8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)                 October 30, 2012           

Hampton Roads Bankshares, Inc.
(Exact name of registrant as specified in its charter)
Virginia	001-32968	54-2053718
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
999 Waterside Drive, Suite 200, Norfolk, Virginia 23510
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (757) 217-1000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

Hampton Roads Bankshares, Inc. (the “Company”), the holding company for Bank of Hampton Roads and Shore Bank, issued a press release today regarding financial results for the third quarter of 2012, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Use of Non-GAAP Financial Measures.

Certain measures provided in the press release attached as Exhibit 99.1 may be deemed to be non-GAAP financial measures.  Tangible common equity to tangible assets ratio is not a measure recognized under U.S. generally accepted accounting principles (“GAAP”) and, therefore, is considered a non-GAAP financial measure.  The most comparable GAAP measure is the ratio of total common shareholders’ equity to total assets.

Management uses this non-GAAP financial measure to assess the strength of the Company’s capital position.  The Company believes that this non-GAAP financial measure provides meaningful additional information about the Company to assist investors in evaluating the Company’s financial strength and capitalization.  The tangible common equity to tangible assets ratio is used by management and investment analysts to assess the strength of the Company’s capital position absent the effects of intangible assets.  Management, banking regulators and many stock analysts use the tangible common equity ratio in conjunction with more traditional bank capital ratios to compare the capital adequacy of banking organizations with significant amounts of intangible assets.

Below is a reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated and presented in accordance with GAAP.

Non-GAAP Measurement

(From Press Release)

September 30, 2012

(dollars in thousands)	As of September 30, 2012			As of June 30, 2012			As of September 30, 2011
Total assets	$	2,071,433		$	2,070,945		$	2,438,691
Less:  intangible assets		2,745			3,080			4,130
Tangible assets		2,068,688			2,067,865			2,434,561
Total shareholders' equity	$	187,960		$	149,347		$	135,670
Less:  intangible assets		2,745			3,080			4,130
Common shareholders' equity - tangible		185,215			146,267			131,540
Tangible common equity to tangible assets		8.95	%		7.07	%		5.40	%
Total common shareholders' equity to total assets		9.07	%		7.21	%		5.56	%

Item 7.01. Regulation FD Disclosure.

As noted in Item 2.02, the Company issued a press release regarding its financial results, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information contained in Item 2.02 above and this Item 7.01, including that which is incorporated by reference, is being furnished to the Securities and Exchange Commission (the “SEC”).  Such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section.  The information shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

Ex. 99.1 Press Release, dated October 30, 2012, announcing Hampton Roads Bankshares, Inc.’s third quarter financial results.

Caution About Forward-Looking Statements.

Certain statements made herein and in the attached earnings press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about events or results or otherwise are not statements of historical facts, such as statements about the continuation of credit quality, origination and efficiency trends. Although the Company believes that its expectations with respect to such forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance the Company will be able to exit its problem assets or return to profitability or that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.  Factors that could cause actual events or results to differ significantly from those described in the forward-looking statements include, but are not limited to those described in the cautionary language included under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, its Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 and other filings made with the SEC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Hampton Roads Bankshares, Inc.
Date:    October 30, 2012	By:	/s/ Douglas J. Glenn
		Douglas J. Glenn
		President and Chief Executive Officer

EXHIBIT INDEX

Exhibit No.	Description
Ex. 99.1	Press Release, dated October 30, 2012, announcing Hampton Roads Bankshares, Inc.’s third quarter financial results.

EX-99.1

Exhibit 99.1

		October  30, 2012
Contact:	Stephen P. Theobald
	Executive Vice President, Chief Financial Officer
	(757) 217-1000

Hampton Roads Bankshares Announces Third Quarter 2012 Financial Results

· Net loss of $5.9 million, a 78% improvement over third quarter 2011

· Provision for loan losses declined to $2.5 million

· Nonperforming assets declined for eighth consecutive quarter

· Net interest margin up 36 basis points year-over-year to 3.55%

· $45 million of additional capital raised in rights offering

Norfolk, Virginia  (October 30, 2012):  Hampton Roads Bankshares, Inc. (the “Company”) (Nasdaq:  HMPR), the holding company of Bank of Hampton Roads and Shore Bank, today announced financial results for the third quarter of 2012.  The Company reported a net loss of $5.9 million for the quarter, compared to losses of $5.7 million for the second quarter of 2012 and $26.7 million for the third quarter of 2011.  Third quarter 2012 results benefitted from increased core deposits, improving loan demand, increased origination activity in the Company’s mortgage business and lower provision for loan losses, due to continued improvements in credit quality.  During the quarter, the Company completed its previously disclosed capital raise by raising $45 million in additional common equity through its backstopped rights offering to existing shareholders.

“Third quarter results reflect continued progress across a number of key areas, including increases in core deposits and mortgage originations, improvements in asset quality and capital ratios, and the eighth consecutive quarterly decline in nonperforming assets,” said Douglas J. Glenn, President and Chief Executive Officer.  “We continue to take actions to strengthen our franchise, improve the efficiency of our operations, and position the Company for growth and profitability.”

Net interest income for the third quarter of 2012 was $15.8 million, down from $16.2 million in the second quarter of 2012 and compared to $17.6 million in the third quarter of 2011.  Net interest margin during the quarter was 3.55%, compared to 3.66% in the previous quarter and significantly higher than the net interest margin of 3.19% in the third quarter of 2011.  Margin improvements from the prior year are the result of lower funding costs and a reduction in the amount of lower earning overnight funds as a percentage of earning assets.  The decline in margin from the second quarter is a result of lower loan yields as rates for new and renewed loans reflect the lower interest rate environment.

Provision for loan losses for the third quarter of 2012 was $2.5 million compared to $4.3 million in the second quarter of 2012 and $17.7 million in the third quarter of 2011.  In addition, the Company reported a decline of $14.3 million in nonperforming assets during the third quarter, marking the eighth straight quarterly decline in the aggregate level of nonperforming assets.  Provision expense during the quarter was lower than previous quarters due to the continued slowdown in new problem loans and continued success in resolving existing nonperforming assets.  Nonperforming asset balances are down nearly 33% from the year ago levels.

Noninterest income was $2.2 million during the third quarter of 2012 compared to $2.0 million during the second quarter of 2012 and a negative $0.2 million in the third quarter of 2011.  The slight improvement over the second quarter was due to increased mortgage banking revenue, offset by increased losses on foreclosed assets.  Losses on foreclosed assets were $6.4 million during the third quarter of 2012 compared to $4.9 million in the prior quarter and $8.8 million in the third quarter of 2011.  Overall, foreclosed asset balances declined by $4.5 million from the previous quarter and $23.0 million year-over-year.  Mortgage revenue continued to benefit from increased origination volumes in the Company’s mortgage business due to the positive impact of the low rate environment on mortgage refinancing activity.  Mortgage revenue increased to $5.2 million from $3.9 million in the prior quarter and $2.7 million in the third quarter of 2011.  In addition, during the quarter the Company completed the sale of the deposits of its Wilmington branch and two branches, along with related deposits, in Raleigh, NC.  The transactions resulted in a net gain of $0.5 million during the quarter.

Noninterest expenses were $20.4 million during the quarter, compared to $18.8 million in the second quarter of 2012 and $24.1 million in the third quarter of 2011.  The increase from the second quarter is due to increased mortgage expenses, primarily salary and benefit costs, associated with the increase in mortgage origination activity and an increase in legal and foreclosed asset expenses during the quarter.  The decline in operating expenses from the prior year quarter is a direct result of the Company’s success in reducing its expense base through the consolidation and/or sales of selected branches, efficiencies gained in its various business operations and improvements in credit quality.

As of September 30, 2012, total assets were $2.07 billion, down slightly from $2.17 billion at December 31, 2011 and flat to the previous quarter.  During 2012, loans outstanding declined from $1.50 billion to $1.42 billion as a result of continued resolutions of problem loans and charge-offs, with new lending activity largely offsetting normal portfolio attrition.  Total deposits declined during the first half of the year to $1.63 billion from $1.80 billion at December 31, 2011

primarily from continued declines in brokered deposits and retail time deposits, and the sale of deposits in Wilmington and Raleigh. Non-interest bearing deposits increased by $11.4 million from the prior quarter.

Nonperforming assets declined to $159.2 million at September 30, 2012 from $173.5 million and $196.9 million at June 30, 2012 and December 31, 2011, respectively.  Nonperforming assets represented 7.68% of total assets at September 30, 2012 compared to 9.08% at December 31, 2011.

At September 30, 2012, the Company exceeded all of the regulatory capital minimums and Bank of Hampton Roads and Shore Bank were both considered “well capitalized” under the risk-based capital standards.

Caution About Forward-Looking Statements.

Certain statements made herein and in the attached earnings press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about events or results or otherwise are not statements of historical facts, such as statements about the continuation of credit quality, origination and efficiency trends. Although the Company believes that its expectations with respect to such forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance the Company will be able to exit its problem assets or return to profitability or that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.  Factors that could cause actual events or results to differ significantly from those described in the forward-looking statements include, but are not limited to those described in the cautionary language included under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, its Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 and other filings made with the SEC.

About Hampton Roads Bankshares

Hampton Roads Bankshares, Inc. is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia.  The Company’s primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961 (the “Banks”).  The Banks engage in general community and commercial banking business, targeting the needs of individuals and small to medium-sized businesses.  Currently, Bank of Hampton Roads operates 33 banking offices in Virginia and North Carolina doing business as Bank of Hampton Roads and Gateway Bank & Trust Co.  Shore Bank serves the Eastern Shore of Maryland and Virginia through seven banking offices and recently opened loan production offices in West Ocean City, Maryland and Rehobeth, Delaware. Through various affiliates, the Banks also offer mortgage banking services and investment products.  Shares of the Company’s

common stock are traded on the NASDAQ Global Select Market under the symbol “HMPR.”  Additional information about the Company and its subsidiaries can be found at www.hamptonroadsbanksharesinc.com.

Use of Non-GAAP Financial Measures

This earnings press release contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding our results of operations or financial position.  Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the Form 8-K filed related to this release.  The Form 8-K can be found on the SEC’s EDGAR website at www.sec.gov or our website at www.hamptonroadsbanksharesinc.com.

Hampton Roads Bankshares, Inc.
Financial Highlights
Unaudited
(in thousands, except per share data)
	Nine months ended
Operating Results	September 30, 2012			September 30, 2011
Interest income	$	62,208		$	77,915
Interest expense		13,473			23,904
Net interest income		48,735			54,011
Provision for loan losses		14,124			53,733
Noninterest income		7,301			5,337
Noninterest expense		59,072			80,281
Income tax expense		-			2,154
Net loss		(17,160	)		(76,820	)
Noncontrolling interest		2,333			382
Net loss attributable to Hampton Roads Bankshares, Inc.	$	(19,493	)	$	(77,202	)
Per Share Data
Loss per share:
Basic	$	(0.32	)	$	(2.28	)
Diluted		(0.32	)		(2.28	)
Common dividends declared		-			-
Book value per common share		1.10			3.93
Book value per common share - tangible		1.09			3.81
Daily Averages
Total assets	$	2,100,016		$	2,654,697
Gross loans		1,450,474			1,783,739
Total investment securities		318,853			347,613
Intangible assets		3,234			9,546
Total deposits		1,722,433			2,212,171
Total borrowings		236,371			253,419
Shareholders' equity		122,699			166,017
Shareholders' equity - tangible		119,465			156,471
Common shareholders' equity		122,699			166,017
Common shareholders' equity - tangible		119,465			156,471
Interest-earning assets		1,801,328			2,302,404
Interest-bearing liabilities		1,724,613			2,235,116

	Nine months ended
Financial Ratios	September 30, 2012			September 30, 2011
Return on average assets		-1.24	%		-3.89	%
Return on average common equity		-21.22	%		-62.17	%
Return on average common equity - tangible		-21.80	%		-65.97	%
Net interest margin		3.61	%		3.14	%
Efficiency ratio		106.33	%		141.63	%
Tangible common equity to tangible assets		8.95	%		5.40	%
Allowance for Loan Losses
Beginning balance	$	74,947		$	157,253
Provision for losses		14,124			53,733
Charge-offs		(40,933	)		(131,900	)
Recoveries		6,306			3,950
Ending balance	$	54,444		$	83,036
Asset Quality Ratios
Annualized net (chargeoffs) recoveries to average loans		-3.19	%		-9.59	%
Nonperforming loans to total loans		8.12	%		10.45	%
Nonperforming assets to total assets		7.68	%		9.72	%
Allowance for loan losses to total loans		3.84	%		5.11	%

Hampton Roads Bankshares, Inc.
Financial Highlights
Unaudited
(in thousands, except per share data)
Operating Results		Q3 2012			Q2 2012			Q3 2011
Interest income	$	19,933		$	20,669		$	24,449
Interest expense		4,096			4,472			6,897
Net interest income		15,837			16,197			17,552
Provision for loan losses		2,476			4,346			17,679
Noninterest income		2,200			1,993			(171	)
Noninterest expense		20,394			18,767			24,086
Income tax expense		-			-			2,110
Net loss		(4,833	)		(4,923	)		(26,494	)
Noncontrolling Interest		1,088			744			247
Net loss attributable to Hampton Roads Bankshares, Inc.	$	(5,921	)	$	(5,667	)	$	(26,741	)
Per Share Data
Loss per share:
Basic	$	(0.05	)	$	(0.15	)	$	(0.77	)
Diluted		(0.05	)		(0.15	)		(0.77	)
Common dividends declared		-			-			-
Book value per common share		1.10			1.41			3.93
Book value per common share - tangible		1.09			1.38			3.81
Balance Sheet at Period-End
Total assets	$	2,071,433		$	2,070,945		$	2,438,691
Gross loans		1,416,933			1,437,644			1,625,107
Allowance for loan losses		54,444			62,907			83,036
Total investment securities		311,104			326,760			300,271
Intangible assets		2,745			3,080			4,130
Total deposits		1,630,943			1,668,025			2,044,395
Total borrowings		236,183			236,306			236,529
Shareholders' equity		187,960			149,347			135,670
Shareholders' equity - tangible		185,215			146,267			131,540
Common shareholders' equity		187,960			149,347			135,670
Common shareholders' equity - tangible		185,215			146,267			131,540

Daily Averages		Q3 2012			Q2 2012			Q3 2011
Total assets	$	2,054,380		$	2,086,935		$	2,531,650
Gross loans		1,422,909			1,444,003			1,670,465
Total investment securities		322,306			328,361			311,067
Intangible assets		2,907			3,227			7,884
Total deposits		1,651,972			1,724,808			2,108,225
Total borrowings		236,238			236,352			242,241
Shareholders' equity		149,019			106,559			157,844
Shareholders' equity - tangible		146,112			103,332			149,960
Common shareholders' equity		149,019			106,559			157,844
Common shareholders' equity - tangible		146,112			103,332			149,960
Interest-earning assets		1,770,564			1,781,285			2,184,958
Interest-bearing liabilities		1,639,320			1,730,717			2,112,414
Financial Ratios
Return on average assets		-1.15	%		-1.09	%		-4.19	%
Return on average common equity		-15.81	%		-21.39	%		-67.21	%
Return on average common equity - tangible		-16.12	%		-22.06	%		-70.75	%
Net interest margin		3.55	%		3.66	%		3.19	%
Efficiency ratio		114.45	%		104.75	%		161.56	%
Tangible common equity to tangible assets		8.95	%		7.07	%		5.40	%
Allowance for Loan Losses
Beginning balance	$	62,907		$	68,917		$	94,595
Provision for losses		2,476			4,346			17,679
Charge-offs		(13,281	)		(12,367	)		(31,053	)
Recoveries		2,342			2,011			1,815
Ending balance	$	54,444		$	62,907		$	83,036
Nonperforming Assets at Period-End
Nonaccrual loans including nonaccrual impaired loans	$	115,093		$	124,915		$	163,816
Loans 90 days past due and still accruing interest		-			-			6,000
Repossessed assets		44,061			48,578			67,107
Total nonperforming assets	$	159,154		$	173,493		$	236,923
Asset Quality Ratios
Annualized net (chargeoffs) recoveries to average loans		-3.06	%		-2.88	%		-6.94	%
Nonperforming loans to total loans		8.12	%		8.69	%		10.45	%
Nonperforming assets to total assets		7.68	%		8.38	%		9.72	%
Allowance for loan losses to total loans		3.84	%		4.38	%		5.11	%
Composition of Loan Portfolio at Period-End
Commercial	$	247,125		$	236,009		$	258,759
Construction		233,194			257,772			318,805
Real-estate commercial		532,884			532,569			585,825
Real-estate residential		379,558			387,687			434,117
Installment		24,302			23,632			27,781
Deferred loan fees and related costs		(130	)		(25	)		(180	)
Total loans	$	1,416,933		$	1,437,644		$	1,625,107