# 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 quarter ended March 31, 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
(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:  1,008,400 shares of common stock,  par value $.01 per share,  were issued and outstanding as of
May 7, 2003.

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

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FIRST CAPITAL BANK
HOLDING CORPORATIONPART 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 CORPORATIONConsolidated Balance Sheets

|                                                            | March 31,2004 | 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                    |               |                  
|Other investments                                           |               |                  
|Loans, net                                                  |               |                  
|Loans available-for-sale                                    |               |                  
|Premises and equipment, net                                 |               |                  
|Accrued interest receivable and other assets                |               |                  
|                                                            |               |                  
|                                                            |               |                  
|                                                            |               |                  
|Liabilities and Shareholders' Equity                        |               |                  
|Deposits:                                                   |               |                  
|Non interest bearing demand                                 |               |                  
|Interest bearing demand                                     |               |                  
|Savings                                                     |               |                  
|Time                                                        |               |                  
|Time over $100,000                                          |               |                  
|                                                            |               |                  
|Total deposits                                              |               |                  
|Fed Funds purchased and Repurchase Agreements               |               |                  
|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; |               |                  
|1,008,400 issued and outstanding March 31, 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 CORPORATIONStatements of Earnings For the Three Months
Ended March 31, 2004 and 2003 (Unaudited)

|                                                    | Three Months Ended | 
|--------------------------------------------------- | ------------------ | 
|
|
|Interest income:                                    |                    | 
|Interest and fees on loans                          |                    | 
|Interest income on investment securities            |                    | 
|Other interest income                               |                    | 
|                                                    |                    | 
|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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FIRST CAPITAL BANK
HOLDING CORPORATIONStatements of Operations and Comprehensive Income (Loss)For the Three Months
Ended March 31, 2004 and 2003 (Unaudited)

|                                                    | Three Months | 
|--------------------------------------------------- | ------------ | 
|
|
|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 (loss) income                   |              | 
|                                                    |              | 
|Comprehensive income                                |              | 
|                                                    |              | 

See accompanying notes to financial statements.

5

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FIRST CAPITAL BANK
HOLDING CORPORATIONStatements of Cash FlowsFor the Three Months
Ended March 31, 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 (used) provided by in operating activities         |      |     
|                                                            |      |     
|Cash flows from investing activities:                       |      |     
|Proceeds from maturities, calls, and paydowns of securities |      |     
|Purchase of investment securities available for sale        |      |     
|Redemption (purchase) of other investments                  |      |     
|Net change in portfolio loans                               |      |     
|Purchase of premises and equipment                          |      |     
|                                                            |      |     
|Net cash (used) provided in investing activities            |      |     
|                                                            |      |     
|Cash flows provided by financing activities                 |      |     
|Net change in deposits                                      |      |     
|Net change in repurchase agreements                         |      |     
|Net change in warehouse line of credit                      |      |     
|Proceeds from stock options exercised                       |      |     
|                                                            |      |     
|Net cash (used) provided by financing activities            |      |     
|                                                            |      |     
|Net increase (decrease) 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 CORPORATIONNotes 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 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
quarter ended March 31, 2004 and 2003, would have been reduced to the proforma amounts
indicated below:

|                           |  | Three 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 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 proforma is the expense associated with the grants, which
would have been earned in the period. No options were granted during the first quarter of
2004. 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 three month periods ended March 31, 2004 and 2003 are as follows:

|                                              | For the three months ended March 31, 2004 |  |  
|--------------------------------------------- | ----------------------------------------- |  | -
|
|
|Basic earnings per share                      |                                           |  | $
|Effect of dilutive securities - Stock Options |                                           |  |  
|                                              |                                           |  |  
|Diluted earnings per share                    |                                           |  | $
|                                              |                                           |  |  

|                                              | For the three months ended March 31, 2003 |  |  
|--------------------------------------------- | ----------------------------------------- |  | -
|
|
|Basic earnings per share                      |                                           |  | $
|Effect of dilutive securities - Stock Options |                                           |  |  
|                                              |                                           |  |  
|Diluted earnings per share                    |                                           |  | $
|                                              |                                           |  |  

Note 3 Transition
Employment Agreement

In
January 2004, the Company entered into a transition employment agreement with William J.
S. Kelley, the Senior Vice President of Wholesale mortgage, to facilitate the sale of the
assets of the wholesale mortgage operations by April 30, 2004. As part of the agreement,
Mr. Kelley will retain his stock options in the Company.

Note 4  Subsequent
Events

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 postclosing services for all loans
produced by the wholesale mortgage operations. All employees associated with the wholesale
operation were retained by the acquiror.

8

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Item 2.     Management's Discussion and Analysis of Financial Condition and Results of Operations
                                For the Three Months Ended March 31, 2004 and 2003

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:

| | 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 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

Financial Condition

As
we discussed in our annual report to shareholders, 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 closer to historical norms were on the horizon. 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. The bank has
hired seasoned lenders and has expanded its geographic scope to include the rapidly
growing markets of Nassau County and Savannah, Georgia.

As
of March 31, 2004, we had total assets of $121 million, an increase of 13% when compared
to December 31, 2003. The significant factor was the increase in portfolio loans of $12.6
million, or 23%. 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, GA. Production of mortgage loans
continued to be slower as expected. 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, we anticipate mortgage loans held for sale to be
fully funded by investors and liquidated by May 2004. Mortgage loans held for sale were
primarily funded through short term bank deposits and alternative sources such as Federal
Home Loan Bank advances and warehouse lines of credit. When compared to December 31, 2003,
deposits for the three months ended March 31, 2004 increased $1.8 million, or 2%,
warehouse line advances increased $1.8 million, or 35%, and overnight bank advances and
repurchase agreements totaled $10.3 million. We anticipate the warehouse line, repurchase
agreements, overnight correspondent bank advances to be paid down as mortgage loans held
for sale are funded by investors. Repurchase agreements and warehouse line advances are
short term borrowings and fluctuate according to loan demand.

Our
portfolio loan to deposit and total loan to deposit ratios were 78% and 64%, as of March
31, 2004 and December 31, 2003. Our long-term target for portfolio loans to deposit ratio
is 80%. We are making a concerted effort to develop quality portfolio loan business in the
local market and to manage the deposit growth consistent with expected loan demand.

The
deposit mix at March 31, 2004 was as follows: $12.6 million (15% of total deposits) in
noninterest bearing demand deposits; $9.6 million (11% of total deposits) in interest
checking accounts; $23.9 million (28% of total deposits) in savings accounts; and $39.7
milllion (46% of total deposits) in time deposits. The deposit mix remains 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
March 31, 2004, all securities were classified as available for sale, totaling $25.1
million. The current investment portfolio strategy is primarily to provide liquidity for
funding loans and initial operating expenditures and secondarily for earnings enhancement.
Accordingly, all investment securities are pledgeable to raise funding through public
deposits, secured borrowing, or repurchase agreements.

At
March 31, 2004, retained earnings totaled $4.3 million, including $214 thousand net
earnings for the three month period ended.

Results of Operations

Net
income for the three months ended March 31, 2004 was $214 thousand, as compared to $487
thousand for the same period in 2003. The decrease in our results was due decreases in
noninterest income generated from the planned sale of our 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 $23 thousand for the period ended March 31, 2004, compared to
income of $311 thousand for the same period in 2003. Income from our core-banking unit was
$273 thousand for the three months ended March 31, 2004 compared to $190 thousand for the
same period in 2003. We expect income from the growth of the core-banking unit to continue
to improve. However, we will no longer generate income associated with our wholesale
mortgage activities following the sale of the assets of the operations.

10

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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 three months ended March 31, 2004 was $1.0 million, compared to
$903 thousand for the three months ended March 31, 2004. Total interest income for the
first three months of 2004 was $1.4 million, compared to $1.4 million for the same period
in 2003. Included in interest income is interest and fees on loans totaling $1.1 million
for the three months ended March 31, 2004 and $1.2 million for the same period in 2003.
Interest income also includes interest income on investments of $244 thousand and $134
thousand for the three months ended March 31, 2004 and 2003, respectively. Net interest
income from core banking activities totaled $981 thousand for the three months ended March
31, 2004 compared to $797 thousand for the same period in 2003. 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
March 31, 2004, as compared to 89% for the same period last year. The decrease is due to
the lower average outstanding balances of mortgage loans held for sale. We expect average
loans available for sale to continue to decrease and result in a decrease in interest
income as compared to 2003. We expect the impact to be offset by continued growth in
portfolio loans. We incurred interest expense on interest bearing deposits of $292
thousand for the three months ended March 31, 2004, as compared to $405 thousand for the
same period in 2003. These numbers reflect the effect of the decrease in the cost of
deposits for the year due to the decrease in rates offered on these products.
Additionally, we recognized $49 thousand and $57 thousand of interest expense from FHLB
term and warehouse advances for the three months ended March 31, 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 March 31, 2004 and
2003 were 4.20% and 4.15%, 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 March 31, 2004 and 2003.

|                             |  | 2004 |   |            | 2003 | 
|---------------------------- |  | ---- | - | ---------- | ---- | 
|
|
|
|Loans                        |  |      | $ | 71,738,336 |      | 
|Federal funds sold and       |  |     
|deposits with banks          |  |      |   | 1,329,036  |      | 
|Investments                  |  |      |   | 26,855,859 |      | 
|                             |  |      |   |            |      | 
|Interest earning assets      |  |      |   | 99,923,231 |      | 
|                             |  |      |   |            |      | 
|Interest bearing deposits    |  |      |   | 71,873,404 |      | 
|FHLB borrowings              |  |      |   | 6,829,999  |      | 
|Other borrowings             |  |      |   | 2,315,337  |      | 
|                             |  |      |   |            |      | 
|Interest bearing liabilities |  |      | $ | 81,018,740 |      | 
|                             |  |      |   |            |      | 
|Net interest income          |  |      |   |            |      | 
|                             |  |      |   |            |      | 
|Net interest spread          |  |      |   |            |      | 
|                             |  |      |   |            |      | 
|Net interest margin          |  |      |   |            |      | 
|                             |  |      |   |            |      | 

11

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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 $56,000 and $33,000 for the three months ended March 31,
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, management uses a loan grading system that rates loans in
different categories. Certain grades representing criticized or classified loans are
assigned allocations of loss based on managements 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 managements 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
March 31, 2004, the allowance for loan losses was $830,401 compared to $789,344 at
December 31, 2003, which represented 1.23% and 1.44% of outstanding portfolio loans,
respectively. 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 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. 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.

|                                       | March 31, 2004 | March 31, 2003
|-------------------------------------- | -------------- | --------------
|Balance January 1,                     |                |               
|Year to date provision for loan losses |                |               
|Charged off loans                      |                |               
|Recoveries                             |                |               
|                                       |                |               
|Balance, end of period                 |                |               
|                                       |                |               

As
of March 31, 2004, we had one non-accrual loan totaling $44,827, which is guaranteed by
the Small Business Administration. At December 31, 2003, we had one non-accrual loan
totaling $209,000, of which $157,050, was partially guaranteed by the Small Business
Administration. We have no loans past due 90 days or more accruing interest.

12

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

Noninterest Income and
Expense

Noninterest
income was $737 thousand and $1.6 million for the three months ended March 31, 2004 and
2003, respectively. This decrease consists primarily of gains on sales of mortgages loans.
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 quarter 2004, reflecting recent changes in the
interest rate environment and our plans to discontinue our wholesale mortgage operations.
We expect non interest income to decrease significantly compared to 2003 as a result of
the discontinuation of our wholesale mortgage activities.

Noninterest
expense was $1.4 million and $1.7 million for the three month period ended March 31, 2004
and 2003, respectively. Salaries and benefits for the three months ended March 31, 2004
and 2003 totaled $853 thousand and $1.1 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.

13

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

Segment Information

Our
company operates 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 consists of mortgage brokerage facilities
that originate, acquire, and sell mortgage products. As we discussed in our annual report
to shareholders, 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
closer to historical norms were on the horizon. 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. Information as of March 31, 2004, for
each of the segments is included below:

|Three months ended                  | Community | Mortgage |   |            |  
|----------------------------------- | --------- | -------- | - | ---------- | -
|
|Net interest income                 |           |          | $ | 981,226    |  
|Provision for loan losses           |           |          |   | (56,000    | )
|                                    |           |          |   |            |  
|Net interest income after provision |           |         
|for loan losses                     |           |          |   | 925,226    |  
|Noninterest income                  |           |          |   | 258,697    |  
|Noninterest expense                 |           |          |   | 748,615    |  
|                                    |           |          |   |            |  
|Income (loss) before income taxes   |           |          |   | 435,308    |  
|Income tax expense (benefit)        |           |          |   | 162,000    |  
|                                    |           |          |   |            |  
|Net income (loss)                   |           |          | $ | 273,308    |  
|                                    |           |          |   |            |  
|Average assets                      |           |          | $ | 95,452,276 |  
|                                    |           |          |   |            |  

|Three months ended                  | Community | Mortgage |   |            |  
|----------------------------------- | --------- | -------- | - | ---------- | -
|
|Net interest income                 |           |          | $ | 796,517    |  
|Provision for loan losses           |           |          |   | (33,000    | )
|                                    |           |          |   |            |  
|Net interest income after provision |           |         
|for loan losses                     |           |          |   | 763,517    |  
|                                    |           |          |   |            |  
|Noninterest income                  |           |          |   | 236,599    |  
|Noninterest expense                 |           |          |   | 694,709    |  
|                                    |           |          |   |            |  
|Income (loss) before income taxes   |           |          |   | 305,407    |  
|Income tax expense (benefit)        |           |          |   | 115,000    |  
|                                    |           |          |   |            |  
|Net income (loss)                   |           |          | $ | 190,407    |  
|                                    |           |          |   |            |  
|Average assets                      |           |          | $ | 74,912,337 |  
|                                    |           |          |   |            |  

14

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

Liquidity and Capital

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. The bank also has a warehouse line of
credit with the Federal Home Loan Bank in the amount of $24 million and an early purchase
line of credit of $50 million with Countrywide Warehouse Lending to provide funding for
mortgage loans held for sale. Additionally, the bank has cash and cash equivalents of $3.9
million and investments available for sale of $25.1 million to fund operations and loan
growth.

Currently,
we limit investments to highly liquid overnight investments in correspondent banks and
bank-qualified securities. For the foreseeable future, the bank will consider its
investment portfolio primarily as a source for liquidity and secondarily as a source for
earnings.

|                                         | 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 March 31, 2004, we had issued commitments to extend credit of $15.6
million through various types of commercial lending arrangements, of which $1.6 million
was at fixed rates and $14.0 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 March 31, 2004.

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

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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

None

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

None

Item 5.  Other Information

None

Item 6.  Exhibits and Reports on Form 8-K

(a)    
          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.

(b)    
          Reports on Form 8-K

No
reports were filed by the company during the quarter ended March 31, 2004.

16

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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:    May 14, 2004

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

Date:    May 14, 2004

17

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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