SecProbe.io

Division of Corporation Finance United States Securities and Exchange Commission Fauquier Bankshares, Inc. Form 10-K for the Year Ended December 31, 2004 File 000-25805

Re:

Dear Mr. Foti:

The purpose of this letter is to respond to your comment letter dated August 25, 2005, requesting additional information regarding the Principles of Consolidation on page 8 of Item 8 of the Annual Report on Form 10-K for Fauquier Bankshares, Inc. (the “Corporation”) for the year ended December 31, 2004 (the “2004 Form 10-K”). Your letter contained one comment, which was as follows:

“We note your response to our prior comment. However, it remains unclear how you combined the accounts of the Fauquier Statutory Trust (“Trust I”) into your consolidated financial statements. Please provide us with a schedule that details the accounts consolidated and eliminated through your consolidation procedures as well as their respective balances.”

Response: As requested, we have attached for your review a schedule detailing the accounts consolidated and eliminated. Please note that the specific details regarding the Trust I are in the shaded column.

The Corporation appreciates the opportunity to clarify its consolidation policy. We hope the foregoing is responsive to your inquiry. Should you have further questions or comments, please feel free to contact the undersigned at (540) 349-0212.

In providing our response to your letter, the Corporation acknowledges that:

•

The Corporation 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.

•

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

Again, thank you for the opportunity for Fauquier Bankshares, Inc. to clarify its consolidation policy.

Yours truly,

/s/ Eric P. Graap

Eric P. Graap

Senior Vice President and Chief Financial Officer

Cc:

Mr. Juan Migone; US Securities and Exchange Commission

Audit Committee of the Board of Directors; Fauquier Bankshares, Inc.

Ten Courthouse Square 20186 • Post Office Box 561 • Warrenton, Virginia 20188

phone: 540-347-2700 • metro: 703-366-1600 • fauquierbank.com

Fauquier Bankshares, Inc.

Consolidation Worksheet

December 31, 2004

Parent

Eliminating/Consolidating Entries

Consolidated

TFB

without Trust I

Trust I Only

DEBIT

CREDIT

Holding Co.

Balance Sheet

Cash and due from banks

8,956,338

884,396

70,005

—

966,149

8,944,590

Investment in Subsidiary

—

31,035,724

4,000,000

—

35,035,724

-

Dividend Receivable

—

—

—

—

—

-

Interest-bearing deposits in other banks

112,984

—

—

—

—

112,984

Federal Funds sold

109,000

—

—

—

—

109,000

Securities

58,594,905

—

—

—

—

58,594,905

Loans, net

337,791,782

—

—

—

—

337,791,782

Bank premises and equipment, net

8,533,619

—

—

—

—

8,533,619

Intangible Asset — Preferred Trust Cost

—

—

57,411

—

—

57,411

Accrued interest receivable

1,507,391

—

—

—

—

1,507,391

Other real estate

—

—

—

—

—

-

Other assets

13,412,144

520,280

—

124,000

508,887

13,547,537

429,018,163

32,440,400

4,127,416

124,000

36,510,760

429,199,219

Non-interest bearing demand deposits

79,998,853

—

—

776,329

—

79,222,524

Savings and interest-bearing demand deposits

215,197,931

—

—

—

—

215,197,931

Time deposits

80,235,242

—

—

—

—

80,235,242

Other Borrowings

15,000,000

—

—

—

—

15,000,000

Preferred Trust Capital Note

—

—

4,124,000

—

—

4,124,000

Accrued interest payable

471,357

—

3,416

—

—

474,773

Dividends payable

508,887

508,887

—

508,887

—

508,887

Directors Fees Payable

—

—

—

—

—

-

Other Liabilities

2,694,169

40,449

—

189,820

—

2,544,798

Common stock

2,000,000

10,618,775

—

2,000,000

—

10,618,775

Capital surplus

400,000

—

—

400,000

—

-

Retained earnings

32,559,658

21,320,223

—

32,559,658

—

21,320,223

Accumulated other comprehensive income

(47,934 )

(47,934 )

—

(47,934 )

—

(47,934 )

429,018,163

32,440,400

4,127,416

36,386,760

—

429,199,219

Income Statement

Dividend income from subsidiary

—

—

—

—

—

-

Undistributed income of subsidiary

5,346,581

—

5,346,581

—

-

Interest and fees on loans

20,034,615

—

—

—

—

20,034,615

Interest on securities

1,670,043

—

—

—

—

1,670,043

Dividends

181,946

—

—

—

—

181,946

Interest on federal funds sold

71,940

—

—

—

—

71,940

Interest on deposits in other banks

19,708

—

—

—

—

19,708

Total interest income

21,978,252

5,346,581

—

5,346,581

—

21,978,252

Interest on deposits

3,400,473

—

—

—

—

3,400,473

Interest on FHLB advances

770,496

—

—

—

—

770,496

Interest on federal funds purchased/other borrow

34,026

—

206,274

—

—

240,300

Total interest expense

4,204,995

—

206,274

—

—

4,411,269

Provision for loan losses

539,583

—

—

—

—

539,583

Wealth Management Income

1,272,655

—

—

2,250

—

1,270,405

Service charge on deposit accounts

2,603,215

—

—

—

—

2,603,215

Other service charges, commission and fees

1,168,842

—

—

—

—

1,168,842

Other operating income

43,360

—

—

—

—

43,360

Total other income

5,088,072

—

—

2,250

—

5,085,822

Salaries and employee benefits

7,769,172

—

—

—

—

7,769,172

Net occupancy expense on premises

863,600

—

—

—

—

863,600

Furniture and equipment

1,274,349

—

—

—

—

1,274,349

Amortization Expense

—

—

25,516

—

—

25,516

Advertising

334,112

—

—

—

—

334,112

Bank card

262,752

—

—

—

—

262,752

Consulting

675,787

152,421

—

—

—

828,208

Data processing

946,375

1,002

—

—

—

947,377

Postage

168,937

—

—

—

—

168,937

Supplies

195,289

—

—

—

—

195,289

Taxes, other than income

263,223

—

—

—

—

263,223

Telephone

234,550

—

—

—

—

234,550

Other operating expenses

1,556,971

172,964

—

—

2,250

1,727,685

Total other expense

14,545,117

326,387

25,516

—

2,250

14,894,770

Income tax expense (benefit)

2,430,048

(110,971 )

(78,809 )

—

—

2,240,268

Net income (loss)

5,346,581

5,131,165

(152,981 )

5,348,831

(2,250 )

4,978,184