GREAT PEE DEE BANCORP, INC.

                               2003 ANNUAL REPORT

<PAGE>

Great Pee Dee Bancorp, Inc. and Subsidiaries
================================================================================




TABLE OF CONTENTS


                                                                        Page No.
                                                                        --------

Report to Shareholders.................................................    1

Selected Consolidated Financial and Other Data.........................    2

Management's Discussion and Analysis...................................    3

Independent Auditors' Report...........................................   14

Consolidated Financial Statements

   Consolidated Statements of Financial Condition......................   15

   Consolidated Statements of Operations...............................   16

   Consolidated Statements of Stockholders' Equity.....................   17

   Consolidated Statements of Cash Flows...............................   18

   Notes to Consolidated Financial Statements..........................   20

General Corporate Information..........................................   43

<PAGE>

                             REPORT TO SHAREHOLDERS

To Our Shareholders:

     June 30, 2003 marked the completion of a strong and productive fiscal year
for Great Pee Dee Bancorp, highlighted by growth in both deposits and assets, as
well as development of new facilities and services.

     During the fiscal year, the Corporation's bank subsidiary, which was known
for 68 years as First Federal Savings and Loan Association of Cheraw, officially
became Sentry Bank & Trust. This very effective re-branding initiative featured
a comprehensive public relations campaign and has defined the banking unit's
identity and enhanced its visibility in all of the markets we serve.

     The new Florence facility, which began operations in 2002, continues to be
very productive in terms of both deposits and lending activity. Deposits through
the Florence office this year reached a level of $48.7 million, a gain of 41%
over the previous fiscal year.

     Growth in all business segments continued to be strong during the year.
Total assets of the Corporation now stand at $143.3 million, and deposits were
up to $108.8 million, reflecting an increase of 23.5%. Net income from all
operations increased 17.3% to $1,410,493, as compared to $1,202,588 during the
previous fiscal year. The Corporation has experienced excellent loan activity,
with $47 million in total loans made for the year. Secondary market lending also
continued during the year, generating $17.4 million of new loans for sale,
reflecting the refinancing boom of the past year.

     Construction of the new Cheraw headquarters facility on Highway 9 West
began this year and is on target for occupancy by early 2004, vastly enhancing
the Corporation's facilities for support, processing, business development and
customer service. The new facility will include 12,000 square feet of customer
service and office space on two levels. The existing Cheraw facility on Market
Street will continue to be used as a downtown office. Online banking was
launched this year, with a growing number of Sentry Bank & Trust customers
taking advantage of this convenient way to access their accounts. Approximately
225 customers are currently utilizing online banking, and that number is
expected to grow.

     The Corporation increased cash dividends to $.545 per share this year and
total stockholders' equity increased to $26 million. The Board of Directors
continues to identify means of increasing shareholder value, including continued
business development, payments of regular and special dividends, and repurchases
of common stock.

     On behalf of The Board of Directors, Management and Staff of Great Pee Dee
Bancorp, I wish to thank you for your confidence and loyalty as demonstrated by
your investment in the Corporation.

Sincerely,



/s/ Herbert W. Watts

Herbert W. Watts
President and Chief Executive Officer

                                       -1-
<PAGE>

Great Pee Dee Bancorp, Inc. and Subsidiaries
Selected Consolidated Financial and Other Data
================================================================================

<TABLE>
<CAPTION>
                                                              At or for the year ended June 30,
                                                           --------------------------------------
                                                              2003          2002          2001
                                                           ----------    ----------    ----------
                                                                  (Dollars in thousands)
<S>                                                        <C>           <C>           <C>
Financial Condition Data:

   Total assets                                            $  143,326    $  131,034    $  115,997
   Investments (1)                                             26,602        12,146        10,154
   Loans receivable, net                                      107,954       109,611        97,804
   Loans held for sale                                          2,056         3,072         3,431
   Deposits                                                   108,812        88,090        77,624
   Borrowings                                                   8,000        17,000        12,800
   Stockholders' equity                                        26,043        25,569        25,130

Operating Data:

   Interest income                                         $    8,426    $    8,637    $    7,905
   Interest expense                                             3,367         3,724         4,477
                                                           ----------    ----------    ----------
     Net interest income                                        5,059         4,913         3,428
   Provision for loan losses                                      400           500            45
                                                           ----------    ----------    ----------
     Net interest income after provision for
        loan losses                                             4,659         4,413         3,383
   Non-interest income                                          1,080           826           723
   Non-interest expense                                         3,496         3,334         2,771
                                                           ----------    ----------    ----------
     Income before income taxes                                 2,243         1,905         1,335
   Income tax expense                                             833           703           488
                                                           ----------    ----------    ----------
     Net income                                            $    1,410    $    1,202    $      847
                                                           ==========    ==========    ==========

Per Common Share Data:(2)

   Net income, basic                                       $     0.87    $     0.74    $     0.51
   Net income, diluted                                           0.85          0.73          0.51
   Regular cash dividends                                       0.545         0.464         0.391
   Dividend payment ratio                                       64.37%        62.70%        76.67%

Selected Other Data:

   Number of:
     Outstanding loans                                          3,435         3,455         2,944
     Deposit accounts                                           5,793         6,262         7,061
     Full-service offices                                           2             2             2
   Return on average assets                                      1.01%         0.98%         0.78%
   Return on average equity                                      5.49%         4.74%         3.34%
   Average equity to average assets                             18.32%        20.58%        23.48%
   Interest rate spread                                          3.36%         3.52%         2.23%
   Net yield on average interest-earning assets                  3.79%         4.18%         3.33%
   Average interest-earning assets to average interest-
     bearing liabilities                                       117.01%       120.78%       125.41%
   Ratio of non-interest expense to average total assets         2.49%         2.71%         2.57%
   Nonperforming assets to total assets                          1.60%         0.86%         0.52%
   Allowance for loan losses to nonperforming loans at
     period end                                                 62.88%        98.79%       100.35%
</TABLE>

(1) Includes interest-earning deposits, federal funds sold, Federal Home Loan
    Bank stock and investment securities.

(2) Retroactively reflects the effects of a 10% stock dividend in fiscal 2002.

                                       -2-
<PAGE>

                  Great Pee Dee Bancorp, Inc. and Subsidiaries
                      Management's Discussion and Analysis
================================================================================


Management's discussion and analysis is intended to assist readers in the
understanding and evaluation of the financial condition and results of
operations of Great Pee Dee Bancorp, Inc. and Subsidiaries. It should be read in
conjunction with the audited consolidated financial statements and accompanying
notes included in this report and the supplemental financial data appearing
throughout this discussion and analysis.

                             Description of Business

Great Pee Dee Bancorp, Inc. ("Great Pee Dee") was incorporated under the laws of
the State of Delaware for the purpose of becoming the savings and loan holding
company of Sentry Bank & Trust (the "Bank" or "Sentry"), formerly First Federal
Savings and Loan Association of Cheraw, in connection with Sentry's conversion
from a federally-chartered mutual savings and loan association to a
federally-chartered stock savings and loan association (the "Conversion"). A
subscription and community offering of Great Pee Dee's common stock closed on
December 31, 1997, at which time Great Pee Dee commenced operations and used one
half of the net proceeds received to acquire all of the outstanding common stock
of the Bank.

Great Pee Dee has no operations and conducts no business of its own other than
owning its subsidiaries, investing its liquid assets, and lending funds to the
Great Pee Dee Bancorp, Inc. Employee Stock Ownership Plan (the "ESOP") which was
formed in connection with the Conversion. Sentry's two full service banking
offices are located in Cheraw and Florence, South Carolina. The principal
business of the Bank is accepting deposits from the general public and using
those deposits and other sources of funds to make loans secured by real estate
located in the Bank's primary market area of Chesterfield, Marlboro and Florence
Counties, South Carolina, as well as other types of loans. On June 30, 2003,
approximately 87% of the Bank's total loans were composed of real estate loans.

On March 9, 2000, Great Pee Dee formed a second wholly-owned subsidiary, Sentry
Investment Services, Inc. (formerly First Federal Investment Services) which,
through an unaffiliated broker-dealer, provides customers of the Bank with
securities products and services. Through this arrangement, Sentry Investment
Services, Inc. earns revenues through commission-sharing with the unaffiliated
broker-dealer. Sentry Investment Services, Inc. employs one licensed securities
representative and for the year ended June 30, 2003 generated net fee income of
$75,000 or 0.8% of total consolidated revenue.

Great Pee Dee's principal sources of revenue are earnings on its investments,
interest earned from the loan to the ESOP, and dividends paid by the Bank to
Great Pee Dee, if any. Revenues of Sentry are derived primarily from interest on
loans. Sentry also receives interest income from its investment securities and
interest-earning deposit balances and various types of non-interest income. The
major expenses of Sentry are interest on deposits and general and administrative
expenses such as personnel costs, occupancy, and federal deposit insurance
premiums. Sentry's deposits are insured up to applicable limits by the Federal
Deposit Insurance Corporation. Great Pee Dee and its subsidiaries are
collectively referred to herein as the "Company."

                Asset/Liability and Interest Rate Risk Management

The Company's asset/liability management, or interest rate risk management,
program is focused primarily on evaluating and managing the composition of its
assets and liabilities in view of various interest rate scenarios. Factors
beyond the Company's control, such as market interest rates and competition, may
also have an impact on the Company's interest income and interest expense.

                                       -3-
<PAGE>

                  Great Pee Dee Bancorp, Inc. and Subsidiaries
                      Management's Discussion and Analysis
================================================================================


In the absence of other factors, the yield or return associated with the
Company's earning assets generally will increase from existing levels when
interest rates rise over an extended period of time, and, conversely, interest
income will decrease when interest rates decrease. In general, interest expense
will increase when interest rates rise over an extended period of time and,
conversely, interest expense will decrease when interest rates decrease.

Interest Rate Gap Analysis. As a part of its interest rate risk management
policy, the Company calculates an interest rate "gap." Interest rate "gap"
analysis is a common, though imperfect, measure of interest rate risk, which
measures the relative dollar amounts of interest-earning assets and
interest-bearing liabilities which reprice within a specific time period, either
through maturity or rate adjustment. The "gap" is the difference between the
amounts of such assets and liabilities that are subject to repricing. A
"negative" gap for a given period means that the amount of interest-bearing
liabilities maturing or otherwise repricing within that period exceeds the
amount of interest-earning assets maturing or otherwise repricing within the
same period. Accordingly, in a declining interest rate environment, an
institution with a negative gap would generally be expected, absent the effects
of other factors, to experience a lower decrease in the yield of its assets
relative to the cost of its liabilities and its income should be positively
affected. Conversely, the cost of funds for an institution with a negative gap
would generally be expected to increase more quickly than the yield on its
assets in a rising interest rate environment, and such institution's net
interest income generally would be expected to be adversely affected by rising
interest rates. Changes in interest rates generally have the opposite effect on
an institution with a "positive gap."

<TABLE>
<CAPTION>
                                                                Terms to Repricing at June 30, 2003
                                              ----------------------------------------------------------------------
                                                             More Than      More Than
                                               1 Year        1 Year to      3 Years to     More Than
                                               or Less        3 Years        5 Years        5 Years          Total
                                              ----------     ----------     ----------     ----------     ----------
                                                                      (Dollars in thousands)
<S>                                           <C>            <C>            <C>            <C>            <C>
INTEREST-EARNING ASSETS:
   Loans receivable:
     Real estate loans:
       Adjustable rate                        $   32,072     $      860     $    4,333     $    3,201     $   40,466
       Fixed rate                                  3,049          2,575          9,190         39,543         54,357
     Other loans                                   5,192          3,442          3,081          2,832         14,547
   Loans held for sale                             2,056             --             --             --          2,056
   Interest-earning balances in other banks        3,580             --             --             --          3,580
   Federal funds sold                              3,833             --             --             --          3,833
   Investment securities available for sale          449             --             --             --            449
   Investment securities held to maturity             --          2,224          6,400          9,441         18,065
   Stock in FHLB of Atlanta(1)                        --             --             --            675            675
                                              ----------     ----------     ----------     ----------     ----------

       Total interest-earning assets          $   50,231     $    9,101     $   23,004     $   55,692     $  138,028
                                              ==========     ==========     ==========     ==========     ==========

INTEREST-BEARING LIABILITIES:
   Deposit accounts:
     Demand                                   $   44,295     $       --     $       --     $       --     $   44,295
     Time over $100,000                           18,189          8,333             --             --         26,522
     Other time                                   26,841          9,716          1,228            210         37,995
   Borrowings                                         --             --             --          8,000          8,000
                                              ----------     ----------     ----------     ----------     ----------

       Total interest-bearing liabilities     $   89,325     $   18,049     $    1,228     $    8,210     $  116,812
                                              ==========     ==========     ==========     ==========     ==========

INTEREST SENSITIVITY GAP PER PERIOD           $  (39,094)    $   (8,948)    $   21,776     $   47,482     $   21,216

CUMULATIVE INTEREST SENSITIVITY GAP           $  (39,094)    $  (48,042)    $  (26,266)    $   21,216     $   21,216

CUMULATIVE GAP AS A PERCENTAGE
   OF TOTAL INTEREST-EARNING ASSETS               (28.32%)       (34.81%)       (19.03%)        15.37%         15.37%

CUMULATIVE RATIO OF INTEREST-EARNING
   ASSETS TO INTEREST-BEARING LIABILITIES          56.23%         55.26%         75.81%        118.16%        118.16%
</TABLE>

(1) Nonmarketable equity security; substantially all required to be maintained
    and assumed to mature in periods greater than 10 years.

                                       -4-
<PAGE>

                  Great Pee Dee Bancorp, Inc. and Subsidiaries
                      Management's Discussion and Analysis
================================================================================


The preceding table sets forth the amounts of interest-earning assets and
interest-bearing liabilities outstanding at June 30, 2003 which are projected to
reprice or mature in each of the future time periods shown. Except as stated
below, the amounts of assets and liabilities shown which reprice or mature
within a particular period were determined in accordance with the contractual
terms of the assets or liabilities. Loans with adjustable rates are shown as
being due at the end of the next upcoming adjustment period. Passbook accounts
and money market deposit accounts are assumed to be subject to immediate
repricing and depositor availability and have been placed in the shortest
period. In making the gap computations, none of the assumptions sometimes made
regarding prepayment rates and deposit decay rates have been used for any other
interest-earning assets or interest-bearing liabilities. In addition, the table
does not reflect scheduled principal payments that will be received throughout
the lives of the loans. The interest rate sensitivity of the Company's assets
and liabilities illustrated in the preceding table would vary substantially if
different assumptions were used or if actual experience differs from that
indicated by such assumptions.

The Company's one-year interest sensitivity gap as a percentage of total
interest-earning assets at June 30, 2003 was a negative 28.32%. At June 30,
2003, the Company's three-year and five-year cumulative interest sensitivity
gaps as a percentage of total interest-earning assets were a negative 34.81% and
a negative 19.03%, respectively.

Net Portfolio Value Analysis. In addition to the interest rate gap analysis
discussed above, management monitors the Bank's interest rate sensitivity
through the use of a model which estimates the change in net portfolio value
("NPV") in response to a range of assumed changes in market interest rates. NPV
is the present value of expected cash flows from assets, liabilities, and
off-balance sheet items. The model estimates the effect on Sentry's NPV of
instantaneous and permanent 100 to 300 basis point changes in market interest
rates.

The following table presents information regarding possible changes in the
Bank's NPV as of June 30, 2003, based on information provided by the Office of
Thrift Supervision's Risk Management Division:

                                                   Net portfolio value
                                          ------------------------------------
         Change in interest rates                      Change in    Percentage
         in basis points (rate shock)       Amount       amount       change
         ----------------------------     ----------   ----------   ----------
                                                 (Dollars in thousands)

         Up 300 basis points              $   24,223   $   (3,994)         (14%)

         Up 200 basis points                  26,014       (2,203)          (8%)

         Up 100 basis points                  27,426         (791)          (3%)

               Static                         28,217           --           --

         Down 100 basis points                29,050          832            3%

Computations of prospective effects of hypothetical interest rate changes are
based on numerous assumptions, including relative levels of market interest
rates, loan prepayments and deposit decay, and should not be relied upon as
indicative of actual results. Further, the computations do not reflect any
actions management may undertake in response to changes in interest rates. The
table set forth above indicates that in the event of a 200 basis point increase
in interest rates, Sentry would be expected to experience an 8% decrease in NPV.
Because of the overall low levels of interest rates, the analysis provided at
June 30, 2003 did not include the effects of downward adjustments exceeding 100
basis points.

                                       -5-
<PAGE>

                  Great Pee Dee Bancorp, Inc. and Subsidiaries
                      Management's Discussion and Analysis
================================================================================


Certain shortcomings are inherent in the NPV method of analysis presented above.
Although certain assets and liabilities may have similar maturities or periods
within which they will reprice, they may react differently to changes in market
interest rates. The interest rates on certain types of assets and liabilities
may fluctuate in advance of changes in market interest rates, while interest
rates on other types may lag behind changes in market rates. Additionally,
adjustable-rate mortgages have interest rate caps which restrict changes in
interest rates on a short-term basis and over the life of the assets. The
proportion of adjustable-rate loans may be reduced during sustained periods of
lower interest rates due to increased refinancing activity. Further, in the
event of a change in interest rates, prepayment and early withdrawal levels
would likely deviate significantly from those assumed in the table above.
Finally, the ability of many borrowers to service adjustable-rate debt may
decrease in the event of a sustained interest rate increase.

                               Net Interest Income

Net interest income represents the difference between income derived from
interest-earning assets and interest expense incurred on interest-bearing
liabilities. Net interest income is affected by both (i) the difference between
the rates of interest earned on interest-earning assets and the rates paid on
interest-bearing liabilities ("interest rate spread") and (ii) the relative
amounts of interest-earning assets and interest-bearing liabilities ("net
earning balance"). The following table sets forth information relating to
average balances of the Company's assets and liabilities for the years ended
June 30, 2003 and 2002. For the periods indicated, the table reflects the
average yield on interest-earning assets and the average cost of
interest-bearing liabilities (derived by dividing income or expense by the
monthly average balance of interest-earning assets or interest-bearing
liabilities, respectively) as well as the net yield on interest-earning assets
(which reflects the impact of the net earning balance). Nonaccruing loans were
included in the computation of average balances.

<TABLE>
<CAPTION>
                                                      Year Ended June 30, 2003          Year Ended June 30, 2002
                                                  -------------------------------    -------------------------------
                                                  Average                 Average    Average                 Average
                                                  Balance     Interest     Rate      Balance     Interest     Rate
                                                  --------    --------   --------    --------    --------   --------
                                                                       (Dollars in thousands)
<S>                                               <C>         <C>            <C>     <C>         <C>            <C>
Interest-earning assets:
   Interest-earning balances                      $  9,752    $    141       1.45%   $  3,051    $     78       2.56%
   Investments                                      10,839         429       3.96%      7,253         409       5.64%
   Loans                                           113,048       7,856       6.95%    107,382       8,151       7.59%
                                                  --------    --------   --------    --------    --------   --------

     Total interest-earning assets                 133,639       8,426       6.31%    117,686       8,638       7.34%
                                                              --------   --------                --------   --------

Other assets                                         6,719                              5,502
                                                  --------                           --------

     Total assets                                 $140,358                           $123,188
                                                  ========                           ========

Interest-bearing liabilities:
   Deposits                                       $102,099       2,976       2.91%   $ 80,681       3,100       3.84%
   Borrowings                                       12,115         392       3.24%     16,754         624       3.72%
                                                  --------    --------   --------    --------    --------   --------

     Total interest-bearing liabilities            114,214       3,368       2.95%     97,435       3,724       3.82%
                                                              --------   --------                --------   --------

Other liabilities                                      426                                404

Stockholders' equity                                25,718                             25,349
                                                  --------                           --------

     Total liabilities and stockholders' equity   $140,358                           $123,188
                                                  ========                           ========

Net interest income and interest rate spread                  $  5,058       3.36%               $  4,914       3.52%
                                                              ========   ========                ========   ========

Net yield on average interest-earning assets                                 3.79%                              4.18%
                                                                         ========                           ========

Ratio of average interest-earning assets to
average interest-bearing liabilities                117.01%                            120.78%
                                                  ========                           ========
</TABLE>

                                       -6-
<PAGE>

                  Great Pee Dee Bancorp, Inc. and Subsidiaries
                      Management's Discussion and Analysis
================================================================================


                              Rate/Volume Analysis

The following table analyzes the dollar amount of changes in interest income and
interest expense for major components of interest-earning assets and
interest-bearing liabilities. The table distinguishes between (i) changes
attributable to volume (changes in volume multiplied by the prior period's
rate), (ii) changes attributable to rate (changes in rate multiplied by the
prior period's volume), and (iii) net change (the sum of the previous columns).
The change attributable to both rate and volume (changes in rate multiplied by
changes in volume) has been allocated equally to both the changes attributable
to volume and the changes attributable to rate.

                                             Year Ended June 30, 2003 vs. 2002
                                             --------------------------------
                                                Increase (Decrease) Due To
                                             --------------------------------
                                              Volume       Rate        Total
                                             --------    --------    --------
                                                   (Dollars in thousands)
         Interest income:
            Interest-earning balances        $    134    $    (71)   $     63
            Investments                           172        (152)         20
            Loans                                 412        (707)       (295)
                                             --------    --------    --------

                    Total interest income         718        (930)       (212)
                                             --------    --------    --------

         Interest expense:
            Deposits                              724        (848)       (124)
            Borrowings                           (161)        (71)       (232)
                                             --------    --------    --------

                    Total interest expense        563        (919)       (356)
                                             --------    --------    --------

         Net interest income (loss)          $    155    $    (11)   $    144
                                             ========    ========    ========


           Comparison of Financial Condition at June 30, 2003 and 2002

The Company's total assets increased by $12.3 million during the year ended June
30, 2003, from $131.0 million at June 30, 2002 to $143.3 million at the year
end. The principal factor driving this growth in total assets was an increase in
customer deposits of $20.7 million. Total deposit accounts increased by 23.5%,
from $88.1 million to $108.8 million. Prominent among the factors driving this
deposit growth was relocation on March 25, 2002 of the Florence, South Carolina
branch office to a more visible and accessible location within that city. In
addition, the change on February 18, 2003 of the Bank's name to Sentry Bank &
Trust from First Federal Savings and Loan Association of Cheraw has been
accompanied by a significant marketing effort that has attracted new banking
customers.

While certificates of deposit continue to comprise the majority of the Company's
deposit accounts, more of the deposit account growth during the year was in
demand accounts. Demand deposits grew by $10.7 million or 31.8%, and totaled
$44.3 million or 40.7% of total deposits at June 30, 2003, as compared with
$33.6 million or 38.2% of total deposits at June 30, 2002. Certificates of
deposit increased by $10.0 million or 18.4%, and totaled $64.5 million or 59.3%
of total deposits at June 30, 2003, as compared with $54.5 million or 61.8% of
total deposits at June 30, 2002. Funds provided by the overall increase in
deposit accounts were deployed to reduce borrowings by $9.0 million, with the
balance of the deposit growth supporting $11.7 million of the $12.3 million
increase in asset growth during the year. The remainder of the funding for asset
growth was provided principally from the portion of the $1.4 million of net
income generated during the year that was retained after payment of regular
quarterly dividends aggregating $885,000 during the year.

                                       -7-
<PAGE>

                  Great Pee Dee Bancorp, Inc. and Subsidiaries
                      Management's Discussion and Analysis
================================================================================


The overall increase of $12.3 million in total assets was reflected principally
as growth in liquid assets, which increased by $15.1 million during the year
while net loans receivable and loans held for sale decreased by $1.7 million and
$1.0 million, respectively. Liquid assets, consisting of cash on hand and in
other banks, federal funds sold and investment securities, increased from $12.3
million or 9.4% of total assets at the beginning of the year to $27.4 million or
19.1% of total assets at June 30, 2003. This change in asset concentration
differs from the trend in recent years where the Company has managed its growth
to achieve a high concentration of interest-earning assets in loans that yield
higher rates of interest than debt securities and overnight investments. For the
current year, loans receivable decreased, partially as a result of some
reduction in loan demand and concerns about overall economic strength in the
Company's market area. More significantly, because of the historically low
interest rates during the year, the Company has allowed its overall investment
in home mortgage loans to decrease during the year while focusing more on
commercial real estate lending. The overall makeup of the loan portfolio is
essentially unchanged from June 30, 2002 to June 30, 2003, with real estate
loans representing 87% of total loans outstanding at both dates. However,
commercial mortgage loans increased from $10.9 million to $20.6 million during
the year, while one-to-four family residential loans and net construction loans
decreased by $4.5 million and $6.4 million, respectively.

During the year ended June 30, 2003, total stockholders' equity increased by
$475,000 to $26.0 million, principally as a result of retention of a portion of
the net income of $1.4 million for the year. Dividends aggregated $885,000 or
$.545 per share for the year, as compared with $764,000 or $.464 per share for
the previous year. The Company's board of directors increased the regular
quarterly dividend to $.14 per share beginning with the first quarter of the
current fiscal year. At June 30, 2003, the Bank continued to significantly
exceed all applicable regulatory capital requirements.


 Comparison of Results of Operations for the Years Ended June 30, 2003 and 2002

Net Income. Net income for the year ended June 30, 2003 was $1.4 million, or
diluted net income per share of $.85, as compared with net income of $1.2
million, or $.73 per diluted share, for the year ended June 30, 2002. These
results represent increases of $208,000 or 17.3% in net income and $.12 or 16.4%
in net income per diluted share.

Net Interest Income. Net interest income for the year ended June 30, 2003 was
$5.1 million as compared with $4.9 million during the year ended June 30, 2002,
an increase of $145,000. The Company's interest rate spread decreased from 3.52%
for the year ended June 30, 2002 to 3.36% for the year ended June 30, 2003,
largely as a result of the sustained trend of lower interest rates in the
economy in general. This downward trend in rates resulted for the Company in a
more significant decrease in fiscal 2003 in the rates earned on interest-earning
assets than in the rates paid on interest-bearing liabilities. The weighted
average yield on interest-earning assets decreased by 103 basis points while the
weighted average cost of interest-bearing liabilities decreased by 87 basis
points. The Company's net yield on average interest-earning assets decreased
from 4.18% for fiscal 2002 to 3.79% for fiscal 2003.

Provision for Loan Losses. Because of an increase in commercial lending, and in
consideration of increased delinquencies and the general downturn in the
economy, both nationally and in the Company's market area, management has
significantly increased the allowance for loan losses during both the current
and previous fiscal years. The provision for loan losses was $400,000 for the
year ended June 30, 2003 and $500,000 for the year ended June 30, 2002, as
compared with a provision of only $45,000 for the year ended June 30, 2001. The
allowance for loan losses as a percentage of total loans has increased from .60%
at June 30, 2001 to .93% at June 30, 2002, and

                                       -8-
<PAGE>

                  Great Pee Dee Bancorp, Inc. and Subsidiaries
                      Management's Discussion and Analysis
================================================================================


then to 1.26% at June 30, 2003. There were net loan charge-offs of $51,000
during fiscal 2003 as compared with $4,000 for fiscal 2002. At June 30, 2003,
nonaccrual loans, substantially all of which management considers to be well
collateralized, aggregated $2.3 million while the allowance for loan losses
stood at $1.4 million.

Non-Interest Income. Non-interest income increased by $254,000, from $826,000 in
fiscal 2002 to $1.1 million in fiscal 2003. Service fees and charges increased
by $184,000 to $594,000 principally as a result of the significant deposit
growth during the current fiscal year. The Company's originations and sale of
one-to-four family residential mortgage loans generated total income from
mortgage operations of $223,000 in fiscal 2003, a decrease of $11,000 from the
$234,000 earned in fiscal 2002. Income from the Company's brokerage subsidiary
decreased significantly, from $124,000 to $75,000 for the years ended June 30,
2002 and 2003, respectively. The decrease in brokerage income was driven
principally by the unfavorable economic conditions in equity market. Also
included in non-interest income for fiscal 2003 is a $175,000 nonrecurring
income item that was received in the settlement of a dispute with another
company.

Non-Interest Expenses. Non-interest expenses increased to $3.5 million for the
year ended June 30, 2003 as compared with $3.3 million for the year ended June
30, 2002, an increase of $161,000 or 4.8%. The most significant component of
this increase is an increase of $152,000 in personnel costs that was principally
growth-related. Non-interest expenses for fiscal 2003 includes advertising,
administrative and other costs aggregating $190,000 incurred in connection with
change of the Bank's name to Sentry Bank & Trust. In addition, during fiscal
2003 the Company completed amortization of the non-compete payment made in
connection with the acquisition of the Florence branch in 2000. During fiscal
2002, the Company incurred computer conversion expenses of $134,000 resulting
from the implementation of a new data processing system, and expenses of $80,000
directly related to relocation of the Florence branch in March of that year.
Principally as a result of these factors, as well as growth-related and
inflationary cost increases, occupancy expenses decreased by $118,000, data
processing costs increased by $19,000, amortization of intangibles decreased by
$28,000 and other non-interest expenses increased by $136,000 during fiscal 2003
as compared to fiscal 2002.

Provision for Income Taxes. The provision for income taxes, as a percentage of
income before income taxes, was approximately 37% for each of the years ended
June 30, 2003 and 2002, respectively.


                                  Asset Quality

The Company considers asset quality to be of primary importance, and employs a
formal internal loan review process to ensure adherence to the Lending Policy as
approved by the Board of Directors. An ongoing systematic evaluation process
fundamentally drives the function of determining the allowance for loan losses.
This ongoing evaluation process serves as the basis for determining, on a
monthly basis, the allowance for loan losses and any resulting provision to be
charged against earnings. Consideration is given to historical loan loss
experience, the value and adequacy of collateral, economic conditions in the
Company's market area and other factors. For loans determined to be impaired,
the allowance is based on discounted cash flows using the loan's initial
effective interest rate or the fair value of the collateral for certain
collateral dependent loans. This evaluation is inherently subjective as it
requires material estimates, including the amounts and timing of future cash
flows expected to be received on impaired loans that may be susceptible to
significant change. The allowance for loan losses represents Management's
estimate of the appropriate level of reserve to provide for probable losses
inherent in the loan portfolio.

                                       -9-
<PAGE>

                  Great Pee Dee Bancorp, Inc. and Subsidiaries
                      Management's Discussion and Analysis
================================================================================


The Company's policy regarding past due loans normally requires a prompt
charge-off to the allowance for loan losses following timely collection efforts
and a thorough review. Further efforts are then pursued through various means
available. Loans carried in a non-accrual status are generally collateralized,
and probable future losses are considered in the determination of the allowance
for loan losses.

Nonperforming Assets

The following table sets forth, at the dates indicated, information with respect
to the Company's nonaccrual loans, restructured loans, total nonperforming loans
(nonaccrual loans plus restructured loans), and total nonperforming assets.

                                                 June 30, 2003    June 30, 2002
                                                 -------------    -------------
                                                     (Dollars in thousands)

Nonaccrual loans                                 $       2,252    $       1,079
Restructured loans                                          --               --
                                                 -------------    -------------
         Total nonperforming loans                       2,252            1,079
Real estate owned                                           36               50
                                                 -------------    -------------
         Total nonperforming assets              $       2,288    $       1,129
                                                 =============    =============

Accruing loans past due 90 days or more          $          --    $          --
Allowance for loan losses                                1,416            1,066
Nonperforming loans to period end loans                   2.00%             .94%
Allowance for loan losses to period end loans             1.26%             .93%
Allowance for loan losses to nonperforming loans         62.88%           98.79%
Nonperforming assets to total assets                      1.60%             .86%

The Company's financial statements are prepared on the accrual basis of
accounting, including the recognition of interest income on loans, except for
loans accounted for on a nonaccrual basis. Loans are placed on a nonaccrual
basis when there are serious doubts about the collectibility of principal or
interest. Generally, the Company's policy is to place a loan on nonaccrual
status when the loan becomes past due 90 days. Loans are also placed on
nonaccrual status in cases where it is uncertain as to whether the borrower can
satisfy the contractual terms of the loan agreement. Amounts received on
nonaccrual loans generally are applied first to principal and then to interest
only after all past due principal has been collected. Restructured loans are
those for which concessions, including the reduction of interest rates below a
rate otherwise available to that borrower or the deferral of interest or
principal, have been granted due to the borrower's weakened financial condition.
Interest is accrued on restructured loans at the restructured rates when it is
anticipated that no loss of original principal will occur. Real estate owned
consists of foreclosed, repossessed and idled properties.

Analysis of Allowance for Loan Losses

The allowance for loan losses is established through charges to earnings in the
form of a provision for loan losses. The allowance for loan losses is increased
by provisions charged to operations and by recoveries of amounts previously
charged off, and reduced by loans charged off. The Company evaluates the
adequacy of the allowance monthly. In addition, on a monthly basis the board of
directors reviews the loan portfolio, conducts an evaluation of credit quality
and reviews the computation of the loan loss provision, recommending changes as
may be required. In evaluating the adequacy of the allowance, the Company
considers the growth, composition and industry diversification of the portfolio,
historical loan loss experience, current delinquency levels, adverse situations
that may affect a borrower's ability to repay, estimated value of any underlying
collateral,

                                      -10-
<PAGE>

                  Great Pee Dee Bancorp, Inc. and Subsidiaries
                      Management's Discussion and Analysis
================================================================================


prevailing economic conditions and other relevant factors. In addition,
regulatory agencies, as an integral part of their examination process,
periodically review the allowance for loan losses and may require the Company to
make additions for estimated losses based upon judgments different from those of
Management.

The Company follows a loan review program designed to evaluate the credit risk
in the loan portfolio. Through this loan review process, the Company maintains
an internally classified watch list that helps Management assess the overall
quality of the loan portfolio and the adequacy of the allowance for loan losses.
In establishing the appropriate classification for specific assets, Management
considers, among other factors, the estimated value of the underlying
collateral, the borrower's ability to repay, the borrower's payment history and
the current delinquent status. As a result of this process, certain loans are
categorized as substandard, doubtful or loss, and reserves are allocated based
on Management's judgment and historical experience.

Loans classified as "substandard" are those loans with clear and defined
weaknesses such as unfavorable financial ratios, uncertain repayment sources or
poor financial condition that may jeopardize the liquidation of the debt. They
are characterized by the distinct possibility that the Company will sustain some
losses if the deficiencies are not corrected. A reserve of 15% is generally
allocated to these loans. Loans classified as "doubtful" are those loans that
have characteristics similar to substandard loans but with an increased risk
that collection or liquidation in full is highly questionable and improbable. A
reserve of 50% is generally allocated to loans classified as doubtful. Loans
classified as "loss" are considered uncollectible and of such little value that
their continuance as bankable assets is not warranted. This classification does
not mean that the loan has absolutely no recovery or salvage value but rather it
is not practical or desirable to defer writing off this asset even though
partial recovery may be achieved in the future. As a practical matter, when
loans are identified as loss they are charged off against the allowance for loan
losses. In addition to the above classification categories, we also categorize
loans based upon loan type, assigning an allowance allocation based upon each
category.

The allowance for loan losses represents Management's estimate of the
appropriate level of reserve to provide for probable losses inherent in the loan
portfolio in the normal course of business. The Company makes specific
allowances that are allocated to certain individual loans and pools of loans
based on risk characteristics, as discussed above. In addition to the allocated
portion of the allowance for loan losses, the Company maintains an unallocated
portion that is not assigned to any specific category of loans. This unallocated
portion is intended to reserve for the inherent risk in the portfolio and the
intrinsic inaccuracies associated with the estimation of the allowance for loan
losses and its allocation to specific loan categories. While Management believes
that it uses the best information available to establish the allowance for loan
losses, future adjustments to the allowance may be necessary and results of
operations could be adversely affected if circumstances differ substantially
from the assumptions used in making the determinations. Furthermore, while
Management believe the Company has established the allowance for loan losses in
conformity with generally accepted accounting principles, there can be no
assurance that regulators, in reviewing the portfolio, will not require an
increase in the allowance for loan losses. In addition, because future events
affecting borrowers and collateral cannot be predicted with certainty, there can
be no assurance that the existing allowance for loan losses is adequate or that
increases will not be necessary should the quality of any loans deteriorate as a
result of the factors discussed herein. Any material increase in the allowance
for loan losses may adversely affect the Company's financial condition and
results of operations.

                         Liquidity and Capital Resources

During the year ended June 30, 2003, Great Pee Dee paid cash dividends of $.545
per share. Although Great Pee Dee anticipates that it will continue to declare
cash dividends on a regular basis, the Board of Directors will review its policy
on the payment of dividends on an ongoing basis, and such payment will be
subject to future earnings, cash flows, capital needs, and regulatory
restrictions.

                                      -11-
<PAGE>

                  Great Pee Dee Bancorp, Inc. and Subsidiaries
                      Management's Discussion and Analysis
================================================================================


Maintaining adequate liquidity while managing interest rate risk is the primary
goal of Great Pee Dee `s asset and liability management strategy. Liquidity is
the ability to fund the needs of the Bank's borrowers and depositors, pay
operating expenses, and meet regulatory liquidity requirements. Maturing
investments, loan and mortgage-backed security principal repayments, deposits
and income from operations are the main sources of liquidity. The Bank's primary
uses of liquidity are to fund loans and to make investments.

As of June 30, 2003, liquid assets (cash, interest-earning deposits, federal
funds sold and marketable investment securities) were approximately $27.4
million, which represents 25.2% of deposits. At that date, outstanding loan
commitments were $7.0 million, the undisbursed portion of construction loans was
$2.9 million and undrawn lines of credit totaled $3.9 million. Funding for these
commitments is expected to be provided from deposits, loan and mortgage-backed
securities principal repayments, maturing investments and income generated from
operations. Supplementing these liquidity sources, the Company has available
lines of credit from various correspondent banks to purchase federal funds on a
short-term basis of approximately $5.0 million. The Company also has the ability
to borrow up to $28.0 million, as of June 30, 2003, from the Federal Home Loan
Bank of Atlanta, with $8.0 million outstanding as of that date.

Under federal capital regulations, Sentry must satisfy certain minimum leverage
ratio requirements and risk-based capital requirements. Failure to meet such
requirements can initiate certain mandatory, and possibly additional
discretionary, actions by regulators that, if undertaken, could have a direct
material effect on Sentry's financial statements. At June 30, 2003 and 2002,
Sentry exceeded all such requirements.

The Bank is restricted in its ability to pay dividends and to make
distributions. A significant source of Great Pee Dee's funds are dividends
received from the Bank. In fiscal 2003, the amount of dividends that can be paid
by the Bank without prior approval from regulators is an amount that should be
adequate to cover Great Pee Dee's cash requirements.


                               Regulatory Matters

Management is not aware of any known trends, events, uncertainties or current
recommendations by regulatory authorities that will have, or that are reasonably
likely to have, a material effect on the Company's liquidity, capital resources,
or other operations.


                   Critical Accounting Policies and Estimates

The Company's discussion and analysis of its financial condition and results of
operations are based upon its consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these consolidated financial statements
requires the Company to make estimates and judgments regarding uncertainties
that affect the reported amounts of assets, liabilities, revenues and expenses.
On an ongoing basis, the Company evaluates its estimates which are based upon
historical experience and on other assumptions that are believed to be
reasonable under the circumstances. Actual results may differ from these
estimates under different assumptions or conditions.

The Company's significant accounting policies are described in Note A to the
consolidated financial statements. The Company considers the following
accounting policies to be most critical in their potential effect on its
financial position or results of operations:

                                      -12-
<PAGE>

                  Great Pee Dee Bancorp, Inc. and Subsidiaries
                      Management's Discussion and Analysis
================================================================================


Allowance for Loan Losses
-------------------------

The most critical estimate concerns the Company's allowance for loan losses. The
Company records provisions for loan losses based upon known problem loans and
estimated deficiencies in the existing loan portfolio. The Company's methodology
for assessing the allowance for loan losses consists of two key components,
which are a specific allowance for identified problem or impaired loans and a
formula allowance for the remainder of the portfolio.

Identified problem and impaired loans are measured for impairment based on the
present value of expected future cash flows discounted at the loan's effective
interest rate, the loan's observable market price or the fair value of the
collateral, if the loan is collateral dependent. This evaluation is inherently
subjective as it requires material estimates that may be susceptible to
significant change. The adequacy of the allowance is also reviewed by management
based upon its evaluation of then-existing economic and business conditions
affecting the key lending areas of the Company and other conditions, such as new
loan products, collateral values, loan concentrations, changes in the mix and
volume of the loan portfolio; trends in portfolio credit quality, including
delinquency and charge-off rates; and current economic conditions that may
affect a borrower's ability to repay. Although management believes it has
established and maintained the allowance for loan losses at appropriate levels,
future adjustments may be necessary if economic, real estate and other
conditions differ substantially from the current operating environment.

Interest Income Recognition
---------------------------

Interest on loans is included in income as earned based upon interest rates
applied to unpaid principal. Interest is not accrued on loans 90 days or more
past due unless the loans are adequately secured and in the process of
collection. Interest is not accrued on other loans when management believes
collection is doubtful. All loans considered impaired are non-accruing. Interest
on non-accruing loans is recognized as payments are received when the ultimate
collectibility of interest is no longer considered doubtful. When a loan is
placed on non-accrual status, all interest previously accrued is reversed
against current-period interest income.


                           Forward-looking Statements

This annual report contains statements which constitute "forward-looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. These statements can be identified by the use of forward
looking terminology, such as "may," "will," "expect," "anticipate," "estimate,"
or "continue," or the negative other variations of those terms or other
comparable terminology. Such forward-looking statements are not guarantees of
future performance and involve risks and uncertainties, and actual results may
differ materially from those described in the statements. Important factors that
could cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to, significant
fluctuations in interest rates, inflation, economic recession, significant
changes in the federal and state legal and regulatory environment and tax laws,
significant underperformance or loan losses in our portfolio of outstanding
loans, and competition in our markets.

                                      -13-
<PAGE>

                                [GRAPHIC OMITTED]

                              DIXON ODOM PLLC(TM)
                  Certified Public Accountants and Consultants


                          INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders
Great Pee Dee Bancorp, Inc.
Cheraw, South Carolina


We have audited the accompanying consolidated statements of financial condition
of Great Pee Dee Bancorp, Inc. and subsidiaries as of June 30, 2003 and 2002 and
the related consolidated statements of operations, stockholders' equity and cash
flows for the years then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Great Pee Dee
Bancorp, Inc. and subsidiaries as of June 30, 2003 and 2002, and the results of
their operations and their cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States of America.


/s/ Dixon Odom PLLC

Sanford, North Carolina
July 18, 2003

                                      -14-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
June 30, 2003 and 2002
================================================================================
<TABLE>
<CAPTION>
ASSETS                                                                          2003             2002
                                                                            -------------    -------------
<S>                                                                         <C>              <C>
Cash on hand and in banks                                                   $   1,497,504    $   1,154,959
Interest-earning balances in other banks                                        3,580,237        2,487,021
Federal funds sold                                                              3,833,478        3,329,708
Investment securities available for sale,
   at fair value (Note B)                                                         449,380          452,200
Investment securities held to maturity,
   at amortized cost, at fair value of
   $18,221,128 and $4,942,855 (Note B)                                         18,064,957        4,877,256

Loans (Note C)                                                                109,369,814       10,676,756
Allowance for loan losses                                                      (1,415,586)      (1,066,143)
                                                                            -------------    -------------
                                                                NET LOANS     107,954,228      109,610,613

Loans held for sale                                                             2,056,139        3,071,542
Accrued interest receivable                                                       792,399          882,518
Stock in the Federal Home Loan Bank, at cost                                      674,600        1,000,000
Premises and equipment, net (Note D)                                            2,340,328        2,026,829
Real estate acquired in settlement of loans                                        35,664           49,676
Intangible assets                                                               1,233,210        1,473,790
Other assets                                                                      813,540          617,717
                                                                            -------------    -------------

                                                             TOTAL ASSETS   $ 143,325,664    $ 131,033,829
                                                                            =============    =============

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
   Deposit accounts (Note G)                                                $ 108,812,261    $  88,089,651
   Advances from Federal Home Loan Bank (Note H)                                8,000,000       17,000,000
   Accrued interest payable                                                        96,042           91,169
   Advance payments by borrowers for property taxes
     and insurance                                                                107,798           90,521
   Accrued expenses and other liabilities                                         266,294          193,954
                                                                            -------------    -------------

                                                        TOTAL LIABILITIES     117,282,395      105,465,295
                                                                            -------------    -------------

COMMITMENTS AND CONTINGENCIES (Notes C and M)

STOCKHOLDERS' EQUITY (Notes I, J and L)
   Preferred stock, no par value, 400,000 shares
      authorized, no shares issued and outstanding                                     --               --
   Common stock, $.01 par value, 3,600,000 shares
     authorized; 2,224,617 shares issued                                           22,246           22,246
   Additional paid-in capital                                                  21,911,185       21,965,524
   Unearned compensation (Note I)                                              (1,082,623)      (1,211,761)
   Retained earnings, substantially restricted                                 10,942,704        0,417,256
   Accumulated other comprehensive loss                                           (31,400)         (30,100)
   Common stock in treasury, at cost (461,002 and
     459,005 shares, respectively)                                             (5,718,843)      (5,594,631)
                                                                            -------------    -------------

                                               TOTAL STOCKHOLDERS' EQUITY      26,043,269       25,568,534
                                                                            -------------    -------------

                               TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 143,325,664    $ 131,033,829
                                                                            =============    =============
</TABLE>
See accompanying notes.

                                      -15-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended June 30, 2003 and 2002
================================================================================
<TABLE>
<CAPTION>
                                                                               2003         2002
                                                                            ----------   ----------
<S>                                                                         <C>          <C>
INTEREST INCOME
   Loans                                                                    $7,856,139   $8,149,884
   Investments                                                                 429,051      409,714
   Deposits in other banks and federal funds sold                              141,163       77,764
                                                                            ----------   ----------

                                                    TOTAL INTEREST INCOME    8,426,353    8,637,362
                                                                            ----------   ----------

INTEREST EXPENSE
   Deposits (Note G)                                                         2,975,735    3,100,317
   Advances from Federal Home Loan Bank                                        391,673      623,537
                                                                            ----------   ----------

                                                   TOTAL INTEREST EXPENSE    3,367,408    3,723,854
                                                                            ----------   ----------

                                                      NET INTEREST INCOME    5,058,945    4,913,508

PROVISION FOR LOAN LOSSES (Note C)                                             400,000      500,000
                                                                            ----------   ----------

                                                NET INTEREST INCOME AFTER
                                                PROVISION FOR LOAN LOSSES    4,658,945    4,413,508
                                                                            ----------   ----------

NON-INTEREST INCOME
   Service fees and charges                                                    594,042      410,252
   Mortgage operations                                                         222,989      233,767
   Brokerage operations                                                         74,763      124,491
   Other                                                                       188,267       57,111
                                                                            ----------   ----------

                                                TOTAL NON-INTEREST INCOME    1,080,061      825,621
                                                                            ----------   ----------

NON-INTEREST EXPENSES
   Personnel costs                                                           1,562,083    1,409,737
   Occupancy                                                                   319,891      437,648
   Data processing                                                             222,332      203,368
   Amortization of intangibles                                                 240,580      268,380
   Other                                                                     1,150,427    1,014,873
                                                                            ----------   ----------

                                              TOTAL NON-INTEREST EXPENSES    3,495,313    3,334,006
                                                                            ----------   ----------

                                               INCOME BEFORE INCOME TAXES    2,243,693    1,905,123

INCOME TAXES (Note K)                                                          833,200      702,535
                                                                            ----------   ----------

                                                               NET INCOME   $1,410,493   $1,202,588
                                                                            ==========   ==========

EARNINGS PER COMMON SHARE (Note A)
   Basic                                                                    $     0.87   $     0.74
                                                                            ==========   ==========
   Diluted                                                                  $     0.85   $     0.73
                                                                            ==========   ==========

WEIGHTED AVERAGE COMMON SHARES
  OUTSTANDING (Note A)
   Basic                                                                     1,622,917    1,628,503
   Diluted                                                                   1,660,104    1,656,883
</TABLE>
See accompanying notes.

                                      -16-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended June 30, 2003 and 2002
================================================================================
<TABLE>
<CAPTION>
                                                                                             Accumulated
                    Shares of common stock   Par value  Additional                              other                     Total
                    -----------------------  of common    paid-in     Unearned     Retained  comprehensive  Treasury   stockholders'
                      Issued    In treasury    stock      capital   compensation   earnings      loss        stock        equity
                    ----------- -----------  ---------- ----------- -----------  ------------  ----------  -----------  -----------
<S>                   <C>           <C>      <C>        <C>         <C>          <C>           <C>         <C>          <C>
Balance at
 June 30, 2001        2,224,617     606,372  $   22,246 $21,561,318 $(1,369,127) $ 12,324,763  $  (17,700) $(7,391,667) $25,129,833

Comprehensive
 income:
   Net income                --          --          --          --          --     1,202,588          --           --    1,202,588
   Unrealized loss
     on securities
     available for
     sale, net of
     income taxes
     of ($7,200)             --          --          --          --          --            --     (12,400)          --      (12,400)
                                                                                                                        ------------
       Total
        comprehensive
        income                                                                                                            1,190,188
                                                                                                                        ------------

Purchase of
 treasury stock              --      15,377          --          --          --            --          --     (183,381)    (183,381)
Issuance of
  non-qualified
  compensation plan
  shares                     --      (1,274)         --          --          --            --          --       12,740       12,740
RRP shares earned            --          --          --          --      40,670            --          --           --       40,670
Release of ESOP shares       --          --          --      26,000     116,696            --          --           --      142,696
Cash dividends paid
  ($.464 per share)          --          --          --          --          --      (764,212)         --           --     (764,212)
10% stock dividend           --    (161,470)         --     378,206          --    (2,345,883)         --    1,967,677           --
                    ----------- -----------  ---------- ----------- -----------  ------------  ----------  -----------  -----------

Balance at
 June 30, 2002        2,224,617     459,005      22,246  21,965,524  (1,211,761)   10,417,256     (30,100)  (5,594,631)  25,568,534

Comprehensive
 income:
   Net income                --          --          --          --          --     1,410,493          --           --    1,410,493
   Unrealized loss
     on securities
     available for
     sale, net of
     income taxes
     of ($1,520)             --          --          --          --          --            --      (1,300)          --       (1,300)
                                                                                                                        ------------
       Total
        comprehensive
        income                                                                                                            1,409,193
                                                                                                                        ------------

Purchase of
 treasury stock              --      28,110          --          --          --            --          --     (356,548)    (356,548)
Exercise of
 stock options               --     (70,256)         --    (762,739)         --            --          --      867,073      104,334
Shares traded
 to exercise options         --      46,409          --     662,758          --            --          --     (662,758)          --
Shares issued to ESOP        --      (1,066)         --       2,588          --            --          --       13,135       15,723
Shares issued to RRP         --      (1,200)         --       3,054     (17,940)           --          --       14,886           --
RRP shares earned            --          --          --          --      17,480            --          --           --       17,480
Release of ESOP shares       --          --          --      40,000     129,598            --          --           --      169,598
Cash dividends paid
  ($.545 per share)          --          --          --          --          --      (885,045)         --           --     (885,045)
                    ----------- -----------  ---------- ----------- -----------  ------------  ----------  -----------  -----------

Balance at
 June 30, 2003        2,224,617     461,002  $   22,246 $21,911,185 $(1,082,623) $ 10,942,704  $  (31,400) $(5,718,843) $26,043,269
                    =========== ===========  ========== =========== ===========  ============  ==========  ===========  ===========
</TABLE>
See accompanying notes.

                                      -17-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended June 30, 2003 and 2002
================================================================================
<TABLE>
<CAPTION>
                                                                               2003             2002
                                                                            ------------    ------------
<S>                                                                         <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                               $  1,410,493    $  1,202,588
   Adjustments to reconcile net income to net cash
      provided by operating activities:
        Depreciation                                                             183,042         252,164
        Amortization                                                             152,811         360,457
        Provision for loan losses                                                400,000         500,000
        (Gain) loss on sale of foreclosed real estate                                712         (34,031)
        Deferred income taxes                                                   (225,000)       (180,000)
        Deferred compensation                                                         --          12,740
        ESOP contribution expense                                                185,321         142,696
        Vesting of deferred recognition and retention plan                        17,480          40,670
        Change in assets and liabilities:
           (Increase) decrease in accrued interest receivable                     90,119        (146,127)
           Decrease in loans held for sale                                     1,015,403         359,123
           (Increase) decrease in other assets                                    30,697         (60,412)
           Decrease in accrued interest payable                                    4,873          38,888
           Increase (decrease) in accrued expenses and
             other liabilities                                                    72,340         (75,124)
                                                                            ------------    ------------

                                                       NET CASH PROVIDED
                                                  BY OPERATING ACTIVITIES      3,338,291       2,413,632
                                                                            ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchases of held to maturity investment securities                       (22,726,937)     (3,300,000)
   Proceeds from maturities and calls of
      held to maturity investment securities                                   9,537,753       4,687,143
   Purchase of Federal Home Loan Bank stock                                           --        (275,000)
   Redemption of Federal Home Loan Bank stock                                    325,400              --
   Net (increase) decrease in loans                                            1,336,791     (12,457,341)
   Purchase of premises and equipment                                           (496,541)     (1,217,381)
   Proceeds from sale of real estate acquired in
      settlement of loans                                                         22,146          80,017
                                                                            ------------    ------------

                                                         NET CASH USED BY
                                                     INVESTING ACTIVITIES    (12,001,388)    (12,482,562)
                                                                            ------------    ------------
</TABLE>
See accompanying notes.

                                      -18-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended June 30, 2003 and 2002
================================================================================
<TABLE>
<CAPTION>
                                                                                2003            2002
                                                                            ------------    ------------
<S>                                                                         <C>             <C>
CASH FLOWS FROM FINANCING ACTIVITIES
   Net increase in demand accounts                                          $ 10,686,047    $  5,970,147
   Net increase in certificates of deposit                                    10,036,563       4,495,171
   Increase (decrease) in advance payments by borrowers
      for taxes and insurance                                                     17,277         (31,115)
   Net increase (decrease) in advances from Federal
      Home Loan Bank                                                          (9,000,000)      4,200,000
   Purchase of treasury stock                                                   (356,548)       (183,381)
   Proceeds from exercise of stock options                                       104,334              --
   Cash dividends paid                                                          (885,045)       (764,212)
                                                                            ------------    ------------

                                                        NET CASH PROVIDED
                                                  BY FINANCING ACTIVITIES     10,602,628      13,686,610
                                                                            ------------    ------------

                                                    NET INCREASE IN CASH
                                                     AND CASH EQUIVALENTS      1,939,531       3,617,680

CASH AND CASH EQUIVALENTS, BEGINNING                                           6,971,688       3,354,008
                                                                            ------------    ------------

                                                            CASH AND CASH
                                                      EQUIVALENTS, ENDING   $  8,911,219    $  6,971,688
                                                                            ============    ============

SUPPLEMENTAL DISCLOSURES OF CASH
   FLOW INFORMATION
      Cash paid during the year for:
      Interest                                                              $  3,362,535    $  3,684,966
                                                                            ============    ============

      Income taxes                                                          $  1,038,500    $    894,330
                                                                            ============    ============

SUPPLEMENTAL SCHEDULE OF NONCASH
   INVESTING AND FINANCING ACTIVITIES

      Loans receivable transferred to real estate acquired
        in settlement of loans                                              $    191,257    $    247,345
                                                                            ============    ============

      Loans receivable originated in the financing of
        foreclosed real estate sold                                         $    182,411    $    188,433
                                                                            ============    ============

      Net unrealized loss on investment securities
        available for sale, net of deferred income taxes                    $     (1,300)   $    (12,400)
                                                                            ============    ============

      Award of shares under the
        Recognition and Retention Plan                                      $     17,940    $         --
                                                                            ============    ============
</TABLE>
See accompanying notes.

                                      -19-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE A - SIGNIFICANT ACCOUNTING POLICIES

Organization and Operations
---------------------------

On December 31, 1997, pursuant to a Plan of Conversion which was approved by its
members and regulators, Sentry Bank & Trust ("Sentry" or the "Bank"), formerly
First Federal Savings and Loan Association of Cheraw, converted from a federally
chartered mutual savings and loan association to a federally-chartered stock
savings association (the "Conversion") and became a wholly-owned subsidiary of
Great Pee Dee Bancorp, Inc. ("Great Pee Dee" or "Parent"). Great Pee Dee was
formed to acquire all of the common stock of Sentry upon its conversion to stock
form. On March 9, 2000, Great Pee Dee formed a second wholly-owned subsidiary,
Sentry Investment Services, Inc. Great Pee Dee has no operations and conducts no
business on its own other than owning its subsidiaries, investing in liquid
assets and lending funds to the Employee Stock Ownership Plan (the "ESOP") which
was formed in connection with the Conversion.

Nature of Business
------------------

Sentry maintains offices in Cheraw and Florence, South Carolina. The Bank
conducts its primary business in Chesterfield, Marlboro and Florence Counties,
South Carolina. The Bank is primarily engaged in the business of attracting
deposits from the general public and using such deposits to make mortgage loans
secured by one-to-four family residential real estate located in its primary
market area. The Bank also makes home improvement loans, multi-family
residential loans, construction loans, commercial loans, automobile loans and
loans secured by deposit accounts. Sentry has been and intends to continue to be
a community-oriented financial institution offering a variety of financial
services to meet the needs of the communities it serves. Sentry Investment
Services, Inc. engages in the brokerage of a variety of investment products
through an unaffiliated broker-dealer.

Basis of Presentation
---------------------

The accompanying consolidated financial statements include the accounts of the
Parent and its subsidiaries, together referred to as the "Company." All
significant intercompany transactions and balances are eliminated in
consolidation.

Cash and Cash Equivalents
-------------------------

For purposes of the consolidated statements of cash flows, cash and cash
equivalents include cash on hand and in banks, interest-earning balances in
other banks, and federal funds sold.

Use of Estimates
----------------

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Material estimates that are particularly sensitive to significant change relate
to the determination of the allowance for loan losses and the valuation of real
estate acquired in connection with foreclosures or in satisfaction of loans. In
connection with the determination of the allowances for loan losses and
foreclosed real estate, management obtains independent appraisals for
significant properties.

                                      -20-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE A - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Use of Estimates (Continued)
----------------

A majority of the Bank's loan portfolio consists of single-family residential
loans in its market area. The regional economy is currently stable and consists
of various types of industry. Real estate prices in this market are also stable;
however, the ultimate collectibility of a substantial portion of the Bank's loan
portfolio is susceptible to changes in local market conditions.

While management uses available information to recognize losses on loans and
foreclosed real estate, future additions to the allowances may be necessary
based on changes in local economic conditions. In addition, regulatory agencies,
as an integral part of their examination process, periodically review the Bank's
allowances for losses on loans and foreclosed real estate. Such agencies may
require the Bank to recognize additions to the allowances based on their
judgments about information available to them at the time of their examination.
Because of these factors, it is reasonably possible that the allowances for loan
losses and foreclosed real estate may change materially in the near term.

Investment Securities
---------------------

Available-for-sale securities are reported at fair value and consist of bonds
and notes not classified as trading securities nor as held-to-maturity
securities. Unrealized holding gains and losses on available-for-sale securities
are reported as a net amount in other comprehensive income. Gains and losses on
the sale of available-for-sale securities are determined using the
specific-identification method. Declines in the fair value of individual
held-to-maturity and available-for-sale securities below their cost that are
other than temporary would result in write-downs of the individual securities to
their fair value. Such write-downs would be included in earnings as realized
losses. Premiums and discounts are recognized in interest income using the
interest method over the period to maturity.

Loans Held for Sale
-------------------

Mortgage loans originated and intended for sale in the secondary market are
carried at the lower of cost or estimated market value in the aggregate. Net
unrealized losses are recognized through a valuation allowance by charges to
income.

Loans Receivable
----------------

Loans receivable are stated at unpaid balances less the allowance for loan
losses and net deferred loan fees.

Loan origination and commitment fees, as well as certain direct origination
costs, are deferred and amortized as a yield adjustment over the contractual
lives of the related loans using the interest method. Amortization of deferred
loan fees is discontinued when a loan is placed on nonaccrual status.

Loans are placed on nonaccrual when a loan is specifically determined to be
impaired or when principal or interest is delinquent for 90 days or more.
Interest income generally is not recognized on specific impaired loans unless
the likelihood of further loss is remote. Interest payments received on such
loans are applied as a reduction of the loan principal balance. Interest income
on other nonaccrual loans is recognized only to the extent of interest payments
received.

                                      -21-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE A - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loans Receivable (Continued)
----------------

The Bank accounts for impaired loans in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 114, Accounting by Creditors for Impairment of
a Loan, amended for SFAS No. 118, Accounting by Creditors for Impairment of a
Loan - Income Recognition and Disclosure. A loan is impaired when, based on
current information and events, it is probable that all amounts due according to
the contractual terms of the loan agreement will not be collected. Impaired
loans are measured based on the present value of expected future cash flows
discounted at the loan's effective interest rate, the loan's observable market
price, or the fair value of the collateral of the loan if the loan is collateral
dependent. Interest income from impaired loans is recognized using the cash
basis method of accounting during the time within that period in which the loans
were impaired.

Allowance for Loan Losses
-------------------------

The Bank 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.
Management 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.

Premises and Equipment
----------------------

Bank premises and equipment are stated at cost less accumulated depreciation.
Depreciation of premises and equipment is recorded on a straight-line basis over
the estimated useful lives of the related assets.

Expenditures for maintenance and repairs are charged to expense as incurred,
while those for improvements are capitalized. The costs and accumulated
depreciation relating to premises and equipment retired or otherwise disposed of
are eliminated from the accounts, and any resulting gains or losses are credited
or charged to earnings.

Investment in Federal Home Loan Bank Stock
------------------------------------------

As a requirement for membership, the Bank invests in stock of the Federal Home
Loan Bank of Atlanta ("FHLB"). This investment is carried at cost.

Real Estate Acquired In Settlement of Loans
-------------------------------------------

Real estate acquired in settlement of loans is carried at the lower of cost or
fair value less estimated costs to dispose. Generally accepted accounting
principles define fair value as the amount that is expected to be received in a
current sale between a willing buyer and seller other than in a forced or
liquidation sale. Fair values at foreclosure are based on appraisals. Losses
arising from the acquisition of foreclosed properties are charged against the
allowance for loan losses. Subsequent writedowns are provided by a charge to
operations through the allowance for losses on other real estate in the period
in which the need arises.

                                      -22-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE A - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes
------------

Deferred tax assets and liabilities are recorded for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Future tax
benefits are recognized to the extent that realization of such benefits is more
likely than not. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which the assets
and liabilities are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income tax
expense in the period that includes the enactment date.

In the event the future tax consequences of differences between the financial
reporting bases and the tax bases of the Bank's assets and liabilities result in
deferred tax assets, applicable accounting standards require an evaluation of
the probability of being able to realize the future benefits indicated by such
assets. A valuation allowance is provided when it is more likely than not that
some portion or all of the deferred tax assets will not be realized. In
assessing the realizability of the deferred tax assets, management considers the
scheduled reversals of deferred tax liabilities, projected future taxable
income, and tax planning strategies.

A deferred tax liability is not recognized for portions of the allowance for
loan losses for income tax purposes in excess of the financial statement
balance, as described in Note K. Such a deferred tax liability will only be
recognized when it becomes apparent that those temporary differences will
reverse in the foreseeable future.

Stock Compensation Plans
------------------------

Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for
Stock-Based Compensation, encourages but does not require that companies record
compensation cost for stock-based employee compensation plans at fair value. The
Company has chosen to account for stock-based compensation plans using the
intrinsic value method prescribed in Accounting Principles Board (APB) Opinion
No. 25, Accounting for Stock Issued to Employees. Under the intrinsic value
based method, compensation cost is the excess, if any, of the quoted market
price of the stock at grant date or other measurement date over the amount an
employee must pay to acquire the stock. All of the Company's stock options have
no intrinsic value at grant date and, consequently, no compensation cost is
recognized for them.

An employer that continues to apply the intrinsic value accounting method rather
than the fair value based method must disclose certain pro forma information.
Under the fair value based method, compensation cost is measured at the grant
date of the option based on the value of the award and is recognized over the
service period, which is usually the vesting period. As required by SFAS No.
123, disclosures are presented below for the effect on the net income and net
income per share for the years ended June 30, 2003 and 2002 that would result
from the use of the fair value based method to measure compensation cost related
to stock option grants. The effects of applying the provisions of SFAS No. 123
are not necessarily indicative of future effects.

                                      -23-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE A - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Stock Compensation Plans (Continued)
------------------------
<TABLE>
<CAPTION>
                                                                         2003          2002
                                                                      ----------    ----------
                                                                       (Amounts in thousands,
                                                                       except per share data)
<S>                                                                   <C>           <C>
   Net income:
     As reported                                                      $    1,410    $    1,203
       Deduct:  Total stock-based employee compensation expenses
                determined under fair value method for all amounts,
                net of related tax effects                                   (86)           (9)
                                                                      ----------    ----------
     Pro forma                                                        $    1,324    $    1,194
                                                                      ==========    ==========

   Basic net income per share:
     As reported                                                      $     0.87    $     0.74
     Pro forma                                                              0.82          0.73

   Diluted net income per share:
     As reported                                                      $     0.85    $     0.73
     Pro forma                                                              0.80          0.72
</TABLE>

Earnings Per Common Share
-------------------------

Basic earnings per share represent income available to common shareholders
divided by the weighted-average number of common shares outstanding during the
period. Diluted earnings per share reflect additional common shares that would
have been outstanding if dilutive potential common shares had been issued, as
well as any adjustment to income that would result from the assumed issuance.
Potential common shares that may be issued by the Company relate to outstanding
stock options and are determined using the treasury stock method.

On October 30, 2001, the Company distributed a 10% stock dividend. All
references to net income per share, weighted average shares outstanding and
dividends per share have been adjusted to give effect to this stock dividend.

Earnings per common share have been computed based on the following:

<TABLE>
<CAPTION>
                                                                   Years Ended June 30,
                                                                 -----------------------
                                                                    2003         2002
                                                                 ----------   ----------
<S>                                                               <C>          <C>
         Average number of common shares outstanding
           used to calculate basic earnings per common share      1,622,917    1,628,503


         Effect of dilutive options                                  37,187       28,380
                                                                 ----------   ----------

         Average number of common shares outstanding
           used to calculate diluted earnings per common share    1,660,104    1,656,883
                                                                 ==========   ==========
</TABLE>

For the year ended June 30, 2003, there were 16,316 options that were
antidilutive since the exercise price exceeded the average market price for the
year. There were no antidilutive options for the year ended June 30, 2002.

                                      -24-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE A - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Comprehensive Income
--------------------

Accounting principles generally require that recognized revenue, expenses, gains
and losses be included in net income. Although certain changes in assets and
liabilities, such as unrealized gains and losses on available-for-sale
securities, are reported as a separate component of the equity section of the
balance sheet, such items, along with net income, are components of
comprehensive income.

The components of other comprehensive income and related tax effects are as
follows:

                                                        2003          2002
                                                     ----------    ----------

   Unrealized holding losses on available-for-sale
      securities                                     $   (2,820)   $  (19,600)

   Reclassification adjustment for (gains) losses
      realized in income                                     --            --
                                                     ----------    ----------

   Net unrealized losses                                 (2,820)      (19,600)

   Tax effect                                             1,520         7,200
                                                     ----------    ----------

   Net of tax amount                                 $   (1,300)   $  (12,400)
                                                     ==========    ==========

Intangible Assets
-----------------

In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No.
141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible
Assets. SFAS No. 141 requires that all business combinations entered into after
June 30, 2001 be accounted for under the purchase method. SFAS No. 142 requires
that goodwill and all intangible assets of indefinite life be periodically (at
least annually) evaluated for impairment, with any resulting impairment loss
being charged against earnings. Also, under SFAS No. 142, goodwill resulting
from any business combination accounted for in accordance with SFAS No. 141 will
not be amortized, and the amortization of goodwill related to business
combinations entered into prior to July 1, 2001 will be discontinued.
Substantially all of the Company's intangible assets were recorded in connection
with its purchase in March of 2000 of a branch office in Florence, South
Carolina, and must be accounted for in accordance with SFAS No. 72, Accounting
for Certain Acquisitions of Banking or Thrift Institutions. As a result, none of
those intangible assets constitutes goodwill that must cease to be amortized
under the provisions of SFAS No. 142. Accordingly, the Company's adoption of
SFAS No. 142 on July 1, 2001 did not significantly affect its consolidated
financial statements.

In connection with the March 2000 acquisition of a branch office in Florence,
South Carolina, the Company purchased for $250,000 a non-compete agreement and
recorded deposit-related intangible assets of $1,850,000. The non-compete
agreement has been amortized using the straight-line method over that
agreement's three-year term. The deposit-related intangible assets are being
amortized using the straight-line method over ten years.

                                      -25-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE A - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements
--------------------------------

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities. This statement addresses financial accounting and
reporting for costs associated with exit or disposal activities and supersedes
Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring). A liability for a cost
associated with an exit or disposal activity shall be recognized and measured
initially at its fair value in the period in which the liability is incurred,
except for certain qualifying employee termination benefits. SFAS No. 146 will
be effective for exit or disposal activities initiated by the Company after June
30, 2003.

In October 2002, the FASB issued SFAS No. 147, Acquisitions of Certain Financial
Institutions, which addresses the financial accounting and reporting for the
acquisition of all or part of a financial institution. This standard removes
certain acquisitions of financial institutions from the scope of SFAS No. 72,
Accounting for Certain Acquisitions of Bank or Thrift Institutions. This
statement requires financial institutions to reclassify goodwill arising from a
qualified business acquisition from SFAS No. 72 goodwill to goodwill subject to
the provisions of SFAS No. 142. The reclassified goodwill will no longer be
amortized but will be subject to an annual impairment test, pursuant to SFAS No.
142. Adoption of this statement did not affect the Company's consolidated
financial statements.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation - Transition and Disclosure. SFAS No. 148 amends SFAS No. 123,
Accounting for Stock-Based Compensation, to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, this SFAS No. 148 amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. SFAS No. 148 is effective for financial statements for fiscal years
ending after December 15, 2002. The Company continues to account for its
stock-based compensation in accordance with Opinion No. 25 and has adopted the
disclosure provisions of SFAS No. 148.

In November 2002, the FASB issued FASB Interpretation No. 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others ("FIN 45"). FIN 45 requires a liability to
be recognized at the time a company issues a guarantee for the fair value of the
obligations assumed under certain guarantee agreements. Additional disclosures
about guarantee agreements are also required in the interim and annual financial
statements. FIN 45 is not expected to have a material impact on the Company's
consolidated financial statements.

                                      -26-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE B - INVESTMENT SECURITIES

The following is a summary of the securities portfolios by major classification:

<TABLE>
<CAPTION>
                                                          June 30, 2003
                                       -----------------------------------------------------
                                                        Gross        Gross
                                        Amortized    unrealized    unrealized       Fair
                                          cost          gains        losses         value
                                       -----------   -----------   -----------   -----------
<S>                                    <C>           <C>           <C>           <C>
Securities available for sale:
   Marketable equity securities        $   500,000   $        --   $    50,620   $   449,380
                                       ===========   ===========   ===========   ===========

Securities held to maturity:
   U. S. government securities and
     obligations of U. S. government
     agencies                          $ 8,100,000   $    75,938   $        --   $ 8,175,938
   Municipal securities                    948,603         8,500            --       957,103
   FHLMC mortgage-backed securities      9,016,354        71,733            --     9,088,087
                                       -----------   -----------   -----------   -----------

                                       $18,064,957   $   156,171   $        --   $18,221,128
                                       ===========   ===========   ===========   ===========


                                                          June 30, 2002
                                       -----------------------------------------------------
                                                        Gross        Gross
                                        Amortized    unrealized    unrealized       Fair
                                          cost          gains        losses         value
                                       -----------   -----------   -----------   -----------

Securities available for sale:
   Marketable equity securities        $   500,000   $        --   $    47,800   $   452,200
                                       ===========   ===========   ===========   ===========

Securities held to maturity:
   U. S. government securities and
     obligations of U. S. government
     agencies                          $ 3,600,000   $    65,531   $        --   $ 3,665,531
   Municipal securities                  1,268,972            --            --     1,268,972
   FHLMC mortgage-backed securities          8,284            68            --         8,352
                                       -----------   -----------   -----------   -----------

                                       $ 4,877,256   $    65,599   $        --   $ 4,942,855
                                       ===========   ===========   ===========   ===========
</TABLE>

The amortized cost and fair values of securities held to maturity at June 30,
2003 by contractual maturity are shown below. Available-for-sale securities are
not included in this table because they consist solely of equity securities.
Expected maturities will differ from contractual maturities because borrowers
may have the right to call or prepay obligations with or without call or
prepayment penalties.

                                                  Securities Held to Maturity
                                                  ---------------------------
                                                   Amortized         Fair
                                                     cost            value
                                                  -----------     -----------

         Due after one year through five years    $ 8,623,603     $ 8,699,545
         Due after five years through ten years     9,441,354       9,521,583
                                                  -----------     -----------

                                                  $18,064,957     $18,221,128
                                                  ===========     ===========

                                      -27-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE B - INVESTMENT SECURITIES (Continued)

Proceeds from maturities and calls of investment securities held to maturity
during the years ended June 30, 2003 and 2002 were $9,537,753 and $4,687,143,
respectively. No gains or losses were realized on those maturities and calls.
There were no sales of available-for-sale securities during the years ended June
30, 2003 or 2002.

Securities with a carrying value of $2,213,087 and $700,000 and a fair value of
$2,222,112 and $714,594 at June 30, 2003 and 2002, respectively, were pledged to
secure public monies on deposit as required by law.


NOTE C - LOANS RECEIVABLE

Loans receivable consist of the following:

<TABLE>
<CAPTION>
                                                              2003           2002
                                                          ------------   ------------
<S>                                                       <C>            <C>
         Type of loan:
           Real estate loans:
             One-to-four family residential               $ 63,844,999   $ 68,296,300
             Commercial                                     20,624,945     10,923,892
             Construction                                    2,318,385      8,702,034
             Home improvement loans                          8,236,049      8,082,781
                                                          ------------   ------------

             Total real estate loans                        95,024,378     96,005,007
                                                          ------------   ------------
           Other loans:
             Commercial                                      6,015,355      6,549,894
             Consumer                                        7,659,024      8,029,523
             Loans secured by deposits                         872,594        334,629
                                                          ------------   ------------

             Total other loans                              14,546,973     14,914,046
                                                          ------------   ------------

             Subtotal                                      109,571,351    110,919,053

         Less:
           Deferred loan origination fees, net of costs        201,537        242,297
                                                          ------------   ------------

             Total loans                                  $109,369,814   $110,676,756
                                                          ============   ============
</TABLE>

The allowance for loan losses is summarized as follows:

<TABLE>
<CAPTION>
                                                              2003           2002
                                                          ------------   ------------
<S>                                                       <C>            <C>
         Balance at beginning of year                     $  1,066,143   $    570,312
         Provision for loan losses                             400,000        500,000
         Charge-offs                                           (52,557)        (4,169)
         Recoveries                                              2,000             --
                                                          ------------   ------------

         Balance at end of year                           $  1,415,586   $  1,066,143
                                                          ============   ============
</TABLE>

                                      -28-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE C - LOANS RECEIVABLE (Continued)


At June 30, 2003 and 2002, the recorded investment in loans considered impaired
in accordance with SFAS No. 114 totaled $2.3 million and $1.1 million,
respectively, with corresponding valuation allowances of $530,000 and $162,000,
respectively. For the years ended June 30, 2003 and 2002, the average recorded
investment in impaired loans was approximately $1.7 million and $1.4 million,
respectively. Interest income that was foregone on impaired loans for the years
ended June 30, 2003, and 2002 amounted to approximately $57,000 and $39,000,
respectively.

At June 30, 2003, the Bank had loan commitments outstanding of $7,024,585,
including loans of $3,285,287 to be originated at fixed interest rates ranging
from 5.0% to 9.0%. In management's opinion, these commitments, and undisbursed
proceeds on construction loans in process reflected above, represent no more
than normal lending risk to the Bank and will be funded from normal sources of
liquidity.

The Bank has had loan transactions with its directors and executive officers.
Such loans were made in the ordinary course of business and also on
substantially the same terms and collateral as those comparable transactions
prevailing at the time and did not involve more than the normal risk of
collectibility or present other unfavorable features. A summary of related party
loan transactions is as follows:

                                                          2003         2002
                                                       ----------   ----------

         Balance at beginning of year                  $  583,508   $  623,154
         Net (repayments) borrowings during the year      501,257      (39,646)
                                                       ----------   ----------

         Balance at end of year                        $1,084,765   $  583,508
                                                       ==========   ==========


NOTE D - PREMISES AND EQUIPMENT

Premises and equipment for the years ended on June 30 consist of the following:

                                                          2003         2002
                                                       ----------   ----------

         Land                                          $  485,687   $  485,687
         Building and improvements                      1,820,330    1,384,914
         Furniture and equipment                          988,218      984,133
                                                       ----------   ----------

                                                        3,294,235    2,854,734
         Accumulated depreciation                        (953,907)    (827,905)
                                                       ----------   ----------

                                                       $2,340,328   $2,026,829
                                                       ==========   ==========

Depreciation expense for the years ended June 30, 2003 and 2002 amounted to
$183,042 and $252,164, respectively.

In January of 2003, the Company entered into a contract for the construction of
a corporate headquarters and full service branch facility to be located on
property the Bank currently owns at 901 Chesterfield Highway in Cheraw, South
Carolina. Total construction costs for the new main office facility are expected
to be approximately $1.7 million. Work began on the new facility in February
2003, with an expected completion date of January 2004. At June 30, 2003, costs
of approximately $460,000 had been incurred on the new office. These costs are
included in building and improvements.

                                      -29-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE D - PREMISES AND EQUIPMENT (Continued)

The Bank has a non-cancelable operating lease for the land on which its Florence
branch is located. Future minimum rent commitments under this lease are as
follows:

           2004                                 $   18,000
           2005                                     18,000
           2006                                     22,500
           2007                                     24,000
           2008                                     24,000
           Thereafter                              243,000
                                                ----------

                                                $  349,500
                                                ==========

The lease has an initial term of fifteen years with renewal options for two
additional ten-year terms followed by one additional five-year term. Total rent
expense for the years ended June 30, 2003 and 2002 was $18,000 and $74,833,
respectively.

NOTE E - INTANGIBLE ASSETS

The following is a summary of the gross carrying amount and accumulated
amortization of amortized intangible assets as of June 30, 2003 and June 30,
2002:

<TABLE>
<CAPTION>
                                         2003                          2002
                              ---------------------------   ---------------------------
                                 Gross                         Gross
                                Carrying     Accumulated      Carrying     Accumulated
                                 Amount      Amortization      Amount      Amortization
                              ------------   ------------   ------------   ------------
                                                    (In thousands)
<S>                           <C>            <C>            <C>            <C>
Non-compete agreement         $        250   $        250   $        250   $        194
Deposit intangibles related
   to branch acquisition             1,850            617          1,850            432
                              ------------   ------------   ------------   ------------

                              $      2,100   $        867   $      2,100   $        626
                              ============   ============   ============   ============
</TABLE>

The following table presents the estimated amortization for intangible assets
for each of the five fiscal years ending June 30, 2008 and the estimated amount
amortizable thereafter. These estimates are subject to change in future periods
to the extent management determines it is necessary to make adjustments to the
carrying value or estimated useful lives of amortized intangible assets.

                                               Estimated
                                              amortization
                                                expense
                                             --------------
                                             (In thousands)

           2004                              $          185
           2005                                         185
           2006                                         185
           2007                                         185
           2008                                         185
           Thereafter                                   308
                                             --------------

                                             $        1,233
                                             ==============

                                      -30-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE F - FEDERAL INSURANCE OF DEPOSITS

Eligible deposit accounts are insured up to $100,000 by the Federal Deposit
Insurance Corporation.


NOTE G - DEPOSIT ACCOUNTS

A comparative summary of deposit accounts at June 30, 2003 and 2002 follows:

<TABLE>
<CAPTION>
                                                2003                           2002
                                     ---------------------------    ---------------------------
                                                     Weighted                        Weighted
                                       Balance       avg. rate        Balance        avg. rate
                                     ------------   ------------    ------------   ------------
<S>                                  <C>                    <C>     <C>                    <C>
         Demand accounts:
           Non-interest bearing      $  6,349,708             --%   $  4,223,006             --%
           Savings                      2,969,022           0.75%      2,471,936           1.90%
           Money market and NOW        34,976,041           1.66%     26,913,782           2.15%
                                     ------------                   ------------
             Total demand accounts     44,294,771           1.36%     33,608,724           1.86%

         Certificates of deposit       64,517,490           3.32%     54,480,927           3.71%
                                     ------------                   ------------

           Total deposit accounts    $108,812,261           2.52%   $ 88,089,651           3.00%
                                     ============                   ============
</TABLE>

A summary of certificate accounts by maturity as of June 30, 2003 follows:

<TABLE>
<CAPTION>
                                                Less than      $100,000
                                                $100,000       or more        Total
                                               -----------   -----------   -----------
<S>                                            <C>           <C>           <C>
         One year or less                      $26,841,237   $18,188,828   $45,030,065
         More than one year to three years       9,715,723     8,333,164    18,048,887
         More than three years to five years     1,228,374            --     1,228,374
         More than five years                      210,164            --       210,164
                                               -----------   -----------   -----------

         Total certificate accounts            $37,995,498   $26,521,992   $64,517,490
                                               ===========   ===========   ===========
</TABLE>

Interest expense on deposits for the years ended June 30 is summarized as
follows:

                                               2003           2002
                                            -----------    -----------

         Checking accounts                  $   120,887    $    48,374
         Passbook savings accounts               35,581         55,711
         Money market savings accounts          585,245        704,116
         Certificates of deposit              2,236,282      2,292,992
                                            -----------    -----------
                                              2,977,995      3,101,193
         Penalties for early withdrawal          (2,260)          (876)
                                            -----------    -----------

                                            $ 2,975,735    $ 3,100,317
                                            ===========    ===========

                                      -31-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE H - ADVANCES FROM FEDERAL HOME LOAN BANK

Advances from the Federal Home Loan Bank of Atlanta, with weighted average
interest rates, are as follows:

                                                     At June 30,
                                             --------------------------
                                                2003           2002
                                             -----------    -----------

         4.31% due on April 6, 2011          $ 5,000,000    $ 5,000,000
         3.41% due on August 1, 2011           3,000,000      3,000,000
         1.91% due on October 7, 2002                 --      6,500,000
         2.02% due on May 5, 2003                     --      2,500,000
                                             -----------    -----------

                                             $ 8,000,000    $17,000,000
                                             ===========    ===========

At June 30, 2003, the Bank also had $20 million available on a line of credit
from the Federal Home Loan Bank. All advances are secured by a blanket-floating
lien on the Bank's one-to-four family residential mortgage loans.


NOTE I - EMPLOYEE AND DIRECTOR BENEFIT PLANS

Recognition and Retention Plan
------------------------------

At the Company's first annual meeting of stockholders held on January 7, 1999,
the Company's stockholders approved the 1998 Recognition and Retention Plan (the
"RRP"). Under the RRP, 88,085 shares of common stock were reserved for issuance
to key officers and directors. Upon approval of the RRP at the annual meeting,
76,192 shares of common stock were granted at a value of $12.00 per share at the
date of grant. The Company funded the grants with 53,700 shares of previously
purchased treasury stock and 22,492 shares of newly issued common stock.
Additional shares of 4,000 and 1,200 were granted during fiscal years 2001 and
2003, respectively, using treasury stock. The Company recognizes compensation
costs over the vesting period of the RRP shares granted as shares are earned,
resulting in the recognition of costs of $106,000 and $17,000 during the years
ended June 30, 2003 and 2002, respectively.

Stock Option Plan
-----------------

At the Company's annual meeting, held on January 7, 1999, the stockholders
approved the Great Pee Dee Bancorp, Inc. Stock Option Plan (the "SOP"). The SOP
provides for the issuance to directors, officers and employees of the Bank
options to purchase up to 242,233 shares of the Company's common stock. Options
granted to directors generally have been fully vested on the date of grant,
while options granted to executive officers and employees have vested over three
years. All options will expire if not exercised within ten years from the date
of grant.

                                      -32-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE I - EMPLOYEE AND DIRECTOR BENEFIT PLANS (Continued)

A summary of activity under the SOP is as follows:

<TABLE>
<CAPTION>
                                              Outstanding Options         Exercisable Options
                                          --------------------------   --------------------------
                             Shares                       Weighted                     Weighted
                          available for                    Average                      Average
                             Future         Number        Exercise       Number        Exercise
                             Grants       Outstanding       Price      Outstanding       Price
                           -----------    -----------    -----------   -----------    -----------
<S>                            <C>            <C>        <C>               <C>        <C>
     At June 30, 2001           36,234        205,998    $     10.84       198,664    $     10.88

     Options granted           (29,000)        29,000          12.25            --             --
     Options vested                 --             --             --         3,666           9.55
                           -----------    -----------    -----------   -----------    -----------

     At June 30, 2002            7,234        234,998          11.01       202,330          10.86

     Shares received in
       cashless exercise        46,409             --             --            --             --
     Options granted           (46,409)        46,409          12.25            --             --
     Options vested                 --             --             --        59,743          13.66
     Options exercised              --        (70,256)         10.92       (70,256)         10.92
                           -----------    -----------    -----------   -----------    -----------

     At June 30, 2003            7,234        211,151    $     11.76       191,817    $     11.71
                           ===========    ===========    ===========   ===========    ===========
</TABLE>

At June 30, 2003, options outstanding had a weighted-average remaining term of 6
years. Total options outstanding at June 30, 2003 included 136,242 options
exercisable at a range of $9.55 to $10.91 per share, and 74,909 options
exercisable at a range of $12.45 to $14.95 per share. Exercisable options at
June 30, 2003 included 136,242 options exercisable at a range of $9.55 to $10.91
per share, and 55,575 options exercisable at a range of $12.45 to $14.95 per
share. No expense has been recognized in connection with the grant or exercise
of these options. At December 31, 2002, authorized shares of common stock
reserved for future grants of options totaled 7,234.

The fair value of options granted was estimated to be $2.69 for options granted
in the year ended June 30, 2003 and $1.05 for options granted in the year ended
June 30, 2002. These amounts were estimated on the date of grant using the
Black-Scholes Option Pricing Model using the following assumptions for the years
ended June 30, 2003 and 2002, respectively: a risk-free interest rate of 2.0%
and 5.0%, a dividend yield of 3.5% and 3.8%, an expected life of 6 years and 8
years, and a volatility ratio of 35% and 22%.

                                      -33-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE I - EMPLOYEE AND DIRECTOR BENEFIT PLANS (Continued)

Employee Stock Ownership Plan
-----------------------------

In the mutual to stock conversion, the Company's Employee Stock Ownership Plan
(the "ESOP") purchased 174,570 shares of the common stock of Great Pee Dee
Bancorp, Inc. sold in the public offering at a total cost of $1,745,700. The
ESOP executed a note payable to Great Pee Dee Bancorp, Inc. for the full price
of the shares purchased. The note is to be repaid over ten years in quarterly
installments of principal and interest. Interest is based upon the prime rate
and will be adjusted annually. Dividends, if any, paid on shares held by the
ESOP may be used to reduce the loan. Dividends paid on unallocated shares held
by the ESOP are not reported as dividends in the consolidated financial
statements. The note may be prepaid without penalty. The unallocated shares of
stock held by the ESOP are pledged as collateral for the note. The ESOP is
funded by contributions made by the Bank in amounts sufficient to retire the
debt. At June 30, 2003, the outstanding balance of the note is $1,055,913 and is
included in unearned compensation as a reduction of stockholders' equity.

Shares released as the debt is repaid and earnings from the common stock held by
the ESOP are allocated among active participants on the basis of compensation in
the year of allocation. Benefits become 100% vested after five years of credited
service. Forfeitures of nonvested benefits will be reallocated among remaining
participating employees in the same proportion as contributions.

Expense of $185,321 and $142,696 has been incurred in connection with the ESOP
during the years ended June 30, 2003 and 2002, respectively. The expense
includes, in addition to the cash contribution necessary to fund the ESOP,
$40,000 and $26,000 which represents the difference between the fair market
value of the shares which have been released or committed to be released to
participants and the cost of these shares to the ESOP for the years ended June
30, 2003 and 2002, respectively. The Bank has credited this amount to additional
paid-in capital. For the year ended June 30, 2003, ESOP expense also includes
$15,723 representing the value of 1,066 shares transferred to the ESOP from
treasury stock.

At June 30, 2003, 62,128 shares held by the ESOP have been released or committed
to be released to the plan's participants for purposes of computing earnings per
share. The fair value of the unallocated shares amounted to approximately $1.9
million at June 30, 2003.

Employee Deferred Compensation Plan
-----------------------------------

The Bank has a deferred compensation plan for certain officers whereby the
executive officers can make elective deferrals in lieu of receiving a portion of
the salary to which they otherwise would be entitled. This plan is not entitled
to favorable tax treatment under current law. Related deferred income tax
benefits are included in the accompanying consolidated financial statements.
Expenses for this plan for the years ended June 30, 2003 and 2002 were $0 and
$12,740, respectively.

Director's Deferred Compensation Plan
-------------------------------------

On March 25, 2002, the board approved a deferred compensation plan for directors
whereby members of the board may make elective deferrals in lieu of receiving a
portion of the compensation to which they otherwise would be entitled. This plan
is not entitled to favorable tax treatment under current law. Related deferred
income tax benefits are included in the accompanying consolidated financial
statements. Expenses for this Plan totaled $39,000 and $10,000 for the years
ended June 30, 2003 and 2002, respectively.

                                      -34-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE I - EMPLOYEE AND DIRECTOR BENEFIT PLANS (Continued)

401(k) Retirement Plan
----------------------

The Bank maintains for the benefit of its eligible employees a 401(k) plan.
Under the plan, the Bank fully matches a participant's elective contributions up
to three percent of base compensation, and then matches fifty percent of a
participant's elective contributions in excess of three percent of base
compensation up to five percent of base compensation. The only eligibility
requirement is completion of one year's full-time service. At June 30, 2003 and
2002, substantially all full-time employees are eligible and are covered by the
plan. 401(k) contributions are funded when accrued. The total 401(k) retirement
plan expense was $18,169 and $14,525 for the years ended June 30, 2003 and 2002,
respectively.


NOTE J - STOCK REPURCHASES

The Company's Board of Directors has adopted stock repurchase plans under which
the Company is authorized to repurchase shares of its outstanding common stock
in the open market or in privately negotiated transactions at times deemed
appropriate. Under such plans, the Company has repurchased a total of 708,794
shares of its common stock at an aggregate cost of $8.7 million. Treasury shares
have been used for various purposes, including grants under the RRP, shares
issued under the deferred compensation plan, shares issued in the form of a 10%
stock dividend in fiscal 2002 and shares issued in connection with exercise of
stock options. At June 30, 2003, 461,002 shares were held as treasury stock.

NOTE K - INCOME TAXES

The components of income tax expense are as follows for the years ended June 30,
2003 and 2002:

                                              2003            2002
                                           -----------     -----------
         Current tax expense:
            Federal                        $   898,700     $   772,435
            State                              159,500         110,100
                                           -----------     -----------
                                             1,058,200         882,535
                                           -----------     -----------
         Deferred tax benefit:
            Federal                           (194,000)       (162,000)
            State                              (31,000)        (18,000)
                                           -----------     -----------
                                              (225,000)       (180,000)
                                           -----------     -----------

         Provision for income taxes        $   833,200     $   702,535
                                           ===========     ===========

The differences between the provision for income taxes and the amount computed
by applying the statutory federal income tax rate of 34% to income before income
taxes were as follows for the years ended June 30, 2003 and 2002:

                                                          2003          2002
                                                       ----------    ----------

         Income tax at federal statutory rate          $  762,856    $  647,879
         State income tax, net of federal tax benefit      84,808        54,210
         Tax exempt interest income                       (20,549)      (17,406)
         ESOP expense differences                          15,200         9,880
         Other                                             (9,115)        7,972
                                                       ----------    ----------

         Provision for income taxes                    $  833,200    $  702,535
                                                       ==========    ==========

                                      -35-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE K - INCOME TAXES (Continued)

Deferred tax assets and liabilities arising from temporary differences at June
30, 2003 and 2002 are summarized as follows:

                                                    2003          2002
                                                 ----------    ----------
         Deferred tax assets relating to:
            Deferred compensation                $   89,098    $   87,924
            Allowance for loan losses               567,160       400,632
            Unrealized securities losses             19,220        17,700
            Amortization of intangibles             141,413       108,392
                                                 ----------    ----------

            Total deferred tax assets               816,891       614,648
                                                 ----------    ----------

         Deferred tax liabilities relating to:
            Premises and equipment                  (43,776)      (40,815)
            FHLB stock dividends                    (50,200)      (77,438)
                                                 ----------    ----------

            Total deferred tax liabilities          (93,976)     (118,253)
                                                 ----------    ----------

            Net deferred tax asset               $  722,915    $  496,395
                                                 ==========    ==========

Retained earnings at June 30, 2003 includes approximately $1.7 million for which
no deferred income tax liability has been recognized. This amount represents an
allocation of income to bad debt deductions for income tax purposes only.
Reductions of the amount so allocated for purposes other than tax bad debt
losses or adjustments arising from carryback of net operating losses would
create income for tax purposes only, which would be subject to the then current
corporate income tax rate.


NOTE L - REGULATORY MATTERS

The Bank is subject to various regulatory capital requirements administered by
the federal banking agencies. Failure to meet minimum capital requirements can
initiate certain mandatory and possibly additional discretionary actions by
regulators that, if undertaken, could have a direct material effect on the
Bank's financial statements. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Bank must meet specific
capital guidelines that involve quantitative measures of the Bank's assets,
liabilities, and certain off-balance sheet items as calculated under regulatory
accounting practices. The Bank's capital amounts and classifications are also
subject to qualitative judgments by the regulators about components, risk
weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios of total and Tier 1
capital (as defined) to risk-weighted assets (as defined), and of Tier 1 capital
(as defined) to adjusted assets (as defined) and of tangible capital to adjusted
assets. Management believes, as of June 30, 2003, that the Bank meets all
capital adequacy requirements to which it is subject.

As of June 30, 2003, the most recent notification from the Office of Thrift
Supervision categorized the Bank as well capitalized under the regulatory
framework for prompt corrective action. To be categorized as well capitalized,
the Bank must maintain minimum total risk-based, Tier 1 risk-based and Tier 1
leverage ratios as set forth in the following table. There are no conditions or
events since that notification that management believes have changed the
institution's category. The Company's and the Bank's actual capital amounts and
ratios as of June 30, 2003 and 2002 are presented in the following table.

                                      -36-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE L - REGULATORY MATTERS (Continued)

<TABLE>
<CAPTION>
                                                                                            Minimum To Be Well
                                                                    Minimum                 Capitalized Under
                                                                  For Capital                Prompt Corrective
                                      Actual                      Requirement                Action Provisions
                           ---------------------------   ---------------------------   ----------------------------
                              Amount          Ratio         Amount          Ratio          Amount          Ratio
                           ------------   ------------   ------------   ------------   -------------   ------------
                                                            (Dollars in Thousands)
<S>                        <C>                <C>        <C>                 <C>        <C>                <C>
June 30, 2003:
Total Risk Weighted
   Capital to Risk
   Weighted Assets:
     Consolidated          $     25,915       29.22%     $      2,073        8.00%      $        N/A          N/A
     Sentry                      24,632       27.97%            1,971        8.00%             2,463       10.00%

Tier 1 Capital to Risk
   Weighted Assets:
     Consolidated                24,810       27.98%            3,547        4.00%               N/A          N/A
     Sentry                      23,527       26.72%            3,522        4.00%             5,283        6.00%

Tier 1 Capital to
  Adjusted Total Assets:
     Consolidated                24,810       17.46%            5,684        4.00%               N/A          N/A
     Sentry                      23,527       16.72%            5,629        4.00%             7,037        5.00%

Tangible Capital to
  Adjusted Total Assets:
     Consolidated                24,810       17.46%            2,131        1.50%               N/A          N/A
     Sentry                      23,527       16.72%            2,111        1.50%               N/A          N/A

June 30, 2002:
Total Risk Weighted
   Capital to Risk
   Weighted Assets:
     Consolidated          $     25,161       28.81%     $      6,987        8.00%      $        N/A          N/A
     Sentry                      23,509       26.92%            6,987        8.00%             8,734       10.00%

Tier 1 Capital to Risk
   Weighted Assets:
     Consolidated                24,095       27.59%            3,494        4.00%               N/A          N/A
     Sentry                      22,443       25.69%            3,494        4.00%             5,241        6.00%

Tier 1 Capital to
  Adjusted Total Assets:
     Consolidated                24,095       19.56%            4,928        4.00%               N/A          N/A
     Sentry                      22,443       18.22%            4,928        4.00%             6,159        5.00%

Tangible Capital to
  Adjusted Total Assets:
     Consolidated                24,095       19.56%            1,848        1.50%               N/A          N/A
     Sentry                      22,443       18.22%            1,848        1.50%               N/A          N/A
</TABLE>

                                      -37-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE M - CONCENTRATION OF CREDIT RISK AND OFF-BALANCE SHEET RISK

The Bank generally originates single-family residential loans within its primary
lending area of Chesterfield County, Marlboro County, Florence County and
surrounding counties. The Bank's underwriting policies require such loans to be
made at no greater than 80% loan-to-value based upon appraised values unless
private mortgage insurance is obtained. These loans are secured by the
underlying properties.

The Bank is a party to financial instruments with off-balance sheet risk in the
normal course of business to meet the financing needs of its customers. These
financial instruments consist of commitments to extend credit and lines of
credit. Those instruments involve, to varying degrees, elements of credit and
interest rate risk in excess of the amount recognized in the statements of
financial condition. The contract or notional amounts of those instruments
reflect the extent of involvement the Bank has in particular classes of
financial instruments.

A summary of the approximate contract amount of the Bank's exposure to
off-balance sheet risk as of June 30, 2003 is as follows:

<TABLE>
<CAPTION>
         Financial instruments whose contract amounts represent credit risk:
<S>                                                                            <C>
           Commitments to extend credit                                        $7,024,585
           Undisbursed construction loans in process                            2,906,840
           Lines of credit                                                      3,968,024
           Letters of credit                                                      150,000
</TABLE>


NOTE N - DISCLOSURES ABOUT FAIR VALUES OF FINANCIAL INSTRUMENTS

The Bank has implemented SFAS No. 107, Disclosures About Fair Value of Financial
Instruments, which requires disclosure of the estimated fair values of the
Bank's financial instruments whether or not recognized in the balance sheet,
where it is practical to estimate that value. Such instruments include cash,
interest-earning balances, federal funds sold, investment securities, loans,
stock in the Federal Home Loan Bank of Atlanta, deposit accounts, advances from
Federal Home Loan Bank, and commitments. Fair value estimates are made at a
specific point in time, based on relevant market information and information
about the financial instrument. These estimates do not reflect any premium or
discount that could result from offering for sale at one time the Bank's entire
holdings of a particular financial instrument. Because no active market readily
exists for a portion of the Bank's financial instruments, fair value estimates
are based on judgments regarding future expected loss experience, current
economic conditions, risk characteristics of various financial instruments, and
other factors. These estimates are subjective in nature and involve
uncertainties and matters of significant judgment and, therefore, cannot be
determined with precision. Changes in assumptions could significantly affect the
estimates.

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate that
value:

         Cash on hand and in banks, interest-earning balances in other banks,
         and federal funds sold

            The carrying amounts for these approximate fair value because of the
            short maturities of those instruments.

                                      -38-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE N - DISCLOSURES ABOUT FAIR VALUES OF FINANCIAL INSTRUMENTS (Continued)

         Investment Securities

            Fair value for investment securities equals quoted market price if
            such information is available. If a quoted market price is not
            available, fair value is estimated using quoted market prices for
            similar securities.

         Loans

           For certain homogenous categories of loans, such as residential
           mortgages, fair value is estimated using the quoted market prices for
           securities backed by similar loans, adjusted for differences in loan
           characteristics. The fair value of other types of loans is estimated
           by discounting the future cash flows using the current rates at which
           similar loans would be made to borrowers with similar credit ratings
           and for the same remaining maturities.

         Loans Held for Sale

           Fair value for loans held for sale is determined by available market
           prices.

         Stock in Federal Home Loan Bank of Atlanta

           The fair value for FHLB stock is its carrying value, since this is
           the amount for which it could be redeemed. There is no active market
           for this stock and the Bank is required to maintain a minimum balance
           based on the unpaid principal of home mortgage loans.

         Deposit Liabilities

           The fair value of savings deposits is the amount payable on demand at
           the reporting date. The fair value of certificates of deposit is
           estimated by discounting future cash flows using rates currently
           offered for deposits of similar remaining maturities.

         Advances from Federal Home Loan Bank

           The fair value of these advances is based upon discounting future
           cash flows using current rates at which borrowings of similar
           maturity could be obtained.

         Financial Instruments with Off-Balance Sheet Risk

           With regard to financial instruments with off-balance sheet risk
           discussed in Note M, it is not practicable to estimate the fair value
           of future financing commitments.

          Accrued Interest and Advance Payments by Borrowers for Property Taxes
          and Insurance

           The carrying amounts of these items approximate fair values.

                                      -39-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE N - DISCLOSURES ABOUT FAIR VALUES OF FINANCIAL INSTRUMENTS (Continued)

The carrying amounts and estimated fair values of the Bank's financial
instruments, none of which are held for trading purposes, are as follows at June
30, 2003 and 2002:

<TABLE>
<CAPTION>
                                                      2003                          2002
                                           ---------------------------   ---------------------------
                                             Carrying      Estimated       Carrying      Estimated
                                              amount       fair value       amount       fair value
                                           ------------   ------------   ------------   ------------
<S>                                        <C>            <C>            <C>            <C>
   Financial assets:
     Cash, interest-earning balances,
        federal funds sold                 $  8,911,219   $  8,911,219   $  6,971,688   $  6,971,688
     Investment securities                   18,514,337     18,670,508      5,329,456      5,395,055
     Loans receivable                       107,954,228    111,875,290    109,610,613    111,911,000
     Loans held for sale                      2,056,139      2,056,139      3,071,542      3,071,542
     Accrued interest receivable                792,399        792,399        882,518        882,518
     Stock in Federal Home Loan Bank
        of Atlanta                              674,600        674,600      1,000,000      1,000,000
   Financial liabilities:
     Deposits                               108,812,261    110,273,000     88,089,651     88,621,000
     Advances from Federal Home
        Loan Bank                             8,000,000      8,733,000     17,000,000     16,634,000
     Accrued interest payable                    96,042         96,042         91,169         91,169
     Advance payments by borrowers
        for property taxes and insurance        107,798        107,798         90,521         90,521
</TABLE>


NOTE O - PLAN OF CONVERSION

On July 14, 1997, the Board of Directors of the Bank adopted a Plan of Holding
Company Conversion whereby the Bank converted from a federally-charted mutual
savings and loan association to a federally-chartered stock savings association
(the "Bank") and became a wholly-owned subsidiary of Great Pee Dee Bancorp, Inc.
(the "Company" or "Holding Company"), a holding company formed in connection
with the conversion. On December 31, 1997, the Bank completed its conversion
from a federally-chartered mutual savings and loan association to a
federally-chartered stock savings association. The conversion occurred through
the sale of 2,182,125 shares of common stock ($.01 par value) of Great Pee Dee
Bancorp, Inc. Total proceeds of $21,821,250 were reduced by conversion expenses
of $746,869. Great Pee Dee Bancorp, Inc. paid $10,550,000 to the Bank in
exchange for the common stock of the Bank issued in the conversion and retained
the balance of the net conversion proceeds. The transaction was recorded as an
"as-if" pooling with assets and liabilities recorded at historical cost.


At the time of conversion, the Bank established a liquidation account in an
amount equal to its net worth as reflected in its latest statement of financial
condition used in its final conversion prospectus. The liquidation account will
be maintained for the benefit of eligible deposit account holders who continue
to maintain their deposit accounts in the Bank after conversion. Only in the
event of a complete liquidation will each eligible deposit account holder be
entitled to receive a subaccount balance for deposit accounts then held before
any liquidation distribution may be made with respect to common stock. The Bank
may not declare or pay a cash dividend on or repurchase any of its common stock
if its net worth would thereby be reduced below either the aggregate amount then
required for the liquidation account or the minimum regulatory capital
requirements imposed by federal and state regulations.

                                      -40-
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE P - PARENT COMPANY FINANCIAL DATA

Following are condensed financial statements of Great Pee Dee Bancorp, Inc. as
of and for the years ended June 30, 2003 and 2002:


                   Condensed Statements of Financial Condition

<TABLE>
<CAPTION>
                                                                2003            2002
                                                            ------------    ------------
<S>                                                         <C>             <C>
         Assets:
           Cash on hand and in banks                        $    761,550    $    183,182
           Investment securities, available for sale             449,380         452,200
           Note receivable from subsidiary                            --         875,191
           Investment in subsidiaries                         24,794,761      23,951,689
           Accrued interest receivable                            16,794          48,099
           Other assets                                           92,860          86,726
                                                            ------------    ------------

           Total assets                                     $ 26,115,345    $ 25,597,087
                                                            ============    ============

         Liabilities:
           Other liabilities                                $     72,076    $     28,553
                                                            ------------    ------------

         Stockholders' equity:
           Common stock                                           22,246          22,246
           Additional paid-in capital                         21,911,185      21,965,524
           ESOP loan receivable and unearned compensation     (1,082,623)     (1,211,761)
           Retained earnings                                  10,942,704      10,417,256
           Accumulated other comprehensive loss                  (31,400)        (30,100)
           Treasury stock                                     (5,718,843)     (5,594,631)
                                                            ------------    ------------
                                                              26,043,269      25,568,534

           Total liabilities and stockholders' equity       $ 26,115,345    $ 25,597,087
                                                            ============    ============
</TABLE>

                       Condensed Statements of Operations
                       Years Ended June 30, 2003 and 2002

<TABLE>
<CAPTION>
                                                                2003            2002
                                                            ------------    ------------
<S>                                                         <C>             <C>
         Equity in earnings of subsidiaries                 $  1,337,320    $  1,205,788
         Interest and other income                               291,851         144,592
         Operating expenses                                     (181,378)       (143,392)
         Income taxes                                            (37,300)         (4,400)
                                                            ------------    ------------

         Net income                                         $  1,410,493    $  1,202,588
                                                            ============    ============
</TABLE>
                                      -41
<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and 2002
================================================================================


NOTE P - PARENT COMPANY FINANCIAL DATA (Continued)

                        Condensed Statement of Cash Flows
                       Years Ended June 30, 2003 and 2002

                                                        2003           2002
                                                     -----------    -----------

Cash flows from operating activities:
    Net income                                       $ 1,410,493    $ 1,202,588
    Adjustments to reconcile net income to net cash
       provided (used) by operating activities:
         Equity in income of subsidiary               (1,348,286)    (1,195,035)
         Other                                            70,214         (8,785)
                                                     -----------    -----------

Net cash provided (used) by operating activities         132,421         (1,232)
                                                     -----------    -----------

Cash flows from investing activities:
    Collection of note receivable from subsidiary        875,191         56,550
    Collection of loan to ESOP                           185,321        116,696
    Increase in investment in subsidiary                (100,306)       (58,506)
    Cash dividends received from subsidiary              623,000      1,000,000
                                                     -----------    -----------

Net cash provided by investing activities              1,583,206      1,114,740
                                                     -----------    -----------

Cash flows from financing activities:
    Purchase of treasury stock                          (356,549)      (183,381)
    Proceeds from option exercise                        104,335             --
    Cash dividends paid                                 (885,045)      (764,212)
                                                     -----------    -----------

Net cash used by financing activities                 (1,137,259)      (947,593)
                                                     -----------    -----------

Net increase in cash and cash equivalents                578,368        165,915

Cash and cash equivalents, beginning                     183,182         17,267
                                                     -----------    -----------

Cash and cash equivalents, ending                    $   761,550    $   183,182
                                                     ===========    ===========

                                      -42-
<PAGE>

                           GREAT PEE DEE BANCORP, INC.
                          GENERAL CORPORATE INFORMATION
================================================================================

                               Executive Officers

                             James C. Crawford, III
                                    Chairman

Herbert W. Watts                                             Johnnie L. Craft
President and CEO                                        Secretary and Treasurer

                                    Directors
<TABLE>
<CAPTION>
<S>                          <C>                     <C>
Robert M. Bennett, Jr.         William R. Butler         James C. Crawford, III - Chairman
   Vice President            Owner, P & H Pharmacy   President and COO, B.C. Moore & Sons, Inc.
 Bennett Motor Co.
</TABLE>

   Henry P. Duvall, IV           H. Malloy Evans                John S. Long
Retired Corporate Executive       President/CEO               President and COO
                                Cheraw Yarn Mills            Sentry Bank & Trust

     Herbert W. Watts                                    Cornelius B. Young
     President and CEO                               Retired Corporate Executive
Great Pee Dee Bancorp, Inc.

    Stock Transfer Agent                       Market for Common Stock

Registrar and Transfer Company          The Company's stock began trading on
      10 Commerce Drive                 December 31, 1997. There are 1,763,615
  Cranford, New Jersey 07016            shares of common stock outstanding which
                                        were held by approximately 349
     Special Legal Counsel              stockholders of record (excluding shares
                                        held in street name) on June 30, 2003.
  Luse Gorman Pomerenk & Schick         The Company's common stock is quoted on
5335 Wisconsin Ave. N.W., Suite 400     the NASDAQ National market under the
    Washington, DC  20015               symbol "PEDE". The following table
                                        reflects the stock trading and dividend
    Independent Auditors                payment frequency of the Company for the
                                        years ended June 30, 2003 and 2002,
      Dixon Odom PLLC                   giving effect to the 10% stock dividend
      408 Summit Drive                  in October 2001.
     Sanford, NC 27330
<TABLE>
<CAPTION>
                                      ============================================================
                                                                     Stock Price
     Office Locations                                            -------------------    Dividend
                                                                  High         Low      per share
       Main Office                                               -------     -------    ---------
<S>                                                              <C>         <C>         <C>
    515 Market Street                   For the year ended
    Cheraw, SC 29520                     June 30, 2003:
                                           First quarter........ $ 13.30     $ 12.01     $  .125
      Branch Office                        Second quarter.......   12.22       12.23        .140
  452 Second Loop Road                     Third quarter........   15.50       13.70        .140
   Florence, SC 29505                      Fourth quarter.......   15.18       14.00        .140

                                        For the year ended
                                         June 30, 2002:
                                           First quarter........ $ 10.30     $  9.63     $  .100
                                           Second quarter.......   12.61        9.78        .114
                                           Third quarter........   12.25       11.54        .125
                                           Fourth quarter.......   13.02       12.11        .125
                                      ============================================================
</TABLE>
       Annual Meeting                                   Form 10-KSB

The annual meeting of stockholders      A copy of Form 10-KSB as filed with the
of Great Pee Dee Bancorp, Inc. will     Securities and Exchange Commission will
be held at 2:00 pm. on October 15,      be furnished without charge to the
2003 at the Matheson Memorial           Company's stockholders for the Company's
Library, Huger Street, Cheraw, SC.      most recent fiscal year upon written
                                        request to Herbert W. Watts, President,
                                        Great Pee Dee Bancorp, Inc., 515 Market
                                        Street, Cheraw, SC 29520.

                                      -43-