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Mail Stop 3628

      July 22, 2005

Thomas J. Martin
Chief Executive Officer and President
Community Financial Holding Company, Inc.
2775 Buford Highway
Duluth, Georgia 30096

Re: 	Community Financial Holding Company, Inc.
    	Schedule 13E-3
    	File No. 5-79621
    	Filed June 17, 2005
    	Preliminary proxy Statement on Schedule 14A,
    	Filed June 17, 2005
	File No. 0-50255

Dear Mr. Martin:

      We have reviewed your filings and have the following
comments. Where indicated, we think you should revise your documents
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 on any other
aspect of our review.  Feel free to call us at the telephone
numbers listed at the end of this letter.

Schedule 13E-3

General

1. It appears that, if approved, Community Financial will
authorize a new class of shares and will provide for the
reclassification of shares of common stock held by owners of less
than 1,000 of such shares of common stock into the new class of shares
(Class A). Shareholders who own more than 1000 shares of record will
similarly have their shares "redesignated" to Class B common stock.
Since you are effectively issuing new securities to your current
common holders, explain in your response letter what exemption from
Section 5 of the Securities Act of 1933 you are relying on to issue
those new securities without registration. Describe all relevant facts
that you believe support your reliance on any such exemption.

2. We note that you are purporting to create two classes of
securities out of what is currently a single class of common
shares, for the purpose of taking the company private by causing each
"new" class to be held by less than 300 shareholders of record. In
your response letter, provide your legal analysis as to why the Class A
and Class B common are truly separate classes for purposes of
determining eligibility to deregister under Section 12 of the
Securities Exchange Act of 1934. We may have further comments.

Item 13.  Financial Statements, page 6

3. We note that subsection (a) of this section attempts to
incorporate by reference financial information that is
incorporated by reference into your proxy statement.  Please revise
to eliminate this "double incorporation."  See Rule 12b-23(b) of the
Exchange Act.

Schedule 14A

General
4. Please provide a pro forma beneficial ownership table to
disclose the beneficial owners of 5% or more of each class of
Community Financial`s voting securities after the amendment to its
articles of incorporation.

5. Please provide a brief statement as to arrears in dividends in
respect to the outstanding common stock that is subject to this
transaction, as required by Item 12(d) of Regulation 14A or
otherwise advise.

6. Consider referencing to "amendments" in the plural when
speaking of the changes you are asking shareholders to approve here.
Referring to a single "amendment" as you currently do throughout the
proxy statement is confusing, since the proxy card does allow
shareholders to vote on each matter separately. You should note in
the proxy statement that the adoption of each separate matter is
cross-conditioned on the approval of all other matters being voted
upon.

Cover Page

7. On the cover page and in other prominent parts of the proxy
statement, including the Summary Term Sheet section, disclose that
current common shareholders will receive no consideration for
their shares in this transaction(s) and will lose the benefits of
holding Section 12 registered securities. Provide the same disclosure
in each place in the proxy statement where you discuss what
shareholders will receive.

8. See our last comment. Highlight the fact that shareholders who
receive Class A common will lose voting rights on any matter other
than a change in control transaction and will also lose the
benefits of registration. Provide similar disclosure as to the effect
on Class B shareholders.

9. See our last two comments. In a similarly prominent manner,
disclose that shareholders who own less than 1,000 shares of
common stock and who will receive Class A common in these
transactions can instead elect to receive cash for their shares by
exercising appraisal rights. This disclosure should be accompanied by
a brief explanation of how to exercise appraisal rights, and in
particular, that Georgia law apparently permits the exercise of
dissenters rights by simply notifying the company with a set time
period after the reclassification and redesignation transactions,
which obligates the company to pay the dissenting shareholder "fair
value" for the shares, plus accrued interest. Disclose what amount
the company believes is fair value, or discuss how it will determine
that value by outlining the factors and the methodology it will use
to calculate.

Summary Term Sheet, page 1

10. In this section, provide a comparison of the rights of Class A
as compared to Class B shareholders, and as compared to current
common shares. Consider presenting in tabular format to most clearly
present the differences between the new categories of securities,
and the rights that existing common holders will give up in this
transaction.

11. In this section or in the Questions and Answers section that
follows, discuss the reasons for the transaction, and in
particular the structure. That is, why did the board choose a
method of going private that results in shareholders receiving
unregistered securities with in some cases, no voting rights, with
no accompanying cash payment?

Purpose and Structure of the Reclassification Transaction, page 3

12. We refer you to the discussion regarding the treatment of
shares held in "street name."  You indicate that security holders
should talk to their broker, nominee or agent to determine how they
expect the reclassification transaction to affect them.  Explain
whether a security holder may convert their shares so that they hold
them of record rather than in street or may purchase additional
shares, dispose of shares or change their ownership structure to be
certain they either remain Class B security holders or become
Class A security holders.

13. Refer to the disclosure in the third paragraph in this
section. It does not seem accurate to state that if a nominee is the
record holder for 1000 or more shares, "then the stock registered in
that nominee`s name will be completely unaffected by the
reclassification transaction." Wouldn`t those shares be "redesignated"
as Class B common stock? In addition, wouldn`t they lose their status
as registered securities? Please revise or advise. In this regard, it
may be helpful here or in another appropriate part of the proxy
materials, to explain the difference between the term
"reclassification" that you used to refer to the issuance of the
new Class A shares, and the term "redesignation" used in reference to
the new Class B securities.

Terms of the Class A Common Stock to be Received in the
Reclassification, page 4

14. In addition to disclosing the terms of the Class A common
stock, please revise to describe the material differences between the
outstanding securities (which will become Class B common stock)
and the Class A common stock that you are seeking to have authorized.
See Item 12(b) of Schedule 14A.

Interests of Certain Persons in the Reclassification Transaction,
page 5

15. Please confirm that the executive officers, directors and
affiliates of the company do not have economic or other interests
that differ from the interests of nonaffiliated stockholders.  In
this regard, confirm that the officers and directors will not
receive any additional compensation or benefits as a result of the
transaction, other than the compensation that they currently
receive as a result of their roles with the company.  For example,
will the compensation to be received by your officers and directors
increase as a result of this transaction?  Will there be any material
alterations to the existing executive agreements that will be
favorable to your executive officers as a result of this
transaction? To the extent that there are material differences between
the interests of your affiliated and unaffiliated stockholders in this
transaction, please prominently disclose a summary of the
interests and potential conflicts of interests in this subsection.

16. We note that you expect that most of your directors and
executive officers will own more than 1,000 shares of common stock
at the effective time of the reclassification, "and will therefore
continue as holders of common stock if the reclassification transaction
is approved."  Clarify why owning more than 1,000 shares is relevant
to remaining a shareholder. That is, won`t shareholders who currently
own less than 1,000 shares also maintain an equity interest in the
company going forward?

17. Refer to our last comment above. Why is this statement phrased
as an expectation rather than a fact? That is, disclose whether
officers and directors have indicated that they will purchase
additional shares in order to exceed the 1,000 share threshold to
become Class B shareholders, or whether they will receive shares from
the company for this purpose. If so, explain why (that is, why would
they prefer to hold Class B rather than Class A shares going forward?).

18. Briefly explain the discrepancy between the percentage of
outstanding common shares held by officers and directors and the
percentage of the vote they control.

19. There appear to be some words missing in the first sentence of
the last paragraph in this section. Please revise.

Appraisal Rights, page 6

20. Refer to our comment above concerning the need to prominently
describe the appraisal rights available to Class A common
shareholders. This section should be expanded to provide that
summary, rather than just a cite to another place in the document.

21. Please explain in your response letter, with a view to
additional disclosure, why the Class B shareholders do not have
appraisal rights under Georgia law in connection with this
transaction. To the extent your explanation cites to or relies on
Georgia law, please provide copies of the relevant statutory or
case law provisions upon which you rely.

Questions and Answers about the Reclassification Transaction,
page 8

22. It appears that your Questions and Answers section repeats a
great deal of information from the Summary Term Sheet.  Please
revise to eliminate unnecessary repetition.  In particular, we
suggest you limit the Questions and Answers section to procedural
matters relating to the meeting.

What will I receive in the reclassification transaction?, page 8

23. See our comments above. Emphasize that shareholders will not
receive cash in this transaction unless they can and exercise
appraisal rights.

Can I change my vote after I have mailed my proxy card?, page 10

24. Briefly describe how a shareholder may revoke a proxy here.
See our comment below about the need to correct some of the
disclosure under "Voting and Revocation of Proxies" on page 39.

Special factors, p. 11

Background of the Reclassification Transaction, page 12

25. You disclose that your board initially began to evaluate
repurchasing shares from security holders in 2004.  You also
disclose that your board has been meeting with your independent
accountants and legal counsel to discuss alternatives to better
manage your shareholders base since February 2005.  Expand to
discuss any actions taken by the company, including management,
regarding the transaction during the period between board meetings.

26. Expand the background section to describe any discussions
considering the structure of this transaction, and how and why the
board elected a transaction structure that provides shareholders
with no cash consideration. In "Purpose and Structure of the
Reclassification Transaction" on page 23, you cite cost as a
factor, so explain how it was considered by the board.

27. Refer to the disclosure at the bottom of page 15, where the
board discusses fairness to unaffiliated shareholders who will
receive Class A shares in this transaction. Are shareholders who own
less than 1,000 shares the only non-affiliates? If so, this fact should
be more prominently disclosed and discussed earlier in the proxy
statement. If not, it is not apparent why the board`s analysis
focused so much on those who will receive Class A shares. Those
shareholders who will receive Class B shares in the transaction
will retain their voting rights, but will lose the benefits of
registration.

Community Financial`s Position as to the Fairness of the
Transaction, page 18

28. Please revise this section generally to avoid excessive
repetition of the same information. In addition, reorganize the
disclosure to separately address fairness to unaffiliated Class A
and Class B shareholders.

29. You disclose on page 18 that the board believes that the
transaction and the terms and provisions of the reclassification
transaction are substantively and procedurally fair to your
unaffiliated security holders.  Please clarify whether the board`s
conclusion applies to security holders that will receive Class A
common stock and to security holders that will continue to own
shares of Class B common stock. As noted in our last comment, both
sets of shareholders should be addressed.

30. Following the first bullet point on page 19 you disclose that
your smaller shareholders who prefer to remain as holders of Class
B security holders may elect to do so by acquiring sufficient shares
so that they hold at least 1,000 shares of common stock prior to the
reclassification transaction.  In view of the fact that the
preceding bullet point on page 18 states that your common stock
trades infrequently, revise to explain why the board believes that
is a viable "positive" factor as described.

31. Expand to address the loss of the benefits of registration
under Section 12 of the Securities Exchange Act of 1934 as a
potential negative associated with this transaction.

32. We note that you disclose on page 20 that your board of
directors is primarily comprised of independent members.  Please
revise to define "primarily."  In this regard, disclose the total
number of directors and the number of directors that are independent.
Also, your disclosure should explain the criteria upon which you are
judging independence.

33. We refer you to page 22.  We note that you did not consider
the liquidation value of the assets, the current or historical market
price of those shares, your net book value or your going concern
value.  In view of the fact that you did not consider these
factors, please disclose the basis for the board`s belief that the
transaction is substantively fair to Community Financial`s unaffiliated
security holders, including those that will remain Class B holders and
those that will become Class A holders.  More specifically, revise to
provide a materially complete explanation of why the board
believes that an exchange of one Class B share or one Class A share is
substantively fair, given the different rights associated with
each as compared to your currently outstanding common shares. Your
discussion should be detailed, and should specifically address the
rights associated with each new class.

34. Also on page 22, we don