SecProbe.io

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      March 29, 2005

     Mail Stop 0408

By U.S. Mail and facsimile to (919) 556-5300

Robert C. White
President, Chief Executive Officer and Director
Wake Forest Bancshares, Inc.
302 South Brooks Street
Wake Forest, NC  27587

Re:	Wake Forest Bancshares, Inc.
	Form 10-KSB filed December 23, 2004
	Form 10-QSB filed February 14, 2005
      File Number: 000-25999

Dear Mr. White:

      We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments.  If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Form 10-KSB filed on December 23, 2004

Business

Asset Quality - page 12
1. Please revise your allowance for loan loss disclosure on page
14
in future filings to clearly describe your systematic analysis and
procedural discipline, required by FRR-28, for determining the
allowance for loan losses related to your homogeneous loan groups.
Specifically discuss:
* How you evaluate homogeneous loan groups for impairment in
accordance with SFAS No. 5;
* How you determine the loss factors you apply to your graded
loans
to develop a general allowance; and
* How you determine both the allocated and unallocated portions of
the allowance for loan losses, if applicable.

Investment Activities - page 16

2. Your investment disclosures which begin on page 16 include
approximately $4.7 million of short-term interest earning deposits
which have been classified as cash for financial statement
purposes.
This presentation is somewhat confusing to readers as the amounts
disclosed to not directly reconcile to the financial statements.
Please revise future filings to more clearly indicate which of the
investments included in your table are classified as cash on the
balance sheet.

2004 Annual Report

Consolidated Financial Statements

Note 2 - Investment Securities - page 24

3. We note your disclosure that during 2003, you sold FHLMC shares
with a cost basis of $2,950 for a gain of $158,600.  Furthermore
we
note that as of September 30, 2004, you have an investment in
FHLMC
stock with an amortized cost of $8,000 and estimated fair market
value of $531,950.  Please supplementally tell us when you
purchased
both sets of shares referred to above and include the number of
shares and their original unit or share price, etc.  Discuss the
impact of any stock dividends or other distributions that may have
changed the weighted-average or specific cost basis per unit or
share.  As a related matter, please also supplementally tell us
whether the amortized costs of $2,950 and $8,000 represent the
original purchase price of the investments or reflect impairments
recorded in prior periods.

Note 3 - Loans Receivable - page 25

4. Please disclose the amount of any loans available for sale for
the
periods presented in future filings.  As a related matter, please
also revise future filings to separately present disclosures
related
to loans available for sale, both here and throughout the filing,
in
accordance with paragraph 13(e) of SOP 01-6.

5. Please revise future filings to clarify your accounting
policies
with respect to loans held for resale.  Your policies should
address
the criteria you consider in evaluating when a loan should be
classified as held for resale as well as how you account for loans
held for resale.

*	*	*

      As appropriate, please amend your filing or respond to these
comments within 10 business days or tell us when you will provide
us
with a response.  You may wish to provide us with marked copies of
the amendment to expedite our review, as appropriate.  Please
furnish
a cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.

        We urge all persons who are responsible for the accuracy
and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.

        In connection with responding to our comments, please
provide, in writing, a statement from the company acknowledging
that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

         In addition, please be advised that the Division of
Enforcement has access to all information you provide to the staff
of
the Division of Corporation Finance in our review of your filing
or
in response to our comments on your filing.

      You may contact Lisa Haynes at (202) 824-5398 or me at (202)
942-1783 if you have questions.

						Sincerely,

						John P. Nolan
						Accounting Branch Chief

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Wake Forest Bancshares, Inc.
Robert C. White
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