On June 1, 2008, Shore Financial Corporation was merged with and into Hampton Roads Bankshares. As a result, 2,713,425 new shares of the Company's common stock were issued to the former Shore Financial Corporation shareholders. The Company's results of operations for both the second quarter and the first half of 2008 include one month of Shore Bank's operational results.

Net income for the three months ended June 30, 2008, was $1,673,143, down $55,548 from the comparable period in 2007. For the first half of 2008, net income was $3,134,422; net income for the comparable period in 2007 was $3,261,013. For the second quarter of 2008, diluted earnings per share, inclusive of the new shares outstanding resulting from the Shore Financial Corporation acquisition was $0.15 compared to $0.17 in the second quarter of 2007. Diluted earnings per share for the first half of 2008 was $0.29 compared to $0.31 in the first half of 2007.

"Hampton Roads Bankshares has spent much of the last year formulating and executing a plan to further grow and expand our branch network. Through the acquisition of Shore Bank, our presence has grown beyond Hampton Roads to the Eastern Shore of Virginia and into Maryland," said Vice Chairman, President and Chief Executive Officer Jack W. Gibson. "Shore Bank is a market leader on the Eastern Shore and allows us to take advantage of future opportunities throughout the Delmarva Peninsula. In addition, I am excited to announce that Bank of Hampton Roads has just entered into a lease for a branch in Virginia Beach's thriving Hilltop market. Subject to regulatory approvals, I would expect the Hilltop branch, our 19th in South Hampton Roads, to be open and serving our customers before year end."

He went on to say, "I am extremely pleased with our financial results considering the unprecedented economic environment in which we are doing business. Despite an increase of more than $118 million in total average loans, our net interest income was off 6% from this time last year. That result alone summarizes the impact that 2008's Federal Reserve rate decreases have had on our industry. Our net interest margin for the first half of 2008 was 3.81%, down 126 basis points from the comparable period in 2007 -- this is the first time in the more than twenty year history of Bank of Hampton Roads that we have reported a net interest margin below 4.00%. Assuming that rates have stabilized, we expect that our margins will gradually increase throughout the second half of the year due to deposit and loan re-pricing as well as the further contribution of Shore Bank to our overall earnings. Shore Bank's business model adds diversification to our Company and will help to temper the effect of this year's rate decreases because the majority of their funding is short-term and less than twenty percent of their loans float with prime."

"Even though our earnings are off slightly from last year, I have never been more proud of our Company and the people that comprise our organization. We were able to close the Shore Bank merger on schedule as of June 1st and throughout the process, both banks continued to deliver the high level of service our customers have come to expect. Further, our Company is well capitalized by every customary measure and as I noted when we announced our latest quarterly dividend, is a safe, sound and strong organization. Bauer Financial has awarded Bank of Hampton Roads their highest 'Superior/5 Star Rating' for fifty-three consecutive quarters and TheStreet.com consistently assigns Bank of Hampton Roads a rating of 'A' or 'Excellent.' These are ratings that we always take great internal pride in, but have never really promoted to the public. Over the last several weeks, more and more consumers have asked about our safety and soundness ratings and we're experiencing growth in our deposit base as a result. Shore Bank is also recommended by Bauer Financial with a rating of '4 Stars,' which signifies excellent financial strength. We could not achieve these high ratings if our Board and management were not dedicated to preserving the strength of our organization and consistently taking measures that are intended to enhance the value of our shareholders' investments," Gibson said.

The Company's total assets as of June 30, 2008, were $845 million or 62.12% ahead of $522 million a year ago; at the time of the acquisition, Shore Bank's total assets were $267 million. Total deposits were up 62.71% from $391 million a year ago to end the quarter at $636 million; at the time of the acquisition, Shore Bank's total deposits were $208 million. The Company's total shareholders' equity on June 30, 2008 was $107,442,143.