Under the agreement, First Capital common stockholders will receive 0.98 shares of Eastern Virginia for each of their shares in First Capital, valued at approximately $27 million as of the close of business on April 2, 2009.

The name of the holding company and the bank will be determined at a later date. The bank's headquarters will be located in the greater Richmond area and the company's operations center will be located in Tappahannock.

Joe Shearin will remain in his position as president and CEO of Eastern Virginia. John Presley, currently managing director and CEO of First Capital, will become managing director and CFO of Eastern Virginia. Rand Cook will remain chairman of the board of Eastern Virginia and Grant Grayson, First Capital's current chairman, will become vice chairman of the board of Eastern Virginia.

Robert Watts, Jr will serve as president and CEO of the combined bank while Joseph James, Jr will serve as its COO. Mr Watts currently serves as president and CEO of First Capital Bank, a wholly owned subsidiary of First Capital Bancorp, while Mr James is currently the COO of EVB, a wholly owned subsidiary of Eastern Virginia Bankshares.

Keefe, Bruyette and Woods acted as financial advisor to Eastern Virginia and Williams Mullen acted as its legal advisor in the transaction. Burke Capital Group, a division of Morgan Keegan, and Davenport & Company acted as financial advisors to First Capital and Cantor Arkema acted as its legal advisor.

The companies expect to complete the transaction by the end of 2009, subject to shareholder and regulatory approvals.

Mr Shearin said: "This alliance is unusual in this environment, in that it combines two solid, healthy banks to make an even stronger financial services provider. EVB and First Capital Bank have complementary strengths, and we fully intend to take advantage of these to provide expanded products and services for our customers and the communities in which we operate."

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