owned subsidiaries of Coastal. Each common
share of First Capital Bank Holding Corporation will be exchanged for 1.054 common shares
of Coastal. The boards of directors of both parties have approved the merger agreement,
and the merger agreement and the transactions contemplated thereby are subject to the
approval of the shareholders of both parties, regulatory approvals, and other customary
closing conditions. The merger is expected to close during the fourth quarter of 2005.

# Financial Condition

As
of June 30, 2005, we had total assets of $161.4 million, an increase of 14% when compared
to December 31, 2004. The significant factor was an increase in portfolio loans of $19.2
million, or 21%, as new loan production remained strong. Our total loan to deposit ratios
were 88% and 92% as of June 30, 2005 and December 31, 2004, respectively. 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.

Our
deposit growth remained strong in the first half of 2005 as a result of increased
marketing efforts within our community. When compared to December 31, 2004, deposits for
the six months ended June 30, 2005 increased $26.3 million, or 26%. Funds from the deposit
growth were used to pay off repurchase agreements and federal funds purchased of $7.3
million as of December 31, 2004, and to fund new loan growth. No overnight bank advances
or repurchase agreements were outstanding at June 30, 2005. Repurchase agreements and
warehouse line advances are short-term borrowings and fluctuate according to loan demand.

The
deposit mix at June 30, 2005 was as follows: $12.7 million (10% of total deposits) in
noninterest bearing demand deposits; $12.9 million (13% of total deposits) in interest
checking accounts; $26.5 million (26% of total deposits) in savings accounts; and $50.6
million (51% of total deposits) in time deposits. The deposit mix remains weighted towards
higher cost time deposits. We expect this trend to continue with an emphasis on time
deposits, thus increasing the average cost of funds and potentially reducing the
banks net interest margin.

-10-

---

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

# Financial Condition,
continued

At
June 30, 2005, total investment securities were $33.6 million, $20.6 million in securities
classified as available for sale, and $13.0 million in securities classified as held to
maturity. Liquidity remains sufficient to support the current operating needs and growth
opportunities of the bank. The current investment portfolio strategy is primarily to
provide liquidity for funding loans and earnings enhancement. Accordingly, all investment
securities available for sale are pledgeable to raise funding through public deposits,
secured borrowing, or repurchase agreements. Investment securities classified as held to
maturity are pledged to the FHLB.

At
June 30, 2005, retained earnings totaled $5.6 million, including $551,000 net earnings for
the six months ended June 30, 2005.

# Results of Operations

Net
income for the six months ended June 30, 2005 was $551,000, as compared to $447,000 for
the same period in 2004. For the quarters ended June 30, 2005 and 2004, net income was
$244,000 and $234,000, respectively. The increase in our results was due to growth in net
interest income generated from the growth in loans. The increase in net interest income
was partially offset by one-time expenses related to merger activities.

# Net Interest Income

Net
interest income for the six months ended June 30, 2005 was $2.6 million, compared to $2.2
million for the six months ended June 30, 2004. Total interest income for the first six
months of 2005 was $4.3 million, compared to $3.0 million for the same period in 2004.
Included in interest income is interest and fees on loans totaling $3.4 million and $2.5
for the six months ended June 30, 2005 and 2004, respectively. Interest income also
included interest income on investments of $745,000 and $543,000 for the six months ended
June 30, 2005 and 2004, respectively. The growth in interest income reflects the growth in
our interest-earning assets. Interest income on loans as a percentage of total interest
income decreased to 80% at June 30, 2005, as compared to 82% for the same period last
year. The decrease is due to the increase in average federal funds sold. We incurred
interest expense on interest bearing deposits of $1.3 million for the six months ended
June 30, 2005, as compared to $643,000 for the same period in 2004. Additionally, we
recognized $327,000 and $145,000 of interest expense from FHLB term and warehouse advances
for the six months ended June 30, 2005 and 2004, 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, 2005 and 2004
were 3.72% and 4.02%, respectively. Our margins decreased due to a higher percentage of
average federal funds sold as a percentage of average assets at June 30, 2005 compared to
June 30, 2004. We have used the excess funds to fund loan growth and expect interest
margins to remain consistent or increase slightly.

-11-

---

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

# Net Interest Income,
continued

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 six
months ended June 30, 2005 and 2004.

|                             | 2005 | 2004
|---------------------------- | ---- | ----
|
|
|
|
|Loans                        |      |     
|Federal funds sold and       |      |     
|deposits with banks          |      |     
|Investments                  |      |     
|CD's at other banks          |      |     
|                             |      |     
|Interest earning assets      |      |     
|                             |      |     
|Interest bearing deposits    |      |     
|FHLB borrowings              |      |     
|Other borrowings             |      |     
|                             |      |     
|Interest bearing liabilities |      |     
|                             |      |     
|Net interest income          |      |     
|                             |      |     
|Net interest spread          |      |     
|                             |      |     
|Net interest margin          |      |     
|                             |      |     

For
the quarters ended June 30, 2005 and 2004, respectively, net income was $244,000 and
$234,000, while net interest income after provision for loan losses was $1.2 million and
$1.0 million. For the six months ended June 30, 2005 and 2004, respectively, net income
was $551,000 and $447,000, while net interest income after provision for loan losses was
$2.4 million and $2.0 million.

-12-

---

# 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 $201,000 and $188,000 for the six months ended June 30, 2005
and 2004, respectively, and $130,000 and $132,000 for the three months ended June 30, 2005
and 2004, 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, 2005, the allowance for loan losses was $1,295,767 compared to $1,103,403 at
December 31, 2004, which represented 1.17% of outstanding portfolio loans. 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, 2005 | June 30, 2004
|-------------------------------------- | ------------- | -------------
|
|Balance January 1,                     |               |              
|Year to date provision for loan losses |               |              
|Charged off loans                      |               |              
|                                       |               |              
|Balance, end of period                 |               |              
|                                       |               |              

-13-

---

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

As
of June 30, 2005, we had two non-accrual loans totaling $152,988, of which the Small
Business Administration guarantees $25,000. At December 31, 2004, we had one non-accrual
loan totaling $34,636, which was 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 $577,000 and $1.2 million for the six month periods ended June 30, 2005 and
2004, respectively, and $270,000 and $415,000 for the quarters ended June 30, 2005 and
2004, respectively. This decrease was primarily caused by decreases in mortgage income as
a result of the discontinuation of our wholesale residential mortgage operations in April
2004. Gains on the sale of loans decreased by approximately $494,000 for the six months
ended June 30, 2005 compared to the same period in 2004, and gains on sales of securities
decreased by approximately $110,000 over the same period.

Noninterest
expense was $2.1 million and $2.5 million for the six month periods ended June 30, 2005
and 2004, respectively, and $1.1 million for the both quarters ended June 30, 2005 and
2004. Salaries and benefits for the six months ended June 30, 2005 and 2004 totaled $1.2
million and $1.4 million, respectively. The decrease is primarily due to reduction in
staff as a result of the sale of the assets of the wholesale mortgage division in April
2004. These expenses were partially offset by staff increases in loan production offices
in Jacksonville, FL and Savannah, GA. Other noninterest expenses also decreased as a
result of sale of the assets of the wholesale mortgage division in April 2004. The
decrease was offset in 2005 because we recognized approximately $136,000 of non-recurring
merger related expenses.

# 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 $7.2 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 $6.6 million and investments available for sale of $20.6 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 FHLB 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. 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.

A
bank is considered to be well capitalized if it has total risk-based capital
ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater, and has a
leverage ration of 5.0% or greater. Based upon these guidelines, the bank is considered to
be well capitalized at June 30, 2005.

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 sets forth the
holding companys and the banks various capital ratios at

-14-

---

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

June 30, 2005. The bank was
considered well capitalized and the holding company met or exceeded its
applicable regulatory capital requirements.

|                                         | Amount | %
|---------------------------------------- | ------ | -
|Total capital (to risk weighted assets)  |        |  
|Bank                                     |        |  
|Holding company consolidated             |        |  
|                                         |        |  
|Tier 1 capital (to risk weighted assets) |        |  
|Bank                                     |        |  
|Holding company consolidated             |        |  
|                                         |        |  
|Tier 1 capital (to average assets)       |        |  
|Bank                                     |        |  
|Holding company consolidated             |        |  

# 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, 2005, we had issued commitments to extend credit of $26.6
million through various types of commercial lending arrangements, of which $854,000 was at
fixed rates and $26.4 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
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, 2005. There have been no
significant changes in our internal controls over financial reporting during the fiscal
quarter ended June 30, 2005 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.

-15-

---

# 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.   Unregistered
Sales of Equity Securities and Use of Proceeds

None

# Item 3.   Defaults Upon
Senior Securities

None

# Item 4.   Submission of Matters to a Vote of Security Holders

None

# Item 5.   Other Information

None

# Item 6.   Exhibits

Exhibit
        Description

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.

-16-

---

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 CORPORATION
(Registrant)
| |  | ---------------------------------------------------

|Date:  August 15, 2005 |  | By:  /s/ Michael G. Sanchez
        Michael G. Sanchez 
      President and Chief Executive Officer
|---------------------- |  | ---------------------------------------------------------------------------------------------------

|Date:  August 15, 2005 |  | By:  /s/ Timothy S. Ayers
       Timothy S. Ayers       Principal Accounting and Chief Financial Officer
|---------------------- |  | --------------------------------------------------------------------------------------------------------

-17-

---

INDEX TO EXHIBITS

ExhibitNumber
                 Description

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.

-18-