EXHIBIT 10.12

                               THE FAUQUIER BANK
                               -----------------

                EXECUTIVE SPLIT DOLLAR LIFE INSURANCE AGREEMENT


         This EXECUTIVE SPLIT DOLLAR LIFE INSURANCE AGREEMENT is made this 26
day of November, 1996, between The Fauquier Bank, a Virginia banking corporation
(the "Bank") and Randy K. Ferrell, an executive employed by the Bank (the
"Executive").

         1. Definitions. Where indicated by initial capital letters, the
following terms shall have the following meanings.

            (a) Agreement: This Executive Split Dollar Life Insurance Agreement
(including Schedules and Attachments) entered into between the Bank and the
Executive pursuant to the Plan.

            (b) Beneficiary: The person or persons designated in writing by the
Executive to receive the Executive Death Benefit.

            (c) Cause: Cause means a determination by the Bank that the
Executive may have been guilty of criminal conduct (regardless of whether proven
or admitted), gross negligence or willful misconduct in the performance of his
duties or otherwise, or has engaged in conduct which, if generally known, would
bring significant discredit to or give rise to significant adverse publicity to
the Bank. The cessation of employment of the Executive shall not be deemed to be
for Cause unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than
two-thirds of the entire membership of the Board at a meeting of the Board
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board), finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described above, and specifying
the particulars thereof in detail.

            (d) Compensation: Compensation means the Executive's annual rate of
salary as in effect when the Executive becomes eligible for initial
participation or subsequent increase of plan benefits.

            (e) Executive Death Benefit: The level of insurance payable to the
Executive from the Existing Policies as designated on Schedule A

            (f) Insurer: Massachusetts Mutual Life Insurance Company or any
other insurance company issuing a life insurance contract on the Executive's
life

            (g) Plan: The Fauquier Bank Executive Split Dollar Life Insurance
Plan.




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            (h) Policy: Either of two life insurance contracts issued on the
life of the Executive pursuant to the Plan as identified on Schedule A.

            (i) Recoverable Amount: The Bank's aggregate premiums for the Policy
(including any amount paid for an existing policy) less any amounts received
from the Executive in conjunction with the Plan.

            (j) Retirement: Any termination of employment other than for Cause
occurring after the Executive shall reach age 55 and has been employed for 10
years or more with the Bank.

            (k) Roll-Out: Division of the Policy into two separate policies, one
to be the sole property of Bank, and the other to be the sole property of the
Executive.

         2. Application for Insurance. The Bank has or will purchase two
existing Policies on the Executive's life from the Executive's prior employer
(the "Existing Policies") as identified on Schedule A. The Bank may apply for
additional insurance to assure recovery to the Bank of its costs associated with
the Plan. The Bank and the Executive agree to take any action necessary to cause
the Insurer to transfer the Existing Policies to the Bank. The Existing Policies
and any other Policy shall be subject to the terms of this Agreement.

         3. Amount of Insurance. The initial amount of insurance shall be as
provided in the Existing Policies.

         4. Ownership. The Bank shall be the owner of the Policy, and it may
exercise all ownership rights granted to the owner by the terms of the Policy
except as otherwise provided in this Agreement. The Bank shall keep possession
of the Policy.

         5. Dividend Option. All dividends declared by the Insurer on the Policy
shall be applied to purchase additional paid-up life insurance on the life of
the Executive, provided that such additional insurance shall not increase the
Executive Death Benefit.

         6. Payment of Premiums.

            (a) The Bank agrees to pay the total amount of each annual Policy
premium on or before the due date of such premium, or within the grace period
provided, if any.

            (b) Thirty (30) days prior to the due date of each annual Policy
premium, the Bank shall notify the Executive of the exact amount due from the
Executive to the Bank as a premium payment. The amount due shall not include any
premium resulting from any substandard insurance rating of the Executive. The
annual amount payable by the Executive may be deducted ratably from the
Executive's compensation during the year. The amount due shall be equal to the
lesser of:


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               (i) the annual cost of the term life insurance protection on the
            life of the Executive as measured by the PS-58 rate (or substitute
            table) published from time to time by the Internal Revenue Service;
            and

               (ii) the term rates published from time to time by the Insurer,
            as determined by the Insurer, and selected by the Bank for use
            within the Plan.

         7. Death Benefits. Upon the Executive's death, the Bank will promptly
take the appropriate action to obtain the death benefits provided under the
Policy, and

            (a) the Bank shall be entitled to receive the excess of the total
Policy proceeds over the Executive Death Benefit. The receipt by the Bank of the
excess over the amount shall constitute satisfaction of the Executive's
obligation to the Bank under this Agreement; and

            (b) the beneficiary or beneficiaries named under the Policy shall be
entitled to receive the Executive Death Benefit which shall be paid in
accordance with the settlement option elected by the Bank at the Executive's
request.

         8. Policy Loans.

            (a) The Bank shall have the right to obtain loans secured by the
Policy from the Insurer or from others. The Bank also has the right to assign
the Policy as security for the repayment of such loans. The amount of such loans
together with interest thereon shall at no time exceed the Bank's Recoverable
Amount. All interest charges with respect to any loans shall be paid by the Bank
promptly upon billing from the Insurer or other lender and such interest charges
shall not be part of the Bank's Recoverable Amount.

            (b) If the Policy is assigned or encumbered in any way, other than a
Policy Loan, on the date of the Executive's death, the Bank shall secure a
release or discharge of the assignment or encumbrance to ensure the prompt
payment of the Executive Death Benefit under the Policy to the Executive's
beneficiary or beneficiaries.

         9. Timing of Roll-Out: Roll-Out shall occur on the first policy
anniversary on which:

            (a) the Bank may retain a policy with cash surrender value equal to
the Bank's Recoverable Amount and with the death benefits at least equal to that
amount as would be provided by a single premium equal to the Recoverable Amount,
and

            (b) the Executive may retain a policy with death benefits at least
equal to the Executive Death Benefit, with no outlays required to sustain this
amount based on the dividend schedule in effect on the Roll-Out date, and with
no loans.


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         10. Amendment and Termination of Agreement.

            (a) This Agreement may not be amended, altered, or modified except
in writing and signed by the Bank and the Executive

            (b) This Agreement shall terminate upon the earliest to occur of any
of the following events:

               (i) termination of the Executive's employment other than by
            reason of death or disability (unless the Committee determines that
            Executive shall be treated as an active employee after a termination
            of employment);

               (ii) termination of the Agreement by the Executive upon written
            notice to the Bank;

               (iii) cessation of the Bank's business or the bankruptcy,
            receivership or dissolution of the Bank, unless the Bank's business
            is continued by a successor corporation or business entity.

         Termination of the Plan by the Bank shall not constitute a termination
of this Agreement.

            (c) If the Executive's termination of employment with the Bank is by
reason of disability (as determined by the Bank), this Agreement shall remain in
full force and effect.

            (d) If the Executive's termination of employment with the Bank is by
reason of Retirement, this Agreement shall remain in force and effect.


         11. Disposition of Policy on Termination of Agreement.

            (a) As of the Executive's Roll-Out date, the Bank shall act to cause
the Insurer to divide the policy as provided in Section 9 of this Agreement.

            (b) If this Agreement is terminated because of the Executive's
termination of employment for Cause, the Executive shall have no rights to the
Policy or any of its values, and shall not be permitted to effectuate a Roll-out
at any time.

            (c) If this Agreement is terminated because of the Executive's
termination of employment for a reason other than Cause, Retirement, or
disability, or pursuant to Section 10(ii), the Executive, at the next Policy
anniversary date after his termination of employment (or a future Policy
anniversary date as allowed by the Bank), shall have the absolute right to
purchase all of the Bank's right, title and interest in the Policy free and
clear of all liens, claims or encumbrances (including any Policy loans) for
cash, by tendering to the Bank an amount equal to the Bank's Recoverable Amount.
The Executive may direct the Bank to borrow against the


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cash value of the  Policy or  surrender  any  portion of the Policy and may then
purchase the Policy, subject to any such Policy loan, for an amount equal to the
Bank's Recoverable Amount less such borrowed or cashed-in values.

            (d) If this Agreement is terminated pursuant to Section 10(b)(iii),
the Executive, at the next Policy anniversary date after the termination (or a
subsequent Policy anniversary date as allowed by the Bank), shall have the
absolute right to purchase all of the Bank's right, title and interest in the
Policy free and clear of all liens, claims or encumbrances (including any Policy
loans) for cash, by tendering to the Bank an amount equal to the lesser of:

               (i) the Bank's Recoverable Amount, and,

               (ii) the Cash Surrender Value, as defined by the Insurer, of any
            policy subject to this Agreement.

The Executive may direct the Bank to borrow against the cash value of the Policy
or surrender any portion of the Policy and purchase the Policy, subject to any
such Policy loan for an amount equal to the lesser of the Bank's Recoverable
Amount or the Cash Surrender Value less such borrowed or cashed-in values.

            (e) Notwithstanding anything contained in this Section to the
contrary, upon termination of this Agreement, the Bank may divide the Policy
such that the Bank can retain the portion of the Policy having a total cash
value equal to the Bank's Recoverable Amount and the Executive can retain the
balance of the policy and the paid-up additions on the Policy.

        12. Miscellaneous.

            (a) This Agreement shall not affect any rights the Executive may
otherwise have under any pension, profit sharing or other employee benefit plan
(except group term life insurance) established by the Bank.

            (b) This Agreement shall be binding on the Bank, its successors and
assigns, and it shall be interpreted in accordance with the laws of the
Commonwealth of Virginia.

            (c) Except as permitted by law or by the Bank's written consent, any
benefits to which the Executive or his beneficiaries may become entitled under
this Agreement shall not be subject to anticipation, alienation, sale, transfer,
assignment, or pledge. The Bank shall not be liable for, or subject to, the
debts, contracts, liabilities, or torts of any person entitled to benefits under
this Agreement.

            (d) This Agreement shall not confer upon the Executive any legal or
equitable right against the Bank or the Administrator except as expressly
provided in this Agreement, the Plan and the Policy.



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            (e) Neither this Agreement, the Plan nor the Policy shall constitute
an inducement or consideration for the employment of the Executive and shall not
give the Executive any right to be retained in the employ of the Bank, and the
Bank hereby retains the right to discharge the Executive at any time, with or
without cause.

            (f) The Executive's interest under this Agreement, the Plan and the
Policy, may be assigned by the Executive upon written notice to the Bank.

            (g) Under no circumstances shall the Insurer be deemed to be a party
to this Agreement.

            (h) If a provision of this Agreement is not valid or enforceable,
that fact in no way affects the validity of enforceability of any other
provision.

         In consideration of the foregoing, the Bank ad the Executive have
executed this Agreement in duplicate, all as of the day and year first written
above.



THE FAUQUIER BANK




By: /s/ H. Frances Stringfellow
    ----------------------------

Title: Sup. HK
       -------------------------

EXECUTIVE



/s/ Randy K. Ferrell
--------------------------------
    Randy K. Ferrell




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                                THE FAUQUIER BANK
                                -----------------

                 EXECUTIVE SPLIT DOLLAR LIFE INSURANCE AGREEMENT
                                      WITH
                                RANDY K. FERRELL

                                   SCHEDULE A

1.   Massachusetts Mutual Life Insurance Company Policy Number 7 246 280

     Executive Death Benefit $325,000

2.   Massachusetts Mutual Life Insurance Company Policy Number 6 952 533

     Executive Death Benefit $120,000
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                               THE FAUQUIER BANK
                               -----------------

                   EXECUTIVE SPLIT DOLLAR LIFE INSURANCE PLAN

         1. Plan Name and Purpose. This Plan shall be known as the "The Fauquier
Bank Executive Split Dollar Life Insurance Plan" (the "Plan"). The purpose of
this Plan is to provide certain senior executive employees of The Fauquier Bank
(the "Bank") and its subsidiary corporations with life insurance protection
under life insurance policies acquired pursuant to the Plan.

         2. Effective Date. The effective date of the Plan is January 1, 1996

         3. Eligibility. Participation in this Plan is limited to the senior
executive employees ("Executives") approved from time to time by the Bank's
Chief Executive Officer as eligible to participate in the Plan. No person shall
participate in this Plan who is not insurable or is not an active employee (or
treated as an active employee with the consent of the Bank) of the Bank or one
of its subsidiary corporations.

         4. Participation. An eligible Executive will commence participation in
this Plan by executing a split dollar life insurance agreement (a "Split Dollar
Agreement") and agreeing to pay a portion of the premium for the purchase of
life insurance to the extent required by, and in accordance with, the terms of
the Split Dollar Agreement. If an Executive does not elect to participate in the
Plan when first eligible, such Executive may elect to participate on any
subsequent date if the Bank approves the Executive's participation.

         5. Amount of Insurance. The amount of insurance which can be purchased
initially under the Plan on an Executive shall be the amount provided under the
Split Dollar Agreement for the Executive. To the extent provided in the Split
Dollar Agreement, an Executive may increase the death benefit payable to the
Executive as of the anniversary of the Split Dollar Agreement in any subsequent
year, provided the Executive is then insurable. Increases in the amount shall be
not less than a minimum amount established by the insurance company.

         6. Administration. The Bank is the named fiduciary under the Plan. It
has the authority to interpret this Plan to resolve ambiguities, inconsistencies
and omissions, to determine any questions of fact, to determine the eligibility
and rights of an Executive under the Plan and the right to benefits, and amount
of benefits, if any, payable to the Executive's named beneficiary in accordance
with the provisions of the split dollar life insurance agreement executed by the
Executive. The Bank shall be the administrator unless it shall appoint an
administrator and delegate its administrative and fiduciary responsibilities to
such administrator.
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         7. Claims Procedure.

              (a) Right to File Claim. Every Executive, former Executive, or
beneficiary (a "Claimant") shall be entitled to file a claim for benefits under
the Plan. The claim is required to be in writing, and must be filed with the
administrator.

              (b) Notice of Denial. If the claim is denied by the administrator,
either in whole or in part, the Claimant shall be furnished a written notice of
denial of the claim containing the following information: (i) the specific
reason or reasons for denial; (ii) a specific reference to pertinent Plan
provisions on which the denial is based; (iii) a description of any additional
material or information necessary for the Claimant to perfect the claim, and an
explanation of why the material or information is necessary; and (iv) an
explanation of the claims review procedure. The notice shall be furnished within
a reasonable time after receipt of the claim. If the notice is not furnished
within 90 days following the date the claim is filed, the claim shall be deemed
denied and the review procedure shall apply

              (c) Review Procedure.

                  (i) Upon denial of a claim, the Claimant may submit a written
         application requesting a review by the administrator. The Claimant also
         may review pertinent documents and submit issues and comments in
         writing.

                  (ii) A review may be requested at any time within 60 days
         following the date of denial of the claim. Any action required or
         authorized to be taken by the claimant may be taken by a representative
         authorized in writing by the Claimant to represent him. The decision on
         review shall be in writing and shall be issued within 60 days following
         receipt of the request for review. The period for decision may be
         extended to a date not later than 120 days after receipt of a request
         for review if it is determined that special circumstances require
         extension. The decision on review shall include specific reasons for
         the decision and specific references to the pertinent Plan provisions
         on which the decision is based.

         8. Amendment and Termination. Subject to any right which may exist
under individual Split Dollar Agreements executed by Executives pursuant to this
Plan, the Bank may, in its sole discretion, amend or terminate this Plan at any
time.

         9. Successors and Assigns. The obligations under this Plan and any
Split Dollar Agreement entered into pursuant to this Plan shall be binding on
the Bank's successors and assigns.

         10. Governing Law. Except as otherwise provided by federal law, this
Plan shall be construed in accordance with the governed by the laws of the
Commonwealth of Virginia.


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         IN WITNESS WHEREOF, the Bank by its duly authorized officers, has
caused this Plan to be executed this 26th day of November, 1996.


                                                 THE FAUQUIER BANK


                                                 By /s/ H. F. Stringfellow
                                                    ----------------------