January 29, 2007

Via Facsimile ((336) 232-9196) and U.S. Mail

John M. Cross, Esq.
Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P.
P.O. Box 26000
Greensboro, NC  27420

Re:	South Street Financial Corporation
	Amended Schedule 13E-3
	File No. 005-49027
	Filed January 19, 2007

    Revised Preliminary Proxy Statement on Schedule 14A
    Filed January 26, 2007
	     File No. 000-21083

Dear Mr. Cross:

      We have reviewed your filings 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.

Amended Schedule 13E-3

General
1. We reissue comment 1 in part.  Please provide your legal
analysis
as to why the common stock and Series A preferred stock are truly
separate classes for purposes of determining eligibility to
deregister under Section 12 of the Securities Exchange Act of
1934.
Please support your analysis with citations to state statutory or
case law, where appropriate.

Revised Preliminary Proxy Statement

General
2. We note your response to comment 3.  Please revise your proxy
statement to present each of the Authorization and the Conversion
as
separate matters.

Cover Page
3. We note your response to comment 8.  Please highlight the added
disclosure added in response to our comment.  Also, please
disclose
the part of your response that addressed the timing of a fair
value
payment pursuant to an exercise of dissenters` rights.
4. Please disclose on the cover page the information in the first
sentence of your response to comment 9.

Summary Term Sheet, page 3
5. We note your response to comment 11.  Please revise your
disclosure throughout the proxy statement to refer to the current
transaction as a going private transaction.  We note additionally
that all transactions subject to Rule 13e-3 are going private
transactions.

Special Factors

Background of the Transaction, page 11
6. We note the added disclosure added in response to our comment
13.
Please explain in the proxy statement why the Board`s conclusion
has
not changed in light of recent relief granted in connection with
the
implementation of Section 404 of the Sarbanes-Oxley Act.
7. We reissue comment 14.  The disclosure added in response to our
comment does not provide a reasonably detailed description of the
Howe Barnes presentation.  Instead, the new disclosure appears to
disclose the agenda of those meetings.  Please revise your
disclosure
to describe the information required by Item 1015(b)(6) of
Regulation
M-A.

Recommendation of the Board of Directors; Fairness of the
Recapitalization, page 20
8. We reissue comment 23.  Note that the fairness determination
required to be made by the company must be as to its unaffiliated
security holders.  To the extent the board is relying on a
financial
advisor`s fairness opinion that is addressed to a larger group of
security holders that includes affiliated and unaffiliated
security
holders, the company must explain how it was able to make its
required determination.

Opinion of Financial Advisor, page 26
9. We reissue comment 24.  We are unable to locate the added
disclosure referred to in your response.
10. We reissue comment 25.  We note that the only projected
financial
information appearing in your proxy statement appears to be the
earnings per share for the years 2006-2010.  Please disclose the
complete financial forecasts and projections provided to Howe
Barnes
or confirm supplementally that the only financial projections or
forecasts provided to Howe Barnes, and which served as the basis
for
its analysis, are the earnings per share forecasts.
11. Refer to prior comment 27.  We note the added disclosure
appearing in the sentence immediately before the table on page __.
Please explain in your disclosure the significance of the
Comparable
Company Analysis to Howe Barnes` fairness opinion given the
advisor`s
conclusion that the company`s "unique financial characteristics
were
not captured ..... by a peer group of individually selected
guideline
companies" (emphasis added).
12. We reissue comment 31.  Clarify in your disclosure the date
upon
which the premium in each listed transaction was measured.  For
example, what measurement date was used to arrive at the 17%
premium
identified in the Harbor Bankshares transaction announced on May
12,
2006?  Was it 30 days prior to the announcement?  Was it 60 days?

Closing
      As appropriate, please amend your filing in response to
these
comments.  You may wish to provide us with marked copies of the
amendment to expedite our review.  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.

      Please direct any questions to me at (202) 551-3619.  You
may
also contact me via facsimile at (202) 772-9203.  Please send all
correspondence to us at the following ZIP code: 20549-3628.

								Sincerely,



								Daniel F. Duchovny
								Special Counsel
								Office of Mergers &
Acquisitions



John M. Cross, Esq.
Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P.
January 29, 2007
Page 1








UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

         DIVISION OF
CORPORATION FINANCE