EXHIBIT 14.1

                                 CODE OF ETHICS

                               WAKE FOREST FEDERAL
                                  ETHICS POLICY

Wake Forest Federal Savings & Loan Association (together with Wake Forest
Bancshares, Inc. and Wake Forest Bancorp, MHC, collectively "Wake Forest
Federal" or the "Association" ) has a responsibility to its community, its
customers, and its shareholders to ensure that its Directors, Officers and
Employees conduct themselves in a manner ethically consistent with the highest
standards of conduct. By keeping our commitment to them, we will make certain
that our actions are founded on integrity, fairness, and impartiality.

In their capacity as Directors, Officers, or Employees of Wake Forest Federal,
each individual is expected to show impartiality and objectivity in professional
encounters representing the Association. Transactions involving the Association
should be conducted at arms length. Wake Forest Federal expects each individual
to avoid the appearance of impropriety by prohibiting personal gain or benefit
from any transaction undertaken on the Association's behalf. Such prohibition of
personal gain or benefit extends to family members and friends. In order to
promote fairness and objectivity, Directors, Officers, and Employees should
refrain from accepting gifts, entertainment or other items of value which are
more than de minimus in amount.

Any conduct or transaction which creates a conflict of interest or is
professionally unethical and dishonest, is prohibited. In addition, no
individual should purposely or with reckless disregard fail to follow an
applicable law, governmental rule or regulation.

The Association through Wake Forest Bancshares, Inc. (the public reporting
entity or the "Company") is committed to disseminating timely, full, accurate,
fair and objective information in an understandable format to its shareholders,
regulators, exchanges, the investing public and other interested parties.
Officers of the Company or the Association who have disclosure responsibilities
are directed to fulfill this commitment in a responsible manner.

The Association expects prompt internal reporting of violations of this Ethics
Policy by the individual who has violated the Policy, or by others who become
aware of the breach in the event the responsible party does not disclose the
indiscretion. It is a breach of this Policy to retaliate against any individual
who discloses relevant violations to appropriate officials. Reporting should be
made to the Chief Executive Officer, who in turn will report all violations to
the Audit Committee. In the event that the Chief Executive Officer violates the
Policy, he or she should report the violation to the Chairman of the Board, who
will forward the violation on to the Audit Committee. The Association expects
accountability for adherence to the Policy, and reserves the right to take
whatever actions are appropriate under the circumstances to enforce the Policy,
and to deal with violations that occur.

The Association expects its Directors, Officers and Employees to conduct
themselves in a ethical manner whenever they are representing Wake Forest
Federal or any situation where their actions might reflect on how the
Association is perceived. Any deviations or waivers from this Policy must be
approved in advance by the Board of Directors.

File name:  Ethics Policy
Revised:  February 18, 2003