First Capital Bancorp, Inc. Announces a $17.8 Million Rights Offering and the Execution of a Standby Purchase Agreement with Kenneth R. Lehman

Jan 19, 2012, 16:00 ET from First Capital Bancorp, Inc.

GLEN ALLEN, Va., Jan. 19, 2012 /PRNewswire/ -- First Capital Bancorp, Inc. (NASDAQ: FCVA) announced today that it intends to conduct a $17.8 million rights offering, and that it has entered into a Standby Purchase Agreement with Kenneth R. Lehman, (the "Standby Purchaser") to facilitate the offering.

First Capital Bancorp intends to commence the rights offering during the first quarter of 2012.  In the rights offering, First Capital Bancorp will offer for sale 8.9 million units for a price of $2.00 per unit, to stockholders as of a to-be determined future record date. Each unit will consist of one share of common stock, and a warrant to purchase one-half of a share of common stock for $2.00 per whole share. For each share of common stock held as of the record date, a stockholder will receive a nontransferable right to subscribe for up to three units in the offering (the "Basic Subscription Privilege").  Stockholders who exercise their Basic Subscription Privilege in full will have the opportunity to purchase units that are not purchased by other stockholders who exercise their Basic Subscription Privilege and by the Standby Purchaser.

The Company has separately entered into a Standby Purchase Agreement with the Standby Purchaser, Kenneth R. Lehman, a private investor from Arlington, Virginia.  The Standby Purchase Agreement provides that the Standby Purchaser will purchase 350,000 units if such units are available after stockholders exercise their Basic Subscription Privilege. The Standby Purchaser's obligation is conditioned on the Company's receipt of valid subscriptions for a minimum of $5.0 million, including $1.0 million from executive officers and directors, although the Standby Purchaser may waive these conditions.  The Standby Purchase Agreement grants the Standby Purchaser a right of first refusal to purchase up to 4,902,432 units if available after the exercise of the Basic Subscription Privilege, provided that immediately following the completion of the offering the Standby Purchaser may not own more than 45% of First Capital Bancorp's outstanding shares of common stock (calculated as set forth in the agreement). The Standby Purchase Agreement also limits the Standby Purchaser's ability to vote more than 45% of the Company's outstanding shares should he acquire greater ownership in the future.  The Standby Purchaser's purchase is conditioned upon the receipt of regulatory approval.

John Presley, Managing Director and CEO of First Capital Bancorp, Inc. stated, "Over the past three years our company has been very internally focused on preserving capital, maintaining liquidity, improving asset quality, improving core earnings and reducing our exposure to acquisition and development loans.  We are conducting the rights offering to improve our capital position, to accelerate our asset resolution plan for resolving certain problem assets and to provide additional capital for our bank subsidiary.  If sufficient funds are raised, we will also consider repaying our TARP funds.  We chose to raise capital through a rights offering to give our current shareholders an opportunity to maintain their current level of ownership.  We are also pleased to have an investor like Mr. Lehman willing to invest in our company."

The Company currently operates seven branches in Innsbrook, Chesterfield Towne Center, near Willow Lawn on Staples Mill Road, in Ashland, at Three Chopt and Patterson in Henrico County, at the James Center in downtown, Richmond, and in Bon Air, Chesterfield County. 

Readers are cautioned that this press release contains forward-looking statements made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management's current knowledge, assumptions, and analyses, which it believes are appropriate in the circumstances regarding future events, and may address issues that involve significant risks including, but not limited to: changes in interest rates; changes in accounting principles, policies, or guidelines; significant changes in general economic, competitive, and business conditions; significant changes in or additions to laws and regulatory requirements; and significant changes in securities markets. Additionally, such aforementioned uncertainties, assumptions, and estimates, may cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements.

A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective.  These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. Copies of the registration statement may be obtained from the Securities and Exchange Commission's website at or by contacting the Company at First Capital Bancorp, Inc., 4222 Cox Road, Suite 200, Glen Allen, Virginia  23060, Attention:  Investor Relations (telephone; (804) 273-1160).This press release shall not constitute an offer to sell or the solicitation of an offer to buy shares of common stock nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. The securities are not savings accounts or savings deposits, may lose value and are not insured by the Federal Deposit Insurance Corporation or any government agency.

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SOURCE First Capital Bancorp, Inc.