SecProbe.io

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Mail Stop 3561

      							June 28, 2005

Via U.S. Mail and Fax
Mr. Blake M. Edwards, Jr
Chief Financial Officer
113 West Main Street
Independence, VA 24348

	Re:	Grayson Bankshares, Inc
      Form 10-K for Fiscal Year Ended December 31, 2004
		Filed March 31, 2005

		Forms 10-Q for Fiscal Quarter Ended March 31, 2004
		File No. 1-4996

Dear Mr. Ford:

      We have reviewed your filing and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and do not intend to expand our review to
other
portions of your documents.  Please address the following comments
in
future filings.  If you disagree, we will consider your
explanation
as to why our comment is inapplicable or a future 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 on 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 for Fiscal Year Ended December 31, 2004

Item 7. Management`s Discussion and Analysis of Financial
Condition
and Results of Operations
Critical Accounting Policies, page 12

1. We note that you perform impairment testing in accordance with
SFAS 121.  We note that SFAS 121 was superseded by SFAS 144
effective
for financial statements issued for fiscal years beginning after
December 15, 2001.  Please revise future filings to apply SFAS 144
as
appropriate and revise disclosures.

*    *    *    *

      Please respond to these comments within 10 business days or
tell us when you will provide us with a response.  Please furnish
a
letter that keys your responses to our comments.

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment 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 filings;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; 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 filings or
in
response to our comments on your filings.

      You may contact Nicole Holden, Staff Accountant, at (202)
551-
3374 or Kyle Moffatt, Accountant Branch Chief, at (202) 551-3836
if
you have questions regarding comments on the financial statements
and
related matters.  Please contact me at (202) 551-3810 with any
other
questions.

								Sincerely,

								Larry Spirgel
								Assistant Director

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Mr. Blake M. Edwards, Jr
Grayson Bankshares, Inc
June 28, 2005
Page 3

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

         DIVISION OF
CORPORATION FINANCE

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