<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934.

     For the fiscal year ended June 30, 2001
                               -------------

[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
    ACT OF 1934

     For the transition period from ______ to _______.


                         Commission file number: 0-23521

                           Great Pee Dee Bancorp, Inc.
             -------------------------------------------------------------
                 (Name of Small Business Issuer in Its Charter)



               Delaware                                 56-2050592
               --------                                 ----------
    (State or Other Jurisdiction of      (I.R.S. Employer Identification Number)
    Incorporation or Organization)



              515 Market Street
           Cheraw, South Carolina                      29520
           ----------------------                      -----
       (Address of Principal Executive              (Zip Code)
                  Offices)

Securities registered under Section 12(b) of the Exchange Act: None
                                                               ----


Securities registered under Section 12(g) of the Exchange Act:
Common Stock par value $.01 per share
-------------------------------------
           (Title of Class)

                                 (843) 537-7656
                                 --------------
                (Issuer's Telephone Number, Including Area Code)

         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

Yes   X              No  -------
   -------

         Check if there is no disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

         The Issuer's revenues for the fiscal year ended June 30, 2001 were
$8,488,852.

         The aggregate market value of the voting stock held by nonaffiliates of
the Registrant, computed by reference to the average of the closing bid and ask
price of such stock on the Nasdaq National Market on August 31, 2001 was
approximately $13,965,784.

         The number of shares outstanding of the Issuer's Common Stock, the
issuer's only class of outstanding capital stock, as of June 30, 2001 was
1,618,245.

<PAGE>

          Documents Incorporated by Reference

          The following documents, in whole or in part, are specifically
incorporated by reference in the indicated Part of this Annual Report on Form
10-KSB:

I.        Portions of the Great Pee Dee Bancorp, Inc. Proxy Statement for the
          2001 Annual Meeting of Shareholders are incorporated by reference into
          certain items of Part III.

II.       Portions of the Great Pee Dee Bancorp, Inc. Annual Report for the 2001
          Annual Meeting of Shareholders are incorporated by  reference into
          certain items of Part II.

<PAGE>

                                     PART I

Item 1.   Business
-------   --------

          Great Pee Dee Bancorp, Inc. (the "Company") was organized in
September, 1997 at the direction of the Board of Directors of First Federal
Cheraw (formerly "First Federal Savings and Loan Association of Cheraw," and the
"Association"), for the purpose of acquiring all of the capital stock to be
issued by the Association in the conversion of the Association from the mutual
to the stock form of organization (the "Conversion"). The Company received
approval from the Office of Thrift Supervision ("OTS") to become a savings and
loan holding company and as such is subject to regulation by the OTS. The
Conversion was completed as of December 31, 1997, the Company issued 2,182,125
shares of Common Stock, and received all of the proceeds of the offering, or
$21.8 million ($10.6 million of the proceeds was transferred to the Association
in exchange for the capital stock of the Association). In connection with the
Conversion, the Company loaned approximately $1,745,700 to the Great Pee Dee
Bancorp, Inc. Employee Stock Ownership Plan and Trust ("ESOP") to enable the
ESOP to purchase 174,570 shares of the Company's Common Stock. The primary
business activity of the Company consists of the operations of its wholly-owned
subsidiary, the Association.

          The Company is a savings and loan holding company and the owner of all
of the issued and outstanding shares of capital stock of the Association. At
June 30, 2001 the assets of the Company consisted of its ownership of the
capital stock of the Association, the loan to the ESOP, an interest-bearing note
receivable from the Association of $932,000, and investment securities with a
carrying value of $472,000. The Company also owns 100% of the outstanding common
stock of First Federal Investment Services, Inc., which offers non-deposit
investment products to retail customers. The Association is a member of the
Federal Home Loan Bank ("FHLB") of Atlanta. At June 30, 2001, the Company had
consolidated total assets of $116.0 million, total deposits of $77.6 million,
and stockholders' equity of $25.1 million.

          The Association was originally organized in 1920 and became a
federally-chartered savings and loan association in 1935. Since then, the
Association has conducted business from its full-service office located in
Cheraw, South Carolina, and in March 2000 acquired a branch office from Coastal
Federal Savings Bank, located in Florence, South Carolina. The Association's
principal business consists of attracting deposits from the general public and
originating fixed-rate and adjustable-rate loans secured primarily by first
mortgage liens on one- to four-family residential real estate. The Association's
deposit accounts are insured up to applicable limits by the SAIF of the FDIC.

          The Association believes that it has developed a reputation among its
loyal customer base because of the commitment to personal service and because of
strong support of the local community. The Association offers a number of
financial services including: (i) residential real estate loans; (ii)
construction loans; (iii) commercial real estate loans; (iv) home improvement
loans; (v) commercial loans; (vi) automobile loans; (vi) money market demand
accounts ("MMDAs"); (vii) passbook savings accounts; (viii) checking accounts;
(ix) full banking services; and (x) certificates of deposit.

Lending Activities

          The Association has historically concentrated lending activities on
the origination of loans secured by first mortgage liens for the purchase,
construction or refinancing of one- to four-family residential real property.
One- to four-family residential mortgage loans continue to be the major focus of
loan origination activities, representing $66.8 million or 68.3% of the total
loan portfolio at June 30, 2001. The Association also offers commercial real
estate loans, construction loans and consumer loans. Loans secured by commercial
real estate totaled approximately $11.6 million or 11.9% of the total loan
portfolio at June 30, 2001. Construction loans totaled approximately $11.0
million or 11.2% of total loans as of June 30,2001. Home improvement loans
totaled $6.1 million, or 6.2% of the total loan portfolio at June 30, 2001.

<PAGE>

          Loan Portfolio Data. The following table sets forth the composition of
loan portfolio by loan type and security type as of the dates indicated,
including a reconciliation of gross loans receivable after consideration of the
allowance for loan losses and loans in process.

<TABLE>
<CAPTION>
                                                                    At June 30,
                                                       ---------------------------------------
                                                               2001                2000
                                                       -------------------- ------------------
                                                         Amount     Percent  Amount    Percent
                                                       ---------    ------- ---------  -------
                                                                (Dollars in Thousands)
<S>                                                    <C>          <C>     <C>        <C>
Type of loan:
  Real estate loans:
  One- to four-family residential .................    $ 66,768       68.3% $ 64,346      75.9%
  Commercial ......................................      11,644       11.9     7,704       9.1
  Construction ....................................      10,959       11.2     6,222       7.3
  Home improvement loans ..........................       6,135        6.2     4,130       4.9
                                                       --------     ------  --------   -------
   Total real estate loans ........................      95,506       97.6    82,401      97.2

Other loans:
  Commercial ......................................       4,352        4.5     3,205       3.8
  Consumer ........................................       4,236        4.3     2,596       3.1
  Loans secured by deposits .......................         295        0.3       278       0.3
                                                       --------     ------  --------   -------
   Total other loans ..............................       8,883        9.1     6,080       7.2

  Total loans .....................................     104,389      106.7    88,481     104.4

Less:
----

  Construction loans in process ...................       5,776        5.9     2,947       3.5
  Allowance for losses ............................         570        0.6       555       0.6
  Deferred loan origination fees, net of costs ....         239        0.2       221       0.3
                                                       --------     ------  --------   -------
   Total, net .....................................    $ 97,804     100.00%   84,758     100.0%
                                                       ========     ======  ========   =======
</TABLE>

          The following table sets forth certain information at June 30, 2001,
regarding the dollar amount of loans maturing in the loan portfolio based on the
earlier of their contractual terms to maturity or their repricing. Demand loans
having no stated schedule of repayments and no stated maturity and overdrafts
are reported as due in one year or less. This schedule does not reflect the
effects of possible prepayments or enforcement of due-on-sale clauses. The
Association expects that prepayments will cause actual maturities to be shorter.

<TABLE>
<CAPTION>
                                                            At June 30, 2001
                                         -----------------------------------------------------
                                                    More Than    More Than
                                          1 Year    1 Year to   3 Years to  More Than
                                         or Less     3 Years     5 Years     5 Years    Total
                                         -------    ---------   ----------  ---------  -------
                                                              (In Thousands)
<S>                                      <C>        <C>         <C>         <C>        <C>
Real estate loans:
     Adjustable .....................    $19,725     $17,570     $   908     $    --   $38,203
     Fixed ..........................      5,282       2,644       6,710      36,652    51,288
                                         -------     -------     -------     -------   -------
         Total real estate loans ....     25,007      20,214       7,618      36,652    89,491

Other loans .........................      3,793       2,344       2,060         686     8,883
                                         -------     -------     -------     -------   -------
     Total loans ....................    $28,800     $22,558     $ 9,678     $37,338    98,374
                                         =======     =======     =======     =======
Less:
   Allowance for loan losses ........                                                      570
                                                                                       -------
     Total ..........................                                                  $97,804
                                                                                       =======
</TABLE>

          As of June 30, 2001, the dollar amount of all loans due after one year
that have fixed interest rates was $49.1 million. None of the Association's
loans with floating or adjustable interest rates are shown as being after one
year.

                                        2

<PAGE>

          One- to Four-Family Residential Loans. The Association's primary
lending activity consists of the origination of one- to four-family residential
mortgage loans secured by property located in the primary market area. The
Association generally originates one-to-four family residential mortgage loans
in amounts up to 95% of the lesser of the appraised value or purchase price,
with private mortgage insurance required on loans with a loan-to-value ratio in
excess of 80%. The Association originates and retains fixed rate loans which
provide for the payment of principal and interest for up to an 18-year period.

          The Association also offers adjustable-rate mortgage ("ARM") loans.
Until recently, the interest rate on ARM loans was indexed to the cost of funds
index ("COFI"), which reacts to changes in market interest rates more slowly
than other indices. Now, the interest rate on the Association's ARM loans is
indexed to the one-year Treasury bill. A substantial portion of the ARM loans in
the portfolio at June 30, 2001 provide for maximum rate adjustments per year and
over the life of the loan of 1% and 5%, respectively. Residential ARMs are
amortized for terms up to 30 years.

          ARM loans decrease the risk associated with changes in interest rates
by periodically repricing, but involve other risks because as interest rates
increase, the underlying payments by the borrower increase, thus increasing the
potential for default by the borrower. At the same time, the marketability of
the underlying collateral may be adversely affected by higher interest rates.
Upward adjustment of the contractual interest rate is also limited by the
maximum periodic and lifetime interest rate adjustment permitted by the loan
documents, and, therefore, is potentially limited in effectiveness during
periods of rapidly rising interest rates. At June 30, 2001, approximately 57% of
one- to four-family residential loans had adjustable rates of interest.

          All of the one-to-four family residential mortgage loans that the
Association originate includes "due-on-sale" clauses, which give the Association
the right to declare a loan immediately due and payable in the event that, among
other things, the borrower sells or otherwise disposes of the real property
subject to the mortgage and the loan is not repaid. However, the Association
occasionally permit assumptions of existing residential mortgage loans on a
case-by-case basis.

          At June 30, 2001, approximately $66.8 million, or 68.3% of the
portfolio of loans, consisted of one- to four-family residential loans.
Approximately $507,000, or 0.5% of total loans (which were comprised of thirteen
loans secured by one- to four-family properties), were included in
non-performing assets as of that date.

          Commercial Real Estate Loans. At June 30, 2001, $11.6 million, or
11.9% of the total loan portfolio, consisted of commercial real estate loans.
Commercial real estate loans are secured by churches, office buildings, and
other commercial properties. The Association generally originates fixed rate
commercial real estate loans with maximum terms of 15 years. The Association
also will originate adjustable rate commercial real estate loans with terms of
up to 30 years. The interest rate on adjustable rate commercial real estate
loans is indexed to the one-year Treasury bill with maximum loan-to-value ratios
of 80%. At June 30, 2001, the largest commercial loan had a principal balance of
$500,000 and was secured by personal guarantees. On June 30, 2001, there were no
commercial real estate loans included in nonperforming assets.

          Loans secured by commercial real estate generally are larger than one-
to four-family residential loans and involve a greater degree of risk.
Commercial real estate loans often involve large loan balances to single
borrowers or groups of related borrowers. Payments on these loans depend to a
large degree on results of operations and management of the properties and may
be affected to a greater extent by adverse conditions in the real estate market
or the economy in general. Accordingly, the nature of the loans makes them more
difficult for management to monitor and evaluate.

          Construction Loans. The Association offers construction loans with
respect to residential and commercial real estate and, in certain cases, to
builders or developers constructing such properties on a speculative basis
(i.e., before the builder/developer obtains a commitment from a buyer). Funds
are disbursed to borrowers upon the successful completion of particular stages
of construction. Typically, loans made to builders who do not have a

                                        3

<PAGE>

commitment for the sale of the property under construction will be for a term of
no more than six months. Except for construction loans made on speculative
basis, upon the successful completion of construction the loan can be converted
into permanent financing. At June 30, 2001, $10.9 million, or 11.2% of the total
loan portfolio, consisted of construction loans. The largest construction loan
had a principal balance of $1.5 million on June 30, 2001 and was secured by an
apartment complex. None of the construction loans were included in
non-performing assets on that date.

          Construction loans generally match the term of the construction
contract and are written with interest calculated on the amount disbursed under
the loan. The maximum loan-to-value ratio for a construction loan is based upon
the nature of the construction project. For example, a construction loan for a
one-to four-family residence may be written with a maximum loan-to-value ratio
of 95% with mortgage insurance. Inspections are made prior to any disbursement
under a construction loan.

          While providing the Association with a comparable, and in some cases
higher, yield than a conventional mortgage loan, construction loans involve a
higher level of risk. For example, if a project is not completed and the
borrower defaults, the Association may have to hire another contractor to
complete the project at a higher cost. Also, a project may be completed, but may
not be salable, resulting in the borrower defaulting and taking the title to the
project.

          Home Improvement Loans. At June 30, 2001, home improvement loans
totaled $6.1 million, or 6.3% of total loans. Home improvement loans are
typically secured by second mortgages on the secured property. At June 30, 2001,
five home improvement loans with an aggregate balance of $16,000 were included
in non-performing assets.

          Origination, Purchase and Sale of Loans. The Association historically
originated mortgage loans pursuant to its own underwriting standards which did
not conform with the standard criteria of Freddie Mac or Fannie Mae because the
Association did not require current property surveys in most cases. Recently,
the Association began originating mortgage loans which conform to the standard
criteria of Freddie Mac and Fannie Mae, and thus can be sold in the secondary
market after origination.

          The Association confines loan origination activities primarily to
Chesterfield County, Florence County, Marlboro County and the surrounding
counties. Loan originations are generated from referrals from existing
customers, real estate brokers, and advertising.

          The Association's loan approval process is intended to assess the
borrower's ability to repay the loan, the viability of the loan and the adequacy
of the value of the property that will secure the loan. To assess the borrower's
ability to repay, the Association studies the employment and credit history and
information on the historical and projected income and expenses of its
mortgagors. All mortgage loans are approved by the loan committee.

          The Association generally requires appraisals on all real property
securing loans and requiring an attorney's opinion and a valid lien on mortgaged
real estate. Appraisals for all real property securing mortgage loans are
performed by independent appraisers who are state-licensed. The Association
requires fire and extended coverage insurance in amounts at least equal to the
principal amount of the loan and also require flood insurance to protect the
property securing its interest if the property is in a flood plain. The
Association also generally requires private mortgage insurance for all
residential mortgage loans with loan-to-value ratios of greater than 80%. The
Association requires escrow accounts for insurance premiums and taxes for loans
that require private mortgage insurance. Mr. Watts and Mr. Long may approve
loans up to $100,000. The Association's Loan Committee may approve loans up to
$250,000 and any loan in excess of $250,000 must be approved by the Board of
Directors.

          Underwriting standards for home improvement loans are intended to
protect against some of the risks inherent in making home improvement loans.
Borrower paying habits and financial strengths are important considerations.

                                        4

<PAGE>

          One-to-four family residential loan originations to be held in the
Association's loan portfolio totaled $18.2 million during the year ended June
30, 2001, compared to $13.3 million during the year ended June 30, 2000. One-to
four family residential loans originated for sale in the secondary market
aggregated $11.6 million and $1.8 million for the years ended June 30, 2001 and
2002, respectively.

Non Performing and Problem Assets

          After a mortgage loan becomes 30 days past due, the Association
delivers a computer generated delinquency notice to the borrower. When loans
become 60 days past due, the Association sends additional delinquency notices
and make personal contact by letter or telephone with the borrower to establish
acceptable repayment schedules. When a mortgage loan is 90 days delinquent, the
Association will have either entered into a workout plan with the borrower or
refer the matter to the Association's attorney for collection. Management is
authorized to commence foreclosure proceedings for any loan upon making a
determination that it is prudent to do so.

          The Association reviews mortgage loans on a regular basis and place
such loans on a non-accrual status when they are specifically determined to be
impaired or when they become 90 days delinquent. When loans are placed on a
non-accrual status, unpaid accrued interest is written off, and further income
is recognized only to the extent received.

          Nonperforming Assets. At June 30, 2001, $605,000, or .52% of total
assets, were nonperforming (nonperforming loans and non-accruing loans). At June
30, 2000, loans secured by real estate accounted for $554,000 of non performing
assets. The Association had real estate owned ("REO") properties in the amount
of $37,000 as of June 30, 2001.

          The table below sets forth the amounts and categories of nonperforming
assets (nonperforming loans and foreclosed real estate) for the last two years.
It is the Association's policy that all earned but uncollected interest on all
loans be reviewed monthly to determine if any portion thereof should be
classified as uncollectible for any loan past due in excess of 90 days.
Delinquent loans that are 90 days or more past due are considered nonperforming
assets. During the periods presented, the Association did not have any troubled
debt restructurings.

                                                        At June 30,
                                                  ----------------------
                                                    2001          2000
                                                  --------      --------
                                                  (Dollars In Thousands)

Loans not accruing interest ...................   $  568        $  186
Accruing loans 90 days or more past due .......       --            --
   Total nonperforming loans ..................      568           186
Foreclosed real estate ........................       37            22
                                                  ------        ------
Total nonperforming assets ....................   $  605        $  208
                                                  ======        ======
   Nonperforming assets to total assets .......     0.52%         0.20%
                                                  ======        ======

          Classified Assets. Federal regulations and the Association's asset
classification policy provide for the classification of loans and other assets
such as debt and equity securities considered by the OTS to be of lesser quality
as "substandard," "doubtful" or "loss" assets. An asset is considered
"substandard" if it is inadequately protected by the current net worth and
paying capacity of the obliger or of the collateral pledged, if any.
"Substandard" assets include those characterized by the "distinct possibility"
that the institution will sustain "some loss" if the deficiencies are not
corrected. Assets classified as "doubtful" have all of the weaknesses inherent
in those classified "substandard," with the added characteristic that the
weaknesses present make "collection or liquidation in full," on the basis of
currently existing facts, conditions, and values, "highly questionable and
improbable." Assets classified as "loss" are those considered "uncollectible"
and of such little value that their continuance as assets without the
establishment of a specific loss reserve is not warranted.

                                        5

<PAGE>

          An insured institution is required to establish general allowances for
loan losses in an amount deemed prudent by management for loans classified
substandard or doubtful, as well as for other problem loans. General allowances
represent loss allowances which have been established to recognize the inherent
risk associated with lending activities, but which, unlike specific allowances,
have not been allocated to particular problem assets. When an insured
institution classifies problem assets as "loss," it is required either to
establish a specific allowance for losses equal to 100% of the amount of the
asset so classified or to charge off such amount. An institution's determination
as to the classification of its assets and the amount of its valuation
allowances is subject to review by the OTS which can order the establishment of
additional general or specific loss allowances.

          At June 30, 2001, the aggregate amount of classified assets, and of
general and specific loss allowances, were as follows:

                                                         Loan Loss
                                                 Amount  Allowance
                                                 ------  ---------
                                                   (In Thousands)

Classified loans receivable:
  Substandard ................................    $928      $139
  Doubtful ...................................      --        --
  Loss .......................................      --        --
General loss allowance .......................      --       431
                                                  ----      ----
Total ........................................    $928      $570
                                                  ====      ====

          The Association regularly reviews the loan portfolio to determine
whether any loans require classification in accordance with applicable
regulations. Not all classified assets constitute non-performing assets.

Allowance for Loan Losses

          The Association provides for loan losses on the allowance method.
Accordingly, all loan losses are charged to the related allowance and all
recoveries are credited to it. Additions to the allowance for loan losses are
provided by charges to operations based on various factors which, in
management's judgment, deserve current recognition in estimating possible
losses. Such factors considered by management include the market value of the
underlying collateral, growth and composition of the loan portfolio, the
relationship of the allowance for loan losses to outstanding loans, delinquency
trends, and economic conditions. The Association evaluates the carrying value of
loans periodically and the allowance is adjusted accordingly. While management
uses the best information available to make evaluations, future adjustments to
the allowance may be necessary if conditions differ substantially from the
assumptions used in making the evaluations.

          In addition, various regulatory agencies, as an integral part of their
examination process, periodically review the Association's allowance for loan
losses. Such agencies may require the Association to recognize additions to the
allowance based on judgments of information available to them at the time of
examination.

                                        6

<PAGE>

         Summary of Loan Loss Experience. The following table analyzes changes
in the allowance during the fiscal years ended June 30, 2001 and 2000.

<TABLE>
<CAPTION>
                                                                                       At June 30,
                                                                                -------------------------
                                                                                  2001             2000
                                                                                --------         --------
                                                                                  (Dollars In Thousands)
<S>                                                                             <C>              <C>
Balance at beginning of period ..............................................   $  555           $   444
                                                                                ------           -------

Loans charged off:
  Real estate ...............................................................       11                10
  Other .....................................................................       19                 7
                                                                                ------           -------

    Total loans charged-off .................................................       30                17

Recoveries:
  Real estate ...............................................................       --                --
  Other .....................................................................       --                --
                                                                                ------           -------
    Total recoveries ........................................................       --                --
                                                                                ------           -------

Net loans charged-off .......................................................       30                17
                                                                                ------           -------

Provision for loan losses ...................................................       45               128
                                                                                ------           -------

Balance at end of period ....................................................   $  570           $   555
                                                                                ======           =======

Ratio of net charge-offs to average loans outstanding during the period .....     0.03%             0.02%
                                                                                ======           =======
</TABLE>


         Allocation of Allowance for Loan Losses. The following table presents
an analysis of the allocation of allowance for loan losses at the dates
indicated. The allocation of the allowance to each category is not necessarily
indicative of future loss in any particular category and does not restrict the
use of the allowance to absorb losses in other categories.

<TABLE>
<CAPTION>
                                                                            At June 30,
                                                 ----------------------------------------------------------------
                                                               2001                             2000
                                                 ------------------------------- --------------------------------
                                                            Percent of  Percent              Percent of  Percent
                                                 Amount of  Allowance  of Loans   Amount of  Allowance  of Loans
                                                 Loan Loss  to Total   to Gross   Loan Loss  to Total   to Gross
                                                 Allowance  Allowance    Loans    Allowance  Allowance    Loans
                                                 ---------  ---------  ---------  ---------  ---------  ---------
                                                                      (Dollars in Thousands)
<S>                                              <C>        <C>        <C>        <C>        <C>        <C>
Real estate loans:
  One- to four-family residential .......        $   259       45.41%    63.96%     $ 233      41.99%     72.72%
  Commercial ............................            175       30.68     11.15         77      13.87       8.71
  Construction ..........................             13        2.28     10.50         15       2.70       7.03
  Home improvement loans ................             31        5.44      5.88         25       4.50       4.67
                                                 -------     -------   -------      -----    -------    -------
    Total real estate loans .............            478       83.81     91.49        350      63.06      93.13

Other loans:
  Commercial ............................             45        7.89      4.17         39       7.03       3.62
  Consumer ..............................             33        5.79      4.06         14       2.52       2.93
  Loans secured by deposits .............             --          --      0.28          1       0.18       0.32

Unallocated .............................             14        2.51        --        151      27.21         --
                                                 -------     -------   -------      -----    -------    -------

    Total allowance for loan losses .....        $   570      100.00%   100.00%     $ 555     100.00%    100.00%
                                                 =======     =======   =======      =====    =======    =======
</TABLE>

                                        7

<PAGE>

Investments

         The Company's investment portfolio consists of short-term U.S. Treasury
and federal agency securities, interest earning deposits in other financial
institutions, federal funds sold, and to a lesser extent mortgage back
securities, marketable equity securities and FHLB stock. At June 30, 2001,
approximately $10.2 million, or 8.8%, of total assets consisted of such
investments. The Association had $2.0 million in interest-earning deposits and
$648,000 in federal funds sold as of that date.

         The following table sets forth the carrying value of the Company's
investment portfolio at the dates indicated.

                                                       At June 30,
                                                 ----------------------
                                                   2001          2000
                                                 --------      --------
                                                     (In Thousands)

Securities available for sale:
  Marketable equity securities ..............    $    472      $    405

Securities held to maturity:
  U.S. government and agency securities .....       6,243         4,700
Mortgage-backed securities ..................          21            12
                                                 --------      --------
    Total securities held to maturity .......       6,264         4,712

Interest-earning balances in other banks ....       2,045         6,215
Federal Funds sold ..........................         648         2,427
Federal Home Loan Bank Stock ................         725           573
                                                 --------      --------
    Total investments .......................    $ 10,154      $ 13,759
                                                 ========      ========


         At June 30, 2001, the market value of the Association's investment
securities held to maturity totaled $6.3 million.

                                        8

<PAGE>

Sources of Funds

         General. Deposits have traditionally been the primary source of funds
for use in lending and investment activities. In addition to deposits, the
Association derives funds from scheduled loan payments, investment maturities,
loan prepayments, retained earnings, income on earning assets and borrowings.
While scheduled loan payments and income on earning assets are relatively stable
sources of funds, deposit inflows and outflows can vary widely and are
influenced by prevailing interest rates, market conditions and levels of
competition. Borrowings from the FHLB of Atlanta may be used in the short-term
to compensate for reductions in deposits or deposit inflows at less than
projected levels.

         Deposits. The Association attracts deposits principally from within
Chesterfield, Marlboro and Florence Counties through the offering of a selection
of deposit instruments, including passbook accounts, checking accounts, money
market accounts, fixed term certificates of deposit, individual retirement
accounts and savings accounts. The Association does not actively solicit or
advertise for deposits outside of Chesterfield, Marlboro and Florence Counties,
and substantially all of the depositors are residents of these Counties. Deposit
account terms vary, with the principal differences being the minimum balance
required, the amount of time the funds remain on deposit and the interest rate.
The Association does not pay broker fees for any deposits received.

         The Association establishes the interest rates paid, maturity terms,
service fees and withdrawal penalties on a periodic basis. Determination of
rates and terms are predicated on funds acquisition and liquidity requirements,
rates paid by competitors, growth goals, and applicable regulations. The
Association relies, in part, on customer service and long-standing relationships
with customers to attract and retain deposits. The Association also closely
prices deposits to the rates offered by competitors.

         The flow of deposits is influenced significantly by general economic
conditions, changes in money market and other prevailing interest rates and
competition. The variety of deposit accounts offered has allowed the Association
to be competitive in obtaining funds and to respond with flexibility to changes
in consumer demand. The Association has become more susceptible to short-term
fluctuations in deposit flows as customers have become more interest rate
conscious. The Association manages the pricing of deposits in keeping with
asset/liability management and profitability objectives. Based on experience,
the Association believes that passbook and MMDAs are relatively stable sources
of deposits. However, the ability to attract and maintain certificates of
deposit, and the rates paid on these deposits, have been and will continue to be
significantly affected by market conditions. At June 30, 2001, 64.4% of deposit
accounts were certificate of deposit accounts, of which $42.3 million have
maturities of one year or less.

         Total deposits at June 30, 2001 were approximately $77.6 million,
compared to approximately $70.3 million at June 30, 2000. The Association's
deposit base is somewhat dependent upon the manufacturing sector of the
Association's market area. Although the manufacturing sector in the
Association's market area is relatively diversified and not significantly
dependent upon any industry, a loss of a material portion of the manufacturing
workforce could adversely affect the ability to attract deposits due to the loss
of personal income attributable to the lost manufacturing jobs and the attendant
loss in service industry jobs.

         Borrowings. The Association focuses on generating high quality loans
and then seek the best source of funding from deposits, investments or
borrowings. At June 30, 2001, the Association had borrowings of $12.8 million
from the FHLB of Atlanta. The Association is eligible to borrow up to 65% of the
outstanding balance of its one-to four family residential mortgage loans,
collateralized by these loans. The Association does not anticipate any
difficulty in obtaining advances appropriate to meet these requirements in the
future.

                                        9

<PAGE>

         The following table sets forth the maximum month-end balance and
average balance of FHLB advances, for the periods indicated.

                                                   Year Ended June 30,
                                                -------------------------
                                                   2001           2000
                                                ----------     ----------

Maximum Balance:
----------------
   FHLB advances ..........................   $ 14,500,000    $ 10,200,000

Average Balance:
----------------
   FHLB advances ..........................   $  9,069,000    $  6,300,000

         The following table presents certain information relating to the
maturities of FHLB of Atlanta borrowings at June 30, 2001.

         Maturing during the year                         Balance at June 30,
               ended June 30            Interest Rates           2001
       ----------------------------   ------------------  -------------------

                   2002                   4.20%-4.86%          7,800,000
                   2003                         4.31%          5,000,000

                Thereafter                        --                  --
                   Total
      Weighted average interest rate            4.40%         12,800,000

Additional Risk Factors

         In addition to factors discussed in the description of the business of
the Company and Association and elsewhere in this report, the following are
factors that could adversely affect future results of operations and the
financial condition of the Company.

The Impact of Changes in Interest Rates

         The Association's ability to make a profit, like that of most financial
institutions, substantially depends upon net interest income, which is the
difference between the interest income earned on interest earning assets (such
as mortgage loans) and the interest expense paid on interest-bearing liabilities
(such as deposits). Approximately 57.3% of our real estate loans have rates of
interest which are fixed for the term of the loan ("fixed rate"), while deposit
accounts have significantly shorter terms to maturity than real estate loans.
Because interest-earning assets generally have fixed rates of interest and have
longer effective maturities than interest-bearing liabilities, the yield on the
Association's interest earning assets generally will adjust more slowly to
changes in interest rates than the cost of its interest-bearing liabilities. The
slower adjustment of interest earning assets as compared to interest-bearing
liabilities results in First Federal having a "negative gap." At June 30, 2001,
our one year interest rate gap was negative 36.7%. As a result, our net interest
income will be adversely affected by material and prolonged increases in
interest rates. In addition, rising interest rates may adversely affect our
earnings because there might be a lack of customer demand for loans. Changes in
interest rates also can affect the average life of loans and mortgage-backed
securities.

Reliance on Certificate of Deposit Accounts

         A significant percentage of our deposit accounts are certificates of
deposit rather than passbook or money market accounts. At June 30, 2001, $50.0
million, or 64.4% of our total deposits were certificate of deposit accounts.
$42.3 million of our certificates of deposit mature within one year.
Certificates of deposit can be a more interest rate sensitive source of funds
than passbook or money market accounts. In the event that interest rates
significantly increase, or if we

                                       10

<PAGE>

do not offer competitive rates of interest on its certificates of deposit, the
Association may experience a significant decrease in its deposit accounts.

Competition

         The Association experiences strong competition in its local market area
in originating loans, primarily from mortgage brokers. There is also significant
competition in attracting deposits, primarily from commercial banks, thrifts and
money center banks. Such competition may limit our growth in the future.

Geographic Concentration of our Loans

         All of the Association's real estate mortgage loans are secured by
properties located in South Carolina, mostly in Chesterfield, Marlboro and
Florence Counties. A weakening in the local real estate market or in the local
or national economy, or a reduction in the workforce at the manufacturing
facilities in the area could result in an increase in the number of borrowers
who default on their loans and a reduction in the value of the collateral
securing the loans, which would reduce our earnings.

Financial Institution Regulation and Future of the Thrift Industry

         The Association and the Company are subject to extensive regulation,
supervision, and examination by the Office of Thrift Supervision ("OTS") and the
Federal Deposit Insurance Corporation (the `FDIC"). Such regulation and
supervision govern the activities in which an institution can engage and are
intended primarily for the protection of the insurance fund and depositors.
Regulatory authorities have been granted extensive discretion in connection with
their supervisory and enforcement activities which are intended to strengthen
the financial condition of the banking and thrift industries, including the
imposition of restrictions on the operation of an institution, the
classification of assets by an institution and the adequacy of an institution's
allowance for loan losses. Any change in such regulation and oversight, whether
by the OTS, the FDIC or Congress, could have a material impact on the Company,
the Bank and their respective operations.

REGULATION

         The Association is examined and supervised extensively by the Office of
Thrift Supervision and the Federal Deposit Insurance Corporation. The
Association is a member of and owns stock in the Federal Home Loan Bank of
Atlanta, which is one of the twelve regional banks in the Federal Home Loan Bank
System. This regulation and supervision establishes a comprehensive framework of
activities in which an institution can engage and is intended primarily for the
protection of the insurance fund and depositors. The Association also is
regulated by the Board of Governors of the Federal Reserve System, governing
reserves to be maintained against deposits and other matters. The Office of
Thrift Supervision examines the Association and prepares reports for the
consideration of the Association's Board of Directors on any deficiencies that
they may find in the Association's operations. The Association's relationship
with its depositors and borrowers also is regulated to a great extent by both
federal and state laws, especially in matters concerning the ownership of
savings accounts and the form and content of the Association's mortgage
documents. Any change in this regulation, whether by the Federal Deposit
Insurance Corporation, Office of Thrift Supervision, or Congress, could have a
material adverse impact on the Company and the Association and their operations.

Federal Regulation of Savings Institutions

         Business Activities. The activities of federal savings associations are
subject to extensive regulation including restrictions or requirements with
respect to loans to one borrower, the percentage of non-mortgage loans or
investments to total assets, capital distributions, permissible investments and
lending activities, liquidity, transactions with affiliates and community
reinvestment. The description of statutory provisions and regulations applicable
to savings associations set forth in this annual report does not purport to be a
complete description of these statutes and regulations and their effect on the
Association.

                                       11

<PAGE>

         Loans to One Borrower. Federal savings associations generally may not
make a loan or extend credit to a single or related group of borrowers in excess
of 15% of unimpaired capital and surplus on an unsecured basis. An additional
amount may be lent, equal to 10% of unimpaired capital and surplus, if the loan
is secured by readily marketable collateral, which is defined to include certain
securities and bullion, but generally does not include real estate. As of June
30, 2001 the Association was in compliance with its loans-to-one-borrower
limitations.

         Qualified Thrift Lender Test. As a federal savings association, the
Association is required to satisfy a qualified thrift lender test whereby it
must maintain at least 65% of its "portfolio assets" in "qualified thrift
investments" consisting primarily of residential mortgages and related
investments, including mortgage-backed and related securities. "Portfolio
assets" generally means total assets less specified liquid assets up to 20% of
total assets, goodwill and other intangible assets, and the value of property
used to conduct business. A savings association that fails the qualified thrift
lender test must either convert to a bank charter or operate under specified
restrictions. As of June 30, 2001, the Association maintained approximately
80.7% of its portfolio assets in qualified thrift investments and, therefore,
met the qualified thrift lender test.

         Capital Distributions. Office of Thrift Supervision regulations govern
capital distributions by savings institutions, which include cash dividends,
stock repurchases and other transactions charged to the capital account of a
savings institution to make capital distributions. A savings institution must
file an application for Office of Thrift Supervision approval of the capital
distribution if either (1) the total capital distributions for the applicable
calendar year exceed the sum of the institution's net income for that year to
date plus the institution's retained net income for the preceding two years, (2)
the institution would not be at least adequately capitalized following the
distribution, (3) the distribution would violate any applicable statute,
regulation, agreement or Office of Thrift Supervision-imposed condition, or (4)
the institution is not eligible for expedited treatment of its filings. If an
application is not required to be filed, savings institutions which are a
subsidiary of a holding company, as well as certain other institutions, must
still file a notice with the Office of Thrift Supervision at least 30 days
before the board of directors declares a dividend or approves a capital
distribution.

         Any additional capital distributions would require prior regulatory
approval. In the event the Association's capital fell below its fully phased-in
requirement or the Office of Thrift Supervision notified it that it was in need
of more than normal supervision, the Association's ability to make capital
distributions could be restricted. In addition, the Office of Thrift Supervision
could prohibit a proposed capital distribution by any institution, which would
otherwise be permitted by the regulation, if the Office of Thrift Supervision
determines that the distribution would constitute an unsafe or unsound practice.

         Community Reinvestment Act and Fair Lending Laws. Savings associations
have a responsibility under the Community Reinvestment Act and related
regulations of the Office of Thrift Supervision to help meet the credit needs of
their communities, including low- and moderate-income neighborhoods. In
addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit
lenders from discriminating in their lending practices on the basis of
characteristics specified in those statutes. An institution's failure to comply
with the provisions of the Community Reinvestment Act could, at a minimum,
result in regulatory restrictions on its activities, and failure to comply with
the Equal Credit Opportunity Act and the Fair Housing Act could result in
enforcement actions by the Office of Thrift Supervision, as well as other
federal regulatory agencies and the Department of Justice. The Association
received a satisfactory Community Reinvestment Act rating under the current
Community Reinvestment Act regulations in its most recent federal examination by
the Office of Thrift Supervision.

         Transactions with Related Parties. The Association's authority to
engage in transactions with related parties or "affiliates" or to make loans to
specified insiders, is limited by Sections 23A and 23B of the Federal Reserve
Act. The term "affiliates" for these purposes generally means any company that
controls or is under common control with an institution, including the Company
and its non-savings institution subsidiaries. Section 23A limits the aggregate
amount of certain "covered" transactions with any individual affiliate to 10% of
the capital and surplus of the savings institution and also limits the aggregate
amount of covered transactions with all affiliates to 20% of the savings
institution's capital

                                       12

<PAGE>

and surplus. Covered transactions with affiliates are required to be secured by
collateral in an amount and of a type described in Section 23A and the purchase
of low quality assets from affiliates is generally prohibited. Section 23B
provides that covered transactions with affiliates, including loans and asset
purchases, must be on terms and under circumstances, including credit standards,
that are substantially the same or at least as favorable to the institution as
those prevailing at the time for comparable transactions with non-affiliated
companies. In addition, savings institutions are prohibited from lending to any
affiliate that is engaged in activities that are not permissible for bank
holding companies and no savings institution may purchase the securities of any
affiliate other than a subsidiary.

         The Association's authority to extend credit to executive officers,
directors and 10% stockholders, as well as entities controlled by these persons,
is currently governed by Sections 22(g) and 22(h) of the Federal Reserve Act,
and also by Regulation O. Among other things, these regulations generally
require these loans to be made on terms substantially the same as those offered
to unaffiliated individuals and do not involve more than the normal risk of
repayment. However, regulations permit executive officers and directors to
receive the same terms through benefit or compensation plans that are widely
available to other employees, as long as the director or executive officer is
not given preferential treatment compared to other participating employees.
Regulation O also places individual and aggregate limits on the amount of loans
the Association may make to these persons based, in part, on the Association's
capital position, and requires approval procedures to be followed. At June 30,
2001, the Association was in compliance with these regulations.

         Enforcement. The Office of Thrift Supervision has primary enforcement
responsibility over savings institutions and has the authority to bring
enforcement action against all "institution-related parties," including
stockholders, and attorneys, appraisers and accountants who knowingly or
recklessly participate in wrongful action likely to have an adverse effect on an
insured institution. Formal enforcement action may range from the issuance of a
capital directive or cease and desist order to removal of officers and/or
directors of the institutions, receivership, conservatorship or the termination
of deposit insurance. Civil penalties cover a wide range of violations and
actions, and range up to $25,000 per day, unless a finding of reckless disregard
is made, in which case penalties may be as high as $1 million per day. The
Federal Deposit Insurance Corporation also has the authority to recommend to the
Director of the Office of Thrift Supervision that enforcement action be taken
with respect to a particular savings institution. If action is not taken by the
Director, the Federal Deposit Insurance Corporation has authority to take action
under specified circumstances.

         Standards for Safety and Soundness. Federal law requires each federal
banking agency to prescribe for all insured depository institutions standards
relating to, among other things, internal controls, information systems and
audit systems, loan documentation, credit underwriting, interest rate risk
exposure, asset growth, compensation, and other operational and managerial
standards as the agency deems appropriate. The federal banking agencies adopted
Interagency Guidelines Prescribing Standards for Safety and Soundness to
implement the safety and soundness standards required under the Federal law. The
guidelines set forth the safety and soundness standards that the federal banking
agencies use to identify and address problems at insured depository institutions
before capital becomes impaired. The guidelines address internal controls and
information systems; internal audit systems; credit underwriting; loan
documentation; interest rate risk exposure; asset growth; and compensation, fees
and benefits. If the appropriate federal banking agency determines that an
institution fails to meet any standard prescribed by the guidelines, the agency
may require the institution to submit to the agency an acceptable plan to
achieve compliance with the standard. If an institution fails to meet these
standards, the appropriate federal banking agency may require the institution to
submit a compliance plan.

Capital Requirements.

         Office of Thrift Supervision capital regulations require savings
institutions to meet three minimum capital standards: a 1.5% tangible capital
ratio, a 4% leverage ratio (3% for institutions receiving the highest rating on
the CAMELS rating system) and an 8% risk-based capital ratio. In addition, the
prompt corrective action standards discussed below also establish, in effect, a
minimum 2% tangible capital standard, a 4% leverage ratio (3% for institutions
receiving the highest rating on the CAMELS financial institution rating system),
and, together with the risk-based capital standard itself, a 4% Tier 1
risk-based capital standard. Office of Thrift Supervision regulations also
require that, in meeting the

                                       13

<PAGE>

tangible, leverage and risk-based capital standards, institutions must generally
deduct investments in and loans to subsidiaries engaged in activities as
principal that are not permissible for a national bank.

         The risk-based capital standard for savings institutions requires the
maintenance of Tier 1 (core) and total capital (which is defined as core capital
and supplementary capital) to risk-weighted assets of at least 4% and 8%,
respectively. In determining the amount of risk-weighted assets, all assets,
including certain off-balance sheet assets, are multiplied by a risk-weight
factor of 0% to 100%, assigned by the Office of Thrift Supervision capital
regulation based on the risks believed inherent in the type of asset. Core (Tier
1) capital is defined as common stockholders' equity (including retained
earnings), certain noncumulative perpetual preferred stock and related surplus
and minority interests in equity accounts of consolidated subsidiaries less
intangibles other than certain mortgage servicing rights and credit card
relationships. The components of supplementary capital currently include
cumulative preferred stock, long-term perpetual preferred stock, mandatory
convertible securities, subordinated debt and intermediate preferred stock, the
allowance for loan and lease losses limited to a maximum of 1.25% of
risk-weighted assets and up to 45% of unrealized gains on available-for-sale
equity securities with readily determinable fair market values. Overall, the
amount of supplementary capital included as part of total capital cannot exceed
100% of core capital.

         The capital regulations also incorporate an interest rate risk
component. Savings institutions with "above normal" interest rate risk exposure
are subject to a deduction from total capital for purposes of calculating their
risk-based capital requirements. For the present time, the Office of Thrift
Supervision has deferred implementation of the interest rate risk capital
charge. At June 30, 2001, the Association met each of its capital requirements.

Prompt Corrective Regulatory Action

         Under the Office of Thrift Supervision Prompt Corrective Action
regulations, the Office of Thrift Supervision is required to take supervisory
actions against undercapitalized institutions, the severity of which depends
upon the institution's level of capital. Generally, a savings institution that
has total risk-based capital of less than 8.0% or a leverage ratio or a Tier 1
core capital ratio that is less than 4.0% is considered to be undercapitalized.
A savings institution that has total risk-based capital less than 6.0%, a Tier 1
core risk-based capital ratio of less than 3.0% or a leverage ratio that is less
than 3.0% is considered to be "significantly undercapitalized" and a savings
institution that has a tangible capital to assets ratio equal to or less than
2.0% is deemed to be "critically undercapitalized." Generally, the banking
regulator is required to appoint a receiver or conservator for an institution
that is "critically undercapitalized." The regulation also provides that a
capital restoration plan must be filed with the Office of Thrift Supervision
within 45 days of the date an institution receives notice that it is
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized." In addition, numerous mandatory supervisory actions become
immediately applicable to the institution, including, but not limited to,
restrictions on growth, investment activities, capital distributions, and
affiliate transactions. The Office of Thrift Supervision could also take any one
of a number of discretionary supervisory actions against undercapitalized
institutions, including the issuance of a capital directive and the replacement
of senior executive officers and directors.

Insurance of Deposit Accounts

         The Federal Deposit Insurance Corporation has adopted a risk-based
deposit insurance assessment system. The Federal Deposit Insurance Corporation
assigns an institution to one of three capital categories based on the
institution's financial information, as of the reporting period ending seven
months before the assessment period, and one of three supervisory subcategories
within each capital group. The three capital categories are well capitalized,
adequately capitalized and undercapitalized. The supervisory subgroup to which
an institution is assigned is based on a supervisory evaluation provided to the
Federal Deposit Insurance Corporation by the institution's primary federal
regulator and information which the Federal Deposit Insurance Corporation
determines to be relevant to the institution's financial condition and the risk
posed to the deposit insurance funds. An institution's assessment rate depends
on the capital category and supervisory category to which it is assigned. The
Federal Deposit Insurance Corporation is authorized to raise the assessment
rates. The Federal Deposit Insurance Corporation has exercised this authority
several times in the past and may raise insurance premiums in the future. If
this type of action is taken by the Federal Deposit Insurance

                                       14

<PAGE>

Corporation, it could have an adverse effect on the earnings of the Association.

Federal Home Loan Bank System

         The Association is a member of the Federal Home Loan Bank System, which
consists of 12 regional Federal Home Loan Banks. The Federal Home Loan Bank
System provides a central credit facility primarily for member institutions. The
Association, as a member of the Federal Home Loan Bank of Atlanta, is required
to acquire and hold shares of capital stock in that Federal Home Loan Bank in an
amount at least equal to 1% of the aggregate principal amount of its unpaid
residential mortgage loans and similar obligations at the beginning of each
year, or 1/20 of its borrowings from the Federal Home Loan Bank, whichever is
greater. As of June 30, 2001, the Association was in compliance with this
requirement. The Federal Home Loan Banks are required to provide funds for the
resolution of insolvent thrifts and to contribute funds for affordable housing
programs. These requirements could reduce the amount of dividends that the
Federal Home Loan Banks pay to their members and could also result in the
Federal Home Loan Banks imposing a higher rate of interest on advances to their
members.

Federal Reserve System

         The Federal Reserve Board regulations require savings institutions to
maintain noninterest-earning reserves against their transaction accounts, such
as negotiable order of withdrawal and regular checking accounts. At June 30,
2001, the Association was in compliance with these reserve requirements. The
balances maintained to meet the reserve requirements imposed by the Federal
Reserve Board may be used to satisfy liquidity requirements imposed by the
Office of Thrift Supervision.

Holding Company Regulation

         The Company is a nondiversified unitary savings and loan holding
company within the meaning of federal law. A unitary savings and loan holding
company, such as the Company, is not generally restricted as to the types of
business activities in which it may engage, provided that the Association
continued to be a qualified thrift lender. A savings and loan holding company is
prohibited from, directly or indirectly, acquiring more than 5% of the voting
stock of another savings institution or savings and loan holding company without
prior written approval of the Office of Thrift Supervision and from acquiring or
retaining control of a depository institution that is not insured by the Federal
Deposit Insurance Corporation. In evaluating applications by holding companies
to acquire savings institutions, the Office of Thrift Supervision considers the
financial and managerial resources and future prospects of the holding company
and institution involved, the effect of the acquisition on the risk to the
deposit insurance funds, the convenience and needs of the community and
competitive factors.

         The Office of Thrift Supervision may not approve any acquisition that
would result in a multiple savings and loan holding company controlling savings
institutions in more than one state, subject to two exceptions: (1) the approval
of interstate supervisory acquisitions by savings and loan holding companies and
(2) the acquisition of a savings institution in another state if the laws of the
state of the target savings institution specifically permit the acquisitions.
The states vary in the extent to which they permit interstate savings and loan
holding company acquisitions.

         Although savings and loan holding companies are not subject to specific
capital requirements or specific restrictions on the payment of dividends or
other capital distributions, federal regulations do prescribe restrictions on
subsidiary savings institutions as described below. The Association must notify
the Office of Thrift Supervision 30 days before declaring any dividend to the
Company. In addition, the financial impact of a holding company on its
subsidiary institution is a matter that is evaluated by the Office of Thrift
Supervision and the agency has authority to order cessation of activities or
divestiture of subsidiaries deemed to pose a threat to the safety and soundness
of the institution.

         The Office of Thrift Supervision has proposed new rules which would
require savings and loan holding companies to notify the Office of Thrift
Supervision prior to engaging in transactions which (i) when combined with other
debt transactions engaged in during a 12-month period, would increase the
holding company's consolidated debt by 5%

                                       15

<PAGE>

or more; (ii) when combined with other asset acquisitions engaged in during a
12-month period, would result in asset acquisitions of greater than 15% of the
holding company's consolidated assets; or (iii) when combined with any other
transactions engaged in during a 12-month period, would reduce the holding
company's consolidated tangible capital to consolidated tangible assets by 10%
or more. The Office of Thrift Supervision has proposed to exempt from this rule
holding companies whose consolidated tangible capital exceeds 10% following the
transactions.

         The Office of Thrift Supervision has also proposed new rules which
would codify the manner in which the Office of Thrift Supervision reviews the
capital adequacy of savings and loan holding companies and determines when a
holding company must maintain additional capital. The Office of Thrift
Supervision is not currently proposing to establish uniform capital adequacy
guidelines for all savings and loan holding companies.

         The Company and the Association are unable to predict whether or when
these proposed regulations will be adopted, and what effect, if any, the
adoption of these regulations would have on their business.

Federal Securities Laws

         The Company's common stock is registered with the Securities and
Exchange Commission under the Securities Exchange Act of 1934. The Company is
subject to the information, proxy solicitation, insider trading restrictions and
other requirements under the Securities Exchange Act of 1934.

Item 2.  Properties
-------------------

         (a) The Company currently conducts its business through 2 full service
banking offices. The following table sets forth the Company's offices as of June
30, 2001:

                                              Original
                                 Leased         Year
                                   or         Leased or      Date of Lease
Location                         Owned        Acquired        Expiration
--------                         -----        --------       ------------

515 Market Street                Owned          1981              --
Cheraw, South Carolina 29520

1385 Alice Drive                 Leased         2000         October 2010
Florence, South Carolina


Item 3.  Legal Proceedings
--------------------------

         None.

Item 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

         Not applicable.

                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Shareholder Matters
------------------------------------------------------------------------------

         Information included in Great Pee Dee Bancorp, Inc.'s 2001 Annual
Report to Shareholders is herein incorporated by reference.

                                       16

<PAGE>

Item 6. Management's Discussion and Analysis of Financial Condition and Results
-------------------------------------------------------------------------------
of Operations
-------------

        Information included in Great Pee Dee Bancorp, Inc.'s 2001 Annual Report
to Shareholders is herein incorporated by reference.

Item 7. Financial Statements
-----------------------------

        Information included in Great Pee Dee Bancorp, Inc.'s 2001 Annual Report
to Shareholders is herein incorporated by reference.

Item 8. Changes in and Disagreements with Accountants on Accounting and
-----------------------------------------------------------------------
Financial Disclosure
--------------------

        Not applicable.

                                       17

<PAGE>

                                    PART III

Item 9.  Directors and Officers of the Registrant
-------------------------------------------------

         Information included in Great Pee Dee Bancorp, Inc.'s Proxy Statement
for its 2001 Annual Meeting of Shareholders is incorporated herein by reference.

Item 10.   Executive Compensation
---------------------------------

         Information included in Great Pee Dee Bancorp, Inc.'s Proxy Statement
for its 2001 Annual Meeting of Shareholders is incorporated herein by reference.

Item 11.   Security Ownership of Certain Beneficial Owners and Management
-------------------------------------------------------------------------

         Information included in Great Pee Dee Bancorp, Inc.'s Proxy Statement
for its 2001 Annual Meeting of Shareholders is incorporated herein by reference.

Item 12.   Certain Relationships and Related Transactions
---------------------------------------------------------

         Information included in Great Pee Dee Bancorp, Inc.'s Proxy Statement
for its 2001 Annual Meeting of Shareholders is incorporated herein by reference.

                                     PART IV

Item 13.   Exhibits and Reports on Form 8-K
-------------------------------------------

          (a)  The following documents appear in sections of the Registrants
               2001 Annual Report to Shareholders under the same caption, and
               are incorporated herein by reference. No other sections of the
               2001 Annual Report to Shareholders are incorporated herein by
               this reference. [any new agreements]

          (2)  Report to Shareholders
          (3)  Selected Financial and Other Data
          (4)  Managements Discussion and Analysis of Financial Condition and
               Results of Operations
          (5)  Independent Auditors' Report
          (6)  Consolidated Financial Statements
               (i)      Consolidated Statements of Financial Condition
               (ii)     Consolidated Statements of Operations
               (iii)    Consolidated Statements of Stockholders' Equity
               (iv)     Consolidated Statements of Cash Flows
               (v)      Notes to Consolidated Financial Statements
          (7)  Corporate Information
          (b)  The following exhibits are filed as part of this report.
        3.1    Certificate of Incorporation of Great Pee Dee Bancorp, Inc.*
        3.2    Bylaws of Great Pee Dee Bancorp, Inc.*
        4.0    Stock Certificate of Great Pee Dee Bancorp, Inc.*
       10.1    Employee Agreement for Herbert W. Watts*
       10.2    Great Pee Dee Bancorp, Inc. Employee Stock Ownership Plan and
               Trust*
       10.3    Employee Agreement for John S. Long
       13.1    Great Pee Dee Bancorp, Inc. 2001 Annual Report to Shareholders
       21      Subsidiaries of Registrant
       23.2    Consent of Dixon, Odom PLLC

                                       18

<PAGE>

      (c)  Reports on Form 8-K

                  None

*     Incorporated herein by reference into this document from the Exhibits to
      Form SB-2 Registration Statement, initially filed on September 26, 1997,
      Registration No. 333-36489.

                                       19

<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                    GREAT PEE DEE BANCORP, INC.

Date: September 24, 2001            By: /s/ Herbert W. Watts
                                        ----------------------------------------
                                        Herbert W. Watts
                                        President and Chief Executive Officer

      Pursuant to the requirements of the Securities Exchange of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

By:   /s/ Herbert W. Watts                     By:   /s/ Johnnie L. Craft
      -------------------------------------          ---------------------------
      Herbert W. Watts, President, Chief             Johnnie L. Craft,
       Executive Officer and Director                 Secretary and Treasurer
      (Principal Executive Officer)                  (Principal Financial and
                                                      Accounting Officer)

Date: September 24, 2001                       Date: September 24, 2001


By:   /s/ William R. Butler                    By:   /s/ James C. Crawford, III
      -------------------------------------          ---------------------------
      William R. Butler, Director                    James C. Crawford, III,
                                                      Chairman


Date: September 24, 2001                       Date: September 24, 2001


By:   /s/ Henry P. Duvall, IV                  By:   /s/ H. Malloy Evans, Jr.
      -------------------------------------          ---------------------------
      Henry P. Duvall, IV, Director                  H. Malloy Evans, Jr.,
                                                      Director


Date: September 24, 2001                       Date: September 24, 2001

                                       20

<PAGE>

By:    /s/ John S. Long                          By:   /s/ Cornelius B. Young
       ---------------------------------------         -------------------------
       John S. Long, Director, Vice                    Cornelius B. Young,
       President and Chief Operating Officer           Director


Date:  September 24, 2001                        Date: September 24, 2001

                                       21