Bylaws - HAMPTON ROADS BANKSHARES INC - 3-26-2003

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					                                                    Exhibit 3.1

                                           BYLAWS
                                              OF
                                 HAMPTON ROADS BANKSHARES, INC.

                                                  ARTICLE I.
                                            Meetings of Shareholders

1.1 Places of Meetings. All meetings of the shareholders shall be held at such place, either within or without the
State of Virginia, as from time to time may be fixed by the Board of Directors.

1.2 Annual Meetings. The annual meeting of the shareholders, for the election of Directors and transaction of
such other business as may come before the meeting, shall be held each year on such business day as shall be
designated in a resolution of the Board of Directors. The failure to hold an annual meeting at the time stated in or
fixed in accordance with these Bylaws does not affect the validity of any action taken by the Corporation.

1.3 Special Meetings. Special meetings of the shareholders for any purpose or purposes may be called at any
time by the Board of Directors on its own motion or on the motion of the Chairman of the Board of Directors, the
President, or such other person or persons authorized to do so by law, and upon such call the Board of Directors
shall fix the date of such special meeting. At a special meeting no business shall be transacted and no action shall
be taken other than that stated in the notice of the meeting.

1.4 Notice of Meetings. Written notice stating the place, day and hour of every meeting of the shareholders and,
in case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than
ten nor more than sixty days before the date of the meeting to each shareholder of record entitled to vote at such
meeting, at his address which appears on the stock transfer books of the Corporation except that notice of a
shareholders' meeting to act on an amendment of the Articles of Incorporation, a plan of merger or share
exchange, a proposed sale of assets pursuant to Section 13.1-724 of the Virginia Stock Corporation Act or the
dissolution of the Corporation shall be given not less than twenty-five nor more than sixty days before the meeting
date. Meetings may be held without notice if all the shareholders entitled to vote at the meeting are present in
person or by proxy or if notice is waived in writing by those not present, either before or after the meeting.

1.5 Action by Shareholders Without a Meeting. Any action which may be taken at a meeting of the shareholders
may be taken without a meeting if one or more consents, in writing, setting forth the action so taken, shall be
signed by all of the shareholders entitled to vote with respect to the subject matter thereof and delivered to the
Secretary for inclusion in the Corporation's minutes or filing with the Corporation's records. Any action taken by
unanimous written consent of the shareholders shall be effective according to its terms when all consents are in
possession of the Corporation. Notwithstanding the foregoing, an action taken by written consent of the
shareholders that specifies an effective date shall be effective as of such date, provided the consent states the date
of execution by each shareholder. A shareholder may withdraw his written consent only by delivering a written
notice of withdrawal to the Secretary prior to the time that all consents are in possession of the Corporation. If
not otherwise determined by resolution of the Board of Directors, the record date for determining shareholders
entitled to take action without a meeting shall be the date the first shareholder signs such consent. Any such
consent shall have the same force and effect as a unanimous vote of the shareholders.

1.6 Quorum. Any number of shareholders together holding at least a majority of the outstanding shares of capital
stock entitled to vote with respect to the business to be transacted, who shall be present in person or represented
by proxy at any meeting duly called, shall constitute a quorum for the transaction of business. If less than a
quorum shall be in attendance at the time for which a meeting shall have been called, the meeting may be
adjourned from time to time by a majority of the shareholders present or represented by proxy without notice
other than by announcement at the meeting until a quorum shall attend. Once a share is represented for any
purpose at a meeting of shareholders, it shall be deemed present for quorum purposes for the remainder of the
meeting and for any adjournment of that meeting unless a new record date is, or shall be, set for that adjourned
meeting.
1.7 Voting. At any meeting of the shareholders each shareholder entitled to vote on any matter coming before the
meeting shall, as to such matter, have one vote, in person or by proxy, for each share of capital stock standing in
his or her name on the books of the Corporation on the date, not more than seventy days prior to such meeting,
fixed by the Board of Directors, for the purpose of determining shareholders entitled to vote, as the date on
which the stock transfer books of the Corporation are to be closed or as the record date. Every proxy shall be in
writing, dated and signed by the shareholder entitled to vote or his duly authorized attorney-in-fact. An
appointment of a proxy is effective when received by the Secretary or other officer or agent authorized to
tabulate votes before or at the time of the meeting. No proxy shall be valid after eleven months from its date,
unless otherwise expressly provided in the proxy. If a quorum is present at a meeting of the shareholders, action
on a matter other than election of Directors shall be approved if the votes cast within the voting group favoring the
action exceed the votes cast within the voting group opposing the action, unless a vote of a greater number is
required by the Articles of Incorporation or by law. If a quorum is present at a meeting of the shareholders,
Directors shall be elected by a plurality of the votes cast by the shares entitled to vote in such election.

1.8 Inspectors. An appropriate number of inspectors for any meeting of shareholders may be appointed by the
Chairman of such meeting. Inspectors so appointed will open and close the polls, will receive and take charge of
proxies and ballots, and will decide all questions as to the qualifications of voters, validity of proxies and ballots,
and the number of votes properly cast.

                                                    ARTICLE II.
                                                     Directors

2.1 General Powers. The property, affairs and business of the Corporation shall be managed by the Board of
Directors, a majority of which shall be citizens of Virginia, and, except as otherwise expressly provided by law,
the Articles of Incorporation or these Bylaws, all of the powers of the Corporation shall be vested in such Board.
No Director of the Corporation shall at the same time serve as a director of any other financial institution unless
such institution is within the same financial institution holding company as the Corporation. Every Director of the
Corporation must be a stockholder of the Corporation in accordance with the provisions of Section 6.1-47 of the
Code of Virginia, 1950, as amended. Such stock must be unpledged and unencumbered at the time such
Director becomes a Director and during the whole of his term as such.

2.2 Oath of Directors. Every Director of the Corporation shall, within thirty days after his election, take and
subscribe to an oath that he will diligently and honestly perform his duties as Director, and that he is the owner
and has in his personal possession or control, standing in his sole name on the books of the Corporation,
unpledged and unencumbered in any way, shares of stock of the Corporation, having a book value of not less
than $5,000 or as may be prescribed in Section 6.1-47 of the Code of Virginia, 1950, as amended, and, in case
of reelection or reappointment, that during the whole of his immediate previous term as a Director, such stock
was not at any time pledged or in any other manner encumbered or hypothecated to secure a loan. Such oath
subscribed to by such Director, certified by the officer before whom it is taken, shall be transmitted by the
Secretary of the Corporation to the State Corporation Commission. Any Director who fails for a period of thirty
days after his election or appointment to take the oath shall automatically forfeit his office.

2.3 Number, Election, Removal, Vacancies. The Articles of Incorporation specify the number of Directors,
divide the Directors into three
(3) classes, establish the term of office for each class, specify procedures for removal of Directors and contain
certain other provisions relating to the Board of Directors and Directors. The Articles of Incorporation shall
govern with regard to all matters concerning the Board of Directors and the Directors that are addressed in the
Articles. Section 2.8 of these Bylaws governs nominations of Directors. Additionally:

(a) A Director who fails to attend at least seventy-five percent (75%) of the meetings in any calendar year shall
be subject to removal by vote of a majority of the Board of Directors at any time within six (6) months after the
end of said calendar year; and

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(b) A majority of the number of Directors elected and serving at the time of any meeting shall constitute a quorum
for the transaction of business. The act of a majority of Directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors. Less than a quorum may adjourn any meeting.

(c) The election of any new Director to the Board of Directors shall be reported to the State Corporation
Commission in accordance with the requirement of Section 6.1-48.1 of the Code of Virginia, 1950, as amended.

2.4 Meetings of Directors. The Board of Directors shall hold meetings at least annually, at which meeting a
majority of the whole Board shall be necessary for the lawful transaction of business. Other meetings of the
Board of Directors shall be held at places within or without the State of Virginia and at times fixed by resolution
of the Board, or upon call of the Chairman of the Board, the President or a majority of the Directors. The
Secretary or officer performing the Secretary's duties shall give not less than twenty-four hours' notice by letter,
telegraph or telephone of all meetings of the Board of Directors, provided that notice need not be given of the
annual meeting or of regular meetings held at times and places fixed by resolution of the Board. Meetings may be
held at any time without notice if all of the Directors are present, or if those not present waive notice in writing
either before or after the meeting. The notice of meetings of the Board need not state the purpose of the meeting.
Members of the Board of Directors or any committee designated thereby may participate in a meeting of the
Board or such committee by any means of communication whereby all persons participating in the meeting can
simultaneously hear each other, and participation by such means shall constitute presence in person at such
meeting. A written record shall be made of any action taken at a meeting conducted by such means of
communication.

2.5 Actions by Board of Directors or Committee Without Meeting. Any action which may be taken at a meeting
of the Board of Directors or of a committee of the Board may be taken without a meeting if one or more
consents in writing, setting forth the action so taken, is signed either before or after such action by all of the
Directors or all of the members of the committee, as the case may be, and delivered to the Secretary for inclusion
in the Corporation's minutes or filing with the Corporation's records. Such action shall be effective when the last
Director or committee member, as the case may be, signs the consent, unless the consent specifies a different
effective date, in which event an action so taken shall be effective on the date specified therein, provided the
consent states the date of execution by each Director or committee member, as the case may be. Any such
consent shall have the same force and effect as a unanimous vote of the Directors or committee members, as the
case may be.

2.6 Compensation. By resolution of the Board of Directors, Directors may be allowed a fee and expenses for
attendance at all meetings, as well as discount and other privileges. Nothing herein shall preclude Directors from
serving the Corporation in other capacities and receiving compensation for such other services.

2.7 Retirement Age of Directors; Directors Emeritus. There shall be no mandatory retirement age for Directors.
Following retirement a Director may, upon affirmative vote of a majority of the Board of Directors, serve as
Director Emeritus, which position shall be honorary and without voting rights.

2.8 Nomination of Directors.

(a) Eligibility. Only persons who are selected and recommended by the Board of Directors or the committee of
the Board of Directors designated to make nominations, or who are nominated by shareholders in accordance
with the procedures set forth in this Section 2.8, shall be eligible for election, or qualified to serve, as directors.
Nominations of individuals for election to the Board of Directors of the Corporation at any annual meeting or any
special meeting of shareholders at which directors are to be elected may be made by any shareholder of the
Corporation entitled to vote for the election of directors at that meeting by compliance with the procedures set
forth in this
Section 2.8. Nominations by shareholders shall be made by written notice (a "Nomination Notice"), which shall
set forth the following information: (1) as to each individual nominated, (i) the name, date of birth, business
address and residence address of such individual, (ii) the business experience during the past five years of such
nominee, including his or her principal occupations and employment during such period, the name and principal
business of any corporation or other organization in which such occupations and employment were carried on,
and such other information as to the nature of his or her responsibilities and level of professional competence as
may be sufficient to permit assessment of his or her
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prior business experience, (iii) whether the nominee is or has ever been at any time a director, officer or owner of
5% or more of any class of capital stock, partnership interests or other equity interest of any corporation,
partnership or other entity, (iv) any directorships held by such nominee in any company with a class of securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
subject to the requirements of Section 15(d) of the Exchange Act or any Company registered as a investment
company under the Investment Company Act of 1940, as amended, (v) whether, in the last five years, such
nominee has been convicted in a criminal proceeding or has been subject to a judgment, order, finding or decree
of any federal, state or other governmental entity, concerning any violation of federal, state or other law, or any
proceeding in bankruptcy, which conviction, order, finding, decree or proceeding may be material to an
evaluation of the ability or integrity of the nominee and (vi) such other information regarding each nominee as
would be required to be included in a proxy statement filed pursuant to the Exchange Act had the nominee been
nominated by the Board of Directors; and (2) as to the person submitting the Nomination Notice and any person
acting in concert with such person, (i) the name and business address of such person, (ii) the name and address of
such person as they appear on the Corporation's books (if they so appear), (iii) the class and number of shares of
the Corporation that are beneficially owned by such person, (iv) a representation that the shareholder (A) is a
holder of record of common stock of the Corporation entitled to vote at the meeting at which directors will be
elected and (B) intends to appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice and (v) a description of all arrangements or understandings between the shareholder and
each nominee and any other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the shareholder. A written consent to being named in a proxy
statement as a nominee, and to serve as a director if elected, signed by the nominee, shall be filed with any
Nomination Notice. If the presiding officer at any shareholders' meeting determines that a nomination was not
made in accordance with the procedures prescribed by these Bylaws, he shall so declare to the meeting and the
defective nomination shall be disregarded.

(b) Shareholder Nomination Notice. Nomination Notices shall be delivered to the Secretary at the principal
executive office of the Corporation not later than (i) 45 days before the date on which the Corporation first
mailed its proxy materials for the prior year's annual meeting of shareholders (or, if the date of the annual meeting
has changed more than 30 days from the prior year, then notice must be received a reasonable time before the
Corporation mails its proxy materials for the current year) or, (ii) in the case of special meetings, at the close of
business on the seventh day following the date on which notice of such meeting is first given to shareholders.

                                                  ARTICLE III.
                                                   Committees

3.1 Executive Committee. The Board of Directors, by resolution adopted by a majority of the number of
Directors then in office, may elect an Executive Committee which shall consist of not less than two Directors,
including the President. When the Board of Directors is not in session, the Executive Committee shall have all
power vested in the Board of Directors by law, by the Articles of Incorporation, or by these Bylaws, provided
that the Executive Committee shall not have power to approve an amendment to the Articles of Incorporation or
a plan of merger or consolidation, a plan of exchange under which the Corporation would be acquired, the sale,
lease or exchange, or the mortgage or pledge for a consideration other than money, of all, or substantially all, the
property and assets of the Corporation otherwise than in the usual and regular course of its business, the
voluntary dissolution of the Corporation, or revocation of voluntary dissolution proceedings, or to take any action
prohibited by express resolution of the Board of Directors. The Executive Committee shall report at the next
regular or special meeting of the Board of Directors all action which the Executive Committee may have taken on
behalf of the Board since the last regular or special meeting of the Board of Directors.

3.2 Other Committees. The Board of Directors, by resolution duly adopted, may establish such other standing or
special committees of the Board, consisting of at least two Directors, as it may deem advisable; and the
members, terms and authority of such committees shall be as set forth in the resolutions establishing the same.

3.3 Meetings. Regular and special meetings of any committee established pursuant to this Article may be called
and held subject to the same requirements with respect to time, place and notice as are specified in these Bylaws
for regular and special meetings of the Board of Directors.

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3.4 Quorum and Manner of Acting. A majority of the members of any committee serving at the time of any
meeting thereof shall constitute a quorum for the transaction of business at such meeting. The action of a majority
of those members present at a committee meeting at which a quorum is present shall constitute the act of the
committee.

3.5 Term of Office. Members of any committee shall hold office until their successors are elected by the Board of
Directors or until such committee is dissolved by the Board of Directors.

3.6 Resignation and Removal. Any member of a committee may resign at any time by giving written notice of his
intention to do so to the President or the Secretary of the Corporation, or may be removed, with or without
cause, at any time by such vote of the Board of Directors as would suffice for his election.

3.7 Vacancies. Any vacancy occurring in a Committee resulting from any cause whatever may be filled by the
Board of Directors.

                                                   ARTICLE IV.
                                                     Officers

4.1 Election of Officers; Terms. The officers of the Corporation shall consist of a Chairman of the Board, a
President, a Secretary, a Treasurer, and at the option of the Board of Directors, one or more Senior Vice
Presidents (sometimes collectively referred to as the "Executive Officers"). Other officers, including one or more
Vice Presidents beneath the level of Senior Vice President, and assistant and subordinate officers (sometimes
collectively referred to as the "Non-Executive Officers"), may from time to time be elected by the Board of
Directors, and they shall hold office for such terms as the Board of Directors may prescribe. In addition, the
President shall have the authority to appoint Non-Executive Officers. All officers shall hold office until the next
annual meeting of the Board of Directors and until their successors are elected. Any two or more offices may be
held by the same person. No officer of the Corporation shall at the same time serve as an officer of any other
financial institution unless such institution is within the same financial institution holding company as the
Corporation.

4.2 Removal of Officers; Vacancies. Any Executive or Non-Executive Officer may be removed summarily with
or without cause, at any time, by the Board of Directors. In addition, the President may remove any Non-
Executive Officer summarily with or without cause, at any time. Vacancies may be filled by the Board of
Directors or by the President with regard to any Non-Executive Officer.

4.3 Duties. The officers of the Corporation shall have such duties as generally pertain to their offices, respectively,
as well as such powers and duties as are prescribed by law or are hereinafter provided or as from time to time
shall be conferred by the Board of Directors. The Board of Directors may require any officer to give such bond
for the faithful performance of his duties as the Board may see fit.

4.4 Duties of the President. The President shall be the chief executive officer of the Corporation and shall be
primarily responsible for the implementation of policies of the Board of Directors. He shall have general
management and direction of the business and operations of the Corporation and its several divisions, subject
only to the ultimate authority of the Board of Directors. Except as otherwise provided in these Bylaws or in the
resolutions establishing such committees, he shall be ex officio a member of all committees of the Board. The
President shall preside at all meetings related to the conduct of the Corporation's business, except Board of
Directors' meetings. He may sign and execute in the name of the Corporation stock certificates, deeds,
mortgages, bonds, contracts or other instruments except in cases where the signing and the execution thereof shall
be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the
Corporation or as otherwise required by law. In addition, he shall perform all duties incident to the office of the
President and such other duties as from time to time may be assigned to him by the Board of Directors.

4.5 Duties of the Chairman of the Board. The Chairman of the Board shall preside at all Board of Directors'
meetings and shall have such powers and duties as may from time to time be assigned to him by the Board of
Directors.

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4.6 Duties of the Senior Vice Presidents. Each Senior Vice President, if any, shall have such powers and duties
as may from time to time be assigned to him by the President or the Board of Directors. Any Senior Vice
President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other
instruments authorized by the Board of Directors, except where the signing and execution of such documents shall
be expressly delegated by the Board of Directors or the President to some other officer or agent of the
Corporation or as otherwise required by law.

4.7 Duties of the Treasurer. The Treasurer shall have charge of and be responsible for all funds, securities,
receipts and disbursements of the Corporation, and shall deposit all monies and securities of the Corporation in
such banks and depositaries as shall be designated by the Board of Directors. He shall be responsible (i) for
maintaining adequate financial accounts and records in accordance with generally accepted accounting practices;
(ii) for the preparation of appropriate operating budgets and financial statements; (iii) for the preparation and filing
of all tax returns required by law; and (iv) for the performance of all duties incident to the office of Treasurer and
such other duties as from time to time may be assigned to him by the Board of Directors or the President. The
Treasurer may sign and execute in the name of the Corporation stock certificates, deeds, mortgages, bonds,
contracts or other instruments, except in cases where the signing and the execution thereof shall be expressly
delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or as
otherwise required by law.

4.8 Duties of the Secretary. The Secretary shall act as secretary of all meetings of the Board of Directors and
shareholders of the Corporation. When requested, he shall also act as secretary of the meetings of the
committees or the Board. He shall keep and preserve the minutes of all such meetings in permanent books. He
shall see that all notices required to be given by the Corporation are duly given and served; shall have custody of
the seal of the Corporation and shall affix the seal or cause it to be affixed to all stock certificates of the
Corporation and to all documents the execution of which on behalf of the Corporation under its seal is duly
authorized in accordance with law or the provisions of these Bylaws; shall have custody of all deeds, leases,
contracts and other important documents related to the conduct of the Corporation's business; shall have charge
of the books, records and papers of the Corporation relating to its organization and management as a
corporation; shall see that all reports, statements and other documents required by law (except tax returns) are
properly filed; and shall in general perform all the duties incident to the office of Secretary and such other duties
as from time to time may be assigned to him by the Board of Directors or the President.

4.9 Compensation. The Board of Directors shall have authority to fix the compensation of all officers of the
Corporation by resolution, with the affected officer not voting, and to enter into such contracts of employment
with such officers as the Board of Directors may deem appropriate. In addition, the President shall have the
authority to fix the compensation of Non-Executive Officers and to enter into contracts of employment with Non-
Executive Officers.

                                                    ARTICLE V.
                                                    Capital Stock

5.1 Subscriptions to Stock. Subscriptions to the capital stock of the Corporation shall be paid in money at not
less than the par value of the stock.

5.2 Certificates. The shares of capital stock of the Corporation may be evidenced by certificates in forms
prescribed by the Board of Directors and executed in any manner permitted by law and stating thereon the
information required by law. Transfer agents and/or registrars for the stock of the Corporation may be appointed
by the Board of Directors and may be required to countersign certificates representing such stock. If any officer
whose signature or facsimile thereof shall have been used on a stock certificate shall for any reason cease to be
an officer of the Corporation and such certificate shall not then have been delivered by the Corporation, the
Board of Directors may nevertheless adopt such certificate and it may then be issued and delivered as though
such person had not ceased to be an officer of the Corporation.

5.3 Lost, Destroyed and Mutilated Certificates. Holders of the stock of the Corporation shall immediately notify
the Corporation of any loss, destruction or mutilation of the certificate therefor, and the Board of Directors may in
its discretion cause one or more new certificates for the same number of shares in the aggregate to be issued to
such
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shareholder upon the surrender of the mutilated certificate or upon satisfactory proof of such loss or destruction,
and the deposit of a bond in such form and amount and with such surety as the Board of Directors may require.

5.4 Transfer of Stock. The stock of the Corporation shall be transferable or assignable only on the books of the
Corporation by the holders in person or by attorney on surrender of the Certificate for such shares duly endorsed
and, if sought to be transferred by attorney, accompanied by a written power of attorney to have the same
transferred on the books of the Corporation. The Corporation will recognize, however, the exclusive right of the
person registered on its books as the owner of shares to receive dividends and to vote as such owner.

5.5 Closing of Transfer Books and Fixing Record Date. For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of
any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of
Directors may provide that the stock transfer books shall be closed for a stated period but not to exceed, in any
case, seventy days. In lieu of closing the stock transfer books, the Board of Directors may fix in advance a date
as the record date for any such determination of shareholders, such date in any case to be not more than seventy
days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken.
If the stock transfer books are not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a
dividend, the date on which notices of the meeting are mailed or the date on which the resolution of the Board of
Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination
of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been
made as provided in this section, such determination shall apply to any adjournment thereof, unless the Board of
Directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than 120 days after
the date fixed for the original meeting.

                                                 ARTICLE VI.
                                               Corporate Records

6.1 Minutes of Meetings and Records of Actions Taken Without Meetings. The Corporation shall keep as
permanent records minutes of all meetings of its shareholders and Board of Directors, of all actions taken by the
shareholders or Board of Directors without a meeting, and of all actions taken by a Committee of the Board of
Directors in place of the Board of Directors on behalf of the Corporation.

6.2 Accounting Records. The Corporation shall maintain appropriate accounting records.

6.3 List of Shareholders. The Corporation or its agent shall maintain a record of its shareholders, in a form that
permits preparation of a list of the names and addresses of all shareholders, in alphabetical order of shares
showing the number of shares held by each.

6.4 Form of Records. The Corporation shall maintain its records in written form or in another form capable of
conversion into written form within a reasonable time.

6.5 Specific Records Which Corporation Must Keep. The Corporation shall keep a copy of the following
records:

(a) The Articles or restated Articles of Incorporation and all amendments to them currently in effect;

(b) The Bylaws or restated Bylaws and all amendments to them currently in effect;

(c) Any resolutions adopted by the Board of Directors creating one or more classes or series of shares, and fixing
their relative rights, preferences, and limitations, if shares issued pursuant to those resolutions are outstanding;

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(d) The minutes of all shareholders' meetings, and records of all action taken by the shareholders without a
meeting, for the past three years;

(e) All written communications to shareholders generally within the past three years;

(f) A list of the names and business addresses of the Corporation's current directors and officers; and

(g) The Corporation's most recent annual report delivered to the State Corporation Commission.

                                                ARTICLE VII.
                                            Miscellaneous Provisions

7.1 Seal. The seal of the Corporation shall consist of a flat-faced circular die, of which there may be any number
of counterparts, on which there shall be engraved the word "Seal" and the name of the Corporation.

7.2 Fiscal Year. The fiscal year of the Corporation shall end on such date and shall consist of such accounting
periods as may be fixed by the Board of Directors.

7.3 Checks, Notes and Drafts. Checks, notes, drafts and other orders for the payment of money shall be signed
by such persons as the Board of Directors from time to time may authorize. When the Board of Directors so
authorizes, however, the signature of any such person may be a facsimile.

7.4 Amendment of Bylaws. Unless proscribed by the Articles of Incorporation or by law, these Bylaws may be
amended or altered at any meeting of the Board of Directors by affirmative vote of a majority of the Directors
fixed by the Board of Directors in accordance with the Articles of Incorporation. Shareholders entitled to vote in
respect to the election of Directors, however, shall have the power to rescind, alter, amend or repeal any Bylaws
and to enact Bylaws which, if expressly so provided, may not be amended, altered or repealed by the Board of
Directors.

7.5 Voting of Stock Held. Unless otherwise provided by resolution of the Board of Directors or of the Executive
Committee, the President may from time to time appoint an attorney or attorneys or agent or agents of this
Corporation, in the name and on behalf of this Corporation, to cast the vote which this Corporation may be
entitled to cast as a stockholder or otherwise in any other corporation, any of whose stock or securities may be
held by this Corporation, at meetings of the holders of the stock or other securities of such other corporation, or
to consent in writing to any action by any such other corporation; and the President shall instruct the person or
persons so appointed as to the manner of casting such votes or giving such consent and may execute or cause to
be executed on behalf of this Corporation, and under its seal or otherwise, such written proxies, consents,
waivers or other instruments as may be necessary or proper in the premises. In lieu of such appointment the
President may himself attend any meetings of the holders of stock or other securities of any such other
corporation and there vote or exercise any or all power of this Corporation as the holder of such stock or other
securities of such other corporation.

7.6 Indemnification. All officers and Directors of the Corporation shall be indemnified to the fullest extent
permitted by law as provided in the Articles of Incorporation.

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                                                    Exhibit 3.2

                                              BYLAWS
                                                OF
                                    THE BANK OF HAMPTON ROADS

                                                ARTICLE 1.
                                           Meetings of Shareholders

1.1 Places of Meetings. All meetings of the shareholders shall be held at such place, either within or without the
State of Virginia, as from time to time may be fixed by the Board of Directors.

1.2 Annual Meetings. The annual meeting of the shareholders, for the election of Directors and transaction of
such other business as may come before the meeting, shall be held in April of each year on such business day as
shall be designated in a resolution of the Board of Directors. The failure to hold an annual meeting at the time
stated in or fixed in accordance with these Bylaws does not affect the validity of any Bank action.

1.3 Special Meetings. Special meetings of the shareholders for any purpose or purposes may be called at any
time by the Board of Directors on its own motion or on the motion of the Chairman of the Board of Directors, the
President, or such other person or persons authorized to do so by law, and upon such call the Board of Directors
shall fix the date of such special meeting. At a special meeting no business shall be transacted and no action shall
be taken other than that stated in the notice of the meeting.

1.4 Notice of Meetings. Written notice stating the place, day and hour of every meeting of the shareholders and,
in case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than
ten nor more than sixty days before the date of the meeting to each shareholder of record entitled to vote at such
meeting, at his address which appears on the stock transfer books of the Bank except that notice of a
shareholders' meeting to act on an amendment of the Articles of Incorporation, a plan of merger or share
exchange, a proposed sale of assets pursuant to Section 13.1-724, or the dissolution of the Bank shall be given
not less than twenty-five nor more than sixty days before the meeting date. Meetings may be held without notice if
all the shareholders entitled to vote at the meeting are present in person or by proxy or if notice is waived in
writing by those not present, either before or after the meeting.

1.5 Action by Shareholders Without a Meeting. Any action which may be taken at a meeting of the shareholders
may be taken without a meeting if one or more consents, in writing, setting forth the action so taken, shall be
signed by all of the shareholders entitled to vote with respect to the subject matter thereof and delivered to the
Secretary for inclusion in the Bank's minutes or filing with the Bank's records. Any action taken by unanimous
written consent of the shareholders shall be effective according to its terms when all consents are in possession of
the Bank. Notwithstanding the foregoing, an action taken by written consent of the shareholders that specifies an
effective date shall be effective as of such date, provided the consent states the date of execution by each
shareholder. A shareholder may withdraw his written consent only by delivering a written notice of withdrawal to
the Secretary prior to the time that all consents aria in possession of the Bank. If not otherwise determined by
resolution of the Board of Directors, the record date for determining shareholders entitled to take action without a
meeting shall be the date the first shareholder signs such consent. Any such consent shall have the same force and
effect as a unanimous vote of the shareholders.

1.6 Quorum. Any number of shareholders together holding at least a majority of the outstanding shares of capital
stock entitled to vote with respect to the business to be transacted, who shall be present in person or represented
by proxy at any meeting duly called, shall constitute a quorum for the transaction of business. If less than a
quorum shall be in attendance at the time for which a meeting shall have been called, the meeting may be
adjourned from time to time by a majority of the shareholders present or represented by proxy without notice
other than by announcement at the meeting until a quorum shall attend. Once a share is represented for any
purpose at a meeting of shareholders, it shall be deemed present for quorum purposes for the remainder of the
meeting and for any adjournment of that meeting unless a new record date is, or shall be, set for that adjourned
meeting.
1.7 Voting. At any meeting of the shareholders each shareholder entitled to vote on any matter coming before the
meeting shall, as to such matter, have one vote, in person or by proxy, for each share of capital stock standing in
his or her name on the books of the Bank on the date, not more than fifty days prior to such meeting, fixed by the
Board of Directors, for the purpose of determining shareholders entitled to Vote, as the date on which the stock
transfer books of the Bank are to be closed or as the record date. Every proxy shall be in writing, dated and
signed by the shareholder entitled to vote or his duly authorized attorney-in-fact. An appointment of a proxy is
effective when received by the Secretary, or other officer or agent authorized to tabulate votes before or at the
time of the meeting. No proxy shall be valid after eleven months from its date, unless otherwise expressly
provided in the proxy. If a quorum is present at a meeting of the shareholders, action on a matter other than
election of Directors shall be approved if the votes cast within the voting group favoring the action exceed the
votes cast within the voting group opposing the action, unless a vote of a greater number is required by the
Articles of Incorporation or by law. If a quorum is present at a meeting of the shareholders, Directors shall be
elected by a plurality of the votes cast by the shares entitled to vote in such election.

1.8 Inspectors. An appropriate number of inspectors for any meeting of shareholders may be appointed by the
Chairman of such meeting. Inspectors so appointed will open and close the polls, will receive and take charge of
proxies and ballots, and will decide all questions as to the qualifications of voters, validity of proxies and ballots,
and the number of votes properly cast.

                                                    ARTICLE II.
                                                     Directors

2.1 General Powers. The property, affairs and business oil the Bank shall be managed by the Board of Directors,
a majority of which shall be citizens of Virginia, and, except as otherwise expressly provided by law, the Articles
of Incorporation or these Bylaws, all of the powers of the Bank shall be vested in such Board. No Director of the
Bank shall at the same time serve as a director of any other financial institution unless such institution is within the
same financial institution holding company as the Bank. Every Director of the Bank must be a stockholder of the
Bank in accordance with the provisions of
Section 6.1-47 of the Code of Virginia, 1950, as amended. Such stock must be unpledged and unencumbered at
the time such Director becomes a Director and during the whole of his term as such.

2.2 Oath of Directors. Every Director of the Bank shall, within sixty days after his election, take and subscribe to
an oath that he will diligently and honestly perform his duties as Director, and that he is the owner and has in his
personal possession or control, standing in his sole name on the books of the Bank, unpledged and
unencumbered in any way, shares of stock of the Bank, having a par value of not less than $1,000.00 or as may
be prescribed in
Section 6.1-47 of the Code of Virginia, 1950, as amended, and, in case of reelection or reappointment, that
during the whole of his immediate previous term as a Director, such stock was not at any time pledged or in any
other manner encumbered or hypothecated to secure a loan. Such oath subscribed to by such Director, certified
by the officer before whom it is taken, shall be transmitted by the Secretary of the Bank to the State Corporation
Commission. Any Director who fails for a period of sixty days after his election or appointment to take the oath,
shall automatically forfeit his office.

2.3 Number, Election, Removal, Vacancies. The Articles of Incorporation specify the number of Directors,
divide the Directors into three
(3) classes, establish the term of office for each class, specify procedures for nomination, election and removal of
Directors and contain certain other provisions relating to the Board of Directors and Directors. The Articles of
Incorporation shall govern with regard to all matters concerning the Board of Directors and the Directors that are
addressed in the Articles. Additionally:

(a) A Director who fails to attend at least seventy-five percent (75%) of the meetings in any calendar year shall
be subject to removal by vote of a majority of the Board of Directors at any time within six (6) months after the
end of said calendar year; and

(b) A majority of the number of Directors elected and serving at the time of any meeting shall constitute a quorum
for the transaction of business. The act of a majority of Directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors. Less than a quorum may adjourn any meeting.
2
(c) The election of any new Director to the Board of Directors shall be reported to the State Corporation
Commission in accordance with the requirement of Section 6.1-48.1 of the Code of Virginia, 1950, as amended.

2.4 Meetings of Directors. The Board of Directors shall hold meetings at least once in each calendar month, at
which meeting a majority of the whole Board shall be necessary for the lawful transaction of business. Other
meetings of the Board of Directors shall be held at places within or without the State of Virginia and at times fixed
by resolution of the Board, or upon call of the Chairman of the Board, the President or a majority of the
Directors. The Secretary or officer performing the Secretary's duties shall give not less than twenty-four hours'
notice by letter, telegraph or telephone of all meetings of the Board of Directors, provided that notice need not be
given of the annual meeting or of regular meetings held at times and places fixed by resolution of the Board.
Meetings may be held at any time without notice if all of the Directors are present, or if those not present waive
notice in writing either before or after the meeting. The notice of meetings of the Board need not state the purpose
of the meeting. Members of the Board of Directors or any committee designated thereby may participate in a
meeting of the Board or such committee by any means of communication whereby all persons participating in the
meeting can simultaneously hear each other, and participation by such means shall constitute presence in person
at such meeting. A written record shall be made of any action taken at a meeting conducted by such means of
communication.

2.5 Actions by Board of Directors or Committee Without Meeting. Any action which may be taken at a meeting
of the Board of Directors or of a committee of the Board may be taken without a meeting if one or more
consents in writing, setting forth the action so taken, is signed either before or after such action by all of the
Directors or all of the members of the committee, as the case may be, and delivered to the Secretary for inclusion
in the Bank's minutes or filing with the Bank's records. Such action shall be effective when the last Director or
committee member, as the case may be, signs the consent, unless the consent specifies a different effective date,
in which event an action so taken shall be effective on the date specified therein, provided the consent states the
date of execution by each Director or committee member, as the case may be. Any such consent shall have the
same force and effect as a unanimous vote of the Directors or committee members, as the case may be.

2.6 Compensation. By resolution of the Board of Directors, Directors may be allowed a fee and expenses for
attendance at all meetings, as well as discount and other privileges. Nothing herein shall preclude Directors from
serving the Bank in other capacities and receiving compensation for such other services.

2.7 Retirement Age of Directors; Directors Emeritus. There shall be no mandatory retirement age for Directors.
Following retirement a Director may, upon election by affirmative vote of a majority of the Board, serve as
Director Emeritus, which position shall be honorary and without voting rights.

                                                  ARTICLE III.
                                                   Committees

3.1 Executive Committee. The Board of Directors, by resolution adopted by a majority of the number of
Directors then in office, may elect an Executive Committee which shall consist of not less than two Directors,
including the President. When the Board of Directors is not in session, the Executive Committee shall have all
power vested in the Board of Directors by law, by the Articles of Incorporation, or by these Bylaws, provided
that the Executive Committee shall not have power to approve an amendment to the Articles of Incorporation or
a plan of merger or consolidation, a plan of exchange under which the Bank would be acquired, the sale, lease or
exchange, or the mortgage or pledge for a consideration other than money, of all, or substantially all, the property
and assets of the Bank otherwise than in the usual and regular course of its business, the voluntary dissolution of
the Bank, or revocation of voluntary dissolution proceedings, or to take any action prohibited by express
resolution of the Board of Directors. The Executive Committee shall report at the next regular or special meeting
of the Board of Directors all action which the Executive Committee may have taken on behalf of the Board since
the last regular or special meeting of the Board of Directors.

                                                         3
3.2 Other Committees. The Board of Directors, by resolution duly adopted, may establish such other standing or
special committees of the Board, consisting of at least two Directors, as it may deem advisable; and the
members, terms and authority of such committees shall be as set forth in the resolutions establishing the same.

3.3 Meetings. Regular and special meetings of any committee established pursuant to this Article may be called
and held subject to the same requirements with respect to time, place and notice as are specified in these Bylaws
for regular and special meetings of the Board of Directors.

3.4 Quorum and Manner of Acting. A majority of the members of any committee serving at the time of any
meeting thereof shall constitute a quorum for the transaction of business at such meeting. The action of a majority
of those members present at a committee meeting at which a quorum is present shall constitute the act of the
committee.

3.5 Term of Office. Members of any committee shall hold office until their successors are elected by the Board of
Directors or until such committee is dissolved by the Board of Directors.

3.6 Resignation and Removal. Any member of a committee may resign at any time by giving written notice of his
intention to do so to the President or the Secretary of the Bank, or may be removed, with or without cause, at
any time by such vote of the Board of Directors as would suffice for his election.

3.7 Vacancies. Any vacancy occurring in a Committee resulting from any cause whatever may be filled by the
Board of Directors.

                                                  ARTICLE IV.
                                                    Officers

4.1 Election of Officers; Terms. The officers of the Bank shall consist of a Chairman of the Board, a President, a
Secretary, a Treasurer, and at the option of the Board of Directors, one or more Executive Vice Presidents
(sometimes collectively referred to as the "Executive Officers"). Other officers, including one or more Vice
Presidents beneath the level of Executive Vice President, and assistant and subordinate officers (sometimes
collectively referred to as the "Non-Executive Officers"), may from time to time be elected by the Board of
Directors, and they shall hold office for such terms as the Board of Directors may prescribe. In addition, the
President shall have the authority to appoint Non-Executive Officers. All officers shall hold office until the next
annual meeting of the Board of Directors and until their successors are elected. Any two or more offices may be
held by the same person. No officer of the Bank shall at the same time serve as an officer of any other financial
institution unless such institution is within the same financial institution holding company as the Bank.

4.2 Removal of Officers; Vacancies. Any Executive or Non-Executive Officer may be removed summarily with
or without cause, at any time, by the Board of Directors. In addition, the President may remove any Non-
Executive Officer summarily with or without cause, at any time. Vacancies may be filled by the Board of
Directors or by the President with regard to any Non-Executive Officer.

4.3 Duties. The officers of the Bank shall have such duties as generally pertain to their offices, respectively, as
well as such powers and duties as are prescribed by law or are hereinafter provided or as from time to time shall
be conferred by the Board of Directors. The Board of Directors may require any officer to give such bond for the
faithful performance of his duties as the Board may see fit.

4.4 Duties of the President. The President shall be the chief executive officer of the Bank and shall be primarily
responsible for the implementation of policies of the Board of Directors. He shall have general management and
direction of the business and operations of the Bank and its several divisions, subject only to the ultimate authority
of the Board of Directors. Except as otherwise provided in these Bylaws or in the resolutions establishing such
committees, he shall be ex officio a member of all committees of the Board. The President shall preside at all
bank meetings, except Board of Directors' meetings. He may sign and execute in the name of the Bank stock
certificates, deeds, mortgages, bonds, contracts or other instruments except in cases where the signing and the
execution thereof shall be expressly

                                                          4
delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or as
otherwise required by law. In addition, he shall perform all duties incident to the office of the President and such
other duties as from time to time may be assigned to him by the Board of Directors.

4.5 Duties of the Chairman of the Board. The Chairman of the Board shall preside at all Board of Directors'
meetings and shall have such powers and duties as may from time to time be assigned to him by the Board of
Directors.

4.6 Duties of the Vice Presidents. Each Vice President, if any, shall have such powers and duties as may from
time to time be assigned to him by the President or the Board of Directors. Any Vice President may sign and
execute in the name of the Bank deeds, mortgages, bonds, contracts or other instruments authorized by the
Board of Directors, except where the signing and execution of such documents shall be expressly delegated by
the Board of Directors or the President to some other officer or agent of the Bank or as otherwise required by
law.

4.7 Duties of the Treasurer. The Treasurer shall have charge of and be responsible for all funds, securities,
receipts and disbursements of the Bank, and shall deposit all monies and securities of the Bank in such banks and
depositaries as shall be designated by the Board of Directors. He shall be responsible (i) for maintaining adequate
financial accounts and records in accordance with generally accepted accounting practices; (ii) for the preparation
of appropriate operating budgets and financial statements; (iii) for the preparation and filing of all tax returns
required by law; and (iv) for the performance of all duties incident to the office of Treasurer and such other duties
as from time to time may be assigned to him by the Board of Directors or the President. The Treasurer may sign
and execute in the name of the Ban,,, stock certificates, deeds, mortgages, bonds, contracts or other instruments,
except in cases where the signing and the execution thereof shall be expressly delegated by the Board of
Directors or by these Bylaws to some other officer or agent of the Bank or as otherwise required by law.

4.8 Duties of the Secretary. The Secretary shall act as secretary of all meetings of the Board of Directors and
shareholders of the Bank. When requested, he shall also act as secretary of the meetings of the committees of the
Board. He shall keep and preserve the minutes of all such meetings in permanent books. He shall see that all
notices required to be given by the Bank are duly given and served; shall have custody of the seal of the Bank
and shall affix the seal or cause it to be affixed to all stock certificates of the Bank and to all documents the
execution of which on behalf of the Bank under its bank seal is duly authorized in accordance with law or the
provisions of these Bylaws; shall have custody of all deeds, leases, contracts and other important bank
documents; shall have charge of the books, records and papers of the Bank relating to its organization and
management as a corporation; shall see that all reports, statements and other documents required by law (except
tax returns) are properly filed; and shall in general perform all the duties incident to the office of Secretary and
such other duties as from time to time may be assigned to hint by the Board of Directors or the President.

4.9 Compensation. The Board of Directors shall have authority to fix the compensation of all officers of the Bank
by resolution, with the affected officer not voting, and to enter into such contracts of employment with such
officers as the Board of Directors may deem appropriate. In addition, the President shall have the authority to fix
the compensation of Non-Executive Officers and to enter into contracts of employment with Non-Executive
Officers.

                                                   ARTICLE V.
                                                   Capital Stock

5.1 Subscriptions to Stock. Subscriptions to the capital stock of the Bank shall be paid in money at not less than
the par value of the stock.

5.2 Certificates. The shares of capital stock of the Bank may be evidenced by certificates in forms prescribed by
the Board of Directors and executed in any manner permitted by law and stating thereon the information required
by law. Transfer agents and/or registrars for the stock of the Bank may be appointed by the Board of Directors
and may be required to countersign certificates representing such stock. If any officer whose signature or
facsimile thereof shall have been used on a stock certificate shall for any reason cease to be an officer of the Bank
and such certificate shall not then

                                                          5
have been delivered by the Bank, the Board of Directors may nevertheless adopt such certificate and it may then
be issued and delivered as though such person had not ceased to be an officer of the Bank.

5.3 Lost, Destroyed and Mutilated Certificates. Holders of the stock of the Bank shall immediately notify the
Bank of any loss, destruction or mutilation of the certificate therefor, and the Board of Directors may in its
discretion cause one or more new certificates for the same number of shares in the aggregate to be issued to such
shareholder upon the surrender of the mutilated certificate or upon satisfactory proof of such loss or destruction,
and the deposit of a bond in such form and amount and with such surety as the Board of Directors may require.

5.4 Transfer of Stock. The stock of the Bank shall be transferable or assignable only on the books of the Bank
by the holders in person or by attorney on surrender of the Certificate for such shares duly endorsed and, if
sought to be transferred by attorney, accompanied by a written power of attorney to have the same transferred
on the books of the Bank. The Bank will recognize, however, the exclusive right of the person registered on its
books as the owner of shares to receive dividends and to vote as such owner.

5.5 Closing of Transfer Books and Fixing Record Date. For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of
any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of
Directors may provide that the stock transfer books shall be closed for a stated period but not to exceed, in any
case, fifty days. In lieu of closing the stock transfer books, the Board of Directors may fix in advance a date as
the record date for any such determination of shareholders, such date in any case to be not more than seventy
days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken.
If the stock transfer books are not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a
dividend, the date on which notices of the meeting are mailed or the date on which the resolution of the Board of
Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination
of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been
made as Provided in this section, such determination shall apply to any adjournment thereof, unless the Board of
Directors fixes a new record date, which it shall do if the meeting is adjourned to a date more than 120 days after
the date fixed for the original meeting.

                                                 ARTICLE VI.
                                               Corporate Records

6.1 Minutes of Meetings and Records of Actions Taken Without Meetings. The Bank shall keep as permanent
records minutes of all meetings of its shareholders and Board of Directors, of all actions taken by the
shareholders or Board of Directors without a meeting, and of all actions taken by a Committee of the Board of
Directors in place of the Board of Directors on behalf of the Bank.

6.2 Accounting Records. The Bank shall maintain appropriate accounting records.

6.3 List of Shareholders. The Rank or its agent shall maintain a record of its shareholders, in a form that permits
preparation of a list of the names and addresses of all shareholders, in alphabetical order of shares showing the
number of shares held by each.

6.4 Form of Records. The Bank shall maintain its records in written form or in another form capable of
conversion into written form within a reasonable time.

6.5 Specific Records Which Bank Must Keep. The Bank shall keep a copy of the following records:

(a) The Articles or restated Articles of Incorporation and all amendments to them currently in effect;

(b) The Bylaws or restated Bylaws and all amendments to them currently in effect;

                                                         6
(c) Any resolutions adopted by the Board of Directors creating one or more classes or series of shares, and fixing
their relative rights, preferences, and limitations, if shares issued pursuant to those resolutions are outstanding;

(d) The minutes of all shareholders' meetings, and records of all action taken by the shareholders without a
meeting, for the past three years;

(e) All written communications to shareholders generally within the past three years;

(f) A list of the names and business addresses of the Bank's current directors and officers; and

(g) The Bank's most recent annual report delivered to the State Bank Commission.

                                                ARTICLE VII.
                                            Miscellaneous Provisions

7.1 Seal. The seal of the Bank shall consist of a flat-faced circular die, of which there may be any number of
counterparts, on which there shall be engraved the word "Seal" and the name of the Bank.

7.2 Fiscal Year. The fiscal year of the Bank shall end on such date and shall consist of such accounting periods as
may be fixed by the Board of Directors.

7.3 Checks, Notes and Drafts. Checks, notes, drafts and other orders for the payment of money shall be signed
by such persons as the Board of Directors from time to time may authorize. When the Board of Directors so
authorizes, however, the signature of any such person may be a facsimile.

7.4 Amendment of Bylaws. Unless proscribed by the Articles of Incorporation, these Bylaws may be amended
or altered at any meeting of the Board of Directors by affirmative vote of a majority of the Directors fixed by the
Board of Directors in accordance with the Articles of Incorporation. Shareholders entitled to vote in respect to
the election of Directors, however, shall have the power to rescind, alter, amend or repeal any Bylaws and to
enact Bylaws which, if expressly so provided, may not be amended, altered or repealed by the Board of
Directors.

7.5 Voting of Stock Held. Unless otherwise provided by resolution of the Board of Directors or of the Executive
Committee, the President may from time to time appoint an attorney or attorneys or agent or agents of this Bank,
in the name and on behalf of this Bank, to cast the vote which this Bank may be entitled to cast as a stockholder
or otherwise in any other corporation, any of whose stock or securities may be held by this Bank, at meetings of
the holders of the stock or other securities of such other corporation, or to consent in writing to any action by any
such other corporation; and the President shall instruct the person or persons so appointed as to the manner of
casting such votes or giving such consent and may execute or cause to be executed on behalf of this Bank, and
under its bank seal or otherwise, such written proxies, consents, waivers or other instruments as may be
necessary or proper in the premises. In lieu of such appointment the President may himself attend any meetings of
the holders of stock or other securities of any such other corporation and there vote or exercise any or all power
of this Bank as the holder of such stock or other securities of such other corporation.

7.6 Indemnification. All officers and Directors of the Bank shall be indemnified to the fullest extent permitted by
law as provided in the Articles of Incorporation.

                                                          7
                                                   Exhibit 10.19

                                       EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT, ("Agreement"), made this 31st day of, December, 2002, by and
between THE BANK OF HAMPTON ROADS, INC., a banking association organized under the laws of the
Commonwealth of Virginia (the "Bank" or "Employer"), and JULIE R. ANDERSON, (the "Executive");

                                              WITNESSETH:

WHEREAS, the Executive currently is rendering valuable services to the Employer and it is the desire of the
Employer to have the benefit of the Executive's continued loyalty, service and counsel; and

WHEREAS, the Executive wishes to continue in the employ of the Employer;

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein set forth, the parties
covenant and agree as follows:

1. EMPLOYMENT: The Employer agrees to continue to employ the Executive to perform services for the
Employer and the Executive agrees to continue to serve the Employer upon the terms and conditions herein
provided. The Executive agrees to perform such managerial duties and responsibilities as shall be assigned to him
by the Board of Directors of the Employer, which duties and responsibilities shall be substantially those functions
of the Executive on the date of this Agreement and the commencement date hereof. The Executive shall devote
his time and attention on a full-time basis to the discharge of the duties undertaken by him hereunder.

2. TERMS AND COMPENSATION:

(a) Term of Employment. The term of employment hereunder shall commence as of the date of this agreement
and shall continue to the first to occur of (i) except as otherwise provided in Section 3 hereof, the end of the
sixtieth consecutive month, following the commencement date aforesaid (ii) the Executive's death, or (iii) except
as provided in Paragraph (d) of this Section 2, the Executive's disability. In the event the Executive is not
informed, in writing, prior to the last day of the forty-eighth consecutive month following the commencement date
of employment as aforesaid that this Agreement will not be renewed, this Agreement will automatically renew
itself for an additional period of sixty months from the anniversary date established by the commencement of
employment as aforesaid.

(b) Compensation. During the term of employment hereunder, the Executive shall receive for his services a basic
salary and incentive or bonus compensation in amounts determined by the Board of Directors or an appropriate
committee of the Employer in accordance with the salary administration program of the Employer as the same
may from time to time be in effect, but in no event shall such basic salary be less than the Executive's basic salary
at the date hereof.

(c) Benefits. The Executive shall be eligible for participation in any additional plans, programs or forms of
compensation or benefits that the Employer's Board of Directors might hereinafter provide to the class of
employees that includes the Executive.

(d) Disability. In the event of the physical or mental disability of the Executive by reason of which the Executive is
unable to perform the duties of his employment hereunder, the Employer shall continue to pay or provide to the
Executive the compensation and benefits provided under Paragraphs (b) and (c) of this Section 2 for the first six
months of such disability. If, however, the disability continues beyond such six-month period, the Employer may,
at its election, terminate the Executive's employment under this Agreement, in which case the Executive shall
receive any disability benefits payable under the Employer's plans in effect at that time.

                                                          1
(e) Death. In the event that the Executive's death should occur during the term of this Agreement, this Agreement
shall terminate and the Executive or his estate or beneficiaries, as the case may be, shall be entitled only to any
and all retirement or death benefits payable under the Employer's plans in effect at that time and no further
compensation will be paid under this Agreement.

3. TERMINATION:

(a) Termination by the Employer. Nothing herein contained shall prevent the Employer from terminating the
services of the Executive at any time prior to the expiration of this Agreement.

(1) If such termination is effective prior to the time "a change in control" (as defined in part (b) of this Paragraph
(3) occurs with respect to the Bank, and prior to the time the Employer enters into negotiations which result in
such change of control, then unless the termination is "for good cause " as hereinafter defined, the Employer shall
pay the Executive a termination allowance in 12 equal monthly payments commencing on the last day of the
month in which the date of actual termination occurs, the total amount of which will equal the base salary plus
director's fees, if any, but not including any bonuses paid to the Executive by the Bank in the 12 months next
preceding the Notice of Termination. Except as provided in this Paragraph 3(a)(1), upon the termination herein
described, the compensation and benefits of the Executive will cease as of the Date of Termination as defined in
Paragraph 3(d).

(2) Termination of employment "for good cause" means a dismissal of the Executive because of (i) the material
failure of the Executive, after written notice, for reasons other than disability, to render services to the Employer
as provided herein, (ii) the Executive's gross or willful neglect of duty, or (iii) illegal or intentional acts by the
Executive demonstrating bad faith toward the Employer. If the Employer shall terminate the Executive's
employment for good cause, the Executive shall be entitled only to receive his basic salary in respect of services
performed through the Date of Termination.

(b) Termination by the Executive. The Executive shall be entitled to terminate his employment for good reason, in
which event the Employer shall be obligated to pay the Executive and furnish him the benefits provided in Section
4 hereof. By way of illustration and not limitation, the following circumstances shall constitute "good reason" and
shall be deemed to be a breach of this Agreement by the Employer:

(i) the Executive is assigned any duties or responsibilities that are inconsistent with his positions, duties,
responsibilities and status with the Employer in effect at the date of this Agreement; or

(ii) a change in control occurs with respect to the Bank.

For purposes of this Agreement, the term "a change in control" shall mean (a) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) who is, or who has entered into a definite
agreement with the Bank to become, the beneficial owner, directly or indirectly, of securities of the Bank
representing more than 50% of the combined voting power of the then outstanding securities of the Bank; or (b) a
change in the composition of a majority of the Board of Directors of the Bank within twelve months after any
person (as defined above) is or becomes the beneficial owner, directly or indirectly, of securities of the Bank
representing 25% of the combined voting power of the then outstanding securities of the Bank. The right herein
conferred upon the Executive to terminate his employment for good reason may be exercised by the Executive at
any time during the terms of this Agreement at his sole discretion, and any failure by the Executive to exercise this
right after he has "good reason" to do so shall not be deemed a waiver of the right.

In the event the Executive terminates his employment without "good reason" then he shall be entitled to no
termination allowance and no severance allowance and no further compensation after the "Date of Termination"
as defined in part (d) of this Paragraph 3.

(c) Notice of Termination. Any termination of the Executive's employment by the Employer or by

                                                            2
the Executive shall be communicated by a written Notice of Termination to the other party hereto. For purposes
of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination.

(d) Date of Termination. "Date of Termination" shall mean (i) if the Agreement is terminated by the Executive, the
date on which the Notice of Termination is delivered, (ii) if the Agreement is terminated by the Employer because
of the Executive's disability, thirty days after the Notice of Termination is given, or (iii) if the Executive's
employment is terminated by the Employer for any other reason, the date on which a Notice of Termination is
given, unless within thirty days thereafter the Executive notifies the Employer that a dispute exists concerning the
termination, in which case the Date of Termination shall be the date on which the dispute is finally determined,
whether by mutual written agreement of the parties or by a final judgement, order or decree of a court of
competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected).

4. Compensation Upon Termination. Except as provided in Paragraph 3(a)(1) above, if, without good cause, the
Employer terminates the services of the Executive prior to the expiration of this Agreement or if the Executive
terminates his employment for good reason, then:

(a) Accrued But Unpaid Compensation. The Employer shall pay the Executive's full base salary through the Date
of Actual Termination at the rate then in effect and the amount, if any, of awards theretofore made which have not
yet been paid.

(b) Severance Allowance. The Employer shall pay the Executive a severance allowance in 60 equal monthly
payments commencing on the last day of the month in which the date of actual termination occurs, the total
amount of which will equal and will not exceed the present value of three times the base amount minus $1.00 plus
the present value of any other payments in the nature of compensation within the meaning of Section 280G(b)(2)
(A)(ii) of the Internal Revenue Code of 1954, as amended (Code).

For purposes of this Paragraph 4(b), the following definitions shall apply:

(i) Base Amount - The term "base amount" means the Executive's average annualized includible compensation for
the base period.

(ii) Annualized Includible Compensation for the Base Period - The term "annualized includible compensation for
the base period" means the average annual compensation paid by the Bank, which was includible in the gross
income of the executive for federal income tax purposes for taxable years in the base period.

(iii) Base Period - The term "base period" means the period consisting of the most recent five taxable years
ending before the date on which termination occurs, except for termination as a result of the operation of
Paragraph 3(b)(ii) above in which case the date of termination shall be deemed to be the date a change in control
occurs with respect to the Bank.

(iv) Present Value - Present value shall be determined in accordance with Section 1274(b)(2) of the Code.

(c) Employee Benefits. The Employer shall maintain in full force and effect, for the Executive's continued benefit
until the earlier of the third anniversary of the Date of Termination or the date the Executive becomes a participant
in similar plans, programs or arrangements provided by a subsequent employer, all life, accident, medical and
dental insurance benefit plans and programs or arrangements in which the Executive was entitled to participate
immediately prior to the Date of Termination, provided that the Executive's continued participation is possible
under the general terms and provisions of such plans and programs. In the event that the Executive's participation
in any such plan or program is barred, the Employer shall arrange to provide the Executive with benefits
substantially similar to those which the Executive is entitled to receive under such plans and programs. At the end
of the period of coverage, the Executive shall have the option to have assigned to him at no cost and with no
apportionment of prepaid premiums, any assignable insurance policy owned by the Employer, or any one of

                                                         3
them, and relating specifically to the Executive.

(d) No Duty to Mitigate. The Executive shall not be required to mitigate the amount of any payment provided for
in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment provided for in
this Section 4 be reduced by any compensation earned by the Executive as the result of employment by another
employer after the Date of Termination, or otherwise.

5. MISCELLANEOUS:

(a) Waiver. A waiver by any party of any of the terms and conditions of this Agreement in any instance shall not
be deemed or construed to be a waiver of such terms and conditions for the future, or of any subsequent breach
thereof.

(b) Severability. If any provision of this Agreement, as applied to any circumstances, shall be adjudged by a court
to be void and unenforceable, the same shall in no way affect any other provision of this Agreement or the
applicability of such provision to any other circumstances.

(c) Amendment. This Agreement may not be varied, altered, modified, changed, or in any way amended except
by an instrument in writing, executed by the parties hereto or their legal representatives.

(d) Nonassignability. Neither the Executive nor his estate shall have any right to commute, sell, assign, transfer or
otherwise convey the right to receive any payments hereunder, which payments and the right thereto are
expressly declared to be nonassignable and nontransferable.

(e) Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Executive (and his
personal representative), the Bank and any successor organization or organizations which shall succeed to
substantially all of the business and property of the Bank, whether by means of merger, consolidation, acquisition
of all or substantially all of the assets of the Bank or otherwise, including by operation of law.

(f) Governing Law. This Agreement shall be governed by and construed in accordance with the Laws of the
Commonwealth of Virginia, whether statutory or decisional, applicable to agreements made and entirely to be
performed within such state and such provisions of federal law as may be applicable.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

                                       The Bank of Hampton Roads, Inc.

                                 By:     /s/ Emil A. Viola
                                         ------------------------------------
                                         Emil A. Viola, Chairman of the Board

                                         /s/ Julie R. Anderson
                                         ------------------------------------
                                         Julie R. Anderson, Executive




                                                          4
                                                   Exhibit 10.20

                       FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT TO EMPLOYMENT AGREEMENT ("Amended Agreement") is made and entered into
as of this 31st day of December, 2002, by and between BANK OF HAMPTON ROADS, INC., a banking
corporation organized under the laws of the Commonwealth of Virginia (the "Bank", or "Employer") and JULIE
R. ANDERSON, (the "Officer").

                                                 RECITALS:

1. The Bank and the Officer entered into an Employment Agreement (the "Agreement") dated the 11th day of
October, 2001.

2. Since entering into the Agreement, the Officer has been employed by the Bank and both the Bank and the
Officer currently wish to continue that relationship.

3. The Agreement as originally prepared provided that it would, absent written notice to the contrary, renew for
an additional period of sixty months from the original anniversary date, but there was no provision for further
renewals.

4. It was the intention of the parties at the time of the original Agreement that it continue to renew for consecutive
sixty-month periods absent the occurrence of one of the events specified in Paragraph 2(a) of the Agreement.

5. The Bank and the Officer wish to amend the Agreement by deleting the existing Paragraph 2(a) and
substituting in its place a new Paragraph 2(a) which will provide for continued renewals of the Agreement.

NOW, THEREFORE, in consideration of the terms and conditions herein contained and for other good and
valuable consideration, the receipt and sufficiency of which are acknowledged by each party to this Amended
Agreement, the Bank and the Officer agree that Paragraph 2(a) of the Agreement is deleted and the following
Paragraph 2(a) substituted in its place:

2. TERMS AND COMPENSATION:

(a) Term of Agreement. The term of this Agreement shall commence on that date upon which the Bank's Board
of Directors approves the said agreement and shall continue until the first to occur of (i) except as otherwise
provided in Section 3 hereof, the end of the sixtieth consecutive month following the commencement date
aforesaid, (ii) the Officer's death, or (iii) except as provided in Paragraph (d) of this Section 2, the Officer's
disability. Notwithstanding the foregoing, however, in the event the Officer is not informed, in writing, prior to the
last day of the forty-eighth consecutive month following the Commencement date of employment, or any
subsequent sixty-month renewal term, that this Agreement will not be renewed, this Agreement will automatically
renew itself for an additional period of sixty months from the original anniversary date or, as the case may be, any
renewal term.

Except as modified above, the parties ratify and reaffirm the Agreement.

WITNESS the following signatures and seals as of the day and year first above written.
      BANK OF HAMPTON ROADS, INC.

BY:   /s/ Emil A. Viola                   (SEAL)
      ------------------------------------
      Emil A. Viola, Chairman of the Board

      /s/ Julie R. Anderson               (SEAL)
      ------------------------------------
      Julie R. Anderson, Executive Officer
                                                    Exhibit 10.21

                      SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

THIS SECOND AMENDMENT TO EMPLOYMENT AGREEMENT ("Second Amendment") is made and
entered into this 31st day of December, 2002, by and between BANK OF HAMPTON ROADS, INC., a
banking corporation organized under the laws of the Commonwealth of Virginia (the "Bank") and JULIE R.
ANDERSON, (the "Executive").

                                                  R E C I T A L S:

1. The Bank and the Executive entered into an Employment Agreement (the"Agreement") dated December 31,
2002.

2. The Agreement was amended by the First Amendment to Employment Agreement dated December 31, 2002.

3. The Bank and the Executive wish to further amend the Agreement.

4. The Bank and the Executive agree that this Second Amendment to Employment Agreement shall apply to
termination for any reason, except where termination is effective prior to the time "a change in control" (as defined
in Paragraph 3, part (b) of the Employment Agreement) occurs, or prior to the time the Employer enters into
negotiations which result in such change of control, or where termination is due to or the result of a change in
control.

NOW, THEREFORE, in consideration of the Executive's continued employment with the Bank and in
recognition of the fact that as an employee of the Bank, the Executive has access to the Bank's customers and to
confidential and valuable business and proprietary information of the Bank, it is further agreed as follows:

1. RETURN OF BANK'S PROPERTY

When the Executive's employment with the Bank ends, the Executive agrees to immediately deliver to the Bank
all documents, including, but not limited to, address and telephone records of customers, listings of customer
names and/or account numbers, and any other items or records in the Executive's possession, or subsequently
coming into the Executive's possession pertaining to the business of the Bank, including without limitation,
confidential and proprietary information which the Executive would not possess but for his employment
relationship with the Bank.

2. PROHIBITION OF COMPETITIVE ACTIVITIES

a. During the Executive's employment with the Bank and for a period of two (2) years following the Executive's
termination, the Executive agrees that he/she will not, either directly or indirectly, on his/her own behalf, or on
behalf of any other person or entity, or in any capacity call upon, solicit, divert, take away, or attempt to solicit,
divert, or take away the business or patronage of any client or customer of the Bank.

b. During the Executive's employment with the Bank and following termination of employment with the Bank, the
Executive will preserve the confidentiality of, and will not reveal for any reason, or use to the detriment of the
Bank, trade secrets, or other confidential, business, or proprietary information which the Executive has received
in the course of the Executive's employment with the Bank.

                                                           1
c. During the period of the Executive's employment and for a period of two (2) years after employment ends, the
Executive agrees that he/she will not either directly or indirectly, on his/her own behalf or on behalf of any person
or entity, in any capacity, recruit or hire or assist others in recruiting or hiring any person who is, or was during the
period of the Executive's employment with the Bank, an employee or consultant with the Bank.

3. NOTICE OF SUBSEQUENT EMPLOYMENT

For a period of two (2) years after the Executive's employment with the Bank ends, the Executive agrees to
notify the Bank of the name and address of the Executive's employer and the Executive hereby authorizes the
Bank to contact any such employer during that period for the limited purpose of making the employer aware of
this Second Amendment to Employment Agreement and protection against any disclosure of confidential and
proprietary information, or unfair competition.

4. REMEDIES

The Executive acknowledges that if he/she breaches or threatens to breach this Second Amendment to
Employment Agreement, in addition to any and all other rights and remedies it may have, the Bank shall be
entitled to injunctive relief, both pendente lite and permanent, against the Executive, as the Executive recognizes
that a remedy at law would be inadequate and insufficient. The Bank shall be entitled to recover from the
Executive all costs and expenses, including but not limited to reasonable attorney's fees and court costs, incurred
by the Bank as a result of or arising out of any breach of threatened breach under or pursuant to this Second
Amendment to Employment Agreement in addition to such other rights and remedies as the Bank may have under
this Second Amendment to Employment Agreement or any other agreement, at law or in equity.

Except as modified by this Second Amendment to Employment Agreement, the Employment Agreement as
previously modified by the Amendment to Employment Agreement, is ratified and affirmed.

WITNESS the following signatures and seals as of the day and year first above written.

                                     BANK OF HAMPTON ROADS, INC.

                             By:     /s/ Emil A. Viola                    (SEAL)
                                     -------------------------------------
                                     Emil A. Viola, Chairman of the Board

                                     /s/ Julie R. Anderson                (SEAL)
                                     -------------------------------------
                                     Julie R. Anderson, Executive




                                                           2
                              Exhibit 13

                         2002 ANNUAL REPORT

[GRAPHIC APPEARS HERE]

[LOGO OF HAMPTON ROADS BANKSHARES]
[LOGO OF HAMPTON ROADS BANKSHARES]

BOARD OF DIRECTORS

EMIL A. VIOLA
Chairman of the Board
President, Vico Construction Corporation

JACK W. GIBSON
President and Chief Executive Officer, Bank of Hampton Roads

WARREN L. ALECK
Retired President,
Earle's Markets, Inc.

ROBERT G. BAGLEY
Senior Vice President,
Bank of Hampton Roads

DURWOOD S. CURLING
Former Executive Director,
Southeastern Public Service Authority

HERMAN A. HALL, III
Secretary-Treasurer,
Hall Farms, Inc.

WILLIAM J. HEARRING
President,
Hearndon Construction Corporation

ROBERT H. POWELL, III
Attorney at Law,
Kaufman & Canoles, P.C.

BOBBY L. RALPH
Former Director of Social Services, City of Suffolk

W. LEWIS WITT
Owner,
Inner-View, Ltd.

OFFICERS

JACK W. GIBSON
President and
Chief Executive Officer

SENIOR VICE PRESIDENTS
Julie R. Anderson
Robert G. Bagley
Tiffany K. Glenn
Paul B. Keister
Gregory P. Marshall
Renee R. McKinney
Cynthia A. Sabol
M. Ann Wright
VICE PRESIDENTS
Tompkins A. Craig
Jeffrey S. Creekmore
Lorelle L. Fritsch
Dorothy S. Grant
Dan E. Grubb
Linda F. Murphy
H. Francis Myers
Rod L. Pierce, Sr.
Linda A. Weiler

ASSISTANT VICE PRESIDENTS
J. Patrick Banks, Jr.
April E. Bennett
Herbert M. Brett
Lucille B. Caughorn
Cynthia L. Connor
Sandra H. Franklin
Lori L. Funk
Renee S. Harris
Dianne M. Henry
E. Regis Lauer, III
Susan E. Murphy
Allen C. Peele
Margaret A. Powell
Karla R. Rasmussen
Philip E. Richard
Cathy L. Robinson
Kemp E. Savage, III
Barbara S. Scheepers

                        Hampton Roads Bankshares, Inc.
                                                    HMPR

TABLE OF CONTENTS

         Board of Directors and Officers ..............................Inside Front Cover
         General Information ...........................................................1
         President's Message ...........................................................2
         Financial Highlights ..........................................................4
         Management's Discussion and Analysis of Financial Condition
          and Results of Operations ....................................................5
         Independent Auditors' Report .................................................18
         Consolidated Balance Sheets ..................................................19
         Consolidated Statements of Income ............................................20
         Consolidated Statements of Shareholders' Equity ..............................21
         Consolidated Statements of Cash Flows ........................................22
         Notes to Consolidated Financial Statements ...................................23
         Advisory Board Members .......................................................39




FINANCIAL INFORMATION
Shareholders, analysts, and investors seeking financial information about the Company, including copies of Form
10-K filed with the Securities and Exchange Commission, may contact:
Cynthia A. Sabol
Senior Vice President and Chief Financial Officer Hampton Roads Bankshares, Inc.
201 Volvo Parkway
Chesapeake, VA 23320
(757) 436-1000

STOCK INFORMATION
The Bank serves as the transfer agent.
The Company's common stock trades under the symbol "HMPR" on the NASDAQ Bulletin Board.
Stock inquiries should be directed to:
Tiffany K. Glenn
Senior Vice President and Marketing Officer Stock Transfer Department
Hampton Roads Bankshares, Inc.
201 Volvo Parkway
Chesapeake, VA 23320
(757) 436-1000

MARKET MAKERS
Davenport & Company LLC
Scott & Stringfellow, Inc.
Baird, Patrick & Co., Inc.
Hill Thompson Magid, L.P.
McKinnon & Company, Inc.
Monroe Securities, Inc.
Knight Securities, L.P.
Schwab Capital Markets L.P.

         OFFICE LOCATIONS

         CHESAPEAKE             MAIN OFFICE
                                201 Volvo Parkway

                                CROSSROADS
                                1500 Mount Pleasant Road

                                DEEP CREEK
                                852 N. George Washington Hwy.

                                MOYOCK
                                4720 Battlefield Boulevard South
                     ORCHARD SQUARE
                     1400 Kempsville Road, Suite 102

                     PORTSMOUTH BOULEVARD
                     4108 Portsmouth Boulevard

                     SOUTH NORFOLK
                     712 Liberty Street

NORFOLK              LITTLE CREEK
                     4037 E. Little Creek Road

                     MACARTHUR CENTER
                     500 Plume Street

                     PRINCESS ANNE
                     4500 E. Princess Anne Road

SUFFOLK              MARKET STREET
                     117 Market Street

VIRGINIA             CORPORATE LANDING
BEACH                1100 Dam Neck Road

                     GREAT NECK
                     1316 N. Great Neck Road

                     INDIAN RIVER
                     5472 Indian River Road

                     PEMBROKE
                     281 Independence Blvd., Suite 100

                     WEB SITE ADDRESS
                     www.bankofhamptonroads.com

2002 Annual Report                                       1
[LOGO OF HAMPTON ROADS BANKSHARES]

PRESIDENT'S MESSAGE

DEAR SHAREHOLDER:

Since the inception of Bank of Hampton Roads in 1987, I have enjoyed the honor of reporting record earnings to
you every single year we have been in business. I am proud to continue this tradition at the close of our fifteenth
anniversary year in which Hampton Roads Bankshares, Inc., parent company of the Bank, celebrated the most
successful and profitable year in its history.

The Company's net income for 2002 was a record $3,298,035, up over 5% from 2001. I am particularly proud
of our achievements considering the prevalent low interest rate environment and the pressure it has put on the
Company's net interest margin for the previous two years. Between January 2001 and November 2002, the
Federal Reserve lowered the federal funds rate 12 times or 525 basis points down to 1.25%. Consequently,
during the same time period, the New York Prime rate was reduced as many times and as many points down to
4.25%. Unfortunately, as a result of these reductions, our net interest margin decreased 40 basis points in 2002
down to 4.84%. In spite of the decline, the Company surpassed its peer group average in this category
throughout the year. While the compressed net interest margin impacted our overall earnings potential, an
increase in loan volume combined with the re-pricing of many of the Bank's interest-bearing deposits led to a
14% increase in net interest income.

During 2002, the Company's assets increased by 24% to a record $299 million at year-end. The Company's
loan portfolio, our largest asset, ended the year at a record high of $203 million, with average loans increasing by
15% from 2001 to another record of $195 million. The low interest rate environment encouraged both home
buying and building. As a result, our construction loan portfolio increased by 26% during the year to $36 million
at year-end. Through our relationship with Tidewater Home Funding, LLC, we are able to accommodate home
buyers with all aspects of their real estate financing needs.

In spite of the numerous interest rate decreases, the Company enjoyed remarkable deposit growth throughout
2002. At year-end, our total deposits had reached a record $244 million, up 23% or $45 million from year-end
2001. The majority of this growth was in the form of demand deposits, which increased from $85 million to $121
million from 2001 to 2002. Substantial deposit growth made it easy for us to accommodate the strong loan
demand incited by the low interest rate environment.

Your Bank has fifteen branch offices located throughout the cities of Chesapeake, Virginia Beach, Norfolk and
Suffolk. Without a doubt, Bank of Hampton Roads is the most convenient community bank serving the Southside
Hampton Roads area. The Bank benefited in 2002 from our friendly business philosophy as well as our strong
market penetration when three of our respected competitors were acquired by larger institutions. The Bank
implemented a multimedia advertising campaign to coincide with the completion of the mergers. The theme of the
campaign, "ENJOY BANKING," promoted our unwavering commitment to consistently provide all of our
customers with excellent service.

Thanks to the increased promotional efforts put forth by the Bank as well as the efforts of our experienced staff,
we attracted numerous customers affected by the mergers and acquisitions. Our deposits within the City of
Virginia Beach increased by 54% from $37.4 million to $57.7 million. Our Chesapeake Offices witnessed their
deposits rise by 18% from $116.5 million to $137.4 million. Our Norfolk and Suffolk markets also realized
considerable deposit growth. To further enhance our presence in Norfolk, we moved our MacArthur Center
location to 500 Plume Street, a newly renovated site. The relocation of this office provides us with the same level
of visibility and prominence in Downtown Norfolk while improving our accessibility to the pedestrian traffic
common in the financial district.

2 Hampton Roads Bankshares, Inc.
                                                     HMPR

In addition to customers seeking new community banking relationships, there were also many good, veteran
community bankers affected by the mergers. As a result, the Company enhanced its staff with friendly,
experienced bankers dedicated to extending the level of service on which the Bank has established its superlative
reputation. The employees who represent our Bank are our most valuable asset and we rely upon them everyday
to ensure that our customers "ENJOY BANKING." Our employees are the only aspect of our Bank that
differentiates us from our competition, and I personally believe that our staff elevates our Bank above all others.
In 2002, the Bank implemented an orientation program that all new employees must attend in order to become
familiar with the Bank's humble roots, its consistent success, its dedication to enhance shareholder value, and its
founding philosophy to provide all customers with excellent, efficient service. If you are not already banking with
us, I hope that you will visit one of our offices to see what a difference our commitment to customer service can
make in your banking experience. Shortly, you will be able to visit us on the Internet to do your banking and even
pay your monthly bills. Our new online banking service is state-of-the-art and will be introduced to customers
later this spring.

While our Company is currently positioned to celebrate yet another record year, I do have some reservations in
expressing my optimism about our predicted financial performance for 2003. Interest rates appear to have
stabilized and loan demand remains strong. With successful net interest margin management, our net interest
income should steadily increase this year. Tidewater Home Funding, LLC continues to benefit from the low
mortgage rate environment and the abundance of home buying that is continuing well into 2003; we should
continue to receive significant dividends from this relationship. To provide us with a new source of income,
Hampton Roads Investments, Inc., a subsidiary of the Holding Company, which will commence operations this
spring, is in the process of acquiring a partial ownership in BI Investments, LLC, an investment services firm
formed by the Virginia Bankers Association. In spite of all of the aforementioned positive factors, I cannot
disregard the threat of a probable war with Iraq and the impact that it could have on our Nation's economy.
Unfortunately, our area has already experienced an exodus of military personnel as they prepare to defend our
Country overseas; some of our small business customers depend on these individuals to support their day-to-day
business operations. In addition, the rising cost of fuel and a drop in consumer spending have had a financial
impact on some local businesses. Facing the reality that some of our customers may not be able to endure the
uncontrollable effects of the economy, our loan loss reserve was increased to $2.8 million, or 1.40% of the
outstanding loan portfolio.

Hampton Roads Bankshares common stock began trading under the symbol HMPR on the Over the Counter
Bulletin Board in the spring of last year. Between May and December 2002, over 192,000 shares of the
Company's stock were traded at prices ranging from a high of $11.00 to a low of $6.75. During the first quarter
of 2003, our stock has been trading in the $9.00 range, which is roughly 700% of the stock's original value in
1987. Adding to the value of our stock is the Company's twelve year record of paying an increasing dividend to
its shareholders. At the share price of $9.00, the Company's recent dividend payment of $0.27 per share yielded
an annual return of 3% on your investment, which is presently more than most financial institutions are paying on a
48 month certificate of deposit. The Board of Directors and management of our Company will continue to focus
their efforts on enhancing the value of your investment while providing enjoyable banking relationships to our
customers. It is what we do best and always strive to do even better.

I am grateful for your contributions to our success and for the confidence you have demonstrated in our
Company by becoming an investor. I will also express my sincere thanks at this time to our loyal customers, our
Board of Directors, our Advisory Board Members, and our dedicated employees who work so hard to ensure
that our customers always "ENJOY BANKING" with us.

Very truly yours,

                                              /s/ Jack W. Gibson

                                              Jack W. Gibson
                                              President




2002 Annual Report 3
[LOGO OF HAMPTON ROADS BANKSHARES]

FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31,

(Dollars in thousands except per share data)        2002            2001            2000            1999
---------------------------------------------------------------------------------------------------------
OPERATING RESULTS
   Interest income                              $     17,344    $     16,557    $     15,842    $     14,
   Interest expense                                    5,413           6,087           5,661           5,
---------------------------------------------------------------------------------------------------------
   Net interest income                                11,931          10,470          10,181           9,
   Provision for loan losses                           1,100              334             390
   Noninterest income                                  3,371           2,499           2,320           2,
   Noninterest expense                                 9,207           7,893           7,402           6,
---------------------------------------------------------------------------------------------------------
   Income before provision for
    income taxes                                       4,995           4,742           4,709           4,
   Provision for income taxes                          1,697           1,612           1,601           1,
---------------------------------------------------------------------------------------------------------
   Net income                                   $      3,298    $      3,130    $      3,108    $      2,
=========================================================================================================
PER SHARE DATA
   Basic earnings                               $        0.43   $        0.42   $        0.41   $        0
   Diluted earnings                                      0.42            0.41            0.40            0
   Book value                                            5.07            4.74            4.56            4
   Basic weighted average
    shares outstanding                             7,606,446       7,509,793       7,491,178       7,461,
   Diluted weighted average
    shares outstanding                             7,782,466       7,698,777       7,765,987       7,766,
   Shares outstanding at year-end                  7,707,744       7,518,066       7,496,426       7,472,
   Cash dividends declared                      $        0.27   $        0.26   $        0.25   $        0
   Dividend payout ratio                               63.10%          62.09%          60.31%          40

YEAR-END BALANCES
   Assets                                       $    298,714    $    240,080    $    204,209    $     190,
   Overnight funds sold                               33,105          18,721           4,718            8,
   Loans                                             203,184         189,142         157,213          141,
   Investment securities                              45,055          13,904          22,188           22,
   Deposits                                          243,874         198,515         167,434          155,
   Shareholders' equity                               39,111          35,623          34,209           30,

AVERAGE BALANCES
   Assets                                       $    265,532    $    217,215    $    195,280    $     184,
   Overnight funds sold                               10,517          12,320           4,195           11,
   Loans                                             194,503         168,912         150,546          132,
   Investment securities                              41,574          18,521          22,226           24,
   Deposits                                          218,387         179,709         159,522          151,
   Shareholders' equity                               36,499          34,057          32,607           30,

RATIOS
   Return on average assets                             1.24%           1.44%           1.59%           1
   Return on average equity                             9.04%           9.19%           9.53%           9
   Year-end shareholders' equity to
    total assets                                       13.09%          14.84%          16.75%          16
   Loan loss allowance to year-end
    loans                                               1.40%           1.12%           1.25%           1
   Net interest margin                                  4.84%           5.24%           5.75%           5
---------------------------------------------------------------------------------------------------------




4 Hampton Roads Bankshares, Inc.
                                                                                                    HMPR

          MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS




INTRODUCTION AND FINANCIAL OVERVIEW

The following discussion provides information about the important factors affecting the consolidated results of
operations, financial condition, capital resources and liquidity of Hampton Roads Bankshares, Inc. and its
subsidiary (the "Company"). In addition to identifying trends and material changes that occurred during the
reporting periods, the report depicts the consistent success achieved by the organization. This discussion and
analysis should be read in conjunction with the Consolidated Financial Statements and Notes thereto, appearing
elsewhere in the report.

On December 31, 2002, the Company celebrated its fifteenth year of record earnings and outstanding growth.
Net income for 2002 totaled a record $3.30 million, a 5.36% increase over 2001 earnings of $3.13 million; net
income for 2001 increased 0.73% over 2000 earnings of $3.11 million. Earnings per share has steadily increased
in conjunction with the Company's record earnings performance. Diluted earnings per share for the years 2002,
2001 and 2000 were $0.42, $0.41 and $0.40, respectively. The Company declared a $0.27 per share dividend
payable in March 2003, which compares favorably to the $0.26 and $0.25 per share dividends respectively paid
in 2001 and 2000. For each of the last three years, the Company has shared more than 60% of its year-end net
income with shareholders in the form of a dividend.

Return on average assets of 1.24% for 2002, as compared to 1.44% for 2001 and 1.59% for 2000, reflected
the impact of the narrowing margins caused by the dominant low interest rate environment. Return on average
equity declined slightly to 9.04% in 2002 from 9.19% in 2001 and 9.53% in 2000. The decrease in this ratio,
despite the increase in net income, was caused mostly by the timing of the annual dividend declaration and the
issuance of new shares, which resulted in increases to common stock and contributed capital. Comprehensive
income from the unrealized gain on available-for-sale securities during 2002 also increased shareholders' equity,
thereby contributing to the decrease in the return on average equity ratio. The Company maintained its well-
capitalized position with a total risk-based capital ratio of 18.46% as of December 31, 2002, compared to
18.95% as of December 31, 2001, and 21.73% as of December 31, 2000.

Management attributes the Company's continued success in 2002 to a number of favorable factors, including:

. A growing retail branch network, which continues to expand into growing markets to accommodate new
customers as well as provide additional convenience to the Company's existing customer base.
. The increased media advertising campaign, which attracted many new customers to the Company.
. The mergers and acquisitions of some of the Company's most respected local competitors.

NET INCOME
(dollars in thousands)

[GRAPHIC APPEARS HERE]

DILUTED EARNINGS PER SHARE

[GRAPHIC APPEARS HERE]

DIVIDENDS PER SHARE

[GRAPHIC APPEARS HERE]

2002 Annual Report 5
             [LOGO OF HAMPTON ROADS BANKSHARES]

             .     The efforts of experienced branch personnel in soliciting new business,
                   especially that of customers affected by the aforementioned mergers and
                   acquisitions.




. An ongoing commitment to community support.
. The ability to take advantage of the opportunities available to the banking industry in the form of new
technology, which provides customers with more convenient products and services.
. The friendly, helpful, and courteous service extended to all of the Company's customers, which facilitates
customer referrals and recommendations.

RESULTS OF OPERATIONS

NET INTEREST INCOME

Net interest income, the principal source of income for the Company, represents interest and fees earned from
lending and investment activities less the interest paid to fund these activities. The following influences may
significantly impact net interest income and net interest margin:

. The level of noninterest bearing liabilities available to support earning assets.
. The level of non-performing assets.
. Variations in the volume and mix of interest earning assets and interest bearing liabilities, and their relative
sensitivity to interest rate movements.

Table 1 presents the average interest earning assets and average interest bearing liabilities, the average yields
earned on such assets and rates paid on such liabilities, and the net interest margin for the indicated periods. The
variance in interest income and expense caused by differences in average balances and rates is shown in Table 2.

During 2002, the Federal Reserve cut the federal funds rate by 50 basis points, down to 1.25%, and by 475
basis points in 2001. The rapid rate decline tempered our net interest income and net interest margin as the
Company's interest sensitive assets repriced slightly faster than its interest sensitive liabilities. Even so, the strong
loan demand generated by the low interest rate environment led to an increase in overall loan volume and
sustained the Company's earnings.

Net interest income for 2002 was $11.93 million, a $1.46 million, or 13.94%, increase over 2001. Net interest
income for 2001 of $10.47 million increased $0.29 million, or 2.85%, over 2000. Increases in net interest
income, for both years, were primarily attributable to the growth in average interest earning assets experienced
during the respective time periods, which more than offset the reduced net interest margin.

Net interest margin, which is calculated by expressing net interest income as a percentage of average interest
earning assets, is an indicator of effectiveness in generating income from earning assets. The Company's net
interest margin, including loan fees, was 4.84% in 2002, as compared to 5.24% in 2001, and 5.75% in 2000.
The average net interest margin for the Company's peer group during 2002 was 4.54%, indicating continued
strength in the Company's balance sheet and ability to manage its interest earning assets.

Average investment securities and average overnight funds sold, both lower interest earning assets, accounted for
15.66% and 3.96% of average assets in 2002, 8.53% and 5.67% in 2001, and 11.38% and 2.15% in 2000.
Average loans, a higher interest earning asset, accounted for 73.25% of average assets in 2002, 77.76% in
2001, and 77.09% in 2000.

Interest on loans, including loan fees, increased $0.33 million from 2001 to 2002. This increase was largely
attributable to the $25.59 million increase in the average loan balance from 2001 to 2002, offset by a 100 basis
point decrease in the average interest rate. The average loan balance increased $18.37 million from 2000 to
2001. Because of the efforts of experienced branch personnel, the strength of the advertising campaign, and the
lower interest rate environment, loan demand increased significantly in 2001 and 2002. As a result of the
substantial interest rate cuts over the last two years, along with a change in the composition of the Company's
loan portfolio, the average yield produced by loans decreased to 7.91% in 2002, as compared to 8.91% in
2001, and 9.50% in 2000. As of December 31, 2002, approximately 40.56% of the loan portfolio consisted of
floating rate loans, up from 36.11% and 29.16% as of December 31, 2001 and 2000, respectively.

Interest on investment securities increased $0.69 million from 2001 to 2002. The average investment portfolio
increased $23.05 million from 2001 to 2002. The declining interest rate environment caused a decrease in the
average yield from 5.90% in 2001 to 4.28% in 2002, as higher yielding securities continued to mature or be
called and replaced with securities earning lower interest rates as dictated by the market. Interest on investment
securities decreased $0.18 million from 2000 to 2001 as a result of the $3.71 million decrease in the average
investment portfolio from 2000 to 2001 netted against the slight increase in the average yield from 5.73% in 2000
to 5.90% in 2001.

6 Hampton Roads Bankshares, Inc.
                                                     HMPR

The Company's interest expense decreased by $0.67 million from 2001 to 2002 despite the increase of $36.06
million in average interest bearing liabilities from 2001 to 2002. The decrease in expense can be explained by the
decline in overall rates paid on liabilities of 3.10% in 2002 compared to 4.39% in 2001. Interest expense in 2001
increased by $0.43 million over 2000 due to an increase of $17.45 million in average interest bearing liabilities,
despite a decrease in overall rates paid on liabilities from 4.67% in 2000.

TABLE 1: AVERAGE BALANCE SHEET AND NET INTEREST MARGIN ANALYSIS

                                                           2002                                    2001
---------------------------------------------------------------------------------------------------------
                                                         INTEREST       AVERAGE                   Interes
                                            AVERAGE       INCOME/        YIELD/       Average     Income/
(In thousands)                              BALANCE       EXPENSE        RATE         Balance     Expense
---------------------------------------------------------------------------------------------------------
ASSETS
   Interest earning assets
     Loans                                 $ 194,503     $ 15,387           7.91%    $ 168,912   $ 15,05
     Investment securities                    41,574         1,780          4.28%       18,521       1,09
     Overnight funds sold                     10,517            177         1.68%       12,320          41
---------------------------------------------------------------------------------------------------------
       Total interest earning assets         246,594        17,344          7.03%      199,753      16,55

   Noninterest earning assets
     Cash and due from banks                   8,806                                     7,005
     Premises and equipment                    8,353                                     8,513
     Other assets                              4,001                                     4,043
     Less: Allowance for loan losses          (2,222)                                   (2,099)
---------------------------------------------------------------------------------------------------------
       Total assets                        $ 265,532                                 $ 217,215
=========================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
   Interest bearing liabilities
     Interest bearing demand deposits      $ 47,299      $     577          1.22%    $ 34,773    $     79
     Savings deposits                         10,908           103          0.94%       10,147         15
     Time deposits                           108,940         4,460          4.09%       93,562       5,13
     Other borrowings                          7,478           273          3.65%           85
---------------------------------------------------------------------------------------------------------
       Total interest bearing liabilities    174,625         5,413          3.10%      138,567       6,08

   Noninterest bearing liabilities
     Demand deposits                          51,240                                    41,227
     Other liabilities                         3,168                                     3,364
   Shareholders' equity                       36,499                                    34,057
---------------------------------------------------------------------------------------------------------
       Total liabilities and
        shareholders' equity               $ 265,532                                 $ 217,215
=========================================================================================================
       Net interest income                               $ 11,931                                $ 10,47
=========================================================================================================
       Net interest spread                                                  3.93%
=========================================================================================================
       Net interest margin                                                  4.84%
=========================================================================================================

                                                         2000
----------------------------------------------------------------------------
                                                       Interest      Average
                                            Average     Income/       Yield/
(In thousands)                              Balance     Expense       Rate
----------------------------------------------------------------------------
ASSETS
   Interest earning assets
     Loans                                 $ 150,546   $ 14,298         9.50%
     Investment securities                    22,226       1,274        5.73%
     Overnight funds sold                      4,195          270       6.44%
----------------------------------------------------------------------------
       Total interest earning assets         176,967      15,842        8.95%

    Noninterest earning assets
      Cash and due from banks                          7,193
      Premises and equipment                           8,765
      Other assets                                     4,286
      Less: Allowance for loan losses                 (1,931)
----------------------------------------------------------------------------
       Total assets                        $ 195,280
============================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
   Interest bearing liabilities
     Interest bearing demand deposits      $ 31,645    $     952        3.01%
     Savings deposits                         10,198         252        2.47%
     Time deposits                            79,208       4,453        5.62%
     Other borrowings                             62           4        6.45%
----------------------------------------------------------------------------
       Total interest bearing liabilities    121,113       5,661        4.67%

   Noninterest bearing liabilities
     Demand deposits                          38,471
     Other liabilities                         3,089
   Shareholders' equity                       32,607
----------------------------------------------------------------------------
       Total liabilities and
        shareholders' equity               $ 195,280
============================================================================
       Net interest income                             $ 10,181
============================================================================
       Net interest spread                                              4.28%
============================================================================
       Net interest margin                                              5.75%
============================================================================




Note: Interest income from loans included fees of $618,530 in 2002, $433,178 in 2001 and $426,555 in 2000.
Nonaccrual loans are not material and are included in loans above.

TABLE 2: EFFECT OF CHANGES IN RATE AND VOLUME ON NET INTEREST MARGIN

                                           2002 COMPARED TO 2001            2001 Compared to 2000
---------------------------------------------------------------------------------------------------------
                                        INTEREST       VARIANCE          Interest         Variance         In
                                        INCOME/     ATTRIBUTABLE TO      Income/     Attributable to       In
                                        EXPENSE   ------------------     Expense    -----------------      Ex
(In thousands)                          VARIANCE    RATE     VOLUME      Variance    Rate      Volume      Va
---------------------------------------------------------------------------------------------------------
INTEREST EARNING ASSETS
   Loans                              $      334 $    (957) $ 1,291    $      755   $ (772) $ 1,527      $
   Investment securities                     688      (194)       882        (182)        37       (219)
   Overnight funds sold                     (235)     (182)       (53)        142       (47)        189
---------------------------------------------------------------------------------------------------------
      Total interest earning assets   $      787 $ (1,333) $ 2,120     $      715   $ (782) $ 1,497      $
=========================================================================================================
INTEREST BEARING LIABILITIES
   Deposits                           $     (943) $ (3,043) $ 2,100    $      426   $ (305) $       731  $
   Other borrowings                          269         (1)      270          --         (1)         1
---------------------------------------------------------------------------------------------------------
      Total interest bearing
       liabilities                          (674)   (3,044)     2,370         426      (306)        732
=========================================================================================================
   Net interest income                $    1,461 $ 1,711     $ (250) $        289   $ (476) $       765  $
=========================================================================================================




Note: The change in interest due to both rate and volume has been allocated to variance attributable to rate and
variance attributable to volume in proportion to the relationship for the absolute dollar amounts of the change in
each.

2002 Annual Report 7
[LOGO OF HAMPTON ROADS BANKSHARES]

Noninterest Income And Expense

Noninterest income is comprised of service charges on deposit accounts, ATM surcharge fees, gain on sale of
investment securities, and other service charges and fees. As shown in Table 3, the Company reported an
increase in total noninterest income of 34.89%, 7.72% and 8.16% in 2002, 2001 and 2000, respectively.
Service charges on deposit accounts, the Company's primary source of noninterest income, increased 4.56% in
2002, 8.05% in 2001 and 9.86% in 2000. This increase was attributable to the increase in the number of deposit
accounts due to our expanded branch network and our continued marketing efforts, along with an increase in fees
during the first quarter of 2001. Another significant component of noninterest income is ATM surcharge income,
which increased by 5.17% in 2002, 1.31% in 2001 and 10.63% in 2000. These increases were the result of the
expansion of our ATM network through the three branch openings in 1999, one branch opening in 2001, and a
higher volume of foreign (non-Bank of Hampton Roads customer) ATM transactions. Other bank service
charges and fees, which includes late charges, wire fees, warehouse loan fees, credit card fees, ATM network
fees, VISA Check Card revenue, safe deposit box rentals, dividend income and lease rental income increased
25.82%, 9.35% and 3.15% in 2002, 2001 and 2000, respectively. These increases can specifically be attributed
to increases in the ATM network fees, wire fees, warehouse loan fees and late charge categories. Additionally,
the Company's VISA Check Card introduced during April 2001, generated approximately $84,000 and
$32,000 in fee income in 2002 and 2001, respectively. In order to take advantage of the current market and
available gains in the investment portfolio, the Company sold an investment security with an amortized cost of
$7,604,301 and, as a result, a gain of $619,449 was recognized in the fourth quarter of 2002. The overall
increase in noninterest income is in line with the Company's objective of increasing the share of income from
noninterest sources to reduce its traditional dependence on the net interest margin.

TABLE 3: NONINTEREST INCOME

                                                                           2002 COMPARED         2001 Comp
December 31,                                                                  TO 2001               to 200
---------------------------------------------------------------------------------------------------------
(In thousands)                              2002      2001      2000     AMOUNT   PERCENT      Amount    P
---------------------------------------------------------------------------------------------------------
Service charges on deposit accounts       $ 1,698 $ 1,624 $ 1,503 $           74       4.56% $     121
ATM surcharge fees                             244       232       229        12       5.17%          3
Gain on sale of investment securities          619         --        --      619    100.00%         --
Other service charges and fees                 810       643       588       167      25.97%        55
---------------------------------------------------------------------------------------------------------
   Total noninterest income               $ 3,371 $ 2,499 $ 2,320 $          872      34.89% $     179
=========================================================================================================




Noninterest expense represents the overhead expenses of the Company. One of the core operating principles of
management continues to be the careful monitoring and control of these expenses. As shown in Table 4, total
noninterest expense increased 16.65% in 2002, 6.63% in 2001 and 12.96% in 2000. This increase has been
fueled by the realization of the Company's expansion plans. In September 2002, the Company relocated its
MacArthur Center office to a more easily accessible location in downtown Norfolk. In October 2001, the
Company opened its Pembroke office. During 1999, the Company opened three new offices - Great Neck,
Little Creek and Moyock. Costs relating to the expansion and costs associated with handling our substantial asset
and liability growth resulted in increases to almost every component of noninterest expense. The new branch
facilities and their related staff as well as the additional staff added to handle our tremendous growth contributed
to a 8.38%, 5.19% and 8.38% increase in occupancy expense and a 16.61%, 7.86% and 14.26% increase to
salaries and benefits in 2002, 2001 and 2000, respectively.

TABLE 4: NONINTEREST EXPENSE

                                                                       2002 COMPARED          2001 Compare
December 31,                                                              TO 2001                 to 2000
---------------------------------------------------------------------------------------------------------
(In thousands)                          2002     2001      2000      AMOUNT     PERCENT      Amount     Pe
---------------------------------------------------------------------------------------------------------
Salaries and benefits                 $ 5,280 $ 4,528 $ 4,198 $          752      16.61%   $     330
Occupancy                                  944        871       828       73       8.38%          43
Data processing                            411        382       285       29       7.59%          97
Directors' and advisory board fees         220       222       228        (2)     (0.90%)        (6)
Bank franchise tax                         244       225       194        19       8.44%         31
Telephone and postage                      317       253       286        64      25.30%        (33)    (
ATM and VISA Check Card expense            289       242       209        47      19.42%         33
Advertising and marketing                  355       191       158       164      85.86%         33
Other                                    1,147       979     1,016       168      17.16%        (37)
---------------------------------------------------------------------------------------------------------
   Total noninterest expense          $ 9,207 $ 7,893 $ 7,402 $ 1,314             16.65%   $    491
=========================================================================================================




8 Hampton Roads Bankshares, Inc.
                                                     HMPR

The Company invested in a new state of the art data processing system in late 1999, which enhanced the overall
efficiency of the Company and enabled the Company to offer its customers the latest banking features,
convenience and products. The products that were launched during 2000 include 24 hour TeleBanc and check
imaging. The costs associated with these upgrades caused the 7.59%, 34.04% and 16.33% increase to data
processing expense in 2002, 2001 and 2000, respectively. Likewise, our check imaging service has cut down on
our postage costs, contributing to the decline in telephone and postage expense of 11.54% in 2001. However,
due to the increase in postage rates, along with the increase in the number of our deposit and loan accounts and
the additional phone lines needed for the Pembroke office, telephone and postage expense increased 25.30% in
2002.

Consistent with the increase in ATM and VISA Check Card revenue, ATM and VISA Check Card expense
increased 19.42% in 2002, 15.79% in 2001 and 14.84% in 2000. These increases were the result of our
expanded ATM network along with an increase in ATM transactions as well as the increase in processing costs
associated with the implementation of our VISA Check Cards in April 2002.

In 2002, the Company invested in an extensive multimedia advertising campaign utilizing billboards, television,
radio and newspaper to promote and reinforce its presence throughout Southside Hampton Roads which
contributed to the 85.86% increase in advertising and marketing expense in 2002. The introduction of the
campaign coincided with the completion of the acquisitions by larger institutions of three of the Company's most
respected competitors. The message of the campaign, "ENJOY BANKING," promoted the Company's friendly
operating philosophy. In addition to the multimedia advertising campaign, the Company was a major sponsor of
two of the area's most prominent sports teams -- the Norfolk Tides and the Norfolk Admirals.

The Company continues to take an active role in the communities in which it operates by utilizing its marketing
dollars to support a wide range of events and organizations. The Company's Community Assistance Program,
established in 1998 to support charities and worthwhile causes throughout Hampton Roads, donated nearly
$100,000 to the community in 2002. To help fund the Community Assistance Account, the Company hosts an
annual golf tournament to entertain customers while raising funds for charity. In 2002, the tournament raised
$47,000, which the Company matched dollar for dollar for a total of $94,000. With the help of its Advisory
Boards, the Company allocates these funds to worthwhile causes, while enhancing the presence of the Bank of
Hampton Roads (the "Bank").

FINANCIAL CONDITION

[GRAPHIC APPEARS HERE]

AVERAGE ASSETS
(dollars in millions)

Assets

Total average assets, a benchmark used by banks when comparing size, is the strongest indicator of our
continuous growth over the past fifteen years. Average assets increased by $48.32 million, or 22.24%, to a new
high of $265.53 million in 2002. Total assets at year-end 2002 were $298.71 million, an increase of $58.63
million, or 24.42%, over December 31, 2001 total assets of $240.08 million. This significant growth is
attributable to the increase in deposits attained during 2002, which the Company utilized in funding the growth in
its interest earning assets. The 2002 average loan portfolio increased $25.59 million over the 2001 average.

Loans

As a community bank, the Company has a primary objective of meeting the business and consumer credit needs
within its market where standards of profitability, client relationships and credit quality can be met. As shown in
Table 5, the overall loan portfolio grew $14.04 million or 7.42% from year-end 2001 to year-end 2002. This is a
continuation of the growth experienced from year-end 2000 to year-end 2001 of $31.93 million or 20.31%. The
tremendous growth experienced during the past two years was achieved not only by the high loan demand
generated by the low interest rate environment, but also by the efforts of the Company's officers to develop new
loan relationships combined with the support of existing customers. The recent bank consolidations and
acquisitions also contributed to loan growth as customers still value the personal service and attention traditionally
offered by a community bank.

2002 Annual Report 9
[LOGO OF HAMPTON ROADS BANKSHARES]

TABLE 5: LOANS BY CLASSIFICATION

December 31,                                            2002                    2001                     2
---------------------------------------------------------------------------------------------------------
(In thousands)                                 BALANCE          %       Balance          %       Balance
---------------------------------------------------------------------------------------------------------
LOAN CLASSIFICATION:
   Commercial                                $    53,843      26.50% $    48,429       25.60% $    47,103
   Construction                                   35,970      17.70%      28,620       15.13%      23,892
   Real estate - commercial mortgage              62,611      30.81%      60,495       31.98%      45,750
   Real estate - residential mortgage             28,505      14.03%      32,212       17.04%      23,546
   Installment loans to individuals               22,217      10.94%      19,328       10.22%      16,890
   Deferred loan fees and related costs                38      0.02%          58        0.03%          32
---------------------------------------------------------------------------------------------------------
      Total loans                            $ 203,184       100.00% $ 189,142        100.00% $ 157,213
=========================================================================================================




The low interest rate environment prevalent during 2002 encouraged both home building and buying. As a result,
the Company's construction loan portfolio increased by 25.68% to $35.97 million from December 31, 2001 to
2002. This growth was mirrored in all other segments of the loan portfolio except residential mortgage real estate
loans, which decreased $3.71 million from year-end 2001 to year-end 2002. In December 2001, the Company
purchased a 10% interest in the mortgage company, Tidewater Home Funding, LLC. Subsequent to the
investment, the Company has referred a portion of its residential real estate business to this affiliate, thereby
contributing to the decline in residential mortgages on the Company's own balance sheet. Through its relationship
with Tidewater Home Funding, LLC, the Company is able to accommodate homebuyers with a full array of
mortgage products and meet all aspects of their real estate financing needs.

Loan growth will continue to be one of the Company's primary goals for 2003 and beyond. The long-range
objective for growth in the loan portfolio will be achieved through continued community involvement,
enhancement of the Company's image as a community asset, and management's continued efforts to offer
competitively-priced products, while offering high quality, personalized service. Furthermore, to balance the
emphasis on loan growth, prudent business practices and stringent internal guidelines will continue to be followed
in making lending decisions in order to minimize exposure to loan losses.

Table 6 sets forth the maturity or period of re-pricing of the Company's loan portfolio as of December 31, 2002.
Demand loans as well as loans having no stated schedule of repayments and no stated maturity are reported as
due within one year. Adjustable and floating-rate loans are included in the period in which interest rates are next
scheduled to adjust rather than in which they contractually mature. Fixed rate loans are included in the period in
which the final contractual repayment is due. Since the majority of the Company's loan portfolio is short-term, the
Company can re-price its portfolio more frequently to minimize long-term interest rate fluctuations and maintain a
steady interest margin.

TABLE 6: LOAN MATURITIES AND RE-PRICING SCHEDULE

December 31, 2002          Commercial  Construction    R/E Commercial   R/E Residential Installment     T
(In thousands)                Loans        Loans           Loans             Loans         Loans        L
---------------------------------------------------------------------------------------------------------
VARIABLE RATE:
   Within 1 year         $      17,185 $     34,074     $     14,071      $    14,643   $    2,436    $
   1 to 5 years                     --           --               --               --            --
   After 5 years                    --           --               --               --            --
---------------------------------------------------------------------------------------------------------
      Total              $      17,185 $     34,074     $     14,071      $    14,643   $    2,436    $
=========================================================================================================

FIXED RATE:
   Within 1 year         $     10,230 $         990     $      9,905      $     2,440   $    4,840    $
   1 to 5 years                24,687           906           37,199           11,057       14,639
   After 5 years                1,741            --            1,436              365          302
---------------------------------------------------------------------------------------------------------
      Total              $     36,658 $       1,896     $     48,540      $    13,862   $   19,781    $
=========================================================================================================
      Total maturities   $     53,843 $      35,970     $     62,611      $    28,505   $   22,217    $
=========================================================================================================




Note: Net of deferred loan fees and related costs of $38 thousand.

10 Hampton Roads Bankshares, Inc.
                                                      HMPR

Non-Performing Assets

Management classifies as non-performing those loans in nonaccrual status, those loans on which payment has
been delinquent 90 days or more but are still accruing interest, and real estate acquired in settlement of loans. As
a general rule, loans are placed in nonaccrual status when principal or interest is 90 days or more past due, or
when management deems collection of all principal and interest doubtful. Management closely reviews the
composition of non-performing assets and related collateral values.

Loans categorized as 90 days or more past due which are deemed collectible and continue to accrue interest
decreased during 2002 to $198 thousand as compared to $664 thousand and $507 thousand at year-end 2001
and 2000, respectively. Management diligently monitors these loans. As of December 31, 2002, collection of all
outstanding loan balances along with the related interest on these loans is expected.

Nonaccrual loans were $78 thousand at December 31, 2002 compared to $13 thousand and $187 thousand at
December 31, 2001 and 2000, respectively. Nonaccrual loans represented only .04%, .01% and .12% of total
loans at year-end 2002, 2001 and 2000, respectively.

Real estate acquired by the Company in settlement of loans totaled $458 thousand at December 31, 2002; the
category consisted of one commercial property and one residential property. Real estate acquired in settlement of
loans totaled $562 thousand and $1.10 million as of December 31, 2001 and 2000, respectively. Management is
actively marketing the sale of these properties and does not anticipate any material losses to occur upon
disposition.

The Company continues to enjoy the same high asset quality as in the past, although, as the loan portfolio
continues to grow and the economy remains unstable, the possibility of losses can occur. In spite of the difficult
economy, the Company continues to focus on relationship-based lending, aggressive collection strategies, and a
proactive approach to managing overall credit risk.

Allowance for Loan Losses

The Company's policy is to maintain the allowance for loan losses at a level which is considered sufficient to
absorb known and inherent losses in the loan portfolio. Both the amount of the provision and the level of the
allowance for loan losses are impacted by many factors, including management's evaluation of the size and current
risk characteristics of the loan portfolio. In addition, management considers general economic conditions, trends
within our peer group, actual and expected credit losses, historical trends and the specific condition of individual
borrowers.

As seen in Table 7, on December 31, 2002, 2001 and 2000, the allowance for loan losses was $2.84 million,
$2.12 million and $1.97 million, and represented 1.40%, 1.12% and 1.25% of year-end loans, respectively. Net
charge-offs of $378 thousand in 2002 increased from $182 thousand in 2001 and $274 thousand in 2000.

The increase in the provision for loan losses as of December 31, 2002 was based on management's assessment
of the loan portfolio and the still faltering local economy, the increase in net charge-offs, the growth experienced
in the loan portfolio, and the change in the portfolio mix to higher exposure loans. In addition, management refined
the loan loss reserve methodology during the fourth quarter of 2002, which together with the growth in loan
balances and classified loans resulted in a fourth quarter provision of $731,000.

Management bases the level of the loan loss reserves on actual loss experience or peer group loss factors. These
factors are adjusted by certain qualitative factors including levels of and trends in delinquencies, non-accrual
loans, national and local economic trends and conditions, and concentrations of loans exhibiting similar risk
profiles in the portfolio.

During the fourth quarter of 2002, the loan loss analysis was refined as follows: The importance of qualitative
factors in the analysis was re-evaluated due primarily to declining economic conditions in our market area and the
increase in charge-offs as a percentage of total loans compared to prior years. In addition, the Company had an
increase in charge-off in the fourth quarter of 2002. Qualitative adjustments to the economic factors increased 20
basis points under the revised analysis.

As part of the loan loss reserve methodology, loans are categorized into one of six pools of loans: commercial,
construction, commercial real estate, residential real estate, consumer installment, and credit cards.

2002 Annual Report 11
[LOGO OF HAMPTON ROADS BANKSHARES]

Peer group annual loss factors are applied to all pools and are adjusted by the qualitative factors mentioned
above. The loss factors resulting from this analysis are applied to each of the loan pools to determine a reserve
level for each of the six pools of loans.

In addition, management individually assigns loss factors to all loans that have been identified by management as
having loss attributes, as indicated by the deterioration in the financial condition of the individual borrower. Loss
factors on classified loans are applied as follows: a 5% loss factor to all special mention loans, a 10% loss factor
to all substandard loans, and a 50% loss factor to doubtful loans.

At present, management believes that the allowance for loan losses is adequate. However, the allowance is
subject to regulatory examinations and determinations as to adequacy, which may take into account such factors
as the methodology used to calculate the allowance and the size of the allowance in comparison to peer banks
identified by regulatory agencies.

TABLE 7: ALLOWANCE FOR LOAN LOSSES ANALYSIS

 December 31,
 (In thousands)                                            2002          2001          2000
 ---------------------------------------------------------------------------------------------
 ROLLFORWARD OF ALLOWANCE FOR LOAN LOSSES
    Balance at beginning of year                        $    2,121    $    1,969    $    1,853
    Charge-offs:
      Commercial                                              (219)         (185)         (261)
      Construction                                              --            --            --
      Real estate - commercial mortgage                         --            --            --
      Real estate - residential mortgage                        --            --            --
      Installment loans to individuals                        (215)          (30)          (28)
 ---------------------------------------------------------------------------------------------
         Total charge-offs                                    (434)         (215)         (289)

    Recoveries:
      Commercial                                                28            30             5
      Construction                                              --            --            --
      Real estate - commercial mortgage                         --            --            --
      Real estate - residential mortgage                        --            --            --
      Installment loans to individuals                          28             3            10
 ---------------------------------------------------------------------------------------------
         Total recoveries                                       56            33            15

    Net charge-offs                                           (378)         (182)         (274)
    Provision for loan losses                                1,100           334           390
 ---------------------------------------------------------------------------------------------
    Balance at end of year                              $    2,843    $    2,121    $    1,969
 =============================================================================================
    Allowance for loan losses to year-end loans               1.40%         1.12%         1.25%
 =============================================================================================
    Ratio of net charge-offs to average loans                 0.19%         0.11%         0.18%
 =============================================================================================




Investment Securities and Overnight Funds Sold

The Company's investment portfolio consists of U.S. agency and mortgage backed securities. At year-end 2002,
the total amortized cost of investment securities held by the Company was $42.83 million, increasing from the
$13.27 million at year-end 2001. This growth was the result of investment purchases made during 2002 to utilize
funds created by the rapid growth in total deposits. The total amortized cost of investment securities on
December 31, 2000 was $21.56 million. On December 31, 2002, investment securities classified as held-to-
maturity with an amortized cost of $50.44 million were transferred to the available-for-sale classification in order
to provide more flexibility in managing the interest-rate risk in the investment security portfolio. These investment
securities had gross unrealized gains of $907 thousand, and accumulated other comprehensive income of $599
thousand, net of taxes of $308 thousand, as of December 31, 2002. Also, on December 31, 2002, an investment
security with an amortized cost of $7.60 million was sold, and a gain of $619 thousand was recognized in the
fourth quarter of 2002. As a result of the transfer, the Company will be unable to classify investment securities as
held-to-maturity in the foreseeable future.

12 Hampton Roads Bankshares, Inc.
                                                      HMPR

Federal Reserve Bank stock increased to $631 thousand at year-end 2002 from $630 thousand and $626
thousand at years ended 2001 and 2000, respectively. In February 2002, the Company became a member of the
Federal Home Loan Bank of Atlanta and was required to purchase $685 thousand in Federal Home Loan Bank
stock.

Table 8 displays the contractual maturities and weighted average yields from investment securities at year-end
2002. Actual maturities will differ from contractual maturities because certain borrowers may have the right to call
or prepay obligations with or without call or prepayment penalties.

TABLE 8: INVESTMENT MATURITIES AND YIELDS

                                                                                Weighted
           December 31, 2002                       Amortized       Market       Average
           (In thousands)                            Cost           Value        Yield
           ------------------------------------------------------------------------------
           Maturities:
            U.S. agency securities
              Within 1 year                      $      2,000   $      2,034         5.74%
              After 1 year, but within 5 years         40,812         41,685         3.41%
              After 5 years                                --             --           --
           ------------------------------------------------------------------------------
                 Total U.S. agency securities          42,812         43,719         3.52%
            Mortgage backed securities                     20             20         5.12%
           ------------------------------------------------------------------------------
                 Total investment securities     $     42,832   $     43,739         3.52%
           ==============================================================================




The Company's investment portfolio serves as a source of liquidity to fund future loan growth and to meet the
necessary collateral requirements for public funds on deposit. As part of the Company's asset/liability
management policy, management has invested in high quality securities with varying maturity dates which provides
for a natural hedge against changes in interest rates.

The Company does not use derivatives or other off-balance sheet transactions such as future contracts, forward
obligations, interest rate swaps, or options.

Overnight funds sold are temporary investments used for daily cash management purposes, as well as
management of short-term interest rate opportunities and interest rate risk, and as a result, daily balances vary.
Overnight funds are comprised of federal funds sold and high quality money market instruments consisting of
short-term debt securities that are U.S. Government issued or guaranteed. The money market instruments offer
higher yields than those offered on federal funds sold, without assuming substantial additional risk or loss of
overall quality. At December 31, 2002, 56.52%, or $18.71 million, of our overnight funds were invested in the
money market instruments compared with 96.15%, or $18.00 million, at December 31, 2001. Federal funds sold
were $14.40 million, $0.72 million, and $4.72 million at December 31, 2002, 2001 and 2000, respectively.

Deposits

Deposits are the most significant source of the Company's funds for use in lending and general business purposes.
The Company's balance sheet growth is largely determined by the availability of deposits in its markets, the cost
of attracting the deposits, and the prospects of profitably utilizing the available deposits by increasing the loan or
investment portfolios. In 2002, average deposits increased $38.68 million, or 21.52%, to a new high of $218.39
million.

See Table 9 for a comparison of year-end deposits by classification for the previous three years. Year-end 2002
total deposits grew to $243.87 million as compared to year-end 2001 total deposits of $198.52 million, an
increase of 22.85%. The convenience and growth in branch office locations contributed to successful market
share gains. In addition, the growth in deposits was further supported by the Company's competitive interest rates
on all deposit products, special deposit promotions and product enhancements, and the Company's expansive
marketing efforts.
[GRAPHIC APPEARS HERE]

AVERAGE DEPOSITS
(dollars in million)

2002 Annual Report 13
[LOGO OF HAMPTON ROADS BANKSHARES]

TABLE 9: DEPOSITS BY CLASSIFICATION

December 31,                                           2002                     2001                    2
---------------------------------------------------------------------------------------------------------
(In thousands)                                 BALANCE          %       Balance          %      Balance
---------------------------------------------------------------------------------------------------------
DEPOSIT CLASSIFICATIONS:
   Noninterest bearing demand                $    62,668      25.70% $    45,811       23.08% $    39,347
   Interest bearing demand                        58,408      23.95%      39,512       19.90%      33,984
   Savings                                        10,684       4.38%       9,789        4.93%       9,574
   Time deposits less than $100,000               70,631      28.96%      68,463       34.49%      64,012
   Time deposits $100,000 or more                 41,483      17.01%      34,940       17.60%      20,517
---------------------------------------------------------------------------------------------------------
      Total deposits                         $ 243,874       100.00% $ 198,515        100.00% $ 167,434
=========================================================================================================




The Company will continue funding assets with deposit liability accounts and focus upon core deposit growth as
its primary source of liquidity and stability. Core deposits consist of noninterest bearing demand accounts, interest
checking accounts, money market accounts, savings accounts and time deposits of less than $100,000. Core
deposits totaled $202.39 million, or 82.99% of total deposits, at year-end 2002 compared to $163.58 million, or
82.40% of total deposits, at year-end 2001.

CAPITAL

Total stockholders' equity increased to $39.11 million at year-end 2002 from $35.62 million at year-end 2001.
This increase was due to current year net income, change in unrealized gain on securities available for sale net of
taxes, stock option exercises, and stock issued as part of the employee 401(k) plan, net of dividends paid and
common stock repurchased.

The Company and the Bank are subject to regulatory risk-based capital guidelines that measure capital relative to
risk-weighted assets and off-balance sheet financial instruments. Tier I capital is comprised of shareholders'
equity, net of unrealized gains or losses on available-for-sale securities, less intangible assets, while total risk-
based capital adds certain debt instruments and qualifying allowances for loan losses.

Under regulatory guidelines, Tier I capital and total risk-based capital must be at least 4% and 8%, respectively,
of risk adjusted total assets. Additionally, a 4% leverage ratio (Tier I capital divided by average total assets, less
intangible assets) must be maintained.

                                                                              Minimum
              December 31,                   2002       2001       2000     Requirement
              -------------------------------------------------------------------------
              TIER I CAPITAL
                 Consolidated Company       17.21%     17.89%     20.55%         4.00%
                 Bank                       15.29%     17.93%     20.55%         4.00%
              TOTAL RISK-BASED CAPITAL
                 Consolidated Company       18.46%     18.95%     21.73%         8.00%
                 Bank                       16.54%     19.01%     21.73%         8.00%
              LEVERAGE RATIO
                 Consolidated Company       13.37%     15.08%     16.89%         4.00%
                 Bank                       11.84%     15.01%     16.89%         4.00%
              -----------------------------------------------------------------------




Under Federal Reserve Bank (FRB) rules, the Company and the Bank were considered "well-capitalized," the
highest category of capitalization defined by the regulators, as of December 31, 2002. Management believes that
a strong capital position is necessary to take advantage of attractive growth and investment opportunities.

In December 2001, the Company implemented a Stock Repurchase Program, where the Company offered to
buy back up to 375,000 shares of its common stock at a price of $8.00 per share during the time frame of
December 17, 2001 to February 14, 2002, the expiration date. Upon expiration of the program, 64,918 shares
were repurchased by the Company at a total price of $519,340.

In January 2003, the Company repurchased 42,224 shares of its common stock in a privately negotiated
transaction at a price of $9.50.

On January 14, 2003, management declared a $0.27 per share dividend payable March 15, 2003, to
shareholders of record on February 15, 2003. The total dividend declared was estimated at $2,093,994 for
2003. On February 26, 2002, management declared a $0.26 per share dividend payable April 15, 2002 to
shareholders of record on March 15, 2002. The

14 Hampton Roads Bankshares, Inc.
                                                          HMPR

total dividend declared in 2002 was $1,946,593. On January 9, 2001, management declared a $0.25 per share
dividend payable March 15, 2001 to shareholders of record on February 15, 2001. The total dividend declared
was $1,876,571 for 2001.

Regulatory agencies place certain restrictions on dividends paid and loans or advances made by the Bank to the
Company. The amount of dividends the Bank may pay to the Company, without prior approval, is limited to
current year earnings plus retained net profits for the two preceding years. At December 31, 2002, the amount
available was approximately $2.5 million. Loans and advances are limited to 10 percent of the Bank's capital
stock and surplus. As of December 31, 2002, funds available for loans or advances by the Bank to the Company
amounted to $2.1 million.

LIQUIDITY

A key goal of asset/liability management is to maintain an adequate degree of liquidity without impairing long-term
earnings. Liquidity represents the Company's ability to provide adequate funding sources for loan growth or
deposit withdrawals. Short-term liquidity is primarily provided by access to the federal funds market through
established correspondent banking relationships. Funds can also be obtained through the Bank's borrowing
privileges at the Federal Reserve, and as of February 2002, with the Federal Home Loan Bank of Atlanta.
Additional liquidity is available through loan repayments and maturities of the Company's investment portfolio.
The Company maintains a very liquid portfolio of both assets and liabilities and attempts to mitigate the risk
inherent in changing rates in this manner. At December 31, 2002, cash, overnight funds sold, and investment
securities and loans maturing or re-pricing within one year were $163.81 million or 54.84% of total assets.
Management believes that the Company maintains overall liquidity sufficient to satisfy its depositors' requirements
and to meet its customers' credit needs.

INFLATIONARY FACTORS

Virtually all of the assets and liabilities of a financial institution are monetary in nature; therefore, interest rates have
a more consequential impact on the Company's performance than the general levels of inflation. Changes in
interest rates and inflation generally correspond, but interest rates do not necessarily move in the same magnitude
as the prices of goods and services. Banks can be affected by inflation, but the effect is usually not as significant
as the impact upon those businesses that have large investments in plant and inventories. During periods of
inflation, general increases in the prices of goods and services will result in increased noninterest expenses for the
Company. The values of real estate securing the Company's loans and foreclosed property can also be affected
by changes in inflation due to market conditions.

Management believes the most significant impact on financial results is the Company's ability to react to changes
in interest rates. The asset/liability management policy requires that the Company attempt to maintain a favorable
position between interest sensitive assets and liabilities in order to protect against wide interest rate fluctuations.

INTEREST SENSITIVITY

The Company's primary component of market risk is interest rate volatility. Fluctuations in interest rates will
impact both the level of interest income and interest expense and the market value of the Company's interest
earning assets and interest bearing liabilities.

The primary goal of the Company's asset/liability management strategy is to maximize its net interest income over
time while keeping interest rate risk exposure within levels established by the Company's management. The
Company's ability to manage its interest rate risk depends generally on the Company's ability to match the
maturities and re-pricing characteristics of its assets and liabilities while taking into account the separate goals of
maintaining asset quality and liquidity and achieving the desired level of net interest income. The principal variables
that affect the Company's management of its interest rate risk include the Company's existing interest rate gap
position, management's assessment of future interest rates, and the withdrawal of liabilities over time.

The Company's primary technique for managing its interest rate risk exposure is the management of the
Company's interest sensitivity gap. The interest sensitivity gap is defined as the difference between the amount of
interest earning assets anticipated, based upon certain assumptions, to mature or re-price within a specific time
period and the amount of interest bearing liabilities anticipated, based upon certain assumptions, to mature or re-
price within that time period. At December 31, 2002, the Company's one year "positive gap" (interest earning
assets maturing or re-pricing within a period exceed interest bearing liabilities maturing or re-pricing within the
same period) was approximately $4.87 million, or 1.63% of total assets. Thus, during periods of rising interest
rates, this implies that the Company's net interest income would be positively affected because the yield of the
Company's interest earning assets is likely to rise more quickly than the cost of its interest bearing liabilities. In
periods of falling interest rates, the opposite effect on net interest income is likely to occur.

2002 Annual Report 15
[LOGO OF HAMPTON ROADS BANKSHARES]

Table 10 sets forth the amounts of interest earning assets and interest bearing liabilities outstanding at December
31, 2002 that are subject to re-pricing or that mature in each of the future time periods shown. Loans and
securities with call or balloon provisions are included in the period in which they balloon or may first be called.
Except as stated above, the amount of assets and liabilities shown that re-price or mature during a particular
period were determined in accordance with the contractual terms of the asset or liability.

TABLE 10: INTEREST RATE SENSITIVITY

December 31, 2002                                          91 Days -                               Over
(in thousands)                                1 - 90 Days   1 Year     1 - 3 Years 3 - 5 Years    5 Years
---------------------------------------------------------------------------------------------------------
INTEREST EARNING ASSETS
   Loans                                      $    89,384 $    21,468 $     38,955 $     49,533 $     3,8
   Investment securities                           10,379       1,534       20,752       11,054       1,3
   Overnight funds sold                            33,105          --           --           --
---------------------------------------------------------------------------------------------------------
      Total                                   $   132,868 $    23,002 $     59,707 $     60,587 $     5,1
      Cumulative totals                       $   132,868 $ 155,870 $      215,577 $    276,164 $ 281,3

INTEREST BEARING LIABILITIES
   Interest checking                          $    18,071 $        -- $         -- $         -- $
   Money market                                    40,337          --           --           --
   Savings                                         10,684          --           --           --
   Time deposits                                   39,209      34,707       21,709       16,484
   FHLB borrowings                                     --       5,000        5,000           --
   Other borrowings                                 2,993          --           --           --
---------------------------------------------------------------------------------------------------------
      Total                                   $   111,294 $    39,707 $     26,709 $     16,484 $
      Cumulative totals                       $   111,294 $ 151,001 $      177,710 $    194,194 $ 194,1
---------------------------------------------------------------------------------------------------------
      Interest sensitivity gap                $    21,574 $ (16,705) $      32,998 $     44,103 $     5,1
      Cumulative interest sensitivity gap     $    21,574 $     4,869 $     37,867 $     81,970 $    87,1
      Cumulative interest sensitivity gap
       as a percentage of total assets               7.22%       1.63%       12.68%       27.44%      29.




CRITICAL ACCOUNTING POLICIES

Certain critical accounting policies affect the more significant judgments and estimates used in the preparation of
the consolidated financial statements. The Company's single most critical accounting policy relates to the
Company's allowance for loan losses, which reflects the estimated losses resulting from the inability of the
Company's borrowers to make required loan payments. If the financial condition of the Company's borrowers
were to deteriorate, resulting in an impairment of their ability to make payments, the Company's estimates would
be updated, and additional provisions for loan losses may be required. Further discussion of the estimates used in
determining the allowance for loan losses is contained in the discussion on "Allowance for Loan Losses" on pages
11 and 24 herein.

NEW ACCOUNTING PRONOUNCEMENTS

In April 2002, the Financial Accounting Standards Board ("FASB") issued Statements of Financial Accounting
Standards ("SFAS") No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections. The provisions of this statement related to the rescission of SFAS
No. 4 were effective for fiscal years beginning after May 15, 2002. These provisions had no impact on the
Company's financial statements.

In July 2002, the FASB issued SFAS No. 147, Acquisitions of Certain Financial Institutions - an amendment of
FASB Statements No. 72 and 144 and FASB Interpretation No. 9, which provides interpretative guidance on
the application of the purchase method to acquisitions of financial institutions. The provisions of SFAS No. 147
were effective October 1, 2002. This statement had no impact on the Company's financial statements.

16 Hampton Roads Bankshares, Inc.
                                                         HMPR

SFAS No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure, an amendment of FASB
Statement No. 123, was issued in December 2002. It amends SFAS No. 123, Accounting for Stock Based
Compensation, to provide alternative methods of transition for an entity that voluntarily changes to the fair value
based method of accounting for stock-based employee compensation. It also amends the disclosure provision of
that statement to require prominent disclosure about the effects on reported net income of an entity's accounting
policy decisions with respect to stock-based employee compensation. Finally, this statement amended
Accounting Principles Board ("APB") Opinion No. 28, Interim Financial Reporting, to require disclosure about
those effects in interim financial information. As permitted by SFAS No. 123 and 148, the Company has chosen
to continue to follow APB Opinion No. 25, Accounting for Stock Issued Employees, and as such, does not
affect the Company at the present time. See Note 11 for further discussion.

In November 2002, the FASB issued Interpretation No. 45 ("FIN 45"), Guarantor's Accounting and Disclosure
Requirements for Guarantors, including Indirect Guarantees of Indebtedness of Others: an Interpretation of
FASB Statements No. 5, 57, and 107 and recission of FASB Interpretation No. 34. Under FIN 45, a liability
must be recognized at the inception of certain guarantees whether or not payment is probable. When the
guarantor has assumed a "stand-ready" obligation, the fair value of the guarantee must be recorded as a liability.
This interpretation was effective at December 31, 2002. This statement had no impact on the Company's financial
statements.

In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"), Consolidation of Variable Interest Entities:
an interpretation of ARB No. 51. This interpretation addresses the issue of consolidation of variable interest
entities, which were previously commonly referred to as special-purpose entities ("SPEs"). Generally, in a
variable interest entity, the equity investment at risk is not sufficient to allow the entity to function without
subordinated financial support from other parties that absorb some of the expected losses and the equity
investors do not have the essential characteristics of a controlling financial interest, as defined. According to FIN
46, if a business has a controlling financial interest in a variable interest entity, the assets, liabilities and operating
results of the variable interest entity should be consolidated with the business, even if the business does not have
voting control of the variable interest entity. FIN 46 applies immediately to variable interest entities created after
January 31, 2003 and to interest in variable interest entities acquired after that date. FIN 46 also applies to the
first interim or fiscal periods beginning after June 15, 2003 for those variable interest entities in which a business
holds an interest that were acquired before February 1, 2003. This statement has no impact on the Company's
financial statements.

2002 Annual Report 17
[LOGO OF HAMPTON ROADS BANKSHARES]

INDEPENDENT AUDITORS' REPORT

THE BOARD OF DIRECTORS AND SHAREHOLDERS
HAMPTON ROADS BANKSHARES, INC.:

We have audited the accompanying consolidated balance sheets of Hampton Roads Bankshares, Inc. and
subsidiary (the Company) as of December 31, 2002 and 2001, and the related consolidated statements of
income, shareholders' equity and cash flows for each of the years then ended. These consolidated financial
statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits. The accompanying consolidated statements of income,
shareholders' equity and cash flows for the year ended December 31, 2000 were audited by other auditors
whose report thereon, dated February 12, 2001, expressed an unqualified opinion on those statements (note 1).

We conducted our audits in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
Hampton Roads Bankshares, Inc. and subsidiary as of December 31, 2002 and 2001, and the results of their
operations and their cash flows for the years then ended in conformity with accounting principles generally
accepted in the United States of America.

          February 14, 2003                                                                         KPMG LLP

          18                                                            Hampton Roads Bankshares, Inc.
                                                                                    HMPR




CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2002 AND 2001

                                                                                 2002              2001
---------------------------------------------------------------------------------------------------------
ASSETS:
   Cash and due from banks                                                 $     7,939,519   $     8,243,
   Overnight funds sold                                                         33,105,061        18,721,
---------------------------------------------------------------------------------------------------------
                                                                                41,044,580        26,965,
   Securities available-for-sale, at fair market value                          43,738,985
   Securities held-to-maturity, at amortized cost (fair market value
    as of December 31, 2001 was $13,466,984)                                            --        13,273,
   Federal Home Loan Bank stock                                                    685,000
   Federal Reserve Bank stock                                                      631,100           630,
---------------------------------------------------------------------------------------------------------
                                                                                45,055,085        13,903,
   Loans                                                                       203,183,511       189,141,
   Allowance for loan losses                                                    (2,842,855)       (2,121,
---------------------------------------------------------------------------------------------------------
            Net loans                                                          200,340,656       187,020,
   Premises and equipment                                                        8,431,209         8,477,
   Interest receivable                                                           1,278,851         1,093,
   Real estate acquired in settlement of loans                                     457,845           562,
   Deferred tax assets                                                             962,436         1,162,
   Other assets                                                                  1,143,738           893,
---------------------------------------------------------------------------------------------------------
            Total assets                                                   $   298,714,400   $   240,079,
=========================================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY:
   Deposits:
     Noninterest bearing demand                                            $    62,667,737   $    45,811,
     Interest bearing:
       Demand                                                                   58,407,499        39,511,
       Savings                                                                  10,684,436         9,788,
       Time deposits:
          Less than $100,000                                                    70,630,990        68,463,
          $100,000 or more                                                      41,483,080        34,940,
---------------------------------------------------------------------------------------------------------
             Total deposits                                                    243,873,742       198,515,
   Interest payable                                                                535,811           583,
   Other liabilities                                                             2,201,075         2,123,
   Other borrowings                                                             12,992,853         3,235,
---------------------------------------------------------------------------------------------------------
             Total liabilities                                                 259,603,481       204,456,
   Shareholders' equity:
     Common stock, $0.625 par value. Authorized 40,000,000 shares;
      issued and outstanding 7,707,744 shares in 2002 and
      7,518,066 shares in 2001                                                   4,817,340         4,698,
     Capital surplus                                                            17,788,739        16,369,
     Accumulated other comprehensive income                                        598,774
     Retained earnings                                                          15,906,066        14,554,
---------------------------------------------------------------------------------------------------------
             Total shareholders' equity                                         39,110,919        35,622,
---------------------------------------------------------------------------------------------------------
             Total liabilities and shareholders' equity                    $   298,714,400   $   240,079,
=========================================================================================================




See accompanying notes to the consolidated financial statements.

2002 Annual Report 19
[LOGO OF HAMPTON ROADS BANKSHARES]

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

                                                            2002         2001           2000
 -----------------------------------------------------------------------------------------------
 INTEREST INCOME:
    Loans, including fees                               $ 15,387,395 $ 15,053,488 $ 14,298,265
    Investment securities                                  1,779,545     1,091,501     1,273,650
    Overnight funds sold                                     176,747       411,884       269,624
 -----------------------------------------------------------------------------------------------
             Total interest income                        17,343,687    16,556,873    15,841,539
 -----------------------------------------------------------------------------------------------

  INTEREST EXPENSE:
    Deposits:
      Demand                                                 577,318       792,020       951,629
      Savings                                                103,215       158,795       251,643
      Time deposits:
        Less than $100,000                                 3,262,634     3,888,800     3,556,983
        $100,000 or more                                   1,197,371     1,243,331       896,724
    Other borrowings                                         272,456         3,892         3,614
 -----------------------------------------------------------------------------------------------
             Total interest expense                        5,412,994     6,086,838     5,660,593
 -----------------------------------------------------------------------------------------------
             Net interest income                          11,930,693    10,470,035    10,180,946
    Provision for loan losses                              1,100,000       334,000       390,000
 -----------------------------------------------------------------------------------------------
             Net interest income after provision
              for loan losses                             10,830,693    10,136,035     9,790,946
 -----------------------------------------------------------------------------------------------
 NONINTEREST INCOME:
    Service charges on deposit accounts                    1,698,063     1,624,002     1,502,681
    ATM surcharge fees                                       244,324       232,363       229,062
    Gain on sale of investment securities                    619,449            --            --
    Other service charges and fees                           809,152       642,726       588,361
 -----------------------------------------------------------------------------------------------
             Total noninterest income                      3,370,988     2,499,091     2,320,104
 -----------------------------------------------------------------------------------------------
 NONINTEREST EXPENSE:
    Salaries and employee benefits                         5,279,816     4,528,403     4,198,456
    Occupancy                                                943,598       870,949       828,225
    Data processing                                          411,232       382,049       285,320
    Other                                                  2,572,391     2,111,732     2,090,491
 -----------------------------------------------------------------------------------------------
             Total noninterest expense                     9,207,037     7,893,133     7,402,492
 -----------------------------------------------------------------------------------------------
 Income before provision for income taxes                  4,994,644     4,741,993     4,708,558
 Provision for income taxes                                1,696,609     1,611,682     1,601,048
 -----------------------------------------------------------------------------------------------
             Net income                                 $ 3,298,035 $ 3,130,311 $ 3,107,510
 ===============================================================================================
 Basic earnings per share                               $       0.43 $        0.42 $        0.41
 ===============================================================================================
 Diluted earnings per share                             $       0.42 $        0.41 $        0.40
 ===============================================================================================
 Basic weighted average shares outstanding                 7,606,446     7,509,793     7,491,178
 Effect of dilutive stock options                            176,020       188,984       274,809
 -----------------------------------------------------------------------------------------------
 Diluted weighted average shares outstanding               7,782,466     7,698,777     7,765,987
 ===============================================================================================




See accompanying notes to the consolidated financial statements.

20 Hampton Roads Bankshares, Inc.
                                                                                    HMPR

         CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
         YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000



                                                                                                     Accum
                                               Common Stock                                             Ot
                                          ------------------------     Capital        Retained     Compre
                                          Shares         Amount        Surplus        Earnings          In
---------------------------------------------------------------------------------------------------------
Balance at January 1, 2000                7,472,627   $ 4,670,392    $ 16,012,721   $ 10,194,530   $
Shares issued related to:
   401(k) plan                                7,229          4,518         58,731              --
   Exercise of stock options                 10,227          6,391         44,262              --
   Dividend reinvestment                      6,433          4,021         77,875              --
Payout of fractional shares                      (90)           (56)       (1,201)             --
Tax benefit of stock option
 exercises                                        --             --        30,516              --
Net income                                        --             --            --      3,107,510
1999 cash dividend adjustment                     --             --            --         (1,156)
---------------------------------------------------------------------------------------------------------
Balance at December 31, 2000              7,496,426      4,685,266     16,222,904     13,300,884
Shares issued related to:
   401(k) plan                                9,189          5,743         67,770              --
   Exercise of stock options                 12,495          7,810         56,541              --
Payout of fractional shares                      (44)           (28)         (410)             --
Tax benefit of stock option
 exercises                                        --             --        22,759              --
Net income                                        --             --            --      3,130,311
Cash dividends ($0.25 per share)                  --             --            --     (1,876,571)
---------------------------------------------------------------------------------------------------------
Balance at December 31, 2001              7,518,066      4,698,791     16,369,564     14,554,624
Comprehensive income:
   Net income                                     --             --            --      3,298,035
   Change in unrealized gain (loss)
    on securities available-for-sale,
    net of taxes of $308,460                      --             --            --              --

Total comprehensive income                       --             --             --             --
Shares issued related to:
   401(k) plan                                8,516          5,323         62,807             --
   Exercise of stock options                103,187         64,492        554,845             --
   Dividend reinvestment                    142,960         89,350      1,120,091             --
Payout of fractional shares                     (67)           (43)          (518)            --
Common stock repurchased and
 surrendered                                (64,918)       (40,573)      (478,767)            --
Tax benefit of stock option
 exercises                                       --             --        160,717             --
Cash dividends ($0.26 per share)                 --             --             --     (1,946,593)
---------------------------------------------------------------------------------------------------------
Balance at December 31, 2002              7,707,744   $ 4,817,340    $ 17,788,739   $ 15,906,066   $
=========================================================================================================




See accompanying notes to the consolidated financial statements.

2002 Annual Report 21
[LOGO OF HAMPTON ROADS BANKSHARES]

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

                                                                                2002             2001
---------------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES:
   Net income                                                              $    3,298,035   $    3,130,31
   Adjustments to reconcile net income to net cash provided by
    operating activities:
      Depreciation and amortization                                               522,857          548,58
      Provisions for loan losses                                                1,100,000          334,00
      Net amortization of premiums and accretion of discounts
       on investment securities                                                  (522,597)         (12,64
      (Gain) loss on sale of real estate acquired in settlement
        of loans                                                                        --            8,62
      (Gain) loss on sale of premises and equipment                                43,336                -
      Gain on sale of securities                                                 (619,449)               -
      Deferred tax assets                                                        (108,227)          11,13
      Changes in:
        Interest receivable                                                      (184,999)         (82,09
        Other assets                                                             (282,753)        (113,02
        Interest payable                                                          (47,508)         (14,67
        Other liabilities                                                         510,801          191,93
---------------------------------------------------------------------------------------------------------
          Net cash provided by operating activities                             3,709,496        4,002,14
---------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
   Proceeds from maturities and calls of securities                            45,484,820       31,171,18
   Proceeds from sales of securities                                            8,223,750                -
   Purchase of securities                                                     (82,125,000)     (22,870,00
   Purchase of Federal Home Loan Bank stock                                      (685,000)               -
   Purchase of Federal Reserve Bank stock                                             (650)         (4,65
   Net increase in total loans                                                (14,501,301)     (32,095,89
   Purchase of premises and equipment                                            (327,366)        (392,90
   Cash proceeds from sale of premises and equipment                                 8,740               -
   Cash received from rental income (paid for) development and
    improvement of real estate acquired in settlement of loans, net                17,459           42,15
   Proceeds from sale of real estate acquired in settlement
    of loans                                                                            --         472,20
---------------------------------------------------------------------------------------------------------
          Net cash used in investing activities                               (43,904,548)     (23,677,90
---------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
   Net increase in deposits                                                    45,358,470       31,081,03
   Net increase in other borrowings                                             9,757,853        3,235,00
   Common stock repurchased and surrendered                                      (519,340)               -
   Dividends reinvested                                                         1,209,441                -
   Proceeds from shares issued related to 401(k) plan                              68,130           73,51
   Cash proceeds from exercise of stock options                                   346,576           50,27
   Dividends paid                                                              (1,946,593)      (1,876,57
---------------------------------------------------------------------------------------------------------
          Net cash provided by financing activities                            54,274,537       32,563,24
---------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents                               14,079,485       12,887,48
Cash and cash equivalents at beginning of year                                 26,965,095       14,077,61
---------------------------------------------------------------------------------------------------------
          Cash and cash equivalents at end of year                         $   41,044,580   $   26,965,09
=========================================================================================================
Supplemental cash flow information:
  Cash paid during the year for interest                                   $    5,460,502   $    6,101,51
  Cash paid during the year for income taxes                                    1,565,000        1,575,00
Supplemental noncash information:
  Transfer between loans and real estate acquired in
   settlement of loans                                                             81,118           14,68
  Transfer between real estate acquired in settlement of
   loans and premises and equipment                                               168,312                -




See accompanying notes to the consolidated financial statements.

22 Hampton Roads Bankshares, Inc.
                                                        HMPR

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

(1) ACCOUNTING POLICIES

Hampton Roads Bankshares, Inc., a Virginia Corporation (the Holding Company), was incorporated under the
laws of the Commonwealth of Virginia on February 28, 2001, primarily to serve as a holding company for Bank
of Hampton Roads (the Bank). On July 1, 2001, all Bank of Hampton Roads common stock, $0.625 par value,
was converted to the common stock, $0.625 par value, of Hampton Roads Bankshares, Inc. on a share for
share exchange basis, making the Bank a wholly owned subsidiary of the Holding Company. This reorganization
was accounted for in a manner similar to a pooling of interests. Accordingly, the prior period consolidated
financial statements of Hampton Roads Bankshares, Inc. (the Company) are identical to the prior period
consolidated financial statements of the Bank.

The consolidated financial statements of the Company are prepared in conformity with accounting principles
generally accepted in the United States of America and prevailing practices of the banking industry. The following
is a summary of the significant accounting and reporting policies used in preparing the financial statements.

(a) BASIS OF CONSOLIDATION

The consolidated financial statements include the accounts of the Holding Company and its wholly owned
subsidiary, Bank of Hampton Roads. All significant intercompany balances and transactions have been eliminated
in consolidation.

(b) NATURE OF OPERATIONS

The Company has 15 branches located in Chesapeake, Suffolk, Norfolk and Virginia Beach, Virginia. The
Company's primary source of income is interest income from loans to small and middle market businesses.

(c) RESTRICTIONS ON CASH AND DUE FROM BANK ACCOUNTS

The Company is required to maintain average reserve balances in cash with the Federal Reserve Bank (FRB).
Required reserves were $806,000 and $414,000 at December 31, 2002 and 2001, respectively.

(d) INVESTMENT SECURITIES

Investment securities are classified in three categories and accounted for as follows:

. Debt securities that the Company has the positive intent and ability to hold to maturity are classified as held-to-
maturity securities and reported at amortized cost.
. Debt and equity securities that are bought and held principally for the purpose of selling them in the near term
are classified as trading securities and reported at fair value, with unrealized gains and losses included in earnings.
. Debt and equity securities not classified as either held-to-maturity or trading securities are classified as available-
for-sale securities and reported at fair value, with unrealized gains and losses excluded from earnings and
reported as other comprehensive income, a separate component of shareholders' equity.

Gains and losses on sales of securities are computed based on specific identification of the adjusted cost of each
security and included in other income. Amortization of premiums and accretion of discounts are computed by the
effective yield method and included in interest income.

(e) FEDERAL RESERVE BANK STOCK AND FEDERAL HOME LOAN BANK STOCK

The Bank, as a member of the Federal Home Loan Bank (FHLB) of Atlanta, is required to hold shares of capital
stock in the FHLB in an amount equal to at least 1% of the aggregate principal amount of its residential mortgage
loans or 5% of its borrowings from the FHLB, whichever is larger.
As a member of the Federal Reserve Bank (FRB), the Bank is required to hold shares of FRB capital stock,
$100 par value, in an amount equal to 6% of the Company's total common stock and capital surplus.

FRB stock and FHLB stock are carried at cost.

2002 Annual Report 23
[LOGO OF HAMPTON ROADS BANKSHARES]

(f) LOANS

Loans are stated at the amount of unpaid principal less net deferred fees and an allowance for loan losses.
Interest on loans is accrued and credited to income based upon the principal amount outstanding. Fees collected
and costs incurred in connection with loan originations are deferred and recognized over the term of the loan. It is
the Company's normal practice to cease the accrual of interest on loans based upon the delinquency status of the
loan, as determined by the contractual terms of the loans, an evaluation of the collateral pledged, and the financial
strength of the borrower.

At December 31, 2002 and 2001, the recorded investments in loans for which impairment has been recognized
in accordance with Statement of Financial Accounting Standards (SFAS) No. 114, Accounting by Creditors for
Impairment of a Loan, (an amendment of FASB Statements No. 5 and 15), the corresponding valuation
allowance and the average recorded investments in impaired loans during each of the three years in the period
ended December 31, 2002 were immaterial.

A loan is deemed impaired when it is probable that the Company will be unable to collect all amounts due
according to the contractual terms of the loan agreement. Impaired loans will be measured at the present value of
their expected future cash flows by discounting those cash flows at the loan's effective interest rate, or at the
loan's observable market price or the fair value of collateral if the loan is collateral dependent. The difference
between this discounted amount and the loan balance is recorded as an allowance for loan losses. Interest on
impaired loans is accrued and recorded as income based upon the principal amount outstanding, except for
nonaccrual loans, for which interest is not accrued. Interest accrual resumes when the loan is no longer 90 or
more days past due and the borrower, in management's opinion, is able to meet payments as they become due.

(g) ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses is established through charges to earnings in the form of a provision for loan losses.
Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is
confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management's
periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan
portfolio, adverse situations that may affect the borrower's ability to repay, estimated value of any underlying
collateral, and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that
are susceptible to significant revision as more information becomes available.

(h) PREMISES AND EQUIPMENT

Premises and equipment are stated at cost, less accumulated depreciation. Depreciation is computed by the
straight-line method over the estimated useful lives of the assets. Useful lives range from 10 to 50 years for
buildings and improvements and from 3 to 15 years for substantially all equipment, furniture and fixtures.

(i) REAL ESTATE ACQUIRED IN SETTLEMENT OF LOANS

Real estate acquired in settlement of loans is stated at the lower of the recorded loan balance or fair market value,
based on appraised value, less estimated disposal costs. Development and improvement costs relating to
property are capitalized. Estimated losses that result from the ongoing periodic evaluation of these properties are
charged to current earnings with a provision for losses on foreclosed property in the period in which they are
identified. Net operating income or expenses of such properties are included in other expenses.

(j) INCOME TAXES

The Company files a consolidated tax return. The provision for income taxes reflects tax expense incurred as a
consolidated group. The expense is allocated among the members of the consolidated group in accordance with
an intercompany agreement for tax expense.
The Company uses the liability method in accounting for income taxes. Under this method, deferred tax assets
and liabilities are determined based on differences between financial reporting and tax bases of assets and
liabilities that will result in future taxable or deductible amounts. The effect on deferred taxes of a change in tax
rates is recognized in the year including the enactment date and is measured using the enacted tax rates and laws
that will be in effect when the differences are expected to reverse. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized. Management does not believe a
valuation allowance is necessary at December 31, 2002

24 Hampton Roads Bankshares, Inc.
                                                                                                     HMPR

                 or 2001 as it is more likely than not that the results of future operations
                 will generate sufficient taxable income to realize the deferred tax assets.

           (k)   PER SHARE DATA

                      Basic earnings per share is computed by dividing income available to
                 common shareholders by the weighted average number of common shares
                 outstanding for the period. Diluted earnings per share reflects potential
                 dilution if stock options would result in the issuance of additional shares
                 of common stock that share in the earnings.

           (l)   ADVERTISING COSTS

                      Advertising costs are expensed as incurred.

           (m)   STOCK-BASED COMPENSATION

                      The Company adopted the disclosure only provision of SFAS No. 123,
                 Accounting for Stock-Based Compensation (SFAS 123) and SFAS No. 148,
                 Accounting for Stock-Based Compensation-Transition and Disclosure (SFAS
                 148). These statements allow an entity to continue to measure compensation
                 cost for these plans using the intrinsic value-based method of accounting
                 prescribed by Accounting Principles Board Opinion No. 25, Accounting for
                 Stock Issued to Employees (APB 25). The Company has elected to follow APB
                 25 and related interpretations in accounting for its employee stock
                 options.

                      Pro forma information regarding net income and earnings per share as
                 required by SFAS 123 and SFAS 148 has been determined as if the Company had
                 accounted for its employee stock options under the fair-value method. The
                 fair value of all currently outstanding options was estimated at the date
                 of the grant using a minimum value option pricing model. Pro forma results
                 and a summary of the assumtions used for 2002, 2001 and 2000 are as




follows:

Years Ended December 31,                                 2002               2001                2000
---------------------------------------------------------------------------------------------------------
Reported net income                                   $   3,298,035      $   3,130,311      $   3,107,510
Stock-based compensation expense (net of tax)
   Actual expense based on APB 25                           160,561            162,642            187,322
   Pro forma expense based on SFAS 123                     (133,334)          (173,784)          (302,124
---------------------------------------------------------------------------------------------------------
Pro forma net income                                  $   3,325,262      $   3,119,169      $   2,992,708
=========================================================================================================
Net income per share
   Basic-as reported                                  $         .43      $         .42      $         .41
   Basic-pro forma                                    $         .44      $         .42      $         .40

   Diluted-as reported                                $         .42      $         .41      $         .40
   Diluted-pro forma                                  $         .43      $         .41      $         .39
=========================================================================================================

December 31,                                             2002               2001                2000
---------------------------------------------------------------------------------------------------------
Assumptions
   Risk-free interest rate                                     3.50%              3.90%              7.00
   Dividend paid                                      $         .25      $         .25      $         .25
   Weighted average expected life (years)                       7.0                7.0                7.0
=========================================================================================================




Option valuation models require the input of highly subjective assumptions. Because the Company's employee
stock options have characteristics significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing
models do not necessarily provide a representative single measure of the fair value at which transactions may
occur.

(n) USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the periods presented. Actual results could differ from those estimates. Material
estimates that are

2002 Annual Report 25
[LOGO OF HAMPTON ROADS BANKSHARES]

particularly susceptible to changes in the near term are the allowance for loan losses and the valuation of deferred
tax assets.

(o) STATEMENT OF CASH FLOWS

For purposes of reporting cash flows, the Company considers cash and due from banks, and overnight funds
sold as cash and cash equivalents. Generally, overnight funds include federal funds sold and high quality money
market instruments which hold short-term debt securities that are U.S. Government issued or guaranteed, and are
purchased and sold from Bank of America for one day periods.

(p) SEGMENT INFORMATION

The Company has determined that it has one significant operating segment, the providing of general commercial
financial services to customers located in the single geographic area of Hampton Roads, Virginia, and surrounding
communities.

(q) COMPREHENSIVE INCOME

SFAS No. 130, Reporting Comprehensive Income, establishes standards for the reporting and presentation of
comprehensive income and its components (revenues, expenses, gains and losses) within the Company's
consolidated financial statements. Although certain changes in assets and liabilities, such as unrealized gains and
losses on available-for-sale securities, are reported as a separate component of the equity section of the balance
sheet, such items, along with net income, are components of comprehensive income.

(r) RECLASSIFICATION

Certain 2001 and 2000 amounts have been reclassified to conform to the 2002 presentation.

(2) INVESTMENT SECURITIES

The amortized cost and estimated market values of investment securities at December 31, 2002 and 2001, were
as follows:

                                                                           2002
---------------------------------------------------------------------------------------------------------
                                                                 Gross               Gross       Estimate
                                               Amortized       Unrealized          Unrealized      Market
                                                  Cost            Gains              Losses         Value
---------------------------------------------------------------------------------------------------------
AVAILABLE-FOR-SALE SECURITIES:
   U.S. agency securities                   $    42,811,920 $        907,143     $          -- $    43,71
   Mortgage backed securities                        19,831               91                --          1
---------------------------------------------------------------------------------------------------------
Total available-for-sale securities         $    42,831,751 $        907,234     $          -- $    43,73
=========================================================================================================

                                                                           2001
---------------------------------------------------------------------------------------------------------
                                                                 Gross               Gross        Estimate
                                               Amortized       Unrealized          Unrealized       Market
                                                  Cost            Gains              Losses          Value
---------------------------------------------------------------------------------------------------------
HELD-TO-MATURITY SECURITIES:
   U.S. agency securities                   $    13,248,569 $        193,896     $           -- $    13,44
   Mortgage backed securities                        24,706               --                187          2
---------------------------------------------------------------------------------------------------------
Total held-to-maturity securities           $    13,273,275 $        193,896     $          187 $    13,46
=========================================================================================================




On December 31, 2002, investment securities classified as held-to-maturity with an amortized cost of
$50,436,052 were transferred to the available-for-sale classification in order to provide more flexibility in
managing the interest-rate risk in the investment security portfolio. These investment securities had gross
unrealized gains of $907,234. Also, on December 31, 2002, an investment security with an amortized cost of
$7,604,301 was sold, and a gain of $619,449 was recognized in the fourth quarter of 2002. As a result of the
transfer, the Company will be unable to classify investment securities as held-to-maturity in the foreseeable future.
There were no sales of securities in 2001 or 2000.

The amortized cost and estimated market value of debt securities at December 31, 2002 by contractual maturity
are

26 Hampton Roads Bankshares, Inc.
                                                       HMPR

shown below. Expected maturities may differ from contractual maturities because borrowers may have the right
to call or prepay obligations with or without call or prepayment penalties.

                                                           Amortized          Estimated
                                                             Cost            Market Value
          --------------------------------------------------------------------------------
          Due in one year or less                       $     1,999,963     $    2,034,523
          Due after one year through five years              40,811,957         41,684,540
          Due after five years through ten years                 19,831             19,922
          --------------------------------------------------------------------------------
                                                        $    42,831,751     $   43,738,985
          ================================================================================




At December 31, 2002 and 2001, the Company had investment securities with carrying values of $16,835,141
and $10,773,275, respectively, pledged to secure public deposits, $1,016,250 and $1,000,000, respectively,
pledged to secure treasury, tax and loan deposits, and $1,757,543 and $1,500,000, respectively, pledged to
secure Federal Reserve Bank borrowings.

(3) LOANS AND ALLOWANCE FOR LOAN LOSSES

The Company grants commercial, construction, real estate, and consumer loans to customers throughout its
lending area. Although the Company has a diversified loan portfolio, a substantial portion of its debtors' abilities
to honor their contracts is dependent upon the economic environment of the lending area.

Major classifications of loans at December 31, 2002 and 2001 were:

                                                             2002                 2001
           ------------------------------------------------------------------------------
           Commercial                                  $   53,842,424     $    48,428,566
           Construction                                    35,969,610          28,620,409
           Real estate - commercial mortgage               62,610,803          60,494,995
           Real estate - residential mortgage              28,505,370          32,212,316
           Installment loans to individuals                22,217,230          19,327,859
           Deferred loan fees and related costs                38,074              57,465
           ------------------------------------------------------------------------------
                                                       $ 203,183,511      $   189,141,610
           ==============================================================================




Nonaccrual loans were $78,443 and $12,597 at December 31, 2002 and 2001, respectively.

Transactions affecting the allowance for loan losses for the years ended December 31, 2002, 2001 and 2000
were as follows:

                                                2002             2001            2000
          -------------------------------------------------------------------------------
          Balance at beginning of year       $ 2,121,137     $ 1,969,271     $ 1,852,885
          Provision for loan losses             1,100,000         334,000         390,000
          Loans charged off                      (434,326)       (215,014)       (288,968)
          Recoveries                               56,044          32,880          15,354
          -------------------------------------------------------------------------------
          Balance at end of year             $ 2,842,855     $ 2,121,137     $ 1,969,271
          ===============================================================================




(4) PREMISES, EQUIPMENT AND LEASES

Premises and equipment at December 31, 2002 and 2001 are summarized as follows:

                                                                       2002                   2001
            ---------------------------------------------------------------------------
            Land                                       $   2,860,152      $   2,766,638
            Buildings and improvements                     5,050,549          4,954,770
            Equipment, furniture and fixtures              3,742,070          3,514,638
            ---------------------------------------------------------------------------
                                                          11,652,771         11,236,046
            Less accumulated depreciation                 (3,221,562)        (2,758,415)
            ---------------------------------------------------------------------------
                                                       $   8,431,209      $   8,477,631
            ===========================================================================




The Company leases the land upon which its Crossroads and Indian River branch offices were constructed. In
addition, the Company also leases the buildings in which the Indian River, Orchard Square, MacArthur Center,
Great Neck, Little Creek and Pembroke branch offices are located, as well as its loan processing department.
The lease related to the Crossroads

2002 Annual Report 27
[LOGO OF HAMPTON ROADS BANKSHARES]

office was renewed in 1999 and is renewable for five additional five-year periods. The Indian River lease was
renewed December 2002 for one additional year. The MacArthur Center office lease commenced October 2002
with a term of ten years. The Orchard Square lease was renewed for a term of five years in October 2001 and is
renewable for one additional five-year period. The Great Neck lease commenced July 1999 with an original term
of five years and is renewable for two additional five-year periods. The Little Creek lease commenced December
1998 with a term of five years and is renewable for two additional five-year periods. The Pembroke lease
commenced August 2001 with an original term of five years and three additional five-year renewal options. The
loan processing department lease commenced in July 2001 with an original term of three years with annual
renewal periods thereafter.

Total rent expense was $398,136 in 2002, $320,254 in 2001, and $287,978 in 2000.

Future minimum lease payments, by year and in the aggregate, under noncancelable operating leases with initial or
remaining terms of one year or more at December 31, 2002 were:

                                     2003                             $    362,998
                                     2004                                  227,377
                                     2005                                  161,385
                                     2006                                  135,433
                                     2007                                   55,613
                                     Thereafter                            288,178
                                     -----------------------------------------------
                                                                      $ 1,230,984
                                     ===============================================

                     (5)   DEPOSITS




The maturities of time deposits of $100,000 or more at December 31, 2002 and 2001, were as follows:

                                              2002                            2001
------------------------------------------------------------------------------------------------
                                       TIME            OTHER            Time           Other
                                   CERTIFICATES        TIME         Certificates       Time
------------------------------------------------------------------------------------------------
MATURITY OF:
  3 months or less                 $ 22,432,787    $     223,177   $ 18,083,261    $     111,012
  Over 3 months - 6 months             2,736,537              --       2,452,477              --
  Over 6 months - 12 months            6,958,975         233,210       7,857,059         405,003
  1 year - 2 years                     1,874,266         220,707       2,249,064         382,443
  2 years - 3 years                    2,040,059         712,671         834,681              --
  3 years - 4 years                      908,394         145,850       1,449,899         614,500
  4 years - 5 years                    2,996,447              --         500,631              --
------------------------------------------------------------------------------------------------
            Total                  $ 39,947,465    $   1,535,615   $ 33,427,072    $   1,512,958
================================================================================================




(6) OTHER BORROWINGS

The Company has a $5,000,000 line of credit, of which $2,992,853 and $3,235,000 were outstanding at
December 31, 2002 and 2001, respectively. The line of credit is unsecured with a floating interest rate equal to
Wall Street Journal prime less .50% (3.75% and 4.25% at December 31, 2002 and 2001, respectively). The line
of credit, which was renewed January 8, 2003, has a 12-month term with interest-only payments due monthly
and any unpaid principal and accrued interest due in full at the end of the 12-month term.

At December 31, 2002, the Company had borrowings from the Federal Home Loan Bank system totaling
$10,000,000 at interest rates ranging from 2.84% to 4.56%. $5 million of the borrowings mature in 2003, $2.5
million mature in 2004 and $2.5 million mature in 2005. The borrowings are collateralized by a blanket lien on the
Company's 1-4 family residential real estate loans, with a carrying value of $23 million as of December 31, 2002.
Interest only is payable on a monthly basis until maturity.
28 Hampton Roads Bankshares, Inc.
                                                    HMPR

(7) INCOME TAXES

Total income tax was allocated for the years ended December 31, 2002, 2001 and 2000, as follows:

                                                     2002             2001             2000
-----------------------------------------------------------------------------------------------
Income before income taxes                      $   1,696,609    $   1,611,682    $   1,601,048
Shareholders' equity for unrealized gain
 on securities available-for-sale                     308,460               --               --
Shareholders' equity for tax benefit for
 excess of fair value above cost of
 stock option plans                                  (160,717)         (22,759)         (30,516)
-----------------------------------------------------------------------------------------------
                                                $   1,844,352    $   1,588,923    $   1,570,532
===============================================================================================




Income tax expense (benefit) applicable to income before taxes consists of:

                                                          Years ended December 31,
          -------------------------------------------------------------------------------
                                               2002              2001             2000
          -------------------------------------------------------------------------------
          Current                          $   1,804,836    $   1,600,552   $   1,611,184
          Deferred                              (108,227)          11,130         (10,136)
          -------------------------------------------------------------------------------
                                           $   1,696,609    $   1,611,682   $   1,601,048
          ===============================================================================




The significant components of deferred income tax expense (benefit) were as follows:

                                                            December 31,
          ------------------------------------------------------------------------------
                                               2002              2001             2000
          ------------------------------------------------------------------------------
          Deferred income tax benefit      $    (144,809)   $    (25,452)   $    (46,718)
          NOL carryforward                        36,582          36,582          36,582
          ------------------------------------------------------------------------------
                                           $    (108,227)   $     11,130    $    (10,136)
          ==============================================================================




The provisions for income taxes for the years ended December 31, 2002, 2001 and 2000 differ from the amount
computed by applying the statutory federal income tax rate of 34% to income before taxes. The differences are
as follows:

                                                    2002          2001           2000
          -------------------------------------------------------------------------------
          Income taxes at statutory rates       $ 1,698,179    $ 1,612,278    $ 1,600,910
          Increase (decrease) resulting from:
            Nondeductible expense                     2,534          2,691          2,636
            Other                                    (4,104)        (3,287)        (2,498)
          -------------------------------------------------------------------------------
          Income tax expense                    $ 1,696,609    $ 1,611,682    $ 1,601,048
          ===============================================================================




At December 31, 2002, the Company had net operating loss carryforwards of $430,380 for income tax
purposes that expire in years 2006 and 2007, resulting from a 1992 acquisition. The amount relating to the net
operating loss carryforwards is limited to $107,595 per year.

2002 Annual Report 29
[LOGO OF HAMPTON ROADS BANKSHARES]

Significant components of the Company's deferred tax liabilities and assets as of December 31, 2002 and 2001
were as follows:

                                                                   2002           2001
          --------------------------------------------------------------------------------
          DEFERRED TAX ASSETS:
            Allowance for loan losses                          $    836,197   $    600,374
            Deferred directors' fees                                 44,267         43,163
            Nonqualified deferred compensation                      654,529        662,713
            Net operating loss carryforward                         146,329        182,912
            Other                                                       570             --
          --------------------------------------------------------------------------------
                      Total deferred tax assets                   1,681,892      1,489,162
          --------------------------------------------------------------------------------
          DEFERRED TAX LIABILITIES:
            Depreciation                                            410,996        326,206
            Unrealized gain on securities available-for-sale        308,460             --
            Other                                                        --            287
          --------------------------------------------------------------------------------
                      Total deferred tax liabilities                719,456        326,493
          --------------------------------------------------------------------------------
                      Net deferred tax assets                  $    962,436   $ 1,162,669
          ================================================================================




(8) COMMITMENTS

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to
meet the financing needs of its customers. These financial instruments include commitments to extend credit and
standby letters of credit. These instruments involve, to varying degrees, elements of credit risk which have not
been recognized in the consolidated balance sheet. The contract amount of these instruments reflects the extent of
the Company's involvement or "credit risk."

The Company uses the same credit policies in making commitments and conditional obligations as it does for on-
balance-sheet instruments.

Unless noted otherwise, the Company requires collateral or other security to support financial instruments with
credit risk. Contractual amounts at December 31, 2002 and 2001 were:

                                                                           2002            2001
----------------------------------------------------------------------------------------------------
FINANCIAL INSTRUMENTS WHOSE CONTRACT AMOUNTS REPRESENT CREDIT RISK:
     Commitments to extend credit                                      $ 50,185,268    $ 27,347,030
     Standby letters of credit                                            10,171,780       9,462,941
----------------------------------------------------------------------------------------------------
                                                                       $ 60,357,048    $ 36,809,971
====================================================================================================




Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any
condition established in the contract. Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee. Since many of the commitments are expected to expire without being
drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company
evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if
deemed necessary by the Company upon extension of credit, is based on management's credit evaluation of the
counter-party. Collateral held varies but may include accounts receivable, inventory, property, plant and
equipment, income-producing commercial properties, and real estate. At December 31, 2002, there was no
allowance for standby letters of credit.

Management does not anticipate that any material losses will arise from additional fundings of the aforementioned
lines of credit or letters of credit.
(9) PROFIT SHARING PLAN AND SUPPLEMENTAL RETIREMENT PLAN

The Company has a defined contribution 401(k) plan. All employees who are 21 years of age and have
completed one year of service are eligible to participate. Under the plan, employees may contribute the lesser of
$11,000 or 20% of their annual salary, and the Company will contribute 25% of the employees' contributions up
to 10%. The Company may also make an additional discretionary contribution. Company contributions will not
exceed the maximum amount deductible annually for income tax purposes. The Company made discretionary
contributions of $129,000, $143,381 and $134,750 for

30 Hampton Roads Bankshares, Inc.
                                                    HMPR

the years ended December 31, 2002, 2001 and 2000, respectively. The Company also made matching
contributions of $40,271, $38,765 and $35,667 for the years ended December 31, 2002, 2001 and 2000,
respectively. Beginning in 1997, the Company began offering its stock as an investment option under the 401(k)
plan. The plan purchased 8,516, 9,189, and 7,229 shares at a price of $8.00, $8.00 and $8.75 per share in
2002, 2001 and 2000, respectively. The Company is the plan's trustee.

In 1993, the Company entered into a Supplemental Retirement Agreement for an officer to provide an annual
post retirement benefit following the attainment of his Plan Retirement Date of November 9, 2015. Partial vesting
began on January 1, 1998, and will continue until the Plan Retirement Date. The Company has funded this
agreement with a life insurance policy, which names the Company as beneficiary. Plan expense recognized in
2002, 2001 and 2000 was $76,651, $69,701 and $78,552, respectively.

(10) DIVIDEND REINVESTMENT AND OPTIONAL CASH PURCHASE PLAN

The Company has a Dividend Reinvestment and Optional Cash Purchase Plan. The plan enables shareholders to
receive cash payment or reinvest their dividends. The plan also enables shareholders to purchase up to $1,000
per quarter of additional common stock. The stock purchased through the plan directly from the Company, is
valued at the weighted average of sales prices of the Company's common stock in transactions occurring during
the sixty calendar days immediately prior to the purchase date. The purchase price of shares purchased on the
open market will be the actual current market price of the shares purchased on the applicable purchase date. In
2002, $1,303,719 of the $1,946,593 total dividend declared in 2002 was reinvested at $8.46 per share for
154,104 shares. In 2001, $1,238,355 of the $1,876,571 total dividend declared in 2001 was reinvested at
$10.37 per share for 119,417 shares. In 2000, $872,216 of the $1,196,778 total dividend declared in 1999 was
reinvested at $12.73 per share for 68,517 shares. Under the Optional Cash Purchase Plan, 25,565 and 35,827
shares were purchased at prices ranging from $9.00 to $7.94 per share and $10.50 to $9.02 per share for 2002
and 2001, respectively. In 2000, 44,265 shares were purchased at prices ranging from $12.82 to $10.46 per
share. When available, shares for sale on the open market are used to satisfy the shares purchased through the
Dividend Reinvestment and Optional Cash Purchase Plan.

(11) STOCK OPTIONS

The Company has a Stock Option Plan under which the Company may grant options to its directors and
employees for shares of common stock. During 2002 and 2001, the Company authorized the grant of options to
employees and directors for 101,737 and 104,053 shares, respectively, of the Company's common stock under
the plan.

During 1997, the Company amended the Directors' Deferred Compensation Agreement to allow directors to
purchase options for the Company's common stock where the directors' fees reduce the exercise price for shares
up to 50% of an amount that represents the fair market value of the stock. The directors purchased 30,604 and
27,909 options in 2002 and 2001, respectively, under this agreement. All options, when granted, have 10-year
terms and are fully vested and exercisable at the date of grant. Both of the above mentioned plans have been
approved by the Company's shareholders.

A summary of the Company's stock option activity and related information is as follows:

                                                             Weighted
                                              Options         Average
                                            Outstanding    Exercise Price
          ---------------------------------------------------------------
          Balance at January 1, 2000            775,022    $       5.4137
            Granted                             135,639            6.7821
            Exercised                           (10,227)           4.0859
          ---------------------------------------------------------------
          Balance at December 31, 2000          900,434            5.6349
            Granted                             131,962            6.7670
            Exercised                           (13,250)           4.2826
            Expired                              (2,902)           6.4426
          ---------------------------------------------------------------
          Balance at December 31, 2001        1,016,244            5.7972
  Granted                             132,341            6.7872
  Exercised                          (115,820)           3.8264
  Expired                              (2,566)           9.0152
---------------------------------------------------------------
Balance at December 31, 2002        1,030,199    $       6.1379
===============================================================

2002 Annual Report                                                31
[LOGO OF HAMPTON ROADS BANKSHARES]

In 2002 and 2001, 115,820 and 13,250 options were exercised, respectively; however, only 103,187 and
12,495 new shares, respectively, were issued since 12,633 and 755 shares, respectively, of previously acquired
stock were used to exercise some of the options.

Exercise prices for options outstanding and exercisable as of December 31, 2002 were as follows:

                                                                          Weighted
                        Range of                          Remaining        Average
                        Exercise           Number of     Contractual      Exercise
                         Prices             Options    Life (in years)     Price
                    ---------------------------------------------------------------
                    $2.025 - $4.000          335,291              4.00   $   3.2681
                    $4.665 - $5.970          199,835              5.02       5.2936
                    $6.530 - $8.750          400,431              8.51       7.7407
                    $10.250 - $11.800         94,642              6.00      11.3067
                    ---------------------------------------------------------------
                    $2.025 - $11.800       1,030,199              6.14   $   6.1379
                    ===============================================================




(12) EMPLOYMENT AGREEMENTS

The Company has employment agreements with nine officers. Three of the agreements expire in 2004, two expire
in 2006 and four expire in 2007. Unless the officer is notified in writing prior to the last day of the forty-eighth
consecutive month, the agreement will automatically renew for an additional period of 60 months. Among other
things, the agreements provide for severance benefits payable to the officers upon termination of employment
following a change of control in the Company.

(13) OTHER EXPENSES

A summary of other expenses for the years ended December 31, 2002, 2001 and 2000 is as follows:

                                                   2002           2001           2000
          -------------------------------------------------------------------------------
          Stationery and office supplies       $    149,043   $    130,700   $    147,620
          Advertising and marketing                 355,083        191,096        158,204
          Telephone and postage                     317,327        253,304        285,934
          Professional                              145,690         68,379         59,752
          Bank franchise tax                        244,018        225,203        194,357
          Equipment                                 134,736        134,506        178,964
          ATM and VISA Check Card expense           289,276        242,331        208,518
          Directors' and advisory board fees        219,875        222,050        228,475
          Other                                     717,343        644,163        628,667
          -------------------------------------------------------------------------------
                                               $ 2,572,391    $ 2,111,732    $ 2,090,491
          ===============================================================================




(14) RESTRICTIONS ON LOANS AND DIVIDENDS FROM SUBSIDIARIES

Regulatory agencies place certain restrictions on dividends paid and loans or advances made by the Bank to the
Company. The amount of dividends the Bank may pay to the Company, without prior approval, is limited to
current year earnings plus retained net profits for the two preceding years. At December 31, 2002, the amount
available was approximately $2.5 million. Loans and advances are limited to 10 percent of the Bank's capital
stock and surplus. As of December 31, 2002, funds available for loans or advances by the Bank to the Company
amounted to $2.1 million.

32 Hampton Roads Bankshares, Inc.
                                                      HMPR

(15) REGULATORY CAPITAL REQUIREMENTS

The Company and the Bank are subject to various regulatory capital requirements of the FRB. Failure to meet
minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by
regulators that, if undertaken, could have a direct material effect on the Company's financial statements.
Management believes that, as of December 31, 2002, the Company and the Bank meet all capital adequacy
requirements to which they are subject.

As of December 31, 2002, the most recent notification from the FRB categorized the Company and the Bank as
well capitalized under the regulatory framework for prompt corrective action. To be categorized as well
capitalized, minimum amounts and ratios, as set forth in the table that follows, must be maintained. There are no
conditions or events since that notification that management believes have changed the Company's or the Bank's
category.

A summary of the Company's and the Bank's required and actual capital components follows:

                                                                             To Be Well Capitalized
                                                        For Capital           Under Prompt Action
                                     Actual          Adequacy Purposes             Provisions
-----------------------------------------------------------------------------------------------------
(in thousands)                 Amount      Ratio      Amount     Ratio       Amount         Ratio
-----------------------------------------------------------------------------------------------------
As of December 31, 2002:
  TIER 1 CAPITAL
    Consolidated Company     $   38,496     17.21%   $ 8,947      4.00%   $      13,421          6.00%
    Bank                         33,920     15.29       8,874     4.00           13,310          6.00
  TOTAL RISK-BASED CAPITAL
    Consolidated Company         41,293     18.46      17,894     8.00           22,368         10.00
    Bank                         36,694     16.54      17,747     8.00           22,184         10.00
  LEVERAGE RATIO
    Consolidated Company         38,496     13.37      11,517     4.00           14,396          5.00
    Bank                         33,920     11.84      11,461     4.00           14,326          5.00

As of December 31, 2001:
  TIER 1 CAPITAL
    Consolidated Company           $    35,581       17.89%     $   7,956      4.00%     $       11,934                6.00%
    Bank                                35,351       17.93          7,886      4.00              11,829                6.00
  TOTAL RISK-BASED CAPITAL
    Consolidated Company                37,702       18.95          15,913     8.00              19,891            10.00
    Bank                                37,472       19.01          15,772     8.00              19,715            10.00
  LEVERAGE RATIO
    Consolidated Company                35,581       15.08          9,438      4.00              11,797                5.00
    Bank                                35,351       15.01          9,421      4.00              11,776                5.00




(16) DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS No. 107, Disclosures About Fair Value of Financial Instruments, requires disclosure of fair value
information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable
to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates
using present value or other valuation techniques. Those techniques are significantly affected by the assumptions
used, including the discount rate and estimates of future cash flows. The derived fair value estimates cannot be
substantiated by comparison to independent markets and, in many cases, could not be realized in immediate
settlement of the instrument. SFAS No. 107 excludes certain financial instruments and all nonfinancial instruments
from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily
represent the underlying fair value of the Company.

2002 Annual Report 33
[LOGO OF HAMPTON ROADS BANKSHARES]

The following methods and assumptions were used by the Company in estimating fair value for its financial
instruments as defined by SFAS No. 107:

(a) CASH AND DUE FROM BANKS AND OVERNIGHT FUNDS

The carrying amount approximates fair value.

(b) SECURITIES AVAILABLE-FOR-SALE AND HELD-TO-MATURITY

Fair values are based on published market prices or dealer quotes. Available-for-sale securities are carried at
their aggregate fair value.

(c) FEDERAL HOME LOAN BANK STOCK AND FEDERAL RESERVE BANK STOCK

The carrying amount approximates fair value.

(d) LOANS

For credit card and other loan receivables with short-term and/or variable characteristics, the total receivables
outstanding approximate fair value. The fair value of other loans is estimated by discounting the future cash flows
using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality.

(e) INTEREST RECEIVABLE AND INTEREST PAYABLE

The carrying amount approximates fair value.

(f) DEPOSITS

The fair value of noninterest bearing deposits and deposits with no defined maturity, by SFAS No. 107 definition,
is the amount payable on demand at the reporting date. The fair value of time deposits is estimated by discounting
the future cash flows using the current rates at which similar deposits would be made.

(g) OTHER BORROWINGS

Included in other borrowings are notes payable to the Federal Home Loan Bank, whose fair value is estimated
using discounted cash flow analysis based on the rates currently offered for borrowings of similar remaining
maturities. The carrying amounts of the other borrowed funds approximates fair value.

(h) COMMITMENTS TO EXTEND CREDIT AND STANDBY LETTERS OF CREDIT

The fair value of commercial lending related letters of credit and commitments is estimated as the amount of fees
currently charged to enter into similar agreements, taking into account the present creditworthiness of the counter-
parties.

The estimated fair values of the Company's financial instruments required to be disclosed under SFAS No. 107
at December 31, 2002 and 2001 were:

                                                    2002                              2001
---------------------------------------------------------------------------------------------------------
                                           CARRYING         ESTIMATED        Carrying        Estimated
                                             VALUE          FAIR VALUE         Value         Fair Value
---------------------------------------------------------------------------------------------------------
Cash and due from banks                 $    7,939,519   $    7,939,519   $    8,243,788   $    8,243,788
Overnight funds sold                        33,105,061       33,105,061       18,721,307       18,721,307
Federal Home Loan Bank stock                   685,000          685,000               --               --
Federal Reserve Bank stock                     631,100          631,100          630,450          630,450
Securities available-for-sale
 and held-to-maturity                       43,738,985       43,738,985       13,273,275       13,466,984
Loans                                   203,183,511   215,257,858   189,141,610   200,890,680
Interest receivable                       1,278,851     1,278,851     1,093,852     1,093,852
Deposits                                243,873,742   246,858,827   198,515,272   201,411,537
Interest payable                            535,811       535,811       583,319       583,319
Other borrowings                         12,992,853    13,248,745     3,235,000     3,235,000
Commitments to extend
 credit and standby letters of credit           --       603,570            --       343,513




34 Hampton Roads Bankshares, Inc.
                                                  HMPR

(17) SUBSEQUENT EVENTS

On January 14, 2003, the Company declared an annual cash dividend of $0.27 per share payable March 15,
2003, to shareholders of record on February 15, 2003.

In January 2003, the Company repurchased 42,224 shares of its common stock in a privately negotiated
transaction at a price of $9.50.

(18) QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized unaudited quarterly financial data for the years ended December 31, 2002 and 2001 is as follows:

                                                                      2002
         --------------------------------------------------------------------------------
         (in thousands)                                 Fourth   Third    Second   First
         --------------------------------------------------------------------------------
           Interest income                             $ 4,547 $ 4,500 $ 4,310 $ 3,987
           Interest expense                              1,317    1,417    1,372    1,307
         --------------------------------------------------------------------------------
                  Net interest income                    3,230    3,083    2,938    2,680
           Provision for loan losses                       731      147      123       99
           Noninterest income                            1,341      713      709      608
           Noninterest expense                           2,402    2,362    2,284    2,159
         --------------------------------------------------------------------------------
                  Income before provision for
                   income taxes                          1,438    1,287    1,240    1,030
           Provision for income taxes                      489      438      420      350
         --------------------------------------------------------------------------------
                  Net income                           $   949 $    849 $    820 $    680
         ================================================================================
           Basic earnings per share                    $ 0.12 $ 0.11 $ 0.11 $ 0.09
         ================================================================================
           Diluted earnings per share                  $ 0.12 $ 0.11 $ 0.10 $ 0.09
         ================================================================================

                                                                      2001
         --------------------------------------------------------------------------------
         (in thousands)                                 Fourth   Third    Second   First
         --------------------------------------------------------------------------------
           Interest income                             $ 4,148 $ 4,188 $ 4,082 $ 4,139
           Interest expense                              1,432    1,540    1,514    1,601
         --------------------------------------------------------------------------------
                  Net interest income                    2,716    2,648    2,568    2,538
           Provision for loan losses                        68       89       93       84
           Noninterest income                              680      593      630      596
           Noninterest expense                           1,995    1,958    1,969    1,971
         --------------------------------------------------------------------------------
                  Income before provision for
                   income taxes                          1,333    1,194    1,136    1,079
           Provision for income taxes                      453      406      386      367
         --------------------------------------------------------------------------------
                  Net income                           $   880 $    788 $    750 $    712
         ================================================================================
           Basic earnings per share                    $ 0.12 $ 0.10 $ 0.10 $ 0.10
         ================================================================================
           Diluted earnings per share                  $ 0.12 $ 0.10 $ 0.10 $ 0.09
         ================================================================================

         2002 Annual Report                                                                      35
[LOGO OF HAMPTON ROADS BANKSHARES]

(19) CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS

The condensed financial position as of December 31, 2002 and 2001 and the condensed results of operations
and cash flows for the years then ended of Hampton Roads Bankshares, Inc., parent company only, are
presented below. For 2001, the amounts included are from the date of commencement of the Holding Company,
July 1, 2001 through December 31, 2001.

CONDENSED BALANCE SHEET

                                                             DECEMBER 31,    December 31,
                                                                 2002           2001
         --------------------------------------------------------------------------------
         ASSETS:
           Cash on deposit with Bank of Hampton Roads       $   4,247,583   $      53,493
           Receivable from Bank of Hampton Roads                1,439,563       1,526,489
           Investment in Bank of Hampton Roads                 34,534,460      35,392,616
           Investment in affiliates                               280,000         100,000
           Loan to Tidewater Home Funding, LLC                  2,992,853       3,235,000
           Other assets                                            40,508          80,671
         --------------------------------------------------------------------------------
                    Total assets                            $ 43,534,967    $ 40,388,269
         ================================================================================
         LIABILITIES AND SHAREHOLDERS' EQUITY:
           Other borrowings                                 $   2,992,853   $   3,235,000
           Other liabilities                                    1,431,195       1,530,290
           Shareholders' equity                                39,110,919      35,622,979
         --------------------------------------------------------------------------------
                    Total liabilities and shareholders'
                     equity                                 $ 43,534,967    $ 40,388,269
         ================================================================================




CONDENSED STATEMENT OF INCOME

                                                           FOR THE YEAR    For the Period
                                                              ENDED        July 1, 2001-
                                                           DECEMBER 31,     December 31,
                                                               2002            2001
         --------------------------------------------------------------------------------
         INCOME:
           Dividends from Bank of Hampton Roads           $   4,965,933    $      200,000
           Dividends from affiliates                             14,001                --
           Interest income                                       23,882             4,721
         --------------------------------------------------------------------------------
                    Total income                              5,003,816           204,721
         EXPENSES:
           Interest expense                                      18,313             3,801
           Other expense                                         95,708             3,190
         --------------------------------------------------------------------------------
                    Total expense                               114,021             6,991
         --------------------------------------------------------------------------------
         Income before income taxes and equity in
          undistributed net income of subsidiary              4,889,795           197,730
         Income tax benefit                                      25,887               772
         Equity in undistributed net income of
          subsidiary                                         (1,617,647)        1,469,538
         --------------------------------------------------------------------------------
                    Net income                            $   3,298,035    $    1,668,040
         ================================================================================




36 Hampton Roads Bankshares, Inc.
                                                    HMPR

CONDENSED STATEMENT OF CASH FLOWS

--------------------------------------------------------------------------------------------------
                                                                   FOR THE YEAR    For the Period
                                                                      ENDED        July 1, 2001-
                                                                   DECEMBER 31,     December 31,
                                                                       2002             2001
--------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES:
  Net income                                                      $   3,298,035    $     1,668,040
  Adjustments:
    Equity in undistributed earnings of subsidiaries                  1,617,647         (1,469,538)
    Depreciation and amortization                                         7,573              1,048
    Change in other assets                                              119,515         (1,708,207)
    Change in other liabilities                                         173,106          1,530,290
--------------------------------------------------------------------------------------------------
           Net cash provided by operations                            5,215,876             21,633
--------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
  (Increase) decrease in loans                                          242,147         (3,235,000)
  Investment in BI Investments, LLC                                    (180,000)                --
--------------------------------------------------------------------------------------------------
           Net cash provided by (used in) investing activities           62,147         (3,235,000)
--------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
  Increase (decrease) in short-term borrowings                         (242,147)         3,235,000
  Common stock repurchased and surrendered                             (519,340)
  Dividends paid                                                     (1,946,593)                --
  Dividends reinvested                                                1,209,441                 --
  Cash proceeds from exercise of stock options                          346,576                 --
  Proceeds from shares issued related to 401(k) plan                     68,130             31,860
--------------------------------------------------------------------------------------------------
           Net cash provided by (used in) financing activities       (1,083,933)         3,266,860
--------------------------------------------------------------------------------------------------
Increase in cash and cash equivalents                                 4,194,090             53,493
Cash and cash equivalents at beginning of year                           53,493                 --
--------------------------------------------------------------------------------------------------
           Cash and cash equivalents at end of year               $   4,247,583    $        53,493
==================================================================================================




(20) RELATED PARTY TRANSACTIONS

On December 1, 2001, the Company purchased a 10% interest in Tidewater Home Funding, LLC. The
Company accounts for this investment under the cost method. On December 19, 2001, both the Holding
Company and the Bank established a warehouse credit facility for Tidewater Home Funding, LLC for up to
$5,000,000 and $5,194,950, respectively. As of December 31, 2002 and 2001, $2,992,853 and $3,235,000,
were outstanding with the Holding Company, under the warehouse line at a rate of 5.25% and 5.75%,
respectively. The warehouse line with the Bank as of December 31, 2002 and 2001, had $5,171,556 and
$5,065,859 outstanding, at a rate of 4.75% and 5.25%, respectively.

Loans are made to the Company's executive officers and directors and their associates during the ordinary course
of business. At December 31, 2002 and 2001, loans to executive officers, directors and their associates
amounted to $10,863,597 and $12,217,607, respectively. During 2002, additional loans and repayments of
loans by executive officers, directors and their associates were $10,320,694 and $11,674,704, respectively.

2002 Annual Report 37
OFFICE LOCATIONS

[LOGO OF HAMPTON ROADS BANKSHARES]

38                                   Hampton Roads Bankshares, Inc.
                                  HMPR




ADVISORY BOARD MEMBERS

DEEP CREEK

EMIL A. VIOLA
Chairman

JACK W. GIBSON
Bank of Hampton Roads

WALTER CARTWRIGHT, JR.
Retired, Watters & Martin, Inc.

PATRICIA S. LAWRENCE
Lawrence Pharmacy, Inc.

DAVIS R. MELLOTT
Southeastern Equipment Corp.

WILLARD F. ROBINS, III, C.P.A.
Willard F. Robins, III, P.C.

R. CURTIS SAUNDERS, JR.
Vico Construction Corporation

CONSTANTINE L. ZINOVIS
Restauranteur

CROSSROADS

HERMAN A. HALL, III
Chairman

JACK W. GIBSON
Bank of Hampton Roads

THE HONORABLE HARRY B. BLEVINS
State Senator

RALPH L. FROST
Retired Farmer

H. LYNN KEFFER
Crossroads Fuel, Inc.

PHILIP V. MILLER
Virginia Door, Inc.

JOHN R. NEWHART
Sheriff, City of Chesapeake

VIVIAN O. PARKER
Civic Leader

JEFFREY P. POWELL, M.D., D.D.S.
Chesapeake Ear, Nose & Throat
Associates, P.C.

SOUTH NORFOLK

DURWOOD S. CURLING
Chairman

JACK W. GIBSON
Bank of Hampton Roads

JAMES A. ALEXANDER, JR.
Service Electric Corp. of Va.

ROBERT G. BAGLEY
Bank of Hampton Roads

JAMES S. CREEKMORE
Creekmore Hardware

CHARLES G. HACKWORTH, SR.
Hackworth Reprographics, Inc.

JAMES W. McNEIL
Civic Leader

RICHARD G. PRETLOW
Pretlow & Sons Funeral Home

ELIZABETH F. ST. JOHN
Supervisor, 1st District Court,
City of Chesapeake

INDIAN RIVER

WARREN L. ALECK
Chairman

JACK W. GIBSON
Bank of Hampton Roads

ERIC C. ANDERSON
Lakeside Construction Corporation

STUART H. BUXBAUM
S & E Builders

LEIGH ANNE FOLKES
Hassell & Folkes, P.C.

IZAAK D. GLASSER
Glasser & Macon, P.C.

MICHAEL S. LEANZO
Mid-Atlantic Coatings, Inc.

CORPORATE LANDING

PATRICIA M. WINDSOR
Chairman
JACK W. GIBSON
Bank of Hampton Roads

WALTER J. BLASCZAK
Retired, U.S. Navy

JOHN E. FREESE
Lewis and Freese Advertising

DAVID E. KELLAM
Kellam and Eaton, Inc.

JAMES W. LAM
Attorney & Counselor at Law

NORRIS W. SHIRLEY
Retired Farmer

CYNTHIA W. SNYMAN
Slip-Free Systems of Virginia

MACARTHUR CENTER

ROBERT H. POWELL, III
Chairman

JACK W. GIBSON
Bank of Hampton Roads

ROBERT G. BAGLEY
Bank of Hampton Roads

EDWARD L. LADD
MacArthur Center

DARRELL L. LONG
Club Soda, Havana-Norfolk, Havana-
Virginia Beach

JONATHAN L. THORNTON
Pierce & Thornton

WILLIAM F. WHITLOW
Whitlow & Baker

MICHAEL P. ZARPAS
Global Real Estate Investment

2002 Annual Report 39
[LOGO OF HAMPTON ROADS BANKSHARES]

MARKET STREET

BOBBY L. RALPH
Chairman

JACK W. GIBSON
Bank of Hampton Roads

ADRIAN T. ROBERTSON
Allied Concrete

JAMES R. ROUNTREE
Rountree Construction Co., Inc.

JAMES F. RUSSELL
Supreme Petroleum, Inc.

KENT B. SPAIN
J. Walter Hosier & Son Insurance Agency

ROBERT B. SPEIGHT
N & S Limited

GAYLE F. UPCHURCH
The Shoetique

ORCHARD SQUARE

WILLIAM J. HEARRING
Chairman

JACK W. GIBSON
Bank of Hampton Roads

WILLIAM B. CROSS
Ashdon Builders, Inc.

RICHARD H. MATTHEWS
Pender & Coward, P.C.

ROBERT L. SAMUEL, JR.
Williams Mullen

PORTSMOUTH BOULEVARD

HENRY P. BARHAM, D.D.S.
Chairman

JACK W. GIBSON
Bank of Hampton Roads

JONNIE GAYLE FRANKLIN
Investor

THOMAS F. MAY
Vexcon Chemicals, Inc.
JOANN H. NESSON
John C. Holland Enterprises

HUGO A. OWENS, JR.
Chesapeake City Schools/Jani-King, Inc.

JUDSON H. RODMAN
Rodman's Bar-B-Que

PAT E. VIOLA
Vico Construction Corporation

PRINCESS ANNE

L. STEVE GOSSETT
Chairman

JACK W. GIBSON
Bank of Hampton Roads

N. MERRILL BECK, JR.
Beck Associates, P.C.

GEORGE RAY BUNCH, JR.
Budget Rent A Car

DONALD M. KOBLE
Steve's Auto Sales

YALE NESSON
AARD Screenprinters & Embroidery

NEAL S. WINDLEY
Goodwill Industries

LITTLE CREEK

W. LEWIS WITT
Chairman

JACK W. GIBSON
Bank of Hampton Roads

ALAN A. BUNCH
Budget Rent A Car

ELAINE CZOHARA
Adams Outdoor Advertising

EDWARD A. FIORELLA
Norfolk Sheriff's Office

JOSEPH L. HOGGARD
Restauranteur

GEORGE STENKE
Investor
W. RANDY WRIGHT
Randy Wright's Printing

ROBERT L. YOUNG
Cottage Toll Exxon

MOYOCK

RODNEY L. FOSTER
Chairman

JACK W. GIBSON
Bank of Hampton Roads

MARTIN W. HOLTON
Forrest Septic Tank Contractors, Inc.

WILLIAM K. JERNIGAN
Mill Run Golf & Country Club, Inc.

ROBERT C. RHOADS
Hoffman Industries, Inc.

SHEILA R. ROMM
Clerk of Superior Court, Currituck, NC

BOBBY R. WADDELL
Contractor

HAYWOOD E. WARD
Retired Deputy Sheriff, Currituck, NC

RICHARD C. WEBB, II
East Coast Abatement Co., Inc.

GREAT NECK

S.G. FOLKES
Chairman

JACK W. GIBSON
Bank of Hampton Roads

E. LEE BOYCE, III
Boyce-Widener, Ltd.

KENNETH R. SIMS
Custom Stone Company, Inc.

KEVIN R. SIMS
Custom Stone Company, Inc.

JAMES D. MARX
In Touch Designs, Inc.

TOWNSEND OAST
Retired Past President of Virginia Bankers Association

LEO THOMAS
Ron Zoby Tours

JEFFREY M. TOURAULT
Atlantic Foundations, Inc.

PEMBROKE

DOUGLAS J. GLENN
Chairman

JACK W. GIBSON
Bank of Hampton Roads

JOHN KATSIAS
Katsias Company

PETE O. KOTARIDES
The Kotarides Companies

AUBREY L. LAYNE, JR.
Great Atlantic Management Company, Inc.

KIRK B. LEVY
Sykes Bourdon Ahern & Levy

ROBERT A. WIDENER
Ainslie Widener, Inc.

40 Hampton Roads Bankshares, Inc.
              REMEMBER WHEN YOU ENJOYED GOING TO THE BANK.

[GRAPHIC APPEARS HERE]

YOU STILL DO AT THE BANK OF HAMPTON ROADS. WHEN YOU WALK THROUGH OUR
                                DOORS,

YOU'LL NOTICE THE DIFFERENCE IMMEDIATELY AS OUR FRIENDLY STAFF GREETS
YOU WITH A SMILE. WE TREAT ALL OF OUR CUSTOMERS LIKE NEIGHBORS BECAUSE
THEY ARE. FROM OUR PRESIDENT TO OUR TELLERS, EVERYONE INVOLVED WITH OUR
BANK IS A MEMBER OF THE HAMPTON ROADS COMMUNITY. WHICH MEANS YOU GET
A WIDE ARRAY OF CONVENIENT BANKING SERVICES; WE JUST MAKE THEM A LITTLE
MORE ENJOYABLE. STOP BY ONE OF OUR CONVENIENT LOCATIONS FOR YOUR NEXT
LOAN WHERE IT'S APPROVED LOCALLY, AND IN MOST

                               CASES RIGHT ON THE SPOT.

[LOGO OF BANK OF HAMPTON ROADS]

                          YOUR COMMUNITY, YOUR BANK.

      [GRAPHIC APPEARS HERE]

      Member FDIC                                                      436-1000
      Equal Opportunity Lender                       www.BankofHamptonRoads.com
[GRAPHIC APPEARS HERE]

                         Hampton Roads Bankshares, Inc.
                            would like to extend our
                           thoughts and prayers to the
                           United States Armed Forces
                               for protecting our
                                    FREEDOM.

                         HAMPTON ROADS BANKSHARES, INC.
                                201 Volvo Parkway
                           Chesapeake, Virginia 23320
                                  757.436.1000

                           www.bankofhamptonroads.com
                                                 Exhibit 23.1

                                INDEPENDENT AUDITORS' CONSENT

The Board of Directors
Hampton Roads Bankshares, Inc.:

We consent to the incorporation by reference in the registration statements (No. 333-84304 and No. 333-
64346) on Forms S-3 and S-8, respectively, of Hampton Roads Bankshares, Inc. of our report dated February
14, 2003, with respect to the consolidated balance sheets of Hampton Roads Bankshares, Inc. as of December
31, 2002 and 2001, and the related consolidated statements of income, shareholders' equity, and cash flows for
each of the years then ended, which report appears in the December 31, 2002 annual report on Form 10-K of
Hampton Roads Bankshares, Inc.

                                             /s/ KPMG LLP

                                             Norfolk, Virginia
                                             March 25, 2003
                                              Exhibit 23.2

                         CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-
84304) and S-8 (No. 333-64246) of Hampton Roads Bankshares, Inc. of our report dated February 12, 2001
relating to the financial statements, which appears in this Form 10-K.

                                   /s/ PricewaterhouseCoopers LLP

                                   PricewaterhouseCoopers LLP

                                   Harrisburg, Pennsylvania
                                   March 25, 2003
rs and is renewable for two additional five-year periods. The Little Creek lease commenced December 1998 with a term of five years and is renewable for two additional five-year periods. The Pembroke lease commenced August 2001 with an original term of five years and three additional five-year renewal options. The loan processing department lease commenced in July 2001 with an original term of three years with annual renewal periods thereafter. Total rent expense was $398,136 in 2002, $320,254 in 2001, and $287,978 in 2000. Future minimum lease payments, by year and in the aggregate, under noncancelable operating leases with initial or remaining terms of one year or more at December 31, 2002 were:
2003 $ 362,998 2004 227,377 2005 161,385 2006 135,433 2007 55,613 Thereafter 288,178 ----------------------------------------------$ 1,230,984 =============================================== (5) DEPOSITS

The maturities of time deposits of $100,000 or more at December 31, 2002 and 2001, were as follows:
2002 2001 -----------------------------------------------------------------------------------------------TIME OTHER Time Other CERTIFICATES TIME Certificates Time -----------------------------------------------------------------------------------------------MATURITY OF: 3 months or less $ 22,432,787 $ 223,177 $ 18,083,261 $ 111,012 Over 3 months - 6 months 2,736,537 -2,452,477 -Over 6 months - 12 months 6,958,975 233,210 7,857,059 405,003 1 year - 2 years 1,874,266 220,707 2,249,064 382,443 2 years - 3 years 2,040,059 712,671 834,681 -3 years - 4 years 908,394 145,850 1,449,899 614,500 4 years - 5 years 2,996,447 -500,631 ------------------------------------------------------------------------------------------------Total $ 39,947,465 $ 1,535,615 $ 33,427,072 $ 1,512,958 ================================================================================================

(6) OTHER BORROWINGS The Company has a $5,000,000 line of credit, of which $2,992,853 and $3,235,000 were outstanding at December 31, 2002 and 2001, respectively. The line of credit is unsecured with a floating interest rate equal to Wall Street Journal prime less .50% (3.75% and 4.25% at December 31, 2002 and 2001, respectively). The line of credit, which was renewed January 8, 2003, has a 12-month term with interest-only payments due monthly and any unpaid principal and accrued interest due in full at the end of the 12-month term. At December 31, 2002, the Company had borrowings from the Federal Home Loan Bank system totaling $10,000,000 at interest rates ranging from 2.84% to 4.56%. $5 million of the borrowings mature in 2003, $2.5 million mature in 2004 and $2.5 million mature in 2005. The borrowings are collateralized by a blanket lien on the Company's 1-4 family residential real estate loans, with a carrying value of $23 million as of December 31, 2002. Interest only is payable on a monthly basis until maturity.

28 Hampton Roads Bankshares, Inc.

HMPR (7) INCOME TAXES Total income tax was allocated for the years ended December 31, 2002, 2001 and 2000, as follows:
2002 2001 2000 ----------------------------------------------------------------------------------------------Income before income taxes $ 1,696,609 $ 1,611,682 $ 1,601,048 Shareholders' equity for unrealized gain on securities available-for-sale 308,460 --Shareholders' equity for tax benefit for excess of fair value above cost of stock option plans (160,717) (22,759) (30,516) ----------------------------------------------------------------------------------------------$ 1,844,352 $ 1,588,923 $ 1,570,532 ===============================================================================================

Income tax expense (benefit) applicable to income before taxes consists of:
Years ended December 31, ------------------------------------------------------------------------------2002 2001 2000 ------------------------------------------------------------------------------Current $ 1,804,836 $ 1,600,552 $ 1,611,184 Deferred (108,227) 11,130 (10,136) ------------------------------------------------------------------------------$ 1,696,609 $ 1,611,682 $ 1,601,048 ===============================================================================

The significant components of deferred income tax expense (benefit) were as follows:
December 31, -----------------------------------------------------------------------------2002 2001 2000 -----------------------------------------------------------------------------Deferred income tax benefit $ (144,809) $ (25,452) $ (46,718) NOL carryforward 36,582 36,582 36,582 -----------------------------------------------------------------------------$ (108,227) $ 11,130 $ (10,136) ==============================================================================

The provisions for income taxes for the years ended December 31, 2002, 2001 and 2000 differ from the amount computed by applying the statutory federal income tax rate of 34% to income before taxes. The differences are as follows:
2002 2001 2000 ------------------------------------------------------------------------------Income taxes at statutory rates $ 1,698,179 $ 1,612,278 $ 1,600,910 Increase (decrease) resulting from: Nondeductible expense 2,534 2,691 2,636 Other (4,104) (3,287) (2,498) ------------------------------------------------------------------------------Income tax expense $ 1,696,609 $ 1,611,682 $ 1,601,048 ===============================================================================

At December 31, 2002, the Company had net operating loss carryforwards of $430,380 for income tax

HMPR (7) INCOME TAXES Total income tax was allocated for the years ended December 31, 2002, 2001 and 2000, as follows:
2002 2001 2000 ----------------------------------------------------------------------------------------------Income before income taxes $ 1,696,609 $ 1,611,682 $ 1,601,048 Shareholders' equity for unrealized gain on securities available-for-sale 308,460 --Shareholders' equity for tax benefit for excess of fair value above cost of stock option plans (160,717) (22,759) (30,516) ----------------------------------------------------------------------------------------------$ 1,844,352 $ 1,588,923 $ 1,570,532 ===============================================================================================

Income tax expense (benefit) applicable to income before taxes consists of:
Years ended December 31, ------------------------------------------------------------------------------2002 2001 2000 ------------------------------------------------------------------------------Current $ 1,804,836 $ 1,600,552 $ 1,611,184 Deferred (108,227) 11,130 (10,136) ------------------------------------------------------------------------------$ 1,696,609 $ 1,611,682 $ 1,601,048 ===============================================================================

The significant components of deferred income tax expense (benefit) were as follows:
December 31, -----------------------------------------------------------------------------2002 2001 2000 -----------------------------------------------------------------------------Deferred income tax benefit $ (144,809) $ (25,452) $ (46,718) NOL carryforward 36,582 36,582 36,582 -----------------------------------------------------------------------------$ (108,227) $ 11,130 $ (10,136) ==============================================================================

The provisions for income taxes for the years ended December 31, 2002, 2001 and 2000 differ from the amount computed by applying the statutory federal income tax rate of 34% to income before taxes. The differences are as follows:
2002 2001 2000 ------------------------------------------------------------------------------Income taxes at statutory rates $ 1,698,179 $ 1,612,278 $ 1,600,910 Increase (decrease) resulting from: Nondeductible expense 2,534 2,691 2,636 Other (4,104) (3,287) (2,498) ------------------------------------------------------------------------------Income tax expense $ 1,696,609 $ 1,611,682 $ 1,601,048 ===============================================================================

At December 31, 2002, the Company had net operating loss carryforwards of $430,380 for income tax purposes that expire in years 2006 and 2007, resulting from a 1992 acquisition. The amount relating to the net operating loss carryforwards is limited to $107,595 per year. 2002 Annual Report 29

[LOGO OF HAMPTON ROADS BANKSHARES] Significant components of the Company's deferred tax liabilities and assets as of December 31, 2002 and 2001 were as follows:
2002 2001 -------------------------------------------------------------------------------DEFERRED TAX ASSETS: Allowance for loan losses $ 836,197 $ 600,374 Deferred directors' fees 44,267 43,163 Nonqualified deferred compensation 654,529 662,713 Net operating loss carryforward 146,329 182,912 Other 570 --------------------------------------------------------------------------------Total deferred tax assets 1,681,892 1,489,162 -------------------------------------------------------------------------------DEFERRED TAX LIABILITIES: Depreciation 410,996 326,206 Unrealized gain on securities available-for-sale 308,460 -Other -287 -------------------------------------------------------------------------------Total deferred tax liabilities 719,456 326,493 -------------------------------------------------------------------------------Net deferred tax assets $ 962,436 $ 1,162,669 ================================================================================

(8) COMMITMENTS The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk which have not been recognized in the consolidated balance sheet. The contract amount of these instruments reflects the extent of the Company's involvement or "credit risk." The Company uses the same credit policies in making commitments and conditional obligations as it does for onbalance-sheet instruments. Unless noted otherwise, the Company requires collateral or other security to support financial instruments with credit risk. Contractual amounts at December 31, 2002 and 2001 were:
2002 2001 ---------------------------------------------------------------------------------------------------FINANCIAL INSTRUMENTS WHOSE CONTRACT AMOUNTS REPRESENT CREDIT RISK: Commitments to extend credit $ 50,185,268 $ 27,347,030 Standby letters of credit 10,171,780 9,462,941 ---------------------------------------------------------------------------------------------------$ 60,357,048 $ 36,809,971 ====================================================================================================

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management's credit evaluation of the counter-party. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, income-producing commercial properties, and real estate. At December 31, 2002, there was no allowance for standby letters of credit. Management does not anticipate that any material losses will arise from additional fundings of the aforementioned

[LOGO OF HAMPTON ROADS BANKSHARES] Significant components of the Company's deferred tax liabilities and assets as of December 31, 2002 and 2001 were as follows:
2002 2001 -------------------------------------------------------------------------------DEFERRED TAX ASSETS: Allowance for loan losses $ 836,197 $ 600,374 Deferred directors' fees 44,267 43,163 Nonqualified deferred compensation 654,529 662,713 Net operating loss carryforward 146,329 182,912 Other 570 --------------------------------------------------------------------------------Total deferred tax assets 1,681,892 1,489,162 -------------------------------------------------------------------------------DEFERRED TAX LIABILITIES: Depreciation 410,996 326,206 Unrealized gain on securities available-for-sale 308,460 -Other -287 -------------------------------------------------------------------------------Total deferred tax liabilities 719,456 326,493 -------------------------------------------------------------------------------Net deferred tax assets $ 962,436 $ 1,162,669 ================================================================================

(8) COMMITMENTS The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk which have not been recognized in the consolidated balance sheet. The contract amount of these instruments reflects the extent of the Company's involvement or "credit risk." The Company uses the same credit policies in making commitments and conditional obligations as it does for onbalance-sheet instruments. Unless noted otherwise, the Company requires collateral or other security to support financial instruments with credit risk. Contractual amounts at December 31, 2002 and 2001 were:
2002 2001 ---------------------------------------------------------------------------------------------------FINANCIAL INSTRUMENTS WHOSE CONTRACT AMOUNTS REPRESENT CREDIT RISK: Commitments to extend credit $ 50,185,268 $ 27,347,030 Standby letters of credit 10,171,780 9,462,941 ---------------------------------------------------------------------------------------------------$ 60,357,048 $ 36,809,971 ====================================================================================================

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management's credit evaluation of the counter-party. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, income-producing commercial properties, and real estate. At December 31, 2002, there was no allowance for standby letters of credit. Management does not anticipate that any material losses will arise from additional fundings of the aforementioned lines of credit or letters of credit.

(9) PROFIT SHARING PLAN AND SUPPLEMENTAL RETIREMENT PLAN The Company has a defined contribution 401(k) plan. All employees who are 21 years of age and have completed one year of service are eligible to participate. Under the plan, employees may contribute the lesser of $11,000 or 20% of their annual salary, and the Company will contribute 25% of the employees' contributions up to 10%. The Company may also make an additional discretionary contribution. Company contributions will not exceed the maximum amount deductible annually for income tax purposes. The Company made discretionary contributions of $129,000, $143,381 and $134,750 for 30 Hampton Roads Bankshares, Inc.

HMPR the years ended December 31, 2002, 2001 and 2000, respectively. The Company also made matching contributions of $40,271, $38,765 and $35,667 for the years ended December 31, 2002, 2001 and 2000, respectively. Beginning in 1997, the Company began offering its stock as an investment option under the 401(k) plan. The plan purchased 8,516, 9,189, and 7,229 shares at a price of $8.00, $8.00 and $8.75 per share in 2002, 2001 and 2000, respectively. The Company is the plan's trustee. In 1993, the Company entered into a Supplemental Retirement Agreement for an officer to provide an annual post retirement benefit following the attainment of his Plan Retirement Date of November 9, 2015. Partial vesting began on January 1, 1998, and will continue until the Plan Retirement Date. The Company has funded this agreement with a life insurance policy, which names the Company as beneficiary. Plan expense recognized in 2002, 2001 and 2000 was $76,651, $69,701 and $78,552, respectively. (10) DIVIDEND REINVESTMENT AND OPTIONAL CASH PURCHASE PLAN The Company has a Dividend Reinvestment and Optional Cash Purchase Plan. The plan enables shareholders to receive cash payment or reinvest their dividends. The plan also enables shareholders to purchase up to $1,000 per quarter of additional common stock. The stock purchased through the plan directly from the Company, is valued at the weighted average of sales prices of the Company's common stock in transactions occurring during the sixty calendar days immediately prior to the purchase date. The purchase price of shares purchased on the open market will be the actual current market price of the shares purchased on the applicable purchase date. In 2002, $1,303,719 of the $1,946,593 total dividend declared in 2002 was reinvested at $8.46 per share for 154,104 shares. In 2001, $1,238,355 of the $1,876,571 total dividend declared in 2001 was reinvested at $10.37 per share for 119,417 shares. In 2000, $872,216 of the $1,196,778 total dividend declared in 1999 was reinvested at $12.73 per share for 68,517 shares. Under the Optional Cash Purchase Plan, 25,565 and 35,827 shares were purchased at prices ranging from $9.00 to $7.94 per share and $10.50 to $9.02 per share for 2002 and 2001, respectively. In 2000, 44,265 shares were purchased at prices ranging from $12.82 to $10.46 per share. When available, shares for sale on the open market are used to satisfy the shares purchased through the Dividend Reinvestment and Optional Cash Purchase Plan. (11) STOCK OPTIONS The Company has a Stock Option Plan under which the Company may grant options to its directors and employees for shares of common stock. During 2002 and 2001, the Company authorized the grant of options to employees and directors for 101,737 and 104,053 shares, respectively, of the Company's common stock under the plan. During 1997, the Company amended the Directors' Deferred Compensation Agreement to allow directors to purchase options for the Company's common stock where the directors' fees reduce the exercise price for shares up to 50% of an amount that represents the fair market value of the stock. The directors purchased 30,604 and 27,909 options in 2002 and 2001, respectively, under this agreement. All options, when granted, have 10-year terms and are fully vested and exercisable at the date of grant. Both of the above mentioned plans have been approved by the Company's shareholders. A summary of the Company's stock option activity and related information is as follows:

HMPR the years ended December 31, 2002, 2001 and 2000, respectively. The Company also made matching contributions of $40,271, $38,765 and $35,667 for the years ended December 31, 2002, 2001 and 2000, respectively. Beginning in 1997, the Company began offering its stock as an investment option under the 401(k) plan. The plan purchased 8,516, 9,189, and 7,229 shares at a price of $8.00, $8.00 and $8.75 per share in 2002, 2001 and 2000, respectively. The Company is the plan's trustee. In 1993, the Company entered into a Supplemental Retirement Agreement for an officer to provide an annual post retirement benefit following the attainment of his Plan Retirement Date of November 9, 2015. Partial vesting began on January 1, 1998, and will continue until the Plan Retirement Date. The Company has funded this agreement with a life insurance policy, which names the Company as beneficiary. Plan expense recognized in 2002, 2001 and 2000 was $76,651, $69,701 and $78,552, respectively. (10) DIVIDEND REINVESTMENT AND OPTIONAL CASH PURCHASE PLAN The Company has a Dividend Reinvestment and Optional Cash Purchase Plan. The plan enables shareholders to receive cash payment or reinvest their dividends. The plan also enables shareholders to purchase up to $1,000 per quarter of additional common stock. The stock purchased through the plan directly from the Company, is valued at the weighted average of sales prices of the Company's common stock in transactions occurring during the sixty calendar days immediately prior to the purchase date. The purchase price of shares purchased on the open market will be the actual current market price of the shares purchased on the applicable purchase date. In 2002, $1,303,719 of the $1,946,593 total dividend declared in 2002 was reinvested at $8.46 per share for 154,104 shares. In 2001, $1,238,355 of the $1,876,571 total dividend declared in 2001 was reinvested at $10.37 per share for 119,417 shares. In 2000, $872,216 of the $1,196,778 total dividend declared in 1999 was reinvested at $12.73 per share for 68,517 shares. Under the Optional Cash Purchase Plan, 25,565 and 35,827 shares were purchased at prices ranging from $9.00 to $7.94 per share and $10.50 to $9.02 per share for 2002 and 2001, respectively. In 2000, 44,265 shares were purchased at prices ranging from $12.82 to $10.46 per share. When available, shares for sale on the open market are used to satisfy the shares purchased through the Dividend Reinvestment and Optional Cash Purchase Plan. (11) STOCK OPTIONS The Company has a Stock Option Plan under which the Company may grant options to its directors and employees for shares of common stock. During 2002 and 2001, the Company authorized the grant of options to employees and directors for 101,737 and 104,053 shares, respectively, of the Company's common stock under the plan. During 1997, the Company amended the Directors' Deferred Compensation Agreement to allow directors to purchase options for the Company's common stock where the directors' fees reduce the exercise price for shares up to 50% of an amount that represents the fair market value of the stock. The directors purchased 30,604 and 27,909 options in 2002 and 2001, respectively, under this agreement. All options, when granted, have 10-year terms and are fully vested and exercisable at the date of grant. Both of the above mentioned plans have been approved by the Company's shareholders. A summary of the Company's stock option activity and related information is as follows:
Weighted Options Average Outstanding Exercise Price --------------------------------------------------------------Balance at January 1, 2000 775,022 $ 5.4137 Granted 135,639 6.7821 Exercised (10,227) 4.0859 --------------------------------------------------------------Balance at December 31, 2000 900,434 5.6349 Granted 131,962 6.7670 Exercised (13,250) 4.2826 Expired (2,902) 6.4426 --------------------------------------------------------------Balance at December 31, 2001 1,016,244 5.7972

Granted 132,341 6.7872 Exercised (115,820) 3.8264 Expired (2,566) 9.0152 --------------------------------------------------------------Balance at December 31, 2002 1,030,199 $ 6.1379 =============================================================== 2002 Annual Report 31

[LOGO OF HAMPTON ROADS BANKSHARES] In 2002 and 2001, 115,820 and 13,250 options were exercised, respectively; however, only 103,187 and 12,495 new shares, respectively, were issued since 12,633 and 755 shares, respectively, of previously acquired stock were used to exercise some of the options. Exercise prices for options outstanding and exercisable as of December 31, 2002 were as follows:
Weighted Range of Remaining Average Exercise Number of Contractual Exercise Prices Options Life (in years) Price --------------------------------------------------------------$2.025 - $4.000 335,291 4.00 $ 3.2681 $4.665 - $5.970 199,835 5.02 5.2936 $6.530 - $8.750 400,431 8.51 7.7407 $10.250 - $11.800 94,642 6.00 11.3067 --------------------------------------------------------------$2.025 - $11.800 1,030,199 6.14 $ 6.1379 ===============================================================

(12) EMPLOYMENT AGREEMENTS The Company has employment agreements with nine officers. Three of the agreements expire in 2004, two expire in 2006 and four expire in 2007. Unless the officer is notified in writing prior to the last day of the forty-eighth consecutive month, the agreement will automatically renew for an additional period of 60 months. Among other things, the agreements provide for severance benefits payable to the officers upon termination of employment following a change of control in the Company. (13) OTHER EXPENSES A summary of other expenses for the years ended December 31, 2002, 2001 and 2000 is as follows:
2002 2001 2000 ------------------------------------------------------------------------------Stationery and office supplies $ 149,043 $ 130,700 $ 147,620 Advertising and marketing 355,083 191,096 158,204 Telephone and postage 317,327 253,304 285,934 Professional 145,690 68,379 59,752 Bank franchise tax 244,018 225,203 194,357 Equipment 134,736 134,506 178,964 ATM and VISA Check Card expense 289,276 242,331 208,518 Directors' and advisory board fees 219,875 222,050 228,475 Other 717,343 644,163 628,667 ------------------------------------------------------------------------------$ 2,572,391 $ 2,111,732 $ 2,090,491 ===============================================================================

(14) RESTRICTIONS ON LOANS AND DIVIDENDS FROM SUBSIDIARIES Regulatory agencies place certain restrictions on dividends paid and loans or advances made by the Bank to the Company. The amount of dividends the Bank may pay to the Company, without prior approval, is limited to

[LOGO OF HAMPTON ROADS BANKSHARES] In 2002 and 2001, 115,820 and 13,250 options were exercised, respectively; however, only 103,187 and 12,495 new shares, respectively, were issued since 12,633 and 755 shares, respectively, of previously acquired stock were used to exercise some of the options. Exercise prices for options outstanding and exercisable as of December 31, 2002 were as follows:
Weighted Range of Remaining Average Exercise Number of Contractual Exercise Prices Options Life (in years) Price --------------------------------------------------------------$2.025 - $4.000 335,291 4.00 $ 3.2681 $4.665 - $5.970 199,835 5.02 5.2936 $6.530 - $8.750 400,431 8.51 7.7407 $10.250 - $11.800 94,642 6.00 11.3067 --------------------------------------------------------------$2.025 - $11.800 1,030,199 6.14 $ 6.1379 ===============================================================

(12) EMPLOYMENT AGREEMENTS The Company has employment agreements with nine officers. Three of the agreements expire in 2004, two expire in 2006 and four expire in 2007. Unless the officer is notified in writing prior to the last day of the forty-eighth consecutive month, the agreement will automatically renew for an additional period of 60 months. Among other things, the agreements provide for severance benefits payable to the officers upon termination of employment following a change of control in the Company. (13) OTHER EXPENSES A summary of other expenses for the years ended December 31, 2002, 2001 and 2000 is as follows:
2002 2001 2000 ------------------------------------------------------------------------------Stationery and office supplies $ 149,043 $ 130,700 $ 147,620 Advertising and marketing 355,083 191,096 158,204 Telephone and postage 317,327 253,304 285,934 Professional 145,690 68,379 59,752 Bank franchise tax 244,018 225,203 194,357 Equipment 134,736 134,506 178,964 ATM and VISA Check Card expense 289,276 242,331 208,518 Directors' and advisory board fees 219,875 222,050 228,475 Other 717,343 644,163 628,667 ------------------------------------------------------------------------------$ 2,572,391 $ 2,111,732 $ 2,090,491 ===============================================================================

(14) RESTRICTIONS ON LOANS AND DIVIDENDS FROM SUBSIDIARIES Regulatory agencies place certain restrictions on dividends paid and loans or advances made by the Bank to the Company. The amount of dividends the Bank may pay to the Company, without prior approval, is limited to current year earnings plus retained net profits for the two preceding years. At December 31, 2002, the amount available was approximately $2.5 million. Loans and advances are limited to 10 percent of the Bank's capital stock and surplus. As of December 31, 2002, funds available for loans or advances by the Bank to the Company amounted to $2.1 million. 32 Hampton Roads Bankshares, Inc.

HMPR (15) REGULATORY CAPITAL REQUIREMENTS The Company and the Bank are subject to various regulatory capital requirements of the FRB. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company's financial statements. Management believes that, as of December 31, 2002, the Company and the Bank meet all capital adequacy requirements to which they are subject. As of December 31, 2002, the most recent notification from the FRB categorized the Company and the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, minimum amounts and ratios, as set forth in the table that follows, must be maintained. There are no conditions or events since that notification that management believes have changed the Company's or the Bank's category. A summary of the Company's and the Bank's required and actual capital components follows:
To Be Well Capitalized For Capital Under Prompt Action Actual Adequacy Purposes Provisions ----------------------------------------------------------------------------------------------------(in thousands) Amount Ratio Amount Ratio Amount Ratio ----------------------------------------------------------------------------------------------------As of December 31, 2002: TIER 1 CAPITAL Consolidated Company $ 38,496 17.21% $ 8,947 4.00% $ 13,421 6.00% Bank 33,920 15.29 8,874 4.00 13,310 6.00 TOTAL RISK-BASED CAPITAL Consolidated Company 41,293 18.46 17,894 8.00 22,368 10.00 Bank 36,694 16.54 17,747 8.00 22,184 10.00 LEVERAGE RATIO Consolidated Company 38,496 13.37 11,517 4.00 14,396 5.00 Bank 33,920 11.84 11,461 4.00 14,326 5.00 As of December 31, 2001: TIER 1 CAPITAL Consolidated Company Bank TOTAL RISK-BASED CAPITAL Consolidated Company Bank LEVERAGE RATIO Consolidated Company Bank

$

35,581 35,351 37,702 37,472 35,581 35,351

17.89% 17.93 18.95 19.01 15.08 15.01

$

7,956 7,886 15,913 15,772 9,438 9,421

4.00% 4.00 8.00 8.00 4.00 4.00

$

11,934 11,829 19,891 19,715 11,797 11,776

6.00% 6.00 10.00 10.00 5.00 5.00

(16) DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS SFAS No. 107, Disclosures About Fair Value of Financial Instruments, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. The derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. SFAS No. 107 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company. 2002 Annual Report 33

[LOGO OF HAMPTON ROADS BANKSHARES] The following methods and assumptions were used by the Company in estimating fair value for its financial instruments as defined by SFAS No. 107: (a) CASH AND DUE FROM BANKS AND OVERNIGHT FUNDS The carrying amount approximates fair value. (b) SECURITIES AVAILABLE-FOR-SALE AND HELD-TO-MATURITY Fair values are based on published market prices or dealer quotes. Available-for-sale securities are carried at their aggregate fair value. (c) FEDERAL HOME LOAN BANK STOCK AND FEDERAL RESERVE BANK STOCK The carrying amount approximates fair value. (d) LOANS For credit card and other loan receivables with short-term and/or variable characteristics, the total receivables outstanding approximate fair value. The fair value of other loans is estimated by discounting the future cash flows using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. (e) INTEREST RECEIVABLE AND INTEREST PAYABLE The carrying amount approximates fair value. (f) DEPOSITS The fair value of noninterest bearing deposits and deposits with no defined maturity, by SFAS No. 107 definition, is the amount payable on demand at the reporting date. The fair value of time deposits is estimated by discounting the future cash flows using the current rates at which similar deposits would be made. (g) OTHER BORROWINGS Included in other borrowings are notes payable to the Federal Home Loan Bank, whose fair value is estimated using discounted cash flow analysis based on the rates currently offered for borrowings of similar remaining maturities. The carrying amounts of the other borrowed funds approximates fair value. (h) COMMITMENTS TO EXTEND CREDIT AND STANDBY LETTERS OF CREDIT The fair value of commercial lending related letters of credit and commitments is estimated as the amount of fees currently charged to enter into similar agreements, taking into account the present creditworthiness of the counterparties. The estimated fair values of the Company's financial instruments required to be disclosed under SFAS No. 107 at December 31, 2002 and 2001 were:
2002 2001 --------------------------------------------------------------------------------------------------------CARRYING ESTIMATED Carrying Estimated VALUE FAIR VALUE Value Fair Value --------------------------------------------------------------------------------------------------------Cash and due from banks $ 7,939,519 $ 7,939,519 $ 8,243,788 $ 8,243,788 Overnight funds sold 33,105,061 33,105,061 18,721,307 18,721,307 Federal Home Loan Bank stock 685,000 685,000 --Federal Reserve Bank stock 631,100 631,100 630,450 630,450 Securities available-for-sale and held-to-maturity 43,738,985 43,738,985 13,273,275 13,466,984

Loans Interest receivable Deposits Interest payable Other borrowings Commitments to extend credit and standby letters of credit

203,183,511 1,278,851 243,873,742 535,811 12,992,853 --

215,257,858 1,278,851 246,858,827 535,811 13,248,745 603,570

189,141,610 1,093,852 198,515,272 583,319 3,235,000 --

200,890,680 1,093,852 201,411,537 583,319 3,235,000 343,513

34 Hampton Roads Bankshares, Inc.

HMPR (17) SUBSEQUENT EVENTS On January 14, 2003, the Company declared an annual cash dividend of $0.27 per share payable March 15, 2003, to shareholders of record on February 15, 2003. In January 2003, the Company repurchased 42,224 shares of its common stock in a privately negotiated transaction at a price of $9.50. (18) QUARTERLY FINANCIAL DATA (UNAUDITED) Summarized unaudited quarterly financial data for the years ended December 31, 2002 and 2001 is as follows:
2002 -------------------------------------------------------------------------------(in thousands) Fourth Third Second First -------------------------------------------------------------------------------Interest income $ 4,547 $ 4,500 $ 4,310 $ 3,987 Interest expense 1,317 1,417 1,372 1,307 -------------------------------------------------------------------------------Net interest income 3,230 3,083 2,938 2,680 Provision for loan losses 731 147 123 99 Noninterest income 1,341 713 709 608 Noninterest expense 2,402 2,362 2,284 2,159 -------------------------------------------------------------------------------Income before provision for income taxes 1,438 1,287 1,240 1,030 Provision for income taxes 489 438 420 350 -------------------------------------------------------------------------------Net income $ 949 $ 849 $ 820 $ 680 ================================================================================ Basic earnings per share $ 0.12 $ 0.11 $ 0.11 $ 0.09 ================================================================================ Diluted earnings per share $ 0.12 $ 0.11 $ 0.10 $ 0.09 ================================================================================ 2001 -------------------------------------------------------------------------------(in thousands) Fourth Third Second First -------------------------------------------------------------------------------Interest income $ 4,148 $ 4,188 $ 4,082 $ 4,139 Interest expense 1,432 1,540 1,514 1,601 -------------------------------------------------------------------------------Net interest income 2,716 2,648 2,568 2,538 Provision for loan losses 68 89 93 84 Noninterest income 680 593 630 596 Noninterest expense 1,995 1,958 1,969 1,971 -------------------------------------------------------------------------------Income before provision for income taxes 1,333 1,194 1,136 1,079 Provision for income taxes 453 406 386 367 -------------------------------------------------------------------------------Net income $ 880 $ 788 $ 750 $ 712 ================================================================================ Basic earnings per share $ 0.12 $ 0.10 $ 0.10 $ 0.10

HMPR (17) SUBSEQUENT EVENTS On January 14, 2003, the Company declared an annual cash dividend of $0.27 per share payable March 15, 2003, to shareholders of record on February 15, 2003. In January 2003, the Company repurchased 42,224 shares of its common stock in a privately negotiated transaction at a price of $9.50. (18) QUARTERLY FINANCIAL DATA (UNAUDITED) Summarized unaudited quarterly financial data for the years ended December 31, 2002 and 2001 is as follows:
2002 -------------------------------------------------------------------------------(in thousands) Fourth Third Second First -------------------------------------------------------------------------------Interest income $ 4,547 $ 4,500 $ 4,310 $ 3,987 Interest expense 1,317 1,417 1,372 1,307 -------------------------------------------------------------------------------Net interest income 3,230 3,083 2,938 2,680 Provision for loan losses 731 147 123 99 Noninterest income 1,341 713 709 608 Noninterest expense 2,402 2,362 2,284 2,159 -------------------------------------------------------------------------------Income before provision for income taxes 1,438 1,287 1,240 1,030 Provision for income taxes 489 438 420 350 -------------------------------------------------------------------------------Net income $ 949 $ 849 $ 820 $ 680 ================================================================================ Basic earnings per share $ 0.12 $ 0.11 $ 0.11 $ 0.09 ================================================================================ Diluted earnings per share $ 0.12 $ 0.11 $ 0.10 $ 0.09 ================================================================================ 2001 -------------------------------------------------------------------------------(in thousands) Fourth Third Second First -------------------------------------------------------------------------------Interest income $ 4,148 $ 4,188 $ 4,082 $ 4,139 Interest expense 1,432 1,540 1,514 1,601 -------------------------------------------------------------------------------Net interest income 2,716 2,648 2,568 2,538 Provision for loan losses 68 89 93 84 Noninterest income 680 593 630 596 Noninterest expense 1,995 1,958 1,969 1,971 -------------------------------------------------------------------------------Income before provision for income taxes 1,333 1,194 1,136 1,079 Provision for income taxes 453 406 386 367 -------------------------------------------------------------------------------Net income $ 880 $ 788 $ 750 $ 712 ================================================================================ Basic earnings per share $ 0.12 $ 0.10 $ 0.10 $ 0.10 ================================================================================ Diluted earnings per share $ 0.12 $ 0.10 $ 0.10 $ 0.09 ================================================================================ 2002 Annual Report 35

[LOGO OF HAMPTON ROADS BANKSHARES] (19) CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS

[LOGO OF HAMPTON ROADS BANKSHARES] (19) CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS The condensed financial position as of December 31, 2002 and 2001 and the condensed results of operations and cash flows for the years then ended of Hampton Roads Bankshares, Inc., parent company only, are presented below. For 2001, the amounts included are from the date of commencement of the Holding Company, July 1, 2001 through December 31, 2001. CONDENSED BALANCE SHEET
DECEMBER 31, December 31, 2002 2001 -------------------------------------------------------------------------------ASSETS: Cash on deposit with Bank of Hampton Roads $ 4,247,583 $ 53,493 Receivable from Bank of Hampton Roads 1,439,563 1,526,489 Investment in Bank of Hampton Roads 34,534,460 35,392,616 Investment in affiliates 280,000 100,000 Loan to Tidewater Home Funding, LLC 2,992,853 3,235,000 Other assets 40,508 80,671 -------------------------------------------------------------------------------Total assets $ 43,534,967 $ 40,388,269 ================================================================================ LIABILITIES AND SHAREHOLDERS' EQUITY: Other borrowings $ 2,992,853 $ 3,235,000 Other liabilities 1,431,195 1,530,290 Shareholders' equity 39,110,919 35,622,979 -------------------------------------------------------------------------------Total liabilities and shareholders' equity $ 43,534,967 $ 40,388,269 ================================================================================

CONDENSED STATEMENT OF INCOME
FOR THE YEAR For the Period ENDED July 1, 2001DECEMBER 31, December 31, 2002 2001 -------------------------------------------------------------------------------INCOME: Dividends from Bank of Hampton Roads $ 4,965,933 $ 200,000 Dividends from affiliates 14,001 -Interest income 23,882 4,721 -------------------------------------------------------------------------------Total income 5,003,816 204,721 EXPENSES: Interest expense 18,313 3,801 Other expense 95,708 3,190 -------------------------------------------------------------------------------Total expense 114,021 6,991 -------------------------------------------------------------------------------Income before income taxes and equity in undistributed net income of subsidiary 4,889,795 197,730 Income tax benefit 25,887 772 Equity in undistributed net income of subsidiary (1,617,647) 1,469,538 -------------------------------------------------------------------------------Net income $ 3,298,035 $ 1,668,040 ================================================================================

36 Hampton Roads Bankshares, Inc.

HMPR CONDENSED STATEMENT OF CASH FLOWS
-------------------------------------------------------------------------------------------------FOR THE YEAR For the Period ENDED July 1, 2001DECEMBER 31, December 31, 2002 2001 -------------------------------------------------------------------------------------------------OPERATING ACTIVITIES: Net income $ 3,298,035 $ 1,668,040 Adjustments: Equity in undistributed earnings of subsidiaries 1,617,647 (1,469,538) Depreciation and amortization 7,573 1,048 Change in other assets 119,515 (1,708,207) Change in other liabilities 173,106 1,530,290 -------------------------------------------------------------------------------------------------Net cash provided by operations 5,215,876 21,633 -------------------------------------------------------------------------------------------------INVESTING ACTIVITIES: (Increase) decrease in loans 242,147 (3,235,000) Investment in BI Investments, LLC (180,000) --------------------------------------------------------------------------------------------------Net cash provided by (used in) investing activities 62,147 (3,235,000) -------------------------------------------------------------------------------------------------FINANCING ACTIVITIES: Increase (decrease) in short-term borrowings (242,147) 3,235,000 Common stock repurchased and surrendered (519,340) Dividends paid (1,946,593) -Dividends reinvested 1,209,441 -Cash proceeds from exercise of stock options 346,576 -Proceeds from shares issued related to 401(k) plan 68,130 31,860 -------------------------------------------------------------------------------------------------Net cash provided by (used in) financing activities (1,083,933) 3,266,860 -------------------------------------------------------------------------------------------------Increase in cash and cash equivalents 4,194,090 53,493 Cash and cash equivalents at beginning of year 53,493 --------------------------------------------------------------------------------------------------Cash and cash equivalents at end of year $ 4,247,583 $ 53,493 ==================================================================================================

(20) RELATED PARTY TRANSACTIONS On December 1, 2001, the Company purchased a 10% interest in Tidewater Home Funding, LLC. The Company accounts for this investment under the cost method. On December 19, 2001, both the Holding Company and the Bank established a warehouse credit facility for Tidewater Home Funding, LLC for up to $5,000,000 and $5,194,950, respectively. As of December 31, 2002 and 2001, $2,992,853 and $3,235,000, were outstanding with the Holding Company, under the warehouse line at a rate of 5.25% and 5.75%, respectively. The warehouse line with the Bank as of December 31, 2002 and 2001, had $5,171,556 and $5,065,859 outstanding, at a rate of 4.75% and 5.25%, respectively. Loans are made to the Company's executive officers and directors and their associates during the ordinary course of business. At December 31, 2002 and 2001, loans to executive officers, directors and their associates amounted to $10,863,597 and $12,217,607, respectively. During 2002, additional loans and repayments of loans by executive officers, directors and their associates were $10,320,694 and $11,674,704, respectively. 2002 Annual Report 37

OFFICE LOCATIONS [LOGO OF HAMPTON ROADS BANKSHARES] 38 Hampton Roads Bankshares, Inc.

OFFICE LOCATIONS [LOGO OF HAMPTON ROADS BANKSHARES] 38 Hampton Roads Bankshares, Inc.

HMPR

ADVISORY BOARD MEMBERS DEEP CREEK EMIL A. VIOLA Chairman JACK W. GIBSON Bank of Hampton Roads WALTER CARTWRIGHT, JR. Retired, Watters & Martin, Inc. PATRICIA S. LAWRENCE Lawrence Pharmacy, Inc. DAVIS R. MELLOTT Southeastern Equipment Corp. WILLARD F. ROBINS, III, C.P.A. Willard F. Robins, III, P.C. R. CURTIS SAUNDERS, JR. Vico Construction Corporation CONSTANTINE L. ZINOVIS Restauranteur CROSSROADS HERMAN A. HALL, III Chairman JACK W. GIBSON Bank of Hampton Roads THE HONORABLE HARRY B. BLEVINS State Senator RALPH L. FROST Retired Farmer H. LYNN KEFFER Crossroads Fuel, Inc. PHILIP V. MILLER Virginia Door, Inc. JOHN R. NEWHART Sheriff, City of Chesapeake

HMPR

ADVISORY BOARD MEMBERS DEEP CREEK EMIL A. VIOLA Chairman JACK W. GIBSON Bank of Hampton Roads WALTER CARTWRIGHT, JR. Retired, Watters & Martin, Inc. PATRICIA S. LAWRENCE Lawrence Pharmacy, Inc. DAVIS R. MELLOTT Southeastern Equipment Corp. WILLARD F. ROBINS, III, C.P.A. Willard F. Robins, III, P.C. R. CURTIS SAUNDERS, JR. Vico Construction Corporation CONSTANTINE L. ZINOVIS Restauranteur CROSSROADS HERMAN A. HALL, III Chairman JACK W. GIBSON Bank of Hampton Roads THE HONORABLE HARRY B. BLEVINS State Senator RALPH L. FROST Retired Farmer H. LYNN KEFFER Crossroads Fuel, Inc. PHILIP V. MILLER Virginia Door, Inc. JOHN R. NEWHART Sheriff, City of Chesapeake VIVIAN O. PARKER Civic Leader JEFFREY P. POWELL, M.D., D.D.S. Chesapeake Ear, Nose & Throat

Associates, P.C. SOUTH NORFOLK DURWOOD S. CURLING Chairman JACK W. GIBSON Bank of Hampton Roads JAMES A. ALEXANDER, JR. Service Electric Corp. of Va. ROBERT G. BAGLEY Bank of Hampton Roads JAMES S. CREEKMORE Creekmore Hardware CHARLES G. HACKWORTH, SR. Hackworth Reprographics, Inc. JAMES W. McNEIL Civic Leader RICHARD G. PRETLOW Pretlow & Sons Funeral Home ELIZABETH F. ST. JOHN Supervisor, 1st District Court, City of Chesapeake INDIAN RIVER WARREN L. ALECK Chairman JACK W. GIBSON Bank of Hampton Roads ERIC C. ANDERSON Lakeside Construction Corporation STUART H. BUXBAUM S & E Builders LEIGH ANNE FOLKES Hassell & Folkes, P.C. IZAAK D. GLASSER Glasser & Macon, P.C. MICHAEL S. LEANZO Mid-Atlantic Coatings, Inc. CORPORATE LANDING PATRICIA M. WINDSOR Chairman

JACK W. GIBSON Bank of Hampton Roads WALTER J. BLASCZAK Retired, U.S. Navy JOHN E. FREESE Lewis and Freese Advertising DAVID E. KELLAM Kellam and Eaton, Inc. JAMES W. LAM Attorney & Counselor at Law NORRIS W. SHIRLEY Retired Farmer CYNTHIA W. SNYMAN Slip-Free Systems of Virginia MACARTHUR CENTER ROBERT H. POWELL, III Chairman JACK W. GIBSON Bank of Hampton Roads ROBERT G. BAGLEY Bank of Hampton Roads EDWARD L. LADD MacArthur Center DARRELL L. LONG Club Soda, Havana-Norfolk, HavanaVirginia Beach JONATHAN L. THORNTON Pierce & Thornton WILLIAM F. WHITLOW Whitlow & Baker MICHAEL P. ZARPAS Global Real Estate Investment 2002 Annual Report 39

[LOGO OF HAMPTON ROADS BANKSHARES] MARKET STREET BOBBY L. RALPH Chairman

[LOGO OF HAMPTON ROADS BANKSHARES] MARKET STREET BOBBY L. RALPH Chairman JACK W. GIBSON Bank of Hampton Roads ADRIAN T. ROBERTSON Allied Concrete JAMES R. ROUNTREE Rountree Construction Co., Inc. JAMES F. RUSSELL Supreme Petroleum, Inc. KENT B. SPAIN J. Walter Hosier & Son Insurance Agency ROBERT B. SPEIGHT N & S Limited GAYLE F. UPCHURCH The Shoetique ORCHARD SQUARE WILLIAM J. HEARRING Chairman JACK W. GIBSON Bank of Hampton Roads WILLIAM B. CROSS Ashdon Builders, Inc. RICHARD H. MATTHEWS Pender & Coward, P.C. ROBERT L. SAMUEL, JR. Williams Mullen PORTSMOUTH BOULEVARD HENRY P. BARHAM, D.D.S. Chairman JACK W. GIBSON Bank of Hampton Roads JONNIE GAYLE FRANKLIN Investor THOMAS F. MAY Vexcon Chemicals, Inc.

JOANN H. NESSON John C. Holland Enterprises HUGO A. OWENS, JR. Chesapeake City Schools/Jani-King, Inc. JUDSON H. RODMAN Rodman's Bar-B-Que PAT E. VIOLA Vico Construction Corporation PRINCESS ANNE L. STEVE GOSSETT Chairman JACK W. GIBSON Bank of Hampton Roads N. MERRILL BECK, JR. Beck Associates, P.C. GEORGE RAY BUNCH, JR. Budget Rent A Car DONALD M. KOBLE Steve's Auto Sales YALE NESSON AARD Screenprinters & Embroidery NEAL S. WINDLEY Goodwill Industries LITTLE CREEK W. LEWIS WITT Chairman JACK W. GIBSON Bank of Hampton Roads ALAN A. BUNCH Budget Rent A Car ELAINE CZOHARA Adams Outdoor Advertising EDWARD A. FIORELLA Norfolk Sheriff's Office JOSEPH L. HOGGARD Restauranteur GEORGE STENKE Investor W. RANDY WRIGHT

W. RANDY WRIGHT Randy Wright's Printing ROBERT L. YOUNG Cottage Toll Exxon MOYOCK RODNEY L. FOSTER Chairman JACK W. GIBSON Bank of Hampton Roads MARTIN W. HOLTON Forrest Septic Tank Contractors, Inc. WILLIAM K. JERNIGAN Mill Run Golf & Country Club, Inc. ROBERT C. RHOADS Hoffman Industries, Inc. SHEILA R. ROMM Clerk of Superior Court, Currituck, NC BOBBY R. WADDELL Contractor HAYWOOD E. WARD Retired Deputy Sheriff, Currituck, NC RICHARD C. WEBB, II East Coast Abatement Co., Inc. GREAT NECK S.G. FOLKES Chairman JACK W. GIBSON Bank of Hampton Roads E. LEE BOYCE, III Boyce-Widener, Ltd. KENNETH R. SIMS Custom Stone Company, Inc. KEVIN R. SIMS Custom Stone Company, Inc. JAMES D. MARX In Touch Designs, Inc. TOWNSEND OAST Retired Past President of Virginia Bankers Association LEO THOMAS

Ron Zoby Tours JEFFREY M. TOURAULT Atlantic Foundations, Inc. PEMBROKE DOUGLAS J. GLENN Chairman JACK W. GIBSON Bank of Hampton Roads JOHN KATSIAS Katsias Company PETE O. KOTARIDES The Kotarides Companies AUBREY L. LAYNE, JR. Great Atlantic Management Company, Inc. KIRK B. LEVY Sykes Bourdon Ahern & Levy ROBERT A. WIDENER Ainslie Widener, Inc. 40 Hampton Roads Bankshares, Inc.

REMEMBER WHEN YOU ENJOYED GOING TO THE BANK. [GRAPHIC APPEARS HERE] YOU STILL DO AT THE BANK OF HAMPTON ROADS. WHEN YOU WALK THROUGH OUR DOORS, YOU'LL NOTICE THE DIFFERENCE IMMEDIATELY AS OUR FRIENDLY STAFF GREETS YOU WITH A SMILE. WE TREAT ALL OF OUR CUSTOMERS LIKE NEIGHBORS BECAUSE THEY ARE. FROM OUR PRESIDENT TO OUR TELLERS, EVERYONE INVOLVED WITH OUR BANK IS A MEMBER OF THE HAMPTON ROADS COMMUNITY. WHICH MEANS YOU GET A WIDE ARRAY OF CONVENIENT BANKING SERVICES; WE JUST MAKE THEM A LITTLE MORE ENJOYABLE. STOP BY ONE OF OUR CONVENIENT LOCATIONS FOR YOUR NEXT LOAN WHERE IT'S APPROVED LOCALLY, AND IN MOST CASES RIGHT ON THE SPOT. [LOGO OF BANK OF HAMPTON ROADS] YOUR COMMUNITY, YOUR BANK.
[GRAPHIC APPEARS HERE] Member FDIC Equal Opportunity Lender 436-1000 www.BankofHamptonRoads.com

[GRAPHIC APPEARS HERE]

REMEMBER WHEN YOU ENJOYED GOING TO THE BANK. [GRAPHIC APPEARS HERE] YOU STILL DO AT THE BANK OF HAMPTON ROADS. WHEN YOU WALK THROUGH OUR DOORS, YOU'LL NOTICE THE DIFFERENCE IMMEDIATELY AS OUR FRIENDLY STAFF GREETS YOU WITH A SMILE. WE TREAT ALL OF OUR CUSTOMERS LIKE NEIGHBORS BECAUSE THEY ARE. FROM OUR PRESIDENT TO OUR TELLERS, EVERYONE INVOLVED WITH OUR BANK IS A MEMBER OF THE HAMPTON ROADS COMMUNITY. WHICH MEANS YOU GET A WIDE ARRAY OF CONVENIENT BANKING SERVICES; WE JUST MAKE THEM A LITTLE MORE ENJOYABLE. STOP BY ONE OF OUR CONVENIENT LOCATIONS FOR YOUR NEXT LOAN WHERE IT'S APPROVED LOCALLY, AND IN MOST CASES RIGHT ON THE SPOT. [LOGO OF BANK OF HAMPTON ROADS] YOUR COMMUNITY, YOUR BANK.
[GRAPHIC APPEARS HERE] Member FDIC Equal Opportunity Lender 436-1000 www.BankofHamptonRoads.com

[GRAPHIC APPEARS HERE] Hampton Roads Bankshares, Inc. would like to extend our thoughts and prayers to the United States Armed Forces for protecting our FREEDOM. HAMPTON ROADS BANKSHARES, INC. 201 Volvo Parkway Chesapeake, Virginia 23320 757.436.1000 www.bankofhamptonroads.com

Exhibit 23.1 INDEPENDENT AUDITORS' CONSENT The Board of Directors Hampton Roads Bankshares, Inc.: We consent to the incorporation by reference in the registration statements (No. 333-84304 and No. 33364346) on Forms S-3 and S-8, respectively, of Hampton Roads Bankshares, Inc. of our report dated February 14, 2003, with respect to the consolidated balance sheets of Hampton Roads Bankshares, Inc. as of December 31, 2002 and 2001, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the years then ended, which report appears in the December 31, 2002 annual report on Form 10-K of Hampton Roads Bankshares, Inc.
/s/ KPMG LLP

[GRAPHIC APPEARS HERE] Hampton Roads Bankshares, Inc. would like to extend our thoughts and prayers to the United States Armed Forces for protecting our FREEDOM. HAMPTON ROADS BANKSHARES, INC. 201 Volvo Parkway Chesapeake, Virginia 23320 757.436.1000 www.bankofhamptonroads.com

Exhibit 23.1 INDEPENDENT AUDITORS' CONSENT The Board of Directors Hampton Roads Bankshares, Inc.: We consent to the incorporation by reference in the registration statements (No. 333-84304 and No. 33364346) on Forms S-3 and S-8, respectively, of Hampton Roads Bankshares, Inc. of our report dated February 14, 2003, with respect to the consolidated balance sheets of Hampton Roads Bankshares, Inc. as of December 31, 2002 and 2001, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the years then ended, which report appears in the December 31, 2002 annual report on Form 10-K of Hampton Roads Bankshares, Inc.
/s/ KPMG LLP Norfolk, Virginia March 25, 2003

Exhibit 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 33384304) and S-8 (No. 333-64246) of Hampton Roads Bankshares, Inc. of our report dated February 12, 2001 relating to the financial statements, which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Harrisburg, Pennsylvania March 25, 2003

Exhibit 23.1 INDEPENDENT AUDITORS' CONSENT The Board of Directors Hampton Roads Bankshares, Inc.: We consent to the incorporation by reference in the registration statements (No. 333-84304 and No. 33364346) on Forms S-3 and S-8, respectively, of Hampton Roads Bankshares, Inc. of our report dated February 14, 2003, with respect to the consolidated balance sheets of Hampton Roads Bankshares, Inc. as of December 31, 2002 and 2001, and the related consolidated statements of income, shareholders' equity, and cash flows for each of the years then ended, which report appears in the December 31, 2002 annual report on Form 10-K of Hampton Roads Bankshares, Inc.
/s/ KPMG LLP Norfolk, Virginia March 25, 2003

Exhibit 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 33384304) and S-8 (No. 333-64246) of Hampton Roads Bankshares, Inc. of our report dated February 12, 2001 relating to the financial statements, which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Harrisburg, Pennsylvania March 25, 2003

Exhibit 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 33384304) and S-8 (No. 333-64246) of Hampton Roads Bankshares, Inc. of our report dated February 12, 2001 relating to the financial statements, which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Harrisburg, Pennsylvania March 25, 2003