UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-Q

(Mark One)

[ X ]  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
       EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2000

                                       or

[   ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d) OF THE  SECURITIES
       EXCHANGE ACT OF 1934

             For the transition period from __________ to __________

                           Commission File No. 2-25805

                            Fauquier Bankshares, Inc.
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


            Virginia                                 54-1288193
-------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


10 Courthouse Square  Warrenton, Virginia                20186
-------------------------------------------------------------------------------
(Address of principal executive offices)               (Zip Code)

                                 (540) 347-2700
-------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

                                 Not Applicable
--------------------------------------------------------------------------------
                  (Former name, former address and former
                  fiscal year, if changed since last report)


         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
                                               ---       ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date:  1,774,811 shares of
common stock, par value $3.13 per share, were outstanding as of April 30, 2000.


<PAGE>


                            Fauquier Bankshares, Inc.

                                      INDEX
<TABLE>
<CAPTION>

Part I.  FINANCIAL INFORMATION
                                                                                                                   Page
                                                                                                                   ----
<S>                                                                                                               <C>
   Item 1.     Financial Statements                                                                                  1

               Consolidated Balance Sheets as of March 31, 2000 (unaudited) and December 31, 1999                    1

               Consolidated Statements of Income (unaudited) for the Three Months Ended March 31, 2000 and 1999      2

               Consolidated   Statements  of  Changes  in  Stockholders'  Equity
               (unaudited) for the Three Months Ended March 31, 2000 and 1999                                        3

               Consolidated  Statements of Cash Flows  (unaudited) for the Three
               Months Ended March 31, 2000 and 1999                                                                  4

               Notes to Condensed Consolidated Financial Statements                                                  5

   Item 2.     Management's Discussion and Analysis of Financial Condition and Results of Operations                 8

   Item 3.     Quantitative and Qualitative Disclosure of Market Risk                                               11

Part II. OTHER INFORMATION

   Item 1.     Legal Proceedings                                                                                    12

   Item 2.     Changes in Securities and Use of Proceeds                                                            12

   Item 3.     Defaults Upon Senior Securities                                                                      12

   Item 4.     Submission of Matters to a Vote of Security Holders                                                  12

   Item 5.     Other Information                                                                                    12

   Item 6.     Exhibits and Reports on Form 8-K                                                                     12

</TABLE>


SIGNATURES


<PAGE>



ITEM 1.           FINANCIAL STATEMENTS

                     FAUQUIER BANKSHARES, INC. AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS
                                    (UNAUDITED)
<TABLE>
<CAPTION>


                                                                               MARCH 31, 2000                     DECEMBER 31, 1999
                                                                               --------------                     -----------------
<S>                                                                       <C>                                        <C>
ASSETS
Cash and due from banks                                                         $   7,431,743                       $  10,697,343
Interest-bearing deposits in other banks                                               60,088                             278,123
Federal funds sold                                                                  6,630,000                          14,010,000
Securities (fair value: 2000, $17,519,694; 1999, $18,752,504)                      17,547,088                          18,779,388
Loans, net of allowance for loan losses of $2,538,827
  in 2000 and $2,284,348 in 1999                                                  189,081,537                         181,503,312
Bank premises and equipment, net                                                    5,438,819                           5,594,248
Accrued interest receivable                                                         1,052,326                           1,097,562
Other real estate                                                                     158,081                                  --
Other assets                                                                        2,050,418                           1,247,649
                                                                                -------------                       -------------
              Total assets                                                      $ 229,450,100                       $ 233,207,625
                                                                                =============                       =============

LIABILITIES
Deposits:
  Noninterest-bearing                                                           $  36,361,882                       $  33,045,513
  Interest-bearing                                                                156,404,987                         154,227,161
                                                                                -------------                       -------------
     Total deposits                                                             $ 192,766,869                       $ 187,272,674
Federal Home Loan Bank advances                                                    13,000,000                          23,000,000
Dividends payable                                                                     266,297                             265,770
Other liabilities                                                                   1,710,369                           1,464,826
Commitments and contingent liabilities                                                     --                                  --
                                                                                -------------                       -------------
              Total liabilities                                                 $ 207,743,535                       $ 212,003,270
                                                                                =============                       =============

SHAREHOLDERS' EQUITY
Common stock, par value, $3.13; authorized 8,000,000 shares;
  issued and outstanding, 2000, 1,774,811 shares; 1999, 1,774,037 shares            5,555,158                           5,552,736
Retained earnings                                                                  16,498,725                          16,019,525
Accumulated other comprehensive (loss)                                               (347,318)                           (367,906)
                                                                                -------------                       -------------
              Total shareholders' equity                                        $  21,706,565                       $ 21,204,355
                                                                                =============                       ============

              Total liabilities and shareholders' equity                        $ 229,450,100                       $ 233,207,625
                                                                                =============                       =============
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.

                                       1

<PAGE>

                   FAUQUIER BANKSHARES, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
               FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999

<TABLE>
<CAPTION>

                                                                       2000         1999
                                                                   -----------  -----------
<S>                                                                    <C>          <C>
INTEREST INCOME

        Interest and fees on loans                                 $3,922,066   $3,490,600
        Interest on investment securities:
            Taxable interest income                                    43,660       60,786
            Interest income exempt from federal income taxes           26,339       29,173
        Interest and dividends on securities available for sale:
            Taxable interest income                                   115,163      207,797
            Interest income exempt from federal income taxes           13,264       11,747
            Dividends                                                   3,541       23,409
        Interest on federal funds sold                                152,950      169,451
        Interest on deposits in other banks                             2,455       23,822
                                                                   ----------   ----------
            Total interest income                                   4,279,438    4,016,785
                                                                   ----------   ----------

INTEREST EXPENSE

        Interest on deposits                                        1,149,515    1,330,542
        Interest on Federal Home Loan Bank advances                   297,572      237,127
                                                                   ----------   ----------
            Total interest expense                                  1,447,087    1,567,669
                                                                   ----------   ----------
            Net interest income                                     2,832,351    2,449,116

PROVISION FOR LOAN LOSSES                                             167,499      235,000
                                                                   ----------   ----------

        Net interest income after
          provision for loan losses                                 2,664,852    2,214,116
                                                                   ----------   ----------

OTHER INCOME

        Trust Department income                                       128,873      180,186
        Service charges on deposit accounts                           358,790      253,573
        Other service charges, commissions and fees                   170,791       82,582
                                                                   ----------   ----------
            Total other income                                        658,454      516,341
                                                                   ----------   ----------

OTHER EXPENSES

        Salaries and employees' benefits                            1,014,108      955,370
        Net occupancy expense of premises                             106,519      106,956
        Furniture and equipment                                       198,800      211,075
        Advertising                                                    26,721       22,147
        Bank card                                                      90,957       63,557
        Consulting                                                     26,325       64,655
        Data processing                                               152,180      150,748
        Non-loan charge-offs                                          149,897       76,848
        Postage                                                        22,046       42,374
        Professional fees                                             112,489       43,765
        Supplies                                                       21,265       27,833
        Taxes, other than income                                       59,001       52,104
        Telephone                                                      41,117       41,690
        Other operating expenses                                      227,894      230,689
                                                                   ----------   ----------
            Total other expenses                                    2,249,319    2,089,811
                                                                   ----------   ----------

            Income before income taxes                              1,073,987      640,646

INCOME TAX EXPENSE                                                    341,000      210,000
                                                                   ==========   ==========

            Net income                                             $  732,987   $  430,646
                                                                   ==========   ==========

EARNINGS PER SHARE, BASIC                                          $     0.41   $     0.24
                                                                   ==========   ==========

EARNINGS PER SHARE, ASSUMING DILUTION                              $     0.41   $     0.23
                                                                   ==========   ==========

</TABLE>


See Accompanying Notes to Consolidated Fianancial Statements.

                                       2

<PAGE>

                   FAUQUIER BANKSHARES, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                   (UNAUDITED)
               FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999


<TABLE>
<CAPTION>

                                                                                          ACCUULATED
                                                                                            OTHER
                                                     COMMON    CAPITAL     RETAINED      COMPREHENSIVE COMPREHENSIVE
                                                     STOCK     SURPLUS     EARNINGS         INCOME        INCOME        TOTAL
                                                  -----------------------------------------------------------------------------
<S>                                               <C>            <C>     <C>              <C>            <C>        <C>
BALANCE, DECEMBER 31, 1998                        $5,752,220     $--     $15,432,062      $  (7,446)                $21,176,836
Comprehensive income:
  Net income                                              --      --         430,646             --      $430,646       430,646
  Other comprehensive income (loss) net of tax:
    Unrealized holding losses on securities
      available for sale, net of deferred
      income taxes of ($30,761)                           --      --              --        (59,713)      (59,713)      (59,713)
                                                                                                         --------
  Total comprehensive income                              --      --              --             --      $370,933            --
                                                                                                         ========
Cash dividends                                            --      --        (237,007)            --                    (237,007)
Acquisition of 14,641 shares of common stock         (45,826)     --        (239,673)            --                    (285,499)
                                                  -------------------------------------------------                 -----------
BALANCE, MARCH 31, 1999                           $5,706,394     $--     $15,386,028      $ (67,159)                $21,025,263
                                                  =================================================                 ===========

BALANCE, DECEMBER 31, 1999                        $5,552,736     $--     $16,019,525      $(367,906)                $21,204,355
Comprehensive income:
  Net income                                              --      --         732,987             --      $732,987       732,987
  Other comprehensive income (loss) net
   of tax:
    Unrealized holding gains on securities
      available for sale, net of deferred
      income taxes of $10,606                             --      --              --         20,588        20,588        20,588
                                                                                                         --------
  Total comprehensive income                              --      --              --             --      $753,575            --
                                                                                                         ========
Cash dividends                                            --      --        (266,297)            --                    (266,297)
Acquisition of 500 shares of common stock             (1,565)     --          (6,435)            --                      (8,000)
Exercise of stock options                              3,987      --          18,945             --                      22,932
                                                  -------------------------------------------------                 -----------
BALANCE, MARCH 31, 2000                           $5,555,158     $--     $16,498,725      $(347,318)                $21,706,565
                                                  =================================================                 ===========

</TABLE>


See Accompanying Notes to Consolidated Financial Statements.

                                       3

<PAGE>

                   FAUQUIER BANKSHARES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
               FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999

<TABLE>
<CAPTION>


                                                                  ------------    ------------
                                                                      2000            1999
                                                                  ------------    ------------
<S>                                                                    <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
        Net income                                              $    732,987    $    430,646
        Adjustments to reconcile net income to net
          cash provided by operating activities:
             Depreciation                                            188,281         187,535
             Provision for loan losses                               167,499         235,000
             Provision for other real estate                              --           6,000
             Net premium amortization on investment
              securities                                               2,716           6,947
             Changes in assets and liabilities:
                 (Increase) in other assets                         (768,139)         (6,781)
                 Increase (decrease) in other
                  liabilities                                        245,543          (8,769)
                                                                ------------    ------------
                    Net cash provided by operating
                     activities                                      568,887         850,578
                                                                ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES

        Proceeds from maturities, calls and principal
             payments of investment securities                       312,318         389,124
        Proceeds from maturities, calls and principal
             payments of securities available for sale               948,460       1,026,280
        Purchase of investment securities
        Purchase of securities available for sale                         --        (755,528)
        Purchase of premises and equipment                           (32,852)        (74,895)
        Net (increase) in loans                                   (7,903,805)     (5,559,958)
                                                                ------------    ------------
                    Net cash (used in) investing activities       (6,675,879)     (4,974,977)
                                                                ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES

        Net increase in demand deposits, NOW accounts
             and savings accounts                                  6,612,639       2,848,308
        Net increase (decrease) in certificates of deposit        (1,118,444)      5,257,513
        Net (decrease) in Federal Home Loan Bank advances        (10,000,000)             --
        Cash dividends paid                                         (265,770)       (238,910)
        Issuance of common stock                                      22,932              --
        Acquisition of common stock                                   (8,000)       (285,499)
                                                                ------------    ------------
                    Net cash provided by financing activities     (4,756,643)      7,581,412
                                                                ------------    ------------

                    Increase in cash and cash equivalents        (12,127,129)      3,457,013

CASH AND CASH EQUIVALENTS

        Beginning                                                 24,985,466      26,730,670
                                                                ------------    ------------

        Ending                                                  $ 12,858,337    $ 30,187,683
                                                                ============    ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
 INFORMATION

        Cash payments for:
             Interest                                           $  1,453,598    $  1,548,066
                                                                ============    ============
             Income taxes                                       $     54,120    $     90,000
                                                                ============    ============

SUPPLEMENTAL DISCLOSURES OF NONCASH
 INVESTING ACTIVITIES

        Other real estate acquired in settlement of loans       $    158,081    $         --
                                                                ============    ============

        Unrealized gain (loss) on securities available for
         sale, net                                              $     20,588    $    (59,713)
                                                                ============    ============

</TABLE>


See Accompanying Notes to Consolidated Financial Statements.

                                       4

<PAGE>


FAUQUIER BANKSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     GENERAL

       The consolidated  statements include the accounts of Fauquier Bankshares,
       Inc. and subsidiaries, The Fauquier Bank and Fauquier Bank Services, Inc.
       All  significant   intercompany   balances  and  transactions  have  been
       eliminated.  In the opinion of  management,  the  accompanying  unaudited
       consolidated financial statements contain all adjustments  (consisting of
       only normal recurring accruals) necessary to present fairly the financial
       positions as of March 31, 2000 and December 31, 1999,  and the results of
       operations  and cash flows for the three  months ended March 31, 2000 and
       1999.

       The results of  operations  for the three months ended March 31, 2000 and
       1999 are not necessarily  indicative of the results expected for the full
       year.

2.     SECURITIES

       The amortized cost of securities held to maturity,  with unrealized gains
       and losses follows:

<TABLE>
<CAPTION>

                                                                                     GROSS              GROSS
                                                               AMORTIZED           UNREALIZED         UNREALIZED            FAIR
                                                                  COST               GAINS             (LOSSES)             VALUE
                                                              ------------       -------------      --------------        ----------
                                                                                          March 31, 2000
                                                              ----------------------------------------------------------------------
<S>                                                           <C>               <C>                  <C>                 <C>
Obligations of U.S.
  Government corporations
  and agencies                                                $ 2,673,706        $        --         $   (17,534)        $ 2,656,172
Obligations of states and political
  subdivisions                                                  2,390,765                860             (10,720)          2,380,905
                                                              -----------        -----------         -----------         -----------

                                                              $ 5,064,471        $       860         $   (28,254)        $ 5,037,077
                                                              ===========        ===========         ===========         ===========

<CAPTION>

                                                                                     GROSS              GROSS
                                                               AMORTIZED           UNREALIZED         UNREALIZED            FAIR
                                                                  COST               GAINS             (LOSSES)             VALUE
                                                              ------------       -------------      --------------        ----------
                                                                                        December 31, 2000
                                                              ----------------------------------------------------------------------
<S>                                                           <C>               <C>                  <C>                 <C>
Obligations of U.S.
  Government corporations
  and agencies                                                $ 2,885,488        $        --         $   (22,826)        $ 2,862,662
Obligations of states and political
  subdivisions                                                  2,490,790              1,693              (5,751)          2,486,732
                                                              -----------        -----------         -----------         -----------

                                                              $ 5,376,278        $     1,693         $   (28,577)        $ 5,349,394
                                                              ===========        ===========         ===========         ===========

</TABLE>

                                       5

<PAGE>


       The amortized  cost of securities  available  for sale,  with  unrealized
gains and losses follows:

<TABLE>
<CAPTION>

                                                                                     GROSS              GROSS
                                                               AMORTIZED           UNREALIZED         UNREALIZED            FAIR
                                                                  COST               GAINS             (LOSSES)             VALUE
                                                              ------------       -------------      --------------        ----------
                                                                                          March 31, 2000
                                                              ----------------------------------------------------------------------
<S>                                                           <C>               <C>                  <C>                 <C>
Obligations of U.S.
  Government corporations
  and agencies                                                $  9,629,303        $  3,549         $   (395,486)        $  9,237,366
Obligations of states and political
  subdivisions                                                     682,244             567               (1,780)             681,031
Equity securities                                                  487,500              --                   --              487,500
Mutual funds                                                       937,809              --             (133,089)             804,720
Restricted investments:
  Federal Home Loan
    Bank stock                                                   1,150,000              --                   --            1,150,000
Federal Reserve Bank
  stock                                                             72,000              --                   --               72,000
Community Bankers'
  Bank stock                                                        50,000              --                   --               50,000
                                                              ----------------------------------------------------------------------
                                                              $ 13,008,856        $  4,116         $   (530,355)        $ 12,482,617
                                                              ======================================================================

<CAPTION>

                                                                                     GROSS              GROSS
                                                               AMORTIZED           UNREALIZED         UNREALIZED            FAIR
                                                                  COST               GAINS             (LOSSES)             VALUE
                                                              ------------       -------------      --------------        ----------
                                                                                         December 31, 2000
                                                              ----------------------------------------------------------------------
<S>                                                           <C>               <C>                  <C>                 <C>
Obligations of U.S.
  Government corporations
  and agencies                                                $ 11,068,015        $  5,376         $   (434,339)        $ 10,639,052
Obligations of states and political
  subdivisions                                                     682,719             327                 (894)             682,152
Mutual funds                                                       937,809              --             (127,903)             809,906
Restricted investments:
  Federal Home Loan
    Bank stock                                                   1,150,000              --                   --            1,150,000
Federal Reserve Bank
  stock                                                             72,000              --                   --               72,000
Community Bankers'
  Bank stock                                                        50,000              --                   --               50,000
                                                              ----------------------------------------------------------------------
                                                              $ 13,960,543        $  5,703         $   (563,136)        $ 13,403,110
                                                              ======================================================================

</TABLE>

3.     LOANS

       A summary of the balances of loans follows:

<TABLE>
<CAPTION>
                                                                                              MARCH 31,       DECEMBER 31,
                                                                                                2000              1999
                                                                                              ---------       ------------
<S>                                                                                           <C>                <C>
                                                                                                     (Thousands)
       Real estate loans:
        Construction and land development                                                     $ 11,446           $ 11,746
        Secured by farmland                                                                        967                903
        Secured by 1-4 family residential                                                       68,180             64,921
        Other real estate loans                                                                 52,653             50,988
       Commercial and industrial loans (except those secured by real estate)                    18,095             16,689
       Loans to individuals for personal expenditures                                           35,552             33,787
       All other loans                                                                           4,826              4,868
                                                                                              --------           --------
            Total loans                                                                       $191,719           $183,902
       Less:  Unearned income                                                                       98                115
              Allowance for loan losses                                                          2,539              2,284
                                                                                              --------           --------
                Net loans                                                                     $189,082           $181,503
                                                                                              ========           ========

</TABLE>

                                       6

<PAGE>

       Analysis of the allowance for loan losses follows:

<TABLE>
<CAPTION>

                                                                        THREE MONTHS          THREE MONTHS
                                                                           ENDING                ENDING
                                                                          MARCH 31,             MARCH 31,               DECEMBER 31,
                                                                            2000                  1999                      1999
                                                                       ------------           --------------          --------------
<S>                                                                    <C>                     <C>                     <C>
                                                                                     (Thousands)

       Balance at beginning of period                                  $ 2,284,348             $ 1,853,150             $ 1,853,150
       Provision charged to operating expense                              167,499                 235,000                 695,000
       Recoveries added to the allowance                                   167,167                  13,566                  63,368
       Loan losses charged to the allowance                                (80,187)                (17,882)               (327,170)
                                                                       -----------             -----------             -----------
       Balance at end of period                                        $ 2,538,827             $ 2,083,834             $ 2,284,348
                                                                       ===========             ===========             ===========

</TABLE>


       Nonperforming assets consist of the following:

<TABLE>
<CAPTION>


                                                                                              MARCH 31,       DECEMBER 31,
                                                                                                2000             1999
                                                                                              ---------       ------------
<S>                                                                                           <C>             <C>
                                                                                                     (Thousands)
       Nonaccrual loans                                                                       $    454         $    125
       Restructured loans                                                                           --               --
                                                                                              --------         --------
            Total non-performing loans                                                        $    454         $    125
       Foreclosed real estate                                                                      158               --
                                                                                              --------         --------
            Total non-performing assets                                                       $    612         $    125
                                                                                              ========         ========

</TABLE>

       Total  loans past due 90 days or more and still  accruing  were  $368,000
       thousand on March 31, 2000 and $170 thousand on December 31, 1999.

4.     EARNINGS PER SHARE

       The following  table shows the weighted  average number of shares used in
       computing earnings per share and the effect on weighted average number of
       shares of diluted  potential  common stock.  Weighted  average  number of
       shares for all periods reported have been restated giving effect to stock
       splits.

<TABLE>
<CAPTION>


                                                                     MARCH 31, 2000                    DECEMBER 31, 1999
                                                                                PER SHARE                           PER SHARE
                                                               SHARES             AMOUNT           SHARES             AMOUNT
                                                              ---------         ---------        ---------          ---------
<S>                                                           <C>                  <C>           <C>                  <C>

       Basic earnings per share                               1,774,766            $ 0.41        1,802,165            $ 1.46
                                                                                   ======                             ======

       Effect of dilutive securities, stock options              12,067                             15,967
                                                              ---------                          ---------

       Diluted earnings per share                             1,786,833            $ 0.41        1,818,132            $ 1.45
                                                              =========            ======        =========            ======

</TABLE>

                                       7

<PAGE>

ITEM 2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF RESULTS OF  OPERATIONS  AND
         FINANCIAL CONDITION

GENERAL

Fauquier Bankshares,  Inc. ("Bankshares") was incorporated under the laws of the
Commonwealth  of Virginia on January 13, 1984.  Bankshares is a registered  bank
holding  company and owns all of the voting shares of The Fauquier Bank ("TFB").
Bankshares engages in its business through TFB, a Virginia  state-chartered bank
that commenced  operations in 1902.  Bankshares  has no  significant  operations
other than  owning  the stock of TFB.  Bankshares  has  issued  and  outstanding
1,774,811  shares  of  commons  stock,  par  value  $3.13  per  share,  held  by
approximately 430 shareholders of record on March 31, 2000.

TFB has six full service branch offices  located in the Virginia  communities of
Warrenton,  Catlett, The Plains,  Manassas and New Baltimore, in addition to the
main office branch  located in  Warrenton,  Virginia.  The executive  offices of
Bankshares  and the main  office of TFB are  located  at 10  Courthouse  Square,
Warrenton, Virginia 20186

TFB provides a range of consumer and commercial banking services to individuals,
businesses,  and  industries.  The deposits of TFB are insured up to  applicable
limits by the Bank Insurance  Fund of the Federal  Deposit  Insurance  Fund. The
basic services offered by TFB include:  demand interest bearing and non-interest
bearing accounts,  money market deposit accounts,  NOW accounts,  time deposits,
safe deposit services,  credit cards, cash management,  direct deposits,  notary
services,  money orders, night depository,  traveler's checks, cashier's checks,
domestic  collections,  savings bonds,  bank drafts,  automated teller services,
drive-in tellers,  internet banking, and banking by mail. In addition, TFB makes
secured and unsecured  commercial and real estate loans, issues stand-by letters
of credit and grants  available  credit for  installment,  unsecured and secured
personal  loans,  residential  mortgages  and  home  equity  loans,  as  well as
automobile and other consumer  financing.  TFB provides automated teller machine
(ATM) cards,  as a part of the Honor and Plus ATM networks,  thereby  permitting
customers to utilize the  convenience  of larger ATM  networks.  TFB operates an
Investments  and Trust  Services  Division that was  established  in 1919. It is
staffed with nine professionals that provide personalized  services that include
investment  management,  trust,  estate  settlement,  retirement,  and brokerage
services.

The revenues of TFB are primarily derived from interest on, and fees received in
connection  with,  real estate and other loans,  and from interest and dividends
from investment and mortgage-backed securities, and short-term investments.  The
principal  sources  of funds  for TFB's  lending  activities  are its  deposits,
repayment of loans,  and the sale and  maturity of  investment  securities,  and
borrowings from the Federal Home Loan Bank of Atlanta. The principal expenses of
TFB are the interest paid on deposits,  and operating and general administrative
expenses.

TFB's general market area principally  includes  Fauquier County and neighboring
communities  and  is  located   approximately  sixty  (60)  miles  southwest  of
Washington, D.C.

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

This report contains  forward-looking  statements  within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Forward-looking statements, which are based on
certain assumptions and describe future plans,  strategies,  and expectations of
Bankshares,  are generally identifiable by use of the words "believe," "expect,"
"intend,"   "anticipate,"   "estimate,"   "project"   or  similar   expressions.
Bankshares'  ability to predict  results or the actual effect of future plans or
strategies is inherently uncertain.  Factors which could have a material adverse
affect on the operations and future prospects of Bankshares include, but are not
limited  to,  changes  in:  interest   rates,   general   economic   conditions,
legislative/regulatory  changes,  monetary  and  fiscal  policies  of  the  U.S.
Government,  including  policies of the U.S. Treasury and the Board of Governors
of the  Federal  Reserve  System,  the  quality  or  composition  of the loan or
investment  portfolios,  demand for loan products,  deposit flows,  competition,
demand  for  financial  services  in  Bankshares'  market  area  and  accounting
principles,

                                       8

<PAGE>

policies and guidelines.  These risks and uncertainties  should be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements.

COMPARISION  OF OPERATING  RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND
MARCH 31, 1999

NET INCOME. Net income for the three months ended March 31, 2000 increased 70.2%
to  $733,000  from  $431,000  for the three  months  ended March 31,  1999.  The
increase  in net income was due to  increases  in both net  interest  income and
total other income that  combined  with a decrease in provision  for loan losses
more than offset an increase in total other expenses.

NET INTEREST INCOME. Growth in interest income and a decline in interest expense
resulted  in an increase  in net  interest  income of $383,000 or 15.6% to $2.83
million for the three months ended March 31, 2000  compared to $2.45 million for
the three months ended March 31, 1999.  Total  interest  income grew $263,000 or
6.5% to $4.28  million for the three  months  ended  March 31, 2000  compared to
$4.02  million for the three  months  ended March 31,  1999.  The increase was a
result of increases in loan  originations,  with increased  interest and fees on
loans of $431,000 or 12.4%,  which was partially offset by a $131,000  reduction
in interest  income from the securities  portfolio.  Securities  were reduced in
part to fund loan growth.  Total interest expense decreased  $121,000 or 7.7% to
$1.45  million for the three months ended March 31, 2000 from $1.57  million for
the three months ended March 31,  1999.  This was due to a $181,000  decrease in
interest  expense on  deposits  which was  partially  offset by an  increase  in
interest expenses on Federal Home Loan Bank advances.

PROVISION  FOR LOAN LOSSES.  The  provision for loan losses was $167,000 for the
three  months  ended March 31, 2000  compared to $235,000  for the three  months
ended March 31, 1999.  The amount of the  provision  for loan loss for the first
quarter  of 2000 and 1999  was  determined  based  upon  management's  continual
evaluation of the adequacy of the allowance for loan losses,  which  encompasses
the  overall  risk  characteristics  of the  loan  portfolio,  trends  in  TFB's
delinquent and  non-performing  loans, and the impact of economic  conditions on
borrowers.  There can be no  assurance,  however,  that  future  losses will not
exceed estimated amounts or that additional  provisions for loan losses will not
be required in future periods.

TOTAL OTHER  INCOME.  Total  other  income  increased  by $142,000 or 27.5% from
$516,000  for the three  months  ended March 31, 1999 to $658,000  for the three
months ended March 31, 2000. Other income is primarily derived from non-interest
fee income,  which is typically divided into three major categories:  fiduciary,
service  charges,  and other  fee  income.  The  increase  in the first  quarter
resulted from increases in loan fees, net service  charges on deposit  accounts,
and other service charges of $193,000 that were partially  offset by a reduction
in trust department income of $51,000.

TOTAL OTHER  EXPENSES.  Total other expenses  increased 7.6% or $160,000 for the
three months  ended March 31, 2000  compared to the three months ended March 31,
1999.  The  increase was  primarily  because  salaries  and  benefits  increased
$59,000,  professional  fees rose  $69,000,  and  nonloan  chargeoffs  increased
$73,000.

COMPARISON OF MARCH 31, 2000 AND DECEMBER 31, 1999 FINANCIAL CONDITION

Assets  totaled  $229  million at March 31,  2000,  a  decrease  of 1.6% or $3.8
million  from $233  million at  December  31,  1999.  Balance  sheet  categories
reflecting  significant changes include loans, federal funds sold, deposits, and
Federal Home Loan advances. Each of these categories is discussed below.

LOANS.  Net loans were $189.1 million at March 31, 2000, which is an increase of
$7.6 million or 4.2% from $181.5 million at December 31, 1999.

FEDERAL  FUNDS SOLD.  Federal  funds sold were $6.6  million at March 31,  2000,
compared to $14.0 million at December 31, 1999,  representing a decrease of $7.4
million.  The  reduction  was  primarily  used  to fund  new  loans  and  reduce
borrowings.

                                       9

<PAGE>

DEPOSITS.  On March 31,  2000,  total  deposits  reflected  an  increase of $5.5
million or 2.9% to $192.8  million from $187.3 million at December 31, 1999. The
growth was in both  non-interest  bearing demand deposits,  which increased $3.3
million, and time deposits, which rose $2.1 million.

FEDERAL  HOME LOAN BANK  ADVANCES.  Federal  Home  Loan Bank  advances  were $13
million at March 31, 2000,  which  represents a decrease of $10 million or 43.5%
from $23 million at December 31, 1999.  Advances  were repaid  primarily  from a
reduction in cash and due from banks,  being held for potential  Y2K needs,  and
reduced federal funds sold.

SHAREHOLDERS EQUITY

Total shareholders  equity was $21.7 million at March 31, 2000 compared to $21.2
million at December  31,  1999,  an  increase of $502,000 or 2.4%.  This was due
primarily  to an increase in retained  earnings of $479,000 to $16.5  million at
March 31,  2000 from $16.0  million at  December  31,  1999.  The  increase  was
primarily  the  result of  income  for the  quarter,  net of  dividends  paid to
shareholders.

CAPITAL RESOURCES AND LIQUIDITY

The primary  sources of funds are  deposits,  repayment of loans,  maturities of
investments,  funds provided from  operations and advances from the Federal Home
Loan Bank of Atlanta.

While scheduled repayments of loans and maturities of investment  securities are
predictable  sources of funds,  deposit  flows and loan  repayments  are greatly
influenced  by the general  level of interest  rates,  economic  conditions  and
competition.  TFB uses its funds  for  existing  and  future  loan  commitments,
maturing  certificates of deposit and demand deposit  withdrawals,  to invest in
other  interest-earning  assets,  to maintain  liquidity,  and to meet operating
expenses.  Management  monitors  projected  liquidity  needs and  determines the
desirable  level  based  in  part  on  TFB's   commitments  to  make  loans  and
management's assessment of TFB's ability to generate funds. Cash and amounts due
from  depository  institutions,  interest-bearing  deposits  in other  banks and
federal funds sold totaled $14.1 million at March 31, 2000. These assets provide
the primary source of liquidity for TFB. In addition,  management has designated
a substantial portion of the investment portfolio, as available for sale and has
an  available  line of credit with the Federal  Home Loan Bank of Atlanta with a
borrowing  limit of  approximately  $37  million  at March 31,  2000 to  provide
additional sources of liquidity.

As of March 31, 2000 the appropriate  regulatory  authorities  have  categorized
Bankshares and TFB as well capitalized under the regulatory framework for prompt
corrective action.

CAPITAL REQUIREMENTS

The  federal  bank  regulatory   authorities  have  adopted  risk-based  capital
guidelines  for banks  and bank  holding  companies  that are  designed  to make
regulatory  capital  requirements  more sensitive to differences in risk profile
among banks and bank holding  companies.  The resulting capital ratios represent
qualifying capital as a percentage of total risk-weighted assets and off-balance
sheet items. The guidelines are minimums,  and the federal regulators have noted
that  banks  and bank  holding  companies  contemplating  significant  expansion
programs  should not allow expansion to diminish their capital ratios and should
maintain  all ratios  well in excess of the  minimums.  The  current  guidelines
require all bank holding  companies and federally  regulated banks to maintain a
minimum risk-based total capital ratio equal to 8%, of which at least 4% must be
Tier 1 capital. Tier 1 capital includes common stockholder's equity,  qualifying
perpetual  preferred  stock,  and  minority  interests  in  equity  accounts  of
consolidated subsidiaries,  but excludes goodwill and most other intangibles and
excludes the allowance for loan and lease  losses.  Tier 2 capital  includes the
excess  of any  preferred  stock  not  included  in  Tier 1  capital,  mandatory
convertible  securities,  hybrid  capital  instruments,  subordinated  debt  and
intermediate  term-preferred  stock,  and  general  reserves  for loan and lease
losses up to 1.25% of risk-weighted assets. As of March 31, 2000 (i) Bankshares'
Tier 1 and total risk-based  capital ratios were 12.4% and 13.7%,  respectively,
and (ii) TFB's Tier 1 and total risk-based  capital ratios were 12.4% and 13.7%,
respectively.

                                       10

<PAGE>

FDICIA contains "prompt corrective  action"  provisions  pursuant to which banks
are to be classified  into one of five categories  based upon capital  adequacy,
ranging  from "well  capitalized"  to  "critically  undercapitalized"  and which
require (subject to certain  exceptions) the appropriate  federal banking agency
to take prompt  corrective  action with respect to an institution  which becomes
"significantly undercapitalized" or "critically undercapitalized".

The FDIC has issued  regulations  to implement  the "prompt  corrective  action"
provisions  of FDICIA.  In  general,  the  regulations  define the five  capital
categories as follows:  (i) an  institution  is "well  capitalized"  if it has a
total  risk-based  capital  ratio  of 10% or  greater,  has a Tier 1  risk-based
capital ratio of 6% or greater, has a leverage ratio of 5% or greater and is not
subject  to any  written  capital  order or  directive  to meet and  maintain  a
specific  capital  level  for  any  capital  measures;  (ii) an  institution  is
"adequately  capitalized"  if it has a total  risk-based  capital ratio of 8% or
greater,  has a Tier 1  risk-based  capital  ratio of 4% or  greater,  and has a
leverage ratio of 4% or greater;  (iii) an institution is  "undercapitalized" if
it has a total risk-based capital ratio of less than 8%, has a Tier 1 risk-based
capital ratio that is less than 4% or has a leverage ratio that is less than 4%;
(iv)  an  institution  is  "significantly  undercapitalized"  if it has a  total
risk-based capital ratio that is less than 6%, a Tier 1 risk-based capital ratio
that is less  than 3% or a  leverage  ratio  that is less  than  3%;  and (v) an
institution is "critically  undercapitalized"  if its "tangible equity" is equal
to or less than 2% of its total assets.  The FDIC also, after an opportunity for
a hearing,  has authority to downgrade an institution from "well capitalized" to
"adequately   capitalized"   or  to  subject  an  "adequately   capitalized"  or
"under-capitalized"  institution to the  supervisory  actions  applicable to the
next lower category,  for supervisory  concerns. As of March 31, 2000, TFB had a
total  risk-based  capital ratio of 13.7%, a Tier 1 risk-based  capital ratio of
12.4%,  and a leverage  ratio of 9.5%.  TFB was notified by the Federal  Reserve
Bank of Richmond that, at March 31, 2000, TFB was "well  capitalized"  under the
regulatory framework for prompt corrective action.

Additionally,  FDICIA  requires,  among  other  things,  that  (i)  only a "well
capitalized"  depository  institution may accept brokered deposits without prior
regulatory  approval and (ii) the  appropriate  federal  banking agency annually
examine all insured  depository  institutions,  with some  exceptions for small,
"well capitalized"  institutions and  state-chartered  institutions  examined by
state regulators.  FDICIA also contains a number of consumer banking provisions,
including disclosure  requirements and substantive  contractual limitations with
respect to deposit accounts.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

An important component of both earnings  performance and liquidity is management
of interest rate sensitivity.  Interest rate sensitivity  reflects the potential
effect on net interest  income of a movement in market  interest  rates.  TFB is
subject to interest  rate  sensitivity  to the degree that its  interest-earning
assets  mature  or  reprice  at a  different  time  interval  from  that  of its
interest-bearing  liabilities.  However,  TFB is not subject to any of the other
major categories of market risk such as foreign  currency  exchange rate risk or
commodity price risk.

TFB uses a  number  of  tools  to  manage  its  interest  rate  risk,  including
simulating net interest income under various  scenarios,  monitoring the present
value change in equity under the same  scenarios,  and monitoring the difference
or gap between rate sensitive assets and rate sensitive liabilities over various
time periods.  Management believes that rate risk is best measured by simulation
modeling.

The earnings  simulation  model  forecasts  annual net income under a variety of
scenarios  that  incorporate  changes in the absolute  level of interest  rates,
changes  in  the  shape  of  the  yield  curve  and  changes  in  interest  rate
relationships.  Management  evaluates  the  effect on net  interest  income  and
present value equity under varying market rate assumptions.

TFB monitors exposure to gradual change in rates of up to 200 basis points up or
down over a rolling 12-month period. TFB's policy limit for the maximum negative
impact on net  interest  income and  change in equity  from  gradual  changes in
interest rates of 200 basis points over 12 months is 15% and 10%,

                                       11

<PAGE>

respectively.  Management  has  maintained  a risk  position  well within  these
guideline levels during the first quarter of 2000.

There have been no material changes in market risk since 1999 year end.

                           PART II. OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS.

There is no pending or threatened litigation that, in the opinion of management,
may materially impact the financial condition of Bankshares or TFB.

ITEM 2.           CHANGES IN SECURITIES AND USE OF PROCEEDS

         None.

ITEM 3.           DEFAULTS UPON SENIOR SECURITIES

         None.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

ITEM 5.           OTHER INFORMATION

         None.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

         (3)(i)          Articles of Incorporation of Fauquier Bankshares,  Inc.
                         (including amendments)*

         (3)(ii)         Bylaws of Fauquier Bankshares, Inc.*

         (10)(i)         Fauquier  Bankshares,  Inc. Omnibus Stock Ownership and
                         Long  Term   Incentive   Plan,   Amended  and  Restated
                         Effective January 1, 2000**

         (11)            Statement regarding computation of per share earnings

         (27)            Financial Data Schedule (filed herewith)

*  Incorporated  by reference  to  Bankshares'  Securities  Exchange Act of 1934
("Exchange  Act")  Registration  Statement on Form 10, filed with the Securities
and Exchange Commission on April 16, 1999.

** Incorporated by reference to Bankshares'  definitive  proxy statement for the
2000 annual  meeting of  shareholders,  filed with the  Securities  and Exchange
Commission on April 14, 2000.

         (b)      Reports on Form 8-K:

                  None.

                                       12

<PAGE>


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 thereunto duly authorized.

                               FAUQUIER BANKSHARES, INC.

Dated: May 11, 2000            /s/ C. Hunton Tiffany
                               -------------------------------------------------
                               C. Hunton Tiffany
                               President and Chief Executive Officer

Dated: May 11, 2000            /s/ Randy K. Ferrell
                               -------------------------------------------------
                               Randy K. Ferrell
                               Senior Vice President and Chief Financial Officer