SecProbe.io

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      May 19, 2005

Mail Stop 4561

By U.S. Mail and facsimile to (717) 485-5134

David Cathell
Principal Executive Officer
Fulton Bancshares Corporation
100 Lincoln Way, East
McConnellsburg, PA 17233

	Re:	Fulton Bancshares Corporation
		Form 10-K for the year ended December 31, 2004
		Form 10-Q for the period ended March 31, 2005
		Form 8-K filed March 23, 2005
		File No. 33-85626

Dear Mr. Cathell:

      We have reviewed your filing and have the following
comments.
We have limited our review to the matters related to the issues
raised in our comments.  Where indicated, we think you should
amend
your filing, as applicable, in response to these comments.  If you
disagree, we will consider your explanation as to why our comments
are inapplicable or a revision is unnecessary.  Please be as
detailed
as necessary in your explanation.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Form 10-K

Item 15 - Exhibits, Financial Statement Schedules, and Reports of
Form 8-K

Financial Statements

Note 1 - Significant Accounting Policies - page 7

1. Please revise here and in the Business section, as applicable,
to
disclose and discuss the following:

* Management`s policies for and methods used to determine which
loans
will held for sale; and

* How you considered the requirements of paragraphs 4, 6, 9 and 28
of
SFAS 65 in determining the appropriate accounting for and
disclosure
of loans held for sale.

Note 2 - Investments - page 12

2. Please revise here and in your MD&A to disclose how you
concluded
that December 23, 2004 was the appropriate day on which the loss
on
FNMA and FHLMC preferred stock was other than temporary.  Clarify
in
your revisions how you considered the market conditions for these
securities in earlier periods and the significant, related
unrealized
losses that you reported in prior periods.

Note 14 - Dividends/Regulatory Matters/Contingencies - page 21

3. Revise here and in your MD&A to disclose the specific facts and
circumstances resulting in the Federal Reserve Bank`s
classification
of your subsidiary as a "troubled" institution.  Include a
discussion
of all relevant factors, how they arose and the periods over which
they developed.

Note 20 - Prior Period Adjustments - page 26

4. Please move this note to the front of the footnotes in order to
provide the restatement an appropriate level of prominence.

5. Please revise here and in your MD&A to significantly expand
your
disclosures to include a discussion of how and when you determined
that the previous accounting method applied was incorrect.
Identify
the method previously applied, the new accounting method, and why
the
new method is preferable.

6. Please revise all related summaries of financial information,
including quarterly information, to comply with paragraph 39 of
APB
20.

Summary of Quarterly Financial Data - page 28

7. Please revise to describe the effect of unusual or infrequently
occurring items recognized in each full quarter within the two
most
recent fiscal years.  Refer to Item 302(a)(3) of Regulation S-K.

Management`s Discussion and Analysis of Consolidated Financial
Condition and Results of Operation

Allowance for Loan Losses and Related Provision - page 36

8. Please revise to discuss the specific facts and circumstances
resulting in the significant increase in the provision for loan
losses charged to operations and the allowance for loan losses in
2003 and 2004 versus prior periods.  Include in your revisions a
discussion of how non-accrual loans, impaired loans, and charged-
off
loans affected the determination of the provision for loan losses
charged to operations and the allowance for loan losses.

Form 10-Q for the Period Ended March 31, 2005

9. Please revise based on the comments issued above, as
applicable.

Form 8-K Filed March 23, 2005

10. Please supplementally tell us how you accounted for the
$250,000
provision required to be applied retroactively in the Consent
Order
dated March 23, 2005 and how you reported its effect on the
relevant
prior quarters.

*    *    *    *

       Please file an amendment in response to these comments
within
10 business days.  Include a response cover letter with your
amendment.  Detailed cover letters greatly facilitate our review.
Please file your response letter on EDGAR.  Please understand that
we
may have additional comments after reviewing your response to our
comments.  You may wish to provide us drafts of your intended
revisions prior to filing your amendment.

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Isa Farhat at (202) 551-3485 or me at (202)
551-3851 if you have questions regarding comments on the financial
statements and related matters.

      Sincerely,

						Paul Cline
						Senior Accountant

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David Cathell
Fulton Bancshares Corporation
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