SecProbe.io

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      September 28, 2005

Mail Stop 4561

By U.S. Mail and facsimile to (919)469-9204

Bruce W. Elder
Vice President and Principal Financial Officer
Crescent Financial Corporation
1005 High House Road
Cary, North Carolina 27513

Re:	Crescent Financial Corporation
	Form 10-K filed March 16, 2005
	File No. 000-32951

Dear Mr. Elder:

	We have reviewed your filing and have the following comments.
We limited our review of your filing to those issues we have
addressed in our comment..  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.
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-K for the three-year period ended December 31, 2004

Note B, Summary of Significant Accounting Policies, Segment
Reporting, page 41

1. We refer to the statement that, in all material respects, the
Company`s operations are entirely composed of one segment
regarding
commercial and retail banking.  In this regard, please tell us and
disclose in future filings the basis for considering that your
mortgage banking operations do not qualify as a separate
reportable
segment based upon the criteria in paragraph 16 of SFAS 131.
Consider in your response the following financial information
regarding your mortgage banking operations:

* mortgage loan origination fees of $643,000 and $620,000 for 2004
and 2003 are 18% and 25% of pre-tax net income of each respective
year.  Refer to Note J, "Non-interest income and other non-
interest
expense" on page 50;

* real estate commercial and residential loans totaling $133
million
as of December 31, 2004 were 40% of total assets of the Company
for
that fiscal period; and

* the commercial mortgage loan category experienced the most
significant growth of all loan categories, with a 20% increase in
2004 as compared to 2003.

*	*	*

Closing Comments

      As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter with any 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 any amendment and responses to our comments.

        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 Edwin Adames (Senior Staff Accountant) at
(202)
551-3447 or me at  (202) 551-3492 if your have any questions
regarding these comments.

						Sincerely,

						John P. Nolan
						Accounting Branch Chief
Crescent Financial Corporation
Bruce W. Elder
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