To the 350 residents of this farming town 50 miles west of Washington, William E. (Buddy) Embrey had more than fulfilled the prediction of his 1957 high school classmates who voted him "most likely to succeed."

At age 38, Embrey had risen from teller to president of the local bank, was chairman of the local Democratic Party and lived, with his wife and two children, in a sprawling $277,000 glass-and-cedar home six miles outside town.

Then six weeks ago, Embrey suddenly was removed as president of the bank without public explanation.

The reason: Embrey had financed some real estate ventures by forging names of two relatives and a bank customer to loan documents amounting to $360,000.

"I'm sure it's some kind of embezzlement or fraud of some kind," Embrey acknowledged as he nervously wound the stem of his wristwatch in an hour-long interview with Washington Post reporters. "I don't think there is any question I'm guilty."

Embrey has not been charged with any crime but he freely conceded that what he did has shocked this community and astounded Virginia bank examiners.

His acts are under investigation by the FBI and banking authorities. According to a letter the State Bank of Remington mailed to its 200 shareholders earlier this month, Embrey has acknowledged to FBI agents and bank directors that he "improperly removed" the $360,000 from the 66-year-old bank, which has assets of $23 million.

"How can you explain this?" asked bank vice president Larry B. Olinger, lifeling acquaintance who says he was as shocked as anyone by the incident. "The only explanation he gave us was that he was trying to move too fast."

In the interview, Embrey sat downcast in a paneled office at his modernistic home, bending a paper clip as he spoke. "It gets pretty heavy knowing I've disappointed so many people -- my friends, my family and the community," he said. "I'm a very honest guy. . .I just didn't take the time to put my own financial investments in order."

Embrey said he has sold off some land holdings and borrowed heavily from a relative to repay the missing funds plus 12 percent interest. He also has agreed to pay for a special audit of the bank, which is still trying to determine the exact amount of money involved in the scheme.

Bank officials said they believe that Embrey has repaid all the money.

When word of his removal from the bank presidency swept this community, townsfolk immediately gathered petitions with 300 signatures calling for his reinstatement. "Pray for Mr. Embrey. He needs healing time," one man was heard to say along Main Street, the only commercial street here.

"I'm sure someone is going to want a pound of flesh along the way," Embrey said. "If they do, I'm willing to give it to them."

His four-bedroom home in the small community of Midland is a small entertainment palace that took two years to build and was part of the banker's dream of "being into everything." The home contains a gleaming, 12-foot diameter dance floor, a built-in home music center and a 20 foot tall glass plant conservatory that overlooks the chestnut-and-dogwood treelined ridge on which the house is located.

A resident who has frequented parties at the house said, "He wanted a big house for entertainment. At night in the winter it was fabulous for a party with the lights outside and the trees silhouetted."

Despite the expense of repaying the bank Embrey said he still has a net worth of $500,000. His holdings include 123 acres in Fauquier County and the town of Culpeper plus a half-interest in another 200-acre tract in the area.

Embry said he is at a loss to explain how he managed to amass his holdings on a salary that was $27,000 a year when he was removed from office.

Embrey's scheme was discovered Aug. 1, when, according to the bank's shareholder letter, a customer complained he received a notice for a loan he never obtained. The bank then began an investigation which it said revealed that the customer's note, as well as several others, were forgeries.

Embrey said in the interview he forged the names of two relatives and a bank customer on the notes.

Embrey then deposited funds from the loans into an account he controlled at the bank, according to vice president Olinger.

According to Olinger, interest payments were shown on some of the loan records at the bank, which he said gave them the appearance of being genuine.

In Richmond, George Petry, a spokesman for the State Bureau of Financial Institutions, said the forgeries could have gone undetected by bank examinations and audits because "not every transaction is analyzed."

Townspeople, who say they have seen little of Embrey since his resignation, are puzzled and saddened at what has happened.

"He was a very energetic, dynamic young man who was aspiring to great things with his life," said lifelong friend Wilbur Lee Heflin, who runs the town drugstore. "It's a tragic thing that he destroyed 20 years of good background on something this stupid.

"What's worst of all is that none of this was really necessary. He could have achieved the same goals without this, in just a couple of more years. Now, it'll be years before he can rebuild, if ever."

"I don't know why he did it, it was just a little too easy to do," said one woman. "He did a lot of good for a lot of people. There are some folks who feel no wrong was really done. But a lot of us just feel very disappointed."

Embrey agreed with her judgment in the interview. "I did what was easy," he said. "With the right amount of time, I could have gotten the money I needed [without doing anything improper.] It was dumb. Bad judgment."

In Remington, where a hardware store, general store and drugstore with marble soda fountain and hand mixed sodas adjoin and constitute the business district, one reason for the dismay is the Embrey family's long record of community involvement.

The Embrey name is repeatedly mentioned in a pamphlet on the town's history that is given out at the bank. The small book, "On the Shores of the Rappahannock, a history of Remington, Va.," notes that the Embrey family built a house in town in 1874 and were early merchants there. It also notes that the family donated land to area Baptist churches.

Embrey, who still participates in church activities at the Midland Church of the Brethern, said the church has been a main source of support.

"The community, has been fantastic," he said. "I feel very humbled by it all. The support of the community has been there and I appreciate it."

At his home, Embrey thumbed through a manila folder filled with copies of the letters of resignation he has submitted since the forgeries were discovered.

Latest is the letter he sent Monday to the Fauquier County Democratic Party, which he chaired. Earlier letters went to the bank and to the town hall, where Embrey served as treasurer for the town of Remington and the county planning commission.

"I'm not a recluse because of this," he said slowly. "I do go out less. But I feel I'm going to come out of this a stronger and better person. I plan to remain in the community and pay my debts, even if it means starting over with everything."