UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 2 to

FORM 10-K

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

For the fiscal year ended December 31, 2008

Commission File Number 001-32968

HAMPTON ROADS BANKSHARES, INC.

(Exact name of registrant as specified in its charter)

(757) 217-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

The aggregate market value of the 11,177,119 voting shares held by non-affiliates based on the last sales price of $12.49 as of June 30, 2008 as recorded by Registrar and Transfer Company was $139,602,221.

The number of shares outstanding of the issuer’s common stock as of March 1, 2009 was 21,796,224 shares of Common Stock, par value $0.625 per share.

DOCUMENTS INCORPORATED BY REFERENCE

None.

EXPLANATORY NOTE

This Amendment No. 2 (“Amendment No. 2”) of Hampton Roads Bankshares, Inc. (the “Company”) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (the “Form 10-K”), originally filed March 30, 2009, corrects certain information related to executive compensation contained in Part III of the Form 10-K, which such information was filed by amendment on April 30, 2009. Amendment No. 2 is intended to replace Amendment No. 1 in its entirely.

Except as modified herein, no other information in the Form 10-K is being modified or amended by Amendment No. 2, and unless indicated otherwise, Amendment No. 2 does not reflect events occurring after March 30, 2009, which is the filing date of the Form 10-K. Accordingly, Amendment No. 2 should be read in conjunction with the Form 10-K and the Company’s other filings with the SEC. This Amendment No. 2 consists solely of the preceding cover page, this explanatory note, Part III (Items 10, 11, 12, 13 and 14), the signature page and the certifications required to be filed as exhibits to this Amendment No. 2.

2

PART III

DIRECTORS

The following sets forth the names, ages and business experience for the past five years of each of the Company’s directors, the date each became a director and their respective term of office.

3

4

EXECUTIVE OFFICERS

The following sets forth the names, ages and business experience for the past five years of the Company’s executive officers and the date each executive officer became employed by the Company, other than the ones listed above under “Directors” above.

Family relationships

Douglas J. Glenn, Executive Vice President, Chief Operating Officer, General Counsel and Director is married to Tiffany K. Glenn, Secretary, Executive Vice President and Investor Relations Officer.

Section 16(a) Beneficial Ownership Reporting Compliance

Section l6(a) of the Securities Exchange Act of 1934, as amended, requires directors, executive officers and persons who beneficially own more than 10% of the Company’s common stock to file initial reports of ownership and reports of changes in beneficial ownership with the SEC. Such persons are also required to furnish the Company with copies of all Section 16(a) forms they file.

5

Based solely on a review of the copies of such forms furnished to the Company, the Company believes that all Section 16(a) filing requirements applicable to its directors, executive officers and greater than 10% beneficial owners were complied with in 2008, except for the following. Form 3s were not timely filed by Scott C. Harvard, Henry P. Custis, Jr., Richard F. Hall, III, D. Ben Berry, William Brumsey, III, Robert Y. Green, Jr., Billy G. Roughton, Frank T. Williams, Ollin B. Sykes, Jerry T. Womak and David R. Twiddy. In addition, Form 4s were not timely filed by Robert R. Kinser and Jordon E. Sloan.

The Company has a Code of Ethics for its senior financial officers and the Chief Executive Officer. The Code of Ethics covers topics including, but not limited to, conflicts of interest, confidentiality of information, and compliance with laws and regulations. The Audit Committee has also adopted a policy pursuant to the Company’s Audit Committee Charter that establishes procedures for employees to communicate concerns about questionable accounting or auditing matters or other improper activities directly to the Audit Committee through its designee.

Any waivers of, or amendments to, the Code of Ethics will be disclosed through the timely filing of a Form 8-K with the Securities and Exchange Commission. A copy of the Company’s Code of Ethics can be obtained, without charge, through written communications addressed to Attn: Tiffany K. Glenn, Executive Vice President, Investor Relations Officer and Corporate Secretary, Hampton Roads Bankshares, Inc., 999 Waterside Dr., Suite 200, Norfolk, VA 23510.

Compensation Discussion and Analysis

Particularly during this challenging environment for banking services and the depressed market for bank stocks, our Compensation Committee and management believe that shareholder value must drive executive compensation decisions. While our compensation philosophy has been to maintain a competitive compensation package to attract qualified executive officers, we have a pay-for-performance program that bases compensation decisions on the financial performance of the Company. Due to economic conditions, our Company’s return to shareholders during 2008 was not what management or our Board of Directors is accustomed to. Even though our performance was favorable when compared to our peer banks, management recommended and the Compensation Committee agreed that our executive compensation should reflect our shareholder returns so that our executive officers’ interests are aligned with those of our shareholders.

Our recent mergers have also factored into our executive compensation program. The June 30, 2008 merger combined the Company’s and Shore’s executive management teams and the December 31, 2008 merger combined the Company’s and Gateway’s management teams. Both mergers brought together different executive compensation programs.

The following plans of Shore were assumed by the Company in connection with its acquisition of Shore: the Shore Financial Corp. 2001 Stock Incentive Plan and the Shore Financial Corp. 401(k) Plan (the “Shore 401(k) Plan”). The following plans of Gateway were assumed by the Company in connection with its acquisition of Gateway Financial Holdings, Inc.: the Gateway Bank and Trust Company Employee’s Savings & Profit Sharing Plan And Trust (the “Gateway 401(k) Plan”), the 1999 Incentive Stock Option Plan of Gateway Financial Holdings, Inc., the 1999 Non-Statutory Stock Option Plan of Gateway Financial Holdings, Inc., the 2001 Non-Statutory Stock Option Plan of Gateway Financial Holdings, Inc., the 2005 Omnibus Stock Ownership and Long Term Incentive Plan of Gateway Financial Holdings, Inc. and the 1999 Bank of Richmond Stock Option Plan of Gateway Financial Holdings, Inc.

6

During 2008, our Compensation Committee established new objectives aimed at transitioning the newly acquired management teams into the Company. These objectives consisted of:

The Compensation Committee reviews the compensation, including salaries, bonuses, employee benefits, executive incentive plans, policies, practices and programs, for the Company’s executive officers. We evaluate the performance of the Company’s Chief Executive Officer, and with the assistance of the Chief Executive Officer, the performance of the other executive officers.

Our intent is to offer compensation packages that will attract and retain high quality personnel for our organization. We want to provide our employees with incentives that will align their interests with the long term and short term goals of the organization as a whole. Several components of our compensation packages include vesting periods and stock ownership which are designed to promote loyalty and longevity among employees. We wish to reward those employees who are excelling in their respective positions and, by so doing, enhance the future profitability of our company.

Our compensation packages currently consist of the following elements:

Salary: We consider many factors in determining the salary component for each of the executive officers. Because one of our objectives is to attract and retain high quality personnel, we conduct surveys of other financial institutions within our region taking into account asset size and revenue base to ensure that we are comparing ourselves to similar organizations. We then compute a range of salaries for each of the executive officer positions using the salary paid to executives with similar job responsibilities at these surveyed financial institutions. Salary for each executive officer is then determined based on his or her individual and group responsibilities and achievements during the preceding year and include judgments based on performance evaluations, regulatory examination results, efficiency in performance of duties, and demonstrated leadership skills. Decisions to increase or decrease compensation materially from the prior period are influenced by the amount of new responsibilities taken on by the executive officers and their contributions to the profitability of the Company.

When determining the 2008 salary for the Chief Executive Officer and the other executive officers, we measured the following financial accomplishments during 2007:

We also factored in the following non-financial accomplishments during 2007:

The executive officers do not play a role in the compensation process except for the former Chief

7

Executive Office, Jack W. Gibson, who would present information regarding the other executive officers to the compensation committee for their consideration. Mr. Gibson was never present while the compensation committee deliberated on his compensation package.

Employment Agreements: We had an employment agreement with Mr. Gibson which was automatically renewable in five year increments and renewed automatically in 2007. This agreement was terminated on May 18, 2009, pursuant to Mr. Gibson’s retirement from the Company on that date. Mr. Gibson’s salary was determined each year by the compensation committee, but in no event was to be less than $50,000. Mr. Gibson’s employment agreement also provided that Mr. Gibson may receive other compensation and benefits as the board of directors elects to provide to all of our employees.

In connection with his retirement, Mr. Gibson entered into a separation agreement with the Company (the “Separation Agreement”). Under the Separation Agreement, the Company agreed to grant Mr. Gibson the option, on the latter of January 4, 2010 or such date as the Company is permitted to do so by law (“Option Date”), to require the Company to purchase 100,000 of his shares of the Company, free and clear of all liens, for the closing price of the Company’s stock on the Option Date. Should Mr. Gibson elect this option, the purchase price for said shares will be paid in twelve (12) equal monthly installments with the first installment being paid to the Executive on the Option Date.

Mr. Gibson will retain his benefits under the following Company plans: Supplemental Retirement Plan, 401(k), Executive Savings, Stock Options, Restricted Stock, and Director Deferred Compensation (“Benefit Plans”), to the extent permitted by law. Benefits under said Benefit Plans will be paid to Mr. Gibson in accordance with the applicable plan terms.

Mr. Gibson will also provide consulting services to the Company as an independent contractor for a period of three years (the “Consultancy Period”) for the total sum of $1,300,000.00, to be paid in the amount of $600,000.00 beginning on May 18, 2009 and $700,000.00 on January 1, 2010. Mr. Gibson may also elect to continue participation in the Company’s medical plans as provided by COBRA. If he so chooses, the Company will pay 100% of Mr. Gibson’s COBRA premiums for 18 months. In addition, Company agreed to turn over ownership of a Company vehicle Mr. Gibson had been using for business purposes. Further, during the Consulting Period, the Company agreed to reimburse Mr. Gibson for his membership dues at Greenbrier Country Club. Mr. Gibson is also subject to a non-solicitation, confidentiality, and non-competition agreement.

Mrs. Fritsch previously entered into a five year employment contract with the Bank, which includes payment of a severance amount in the event of a change in control of the Company, which may be paid unless the Treasury Department or other government agency issues guidance that would prohibit such payments, such as EESA and ARRA. This contract was amended as of July 23, 2008, to make the Company a party in addition to the Bank. The severance amount will be equivalent to the three times the average of her previous three year’s salary minus one dollar payable over a sixty month period. Mrs. Fritsch’s employment contract will renew in five year increments. The Company had a similar agreement with Mr. Fulton.

During 2008, the Company entered into amendments to the employment agreements with Jack W. Gibson and Donald W. Fulton, Jr. to reflect provisions required by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). The amendments to Mr. Gibson’s and Mr. Fulton’s employment agreement also reflect such executive’s employment relationship not only with the Bank but also with the Company.

Upon the closing of the acquisition of Shore, the Company and Shore Bank entered into an employment agreement with Scott C. Harvard. The agreement has a term of sixty (60) months with an initial base salary of $250,000. The agreement restricts Mr. Harvard from employment that competes with Shore Bank for one year following termination of employment. In addition, he is restricted from the

8

solicitation of business of Shore Bank’s customers and solicitation of employment of Shore Bank’s employees for a period of one year following termination of employment. The agreement further prohibits the disclosure of proprietary information. In addition, the Company entered into a restrictive covenant agreement with Mr. Harvard that restricts Mr. Harvard from employment that competes with the Company and any of its affiliates for a period of time specified in the covenant. Mr. Harvard received $175,000 in compensation for entering into the covenant.

On December 31, 2008, the Company entered into an employment agreement with Mr. Berry. This agreement was terminated on April 14, 2009, pursuant to Mr. Berry’s resignation from the Company on that date. The agreement had a term of thirty-six (36) months with an initial base salary of $500,000. The agreement provided for certain payments under specified circumstances including a change in control of the Company. The agreement restricted Mr. Berry from employment that competes with the Company or any of its subsidiaries for one year following termination of employment. In addition Mr. Berry is restricted from the solicitation of business of the Company’s or any of its affiliates’ customers and solicitation of employment of the Company’s or any of its affiliates’ employees for a period of one year following termination of employment. The agreement further prohibits the disclosure of proprietary information. In addition, the Company entered into a restrictive covenant agreement with Mr. Berry that restricts Mr. Berry from employment that competes with the Company and any of its affiliates for a period of time specified in the covenant. Mr. Berry received $500,000 in compensation for entering into the covenant.

On December 31, 2008, Gateway Bank. entered into an employment agreement with David R. Twiddy. The agreement has a term of thirty-six (36) months with an initial base salary of $425,000. The agreement provides for certain payments under specified circumstances including a change in control of the Company. The agreement restricts Mr. Twiddy from employment that competes with the Company or any of its subsidiaries for one year following termination of employment. In addition Mr. Twiddy is restricted from the solicitation of business of the Company’s or any of its affiliates’ customers and solicitation of employment of the Company’s or any of its affiliates’ employees for a period of one year following termination of employment. The agreement further prohibits the disclosure of proprietary information. In addition, the Company entered into a restrictive covenant agreement with Mr. Twiddy that restricts Mr. Twiddy from employment that competes with the Company and any of its affiliates for a period of time specified in the covenant. Mr. Twiddy received $425,000 in compensation for entering into the covenant.

Incentive Plan: In order to focus our executive officers’ attention on the profitability of the organization as a whole, we pay cash incentives based upon our annual financial performance as measured by return on average assets. No bonuses were paid to executive officers under this plan during 2008.

2006 Stock Incentive Plan: We strongly encourage all directors and employees to own stock in the Company. We feel that stock ownership among employees fosters loyalty and longevity and is an excellent method for aligning employee interests with the long term goals of the organization and our shareholders. To facilitate stock ownership, the Compensation Committee of the board of directors adopted the 2006 Stock Incentive Plan on March 14, 2006. This plan was approved by the shareholders of the Company at the April 25, 2006 Annual Meeting of Shareholders. Under the plan, shares of our common stock may be issued to our directors, officers, key employees, consultants and advisors in the form of restricted stock awards, incentive stock awards, incentive stock options and non-statutory stock options. Each type of award under the plan is subject to different requirements and the awards may be conditioned by the performance of the officers and their contribution to the performance of the Company. The plan provides that no person shall be granted incentive stock options worth more than $100,000 based on their exercise price or 50,000 shares of restricted stock or stock options during any calendar year.

9

During 2008, stock options and stock awards were granted on a case by case basis. Jack W. Gibson was awarded 9,352 shares of restricted stock and Lorelle L. Fritsch was awarded 2,647 shares of restricted stock on December 2, 2008. These stock awards vest over twelve months. Scott C. Harvard was awarded 10,000 nonqualified and 8,000 incentive stock options as part of his employment contract.

Executive Savings Plan: We have implemented an Executive Savings Plan with executive officers and certain other officers whereby an initial contribution of the officer’s salary made by the officer will be matched 100% each year by us as long as the officer’s employment with us continues and the officer is in good standing. The total expense to the Company for the Executive Savings Plan match during 2008 was $241,759. The purpose of this plan is to promote employment longevity and to provide key employees with a retirement savings vehicle. Contributions into this plan may be used to purchase employer stock or may be placed in savings accounts for the benefit of each individual participant. Dividends paid on common stock held in the plan are reinvested. Amounts may only be withdrawn from the plan upon termination of employment at which time the participant may elect to take the distribution as a lump sum payment or in annual installments. The plan also provides for additional payments to be made to the officers upon termination of employment following a change of control of the Company. Additional information regarding these payments can be found further in this document.

Profit Sharing Plan: We provide defined contribution 401(k) plans at each of our subsidiary banks. Under the Bank of Hampton Roads’ 401(k) plan, all employees who are 21 years of age and have completed one year of service are eligible to participate. Participants may contribute up to 20% of their compensation, subject to statutory limitations and the Company matches 100% of the employees’ contributions up to 4% of salary.

Under the Shore Bank 401(k) plan, all employees who are 18 years of age and have completed 3 months of service are eligible to participate. Participants may contribute up to 15% of their compensation and the Company matches 100% up to 3% of the employees’ contributions and 50% of the next 3%. The Company may also make an additional discretionary contribution to both plans.

Under the Gateway 401(k) Plan, all employees over the age of 18 are eligible to participate and executive officers participate in the Gateway 401(k) Plan on the same basis as all other eligible employees. 100% of the contributions to the 401(k) Plan are matched up to 6% of the employee’s compensation.

Supplemental Retirement Agreements: We entered into a Supplemental Retirement Agreement with Jack W. Gibson on January 1, 1993. The purpose of the agreement was to provide retirement benefits for Mr. Gibson that will reward his years of service to the Company. Under this agreement, Mr. Gibson is eligible to receive an annual benefit payable in 15 installments equal to 50% of his benefit computation base following the attainment of his plan retirement date, November 9, 2010. The benefit computation base is calculated as his average compensation including bonuses from us over the three highest compensation completed calendar years prior to the year during which the Plan Retirement Date occurs. The estimated annual benefits payable upon retirement at the plan retirement date are $357,826. Mr. Gibson became fully vested in the plan in January 2008.

On May 27, 2008, the Bank and Mr. Gibson entered into an amendment to Mr. Gibson’s Supplemental Retirement Agreement. The amendment reflects provisions required by Section 409A of the Code and clarified the benefits to be paid in the event of Mr. Gibson’s death prior to retirement.

We entered into a Supplemental Retirement Agreement with D. Ben Berry on December 24, 2008. The purpose of the agreement was to provide retirement benefits for Mr. Berry that will reward his years of service to the Company. Under this agreement, Mr. Berry was eligible to receive an annual benefit payable in 15 installments equal to 70% of his benefit computation base following the attainment of his plan retirement date, November 9, 2019. The benefit computation base is calculated as his average

10

compensation including bonuses from us over the three highest compensation completed calendar years prior to the year during which the Plan Retirement Date occurs. This agreement was terminated on April 14, 2009, pursuant to Mr. Berry’s resignation from the Company on that date.

Gateway Bank entered into a Supplemental Retirement Agreement with David R. Twiddy on December 24, 2008. The purpose of the agreement is to provide a retirement vehicle for Mr. Twiddy that will reward his years of service to Gateway Bank. Under this agreement, Mr. Twiddy is eligible to receive an annual benefit payable in 15 installments equal to 70% of his benefit computation base following the attainment of his plan retirement date, September 24, 2022. The benefit computation base is calculated as his average compensation including bonuses from us over the three highest compensation completed calendar years prior to the year during which the Plan Retirement Date occurs.

Supplemental Executive Retirement Plan: The Bank adopted a Supplemental Executive Retirement Plan (“SERP”) in 2005. The only Named Executive Officer currently participating in the SERP is Lorelle Fritsch. The SERP provides participating executives a retirement benefit payable annually for fifteen (15) years commencing upon the first month after such executive attains age 65. The normal retirement benefit under the SERP shall be an amount equal to $750,00 payable to the executive in fifteen (15) annual installments of $50,000. The benefits shall, to the extent in compliance with applicable law, vest ratably from the date of the sixtieth month of participation in the SERP through the executive attaining age 65.

Deferred Compensation Agreement: Shore Bank entered into a deferred compensation agreement with Scott C. Harvard. Under the terms of the agreement, $400,000 of Mr. Harvard’s retention bonus was deferred. Future deferral amounts are to be calculated based upon the performance, as defined in the agreement, of Shore Bank. Payments under the deferred compensation agreement will begin at the earlier of ten years from the date of the agreement or the date on which Mr. Harvard’s employment with Shore Bank and its affiliates ceases.

Donald W. Fulton, Jr. did not entered into any supplemental retirement agreements with the Company nor did he participate in the SERP. Mr. Fulton resigned from the Company on July 31, 2008.

Perquisites and other benefits. In addition to the benefits described above, we provide our executive officers with certain other perquisites that the Compensation Committee considers to be usual and customary within our peer group to remain competitive in the market for experienced management. For instance, named executive officers receive partial reimbursement from the Company of their country club expenses and the use of an automobile. Gateway paid premiums for dependent health insurance coverage for its executive officers and reimburses executive officers for the payment of federal and state income taxes imposed as a result of the grant of restricted stock.

Split Dollar Arrangements. Gateway Bank is a party to Split Dollar Agreements with Mssrs. Berry and Twiddy, which provide for the division of the death proceeds of certain life insurance policies on the lives of the participating officers, which are owned by Gateway Bank, with the designated beneficiary of each insured participating officer. Under the Split Dollar Agreements, if the officer dies, his beneficiary shall be entitled to a fixed cash benefit from Gateway Bank. The amounts are approximately $2,659,300 for Mr. Berry and $2,535,500 for Mr. Twiddy. Gateway Bank is not permitted to sell, surrender, or transfer ownership of any life insurance policy without replacing the policy with a comparable policy to cover the benefit provided by the Split Dollar Agreement. Gateway Bank may not terminate or amend the Split Dollar Agreements without the officer’s consent. All life insurance policies are subject to the claims of creditors.

US Treasury Capital Purchase Program Limitations on Executive Compensation. In 2008, the Company elected to participate in the United States Department of the Treasury’s Capital Purchase Program (“CPP”), which is part of what is commonly known as “TARP,” by selling preferred stock and

11

warrants to the Treasury. As a condition to participating in the CPP, each participating company was required to agree to certain limits on executive compensation. Before electing to participate in the CPP, we carefully considered these limitations and concluded that they are not inconsistent with, and would not unduly interfere with, our compensation philosophy or our compensation plans and programs.

The Company has agreements with Jack W. Gibson, Lorelle L. Fritsch, Scott Harvard, David Twiddy and Ben Berry which: authorize the Company or the applicable subsidiary of the Company to amend his or her compensation, bonus, incentive, and other benefit plans and arrangements and agreements as necessary to comply with the requirements of Section 111(b) of the EESA and the TARP Capital Purchase Program; and waives any and all claims against the U.S. Treasury and against the Company for those changes that the Company shall make to its compensation and benefit programs to allow the Company to comply with Section 111(b) of EESA in conjunction with its participation in the U.S. Treasury’s TARP Capital Purchase Program.

In February 2009, the US Congress enacted the American Recovery and Reinvestment Act of 2009, (“ARRA”) which imposes additional compensation restrictions on institutions that participate in the CPP. This law requires the Secretary of the Treasury to establish compensation standards, some of which appear to require limitations that exceed the limitations agreed to by our five senior executive officers and that appear to be inconsistent with our contractual obligations to these officers and other highly compensated employees. The Secretary of the Treasury has not issued regulations that implement these provisions of the ARRA. Consequently, it is premature for us to predict how these provisions of the ARRA may affect our compensation plans and policies.

2008 Compensation Committee Report

We have reviewed and discussed the Compensation Discussion and Analysis with management and, based upon that discussion, we recommend that the section be included in the Company’s annual report on Form 10-K and proxy statement.

Emil A. Viola, Chairman

Herman A. Hall, III

W. Lewis Witt

Summary Compensation Table

The following table shows the compensation of our principal executive officer and principal financial officers, as well as our three most highly compensated executive officers (other than our principal executive officer and principal financial officers) during the year. References throughout this report to our “named executive officers” or “named executives” refer to each of the individuals named in the table below. In accordance with SEC rules, in determining our three most highly compensated executive officers, other than our principal executive officer and principal financial officer, we used compensation paid to those executive officers who became executive officers via mergers, from June 1, 2008 (the effective date of the Shore merger) through December 31, 2008 (in the case of Scott Harvard) and on December 31, 2008 (in the case of David Twiddy and Ben Berry), the respective date of the Gateway merger. However, we have included compensation information for all of 2008 in the “Summary Compensation Table” and other compensation tables to provide a better understanding of the total compensation that the named officers earned in 2008.

12

13

14

Grants of Plan-Based Awards Table

The following table presents stock options granted to the named executive officers during 2008.

On December 2, 2008, the Compensation Committee granted stock awards to certain executive officers, including Jack W. Gibson and Lorelle L. Fritsch. These stock awards vest over a 12 month period beginning January 1, 2009. They are being expensed by the Company over that same time period with the grant date fair value calculated using the stock price at the time of the grant of $8.50 per share. In conjunction with his employment agreement, dated June 1, 2008, Scott C. Harvard was granted 10,000 nonqualified and 8,000 incentive stock options.

15

Outstanding Equity Awards at Fiscal Year-End Table

The following table presents outstanding stock option and non-vested stock awards as of December 31, 2008.

All of the above stock options were fully vested on the grant date except for the stock options granted on December 31, 2006 and November 1. 2007. Of the stock options granted on December 31, 2006, Mr. Gibson’s options have a four year vesting schedule, and Ms. Fritsch’s options have a five year vesting schedule. All stock options have 10-year terms. Non-vested stock awards for Ms. Fritsch will vest over the 12 month period ending on December 31, 2009. Mr. Gibson’s non-vested stock awards were to vest over the seven year period ending January 1, 2016.

16

Option Exercises and Stock Vested Table

The following table presents the stock options exercised and the stock awards vested for the named executive officers during 2008.

Pension Benefits Table

The following table presents information related to the Supplemental Retirement Agreements for the named executive officers as of the year ended December 31, 2008.

17

The Supplemental Retirement Agreements are discussed in further detail in the Compensation Disclosure and Analysis section of this report. The discount rate used to calculate the Present Value of Accumulated Benefit was 7% in accordance with the plan agreement.

Nonqualified Deferred Compensation Table

The following table presents information related to the Executive Savings Plan for the named executive officers during 2008.

The Executive Savings Plan is discussed in further detail in the Compensation Disclosure and Analysis section of this report. Amounts disclosed above in the “Registrant Contributions in Last Fiscal Year” and “Aggregate Earnings in Last Fiscal Year” columns were also included in the “All Other Compensation” column of the Summary Compensation Table above.

Potential Payments upon Termination or Change in Control

The table below shows the present value of estimated Company payments pursuant to the employment agreements, equity plans and other non-qualified plans described above, upon a termination of employment, including the Company gross-up payments for excise tax on the parachute payments upon a change of control, for each of Mr. Gibson, Mr. Fulton, Ms. Fritsch, Mr. Berry, Mr. Twiddy and Mr. Harvard. The payments represent the maximum possible payments under interpretations and assumptions most favorable to the executive officer. All termination events, except retirement, are assumed to occur on December 31, 2008 and termination upon a change of control is assumed to be involuntary by the Company or its successor. Termination upon retirement is assumed to occur upon the officer’s normal retirement date. Company payments to a terminated executive may be more or less than the amounts contained in the various agreements and plans. In addition, certain amounts currently are vested and, thus, do not represent an increased amount of benefits.

18

19

Director Compensation Table

20

During fiscal year 2008, each director of the Company received a director’s fee of $850 per board meeting attended, $250 per committee meeting attended, and $100 per advisory board meeting attended. The Company has a Directors’ Deferred Compensation Agreement through which directors can elect to defer their directors’ fees by using the fees to purchase shares of our stock held in a Rabbi Trust. The directors can also elect to defer their board fees and we will accrue interest on the deferred fees at an interest rate equal to the highest rate currently being offered on a certificate of deposit at our bank subsidiaries.

Gateway’s Voluntary Deferred Compensation Plan for Directors in 2008 allowed its board members to elect to have their Board fees invested in Gateway common stock. The amounts deferred were payable at the election of the board member following termination of service as a director, a change in control of the bank, death of the director, or hardship (as defined in the plan). The amounts deferred were paid out, at the election of the board member, in lump sum or semi-annual or annual installments.

Compensation Committee Interlocks and Insider Participation

No member of the Company’s Compensation Committee was an officer or employee of the Company during 2008. During 2008, none of our executive officers served as a member of the Compensation Committee of another entity, nor did any of our executive officers serve as a director of another entity, one of whose executive officers served on our Compensation Committee. All three members of our Compensation Committee have outstanding with us. Each of these loans was made in the ordinary course of business on substantially the same terms, including interest rates, collateral and repayment terms, as those prevailing at the time for comparable transactions with unrelated parties and did not involve more than the normal risk of collectability or present other unfavorable features. See “Certain Relationships and Related Transactions.”

21

The following table sets forth for (1) each director and the executive officers named in the Summary Compensation Table, (2) all directors and executive officers as a group, and (3) each beneficial owner of more than 5% of Company common stock: (i) the number of shares of Company common stock beneficially owned on April 10, 2009, and (ii) such person’s or group’s percentage ownership of outstanding shares of Company common stock on such date. The Company is not aware of any shareholder that beneficially owns 5% or more of the outstanding shares of Company common stock. All of the Company’s directors and executive officers receive mail at the Company’s principal executive office at Attn: Tiffany K. Glenn, Executive Vice President, Investor Relations Officer and Corporate Secretary, 999 Waterside Dr., Suite 200, Norfolk, Virginia 23510.

This table is based upon information supplied by officers, directors, and principal shareholders and Schedule 13Ds/Gs filed with the SEC. Unless indicated in the footnotes to this table and subject to community property laws where applicable, the Company believes that each of the shareholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned.

22

23

24

During 2008, some director-nominees, directors and executive officers of the Company, their affiliates and members of their immediate families were customers of and had loan transactions with the Company in the normal course of business and are expected to continue to have customer relationships with the Company in the future. All outstanding loans and commitments included in such transactions were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons, and did not involve more than a normal risk of collectability or present other unfavorable features. At December 31, 2008, loans to executive officers, directors and their associates amounted to $88,345,146. During 2008, additional loans and repayments of loans by executive officers, directors, and their associates were $68,143,003. There were no loans made to directors, or to entities of which directors are material shareholders or equity owners, which were in excess of any subsidiary bank’s legal lending limits.

Douglas J. Glenn, a director and Executive Vice President, Chief Operating Officer and General Counsel of the Company, is the spouse of Tiffany K. Glenn, the Company’s Executive Vice President, Marketing Officer and Secretary. For more information about Mr. and Ms. Glenn, please see “Executive Officers” above. Prior to his employment with the Company in November 2007, Mr. Glenn was an attorney in the law firm Pender & Coward, P.C., which provided legal services for the Company. Pender & Coward, P.C., continues to provide legal services to the Company.

Jordan E. Slone, a director, is the managing member of two limited liability companies that serve as the managers for the legal entities which own and manage the Dominion Tower at 999 Waterside Drive, Norfolk, Virginia 23510. As of December 31, 2008, we had leased the second floor of the Dominion Tower for our executive offices and a first floor branch office since August 2005. Our lease expires in September 2016, and we have one renewal option for a period of seven years. Rent payments made in 2008 totaled $624,951 for the year. It is expected that the rent paid will exceed 5% of the gross revenues of the entities that own Dominion Tower. The terms of this lease are substantially similar to the terms of leases that are the result of “arms length” negotiations between unrelated parties, and the rent is comparable to current market rates. In addition, in March, 2009, we also leased a portion of the nineteenth floor at Dominion Tower and such lease also expires in September 2016.

25

The Bank leases its Nags Head, North Carolina and one of its Kitty Hawk, North Carolina branches from Billy G. Roughton and his wife for monthly payments of $6,000 and $16,679, respectively. The term of the Nags Head lease is for five years, with one five-year renewal. Kitty Hawk is a land lease that commenced in April 2006 for a term of twenty years, with three five-year renewals.

The Company made payments during 2008 to Vico Construction Corporation in the amount of $353,048 and Viola Commercial Group, LLC in the amount of $1,557,250. These entities are affiliated with Emil A. Viola, for construction of the Edinburg branch.

Corporate Governance

The board of directors in its business judgment has determined that the following fourteen of its nineteen members are independent as defined under the Nasdaq Stock Market’s listing standards: William Brumsey, III, Patrick E. Corbin, Henry P. Custis, Robert Y. Green, Jr., Herman A. Hall, III, Richard F. Hall, III, Robert R. Kinser, William A. Paulette, Bobby L. Ralph, Roland Carroll Smith, Sr., Ollin B. Sykes, Frank T. Williams, W. Lewis Witt, and Jerry Womack. In reaching this conclusion, the board of directors considered that the Company and its subsidiaries provide services to, and otherwise conduct business with, certain members of the board of directors or members of their immediate families or companies with which members of the board of directors are affiliated. These transactions are discussed in greater detail in the “Certain Relationships and Related Transactions” section of this report.

In addition, as disclosed in the Company’s Form 8-K, filed May 8, 2009, based on these standards, the Board of Directors recently determined that Emil A. Viola was not independent due his affiliation with Viola Commercial Group, LLC. Except for Jordan E. Slone, Emil A. Viola, and Billy Roughton, none of our non-employee directors, their immediate family members, or employees, are engaged in such relationships with us.

The board of directors considered the following transactions between us and certain of our directors or their affiliates and determined that such transactions did not impair the director’s independence under the above standard:

Information About Shareholders

The board of directors has not established a written policy regarding communications with shareholders. A formal policy has not been adopted because directors have periodic contact with shareholders through business, personal, and community-based activities. Although not prescribed in a policy, shareholders may communicate with the board of directors through written communications addressed to the Company’s executive office at Attn: Tiffany K. Glenn, Executive Vice President, Investor Relations Officer and Corporate Secretary, Hampton Roads Bankshares, Inc., 999 Waterside Dr., Suite 200, Norfolk, Virginia 23510.

Board and Committee Meetings

The business of the Company is managed under the direction of the board of directors. The board of directors generally meets twice a month and held 27 meetings in 2008. During 2008, each director participated in at least 75% of all board of directors meetings and at least 75% of all meetings of

26

committees on which he or she served, except for Jordan Slone who attended 20 boards of directors meetings or 74% of all board of directors meetings. The board of directors does not have a policy regarding attendance at annual shareholders’ meetings. However, directors are encouraged to attend such meetings and at the annual meeting held on May 22, 2008, all directors were in attendance. Set forth below is certain information on the members and duties of the various board committees. All committee meetings are scheduled by the committee chairpersons as deemed necessary.

Audit Committee

Through June, 2008, the Audit Committee consisted of Herman A. Hall, III, Pat M. Windsor, and W. Lewis Witt. Richard F. Hall, III was appointed to the Audit Committee after the merger with Shore. Ms. Windsor retired from the board of directors on December 31, 2008. The board of directors determined that each of these directors was an “independent director” as that term is defined under the Nasdaq Stock Market’s listing standards and the requirements of the Securities and Exchange Commission. The Audit Committee has determined that Herman A. Hall, III meets the qualifications of an “audit committee financial expert” as defined under final rules adopted by the Securities and Exchange Commission.

The Audit Committee’s charter appears on the Company’s website. The Audit Committee is responsible for the appointment, compensation, and oversight of the work of the independent registered public accounting firm of the Company. It also must pre-approve all audit and non-audit services provided by the independent registered public accounting firm. The Audit Committee acts as the intermediary between the Company and the independent registered public accounting firm and reviews the reports of the independent registered public accounting firm. The Audit Committee held four meetings in 2008. See “Audit Committee Report” below.

Compensation Committee

In 2008, the Compensation Committee consisted of Emil A. Viola, Herman A. Hall, III, and W. Lewis Witt, all of whom the board of directors determined were independent in 2008 under standards set by the Nasdaq Stock Market. The Compensation Committee’s charter appears on the Company’s website. The Compensation Committee reviews the compensation of all executive officers, determines the compensation package for the Vice Chairman and Chief Executive Officer and administers the Company’s compensation programs. The Compensation Committee held two meetings in 2008. See “Compensation Discussion and Analysis” and “Compensation Committee Report” below.

Nominating Committee

In 2008, the Nominating Committee consisted of Emil A. Viola, Herman A. Hall, III and W. Lewis Witt. The board of directors determined that the members of the Nominating Committee were independent in 2008 as defined under the Nasdaq Stock Market’s listing standards and the requirements of the Securities and Exchange Commission. The function of the Nominating committee is to identify and present nominees for membership on the board of directors. The Nominating Committee held two meetings in 2008.

The Nominating Committee’s charter appears on the Company’s website. The board of directors relies on the discretion of the Nominating Committee members to identify potential nominees from sources that they deem appropriate. The Nominating Committee has not formulated specific criteria for nominees, but it considers qualifications that include, but are not limited to, ability to serve, conflicts of interest, and other relevant factors. In consideration of the fiduciary requirements of a board member, and the relationship of the Company and its subsidiaries to the communities it serves, the Nominating Committee places emphasis on character, ethics, financial stability, business acumen, and community involvement among other criteria it may consider. In addition, as a financial services holding company,

27

the Company is regulated by the Federal Reserve and the Bureau of Financial Institutions of the State Corporation Commission of the Commonwealth of Virginia. Directors and director-nominees are subject to various laws and regulations pertaining to financial holding companies including a minimum stock ownership requirement.

The Nominating Committee utilizes a variety of resources in identifying nominees including individuals who serve the Company and its subsidiaries on advisory boards, recommendations of management and other Board members, and other business or community leaders who may be qualified to serve. The Nominating Committee may consider recommendations from shareholders, but has not established a formal process for doing so. A formal process has not been adopted because directors have historically had periodic contact with shareholders through business, personal, and community-based activities. Shareholders may contact any director with a recommendation for a nominee.

Under the Company’s bylaws, shareholders may submit nominees for director.

Audit Committee Report

The Audit Committee reviews the Company’s financial reporting process, including internal control over financial reporting, on behalf of the board of directors. As required by the Audit Charter, each Audit Committee member satisfies the independence and financial literacy requirements for serving on the Audit Committee, and at least one member has accounting or related financial management expertise, all as stated in the rules of The Nasdaq Stock Market LLC.

Management has the primary responsibility for the consolidated financial statements and the reporting process, including internal control over financial reporting. In this context, the Audit Committee has met and held discussions with management and the independent registered public accounting firm. Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles and that the Company’s internal control over financial reporting is effective. The Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm.

The Audit Committee discussed with the independent registered public accounting firm matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as amended, including their judgment about the quality, not just the acceptability, of the Company’s accounting principles and underlying estimates in the Company’s consolidated financial statements; all critical accounting policies and practices to be used; all alternative treatments within U.S. generally accepted accounting principles for policies and practices related to material items that have been discussed with management of the Company; and other material written communications between the independent registered public accounting firm and the management of the Company, such as any management letter or schedule of unadjusted differences. In addition, the Audit Committee has discussed with the independent registered public accounting firm its independence from the Company and its management, including the matters in the written disclosures required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the audit committee concerning independence. The Audit Committee discussed with the Company’s internal and independent registered public accounting firm the overall scope and specific plans for their respective audits.

The Audit Committee meets with the internal and independent registered public accounting firm to discuss the results of their audits, the evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting. The meetings also are designed to facilitate any private communications with the Audit Committee desired by the internal auditors or independent registered public accounting firm. In reliance on the reviews and discussions referred to above, the Audit

28

Committee recommended to the board of directors, and the board has approved, that the audited consolidated financial statements of the Company be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008, for filing with the Securities and Exchange Commission. In addition, as of December 31, 2008, the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended. Based upon that evaluation, the Audit Committee, along with the Company’s Chief Executive Officer and Chief Financial Officer, concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company’s Exchange Act filings. The Audit Committee and the board of directors also have recommended, subject to shareholder ratification, the selection of the Company’s independent registered public accounting firm, Yount, Hyde & Barbour, P.C.

Herman A. Hall, III, Chairman

Richard F. Hall, III

W. Lewis Witt

Amounts paid to YHB for work performed in 2008 and 2007 appear below:

As stated in the Audit Committee charter, the Audit Committee must pre-approve all audit and non-audit services provided by the firm of independent auditors. During 2008, the Audit Committee pre-approved 100% of services provided by YHB. The Audit Committee has considered the provisions of these services by YHB and has determined that the services are compatible with maintaining YHB’s independence.

29

PART IV

The following documents are filed as part of this report:

30

31

32

33