<PAGE>

                                                                      EXHIBIT 13

                           GREAT PEE DEE BANCORP, INC.

                               2001 ANNUAL REPORT

<PAGE>

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


TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                        Page No.
                                                                        --------
<S>                                                                     <C>
Report to Shareholders ..............................................      1

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

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

Independent Auditors' Report ........................................     12

Consolidated Financial Statements

   Consolidated Statements of Financial Condition ...................     13

   Consolidated Statements of Operations ............................     14

   Consolidated Statements of Stockholders' Equity ..................     15

   Consolidated Statements of Cash Flows ............................     16

   Notes to Consolidated Financial Statements .......................     18

General Corporate Information .......................................     40
</TABLE>

<PAGE>

                             REPORT TO SHAREHOLDERS

To Our Shareholders:

June 30, 2001 marked the end of another very positive year for Great Pee Dee
Bancorp, highlighted by significant growth and enhanced customer services.

Our bank subsidiary, First Federal, has experienced significant growth. Total
assets now stand at $115.9 million, fueled by a 15.4% increase in loans during
the year just concluded. Deposits grew at a very healthy rate of 10.4%.

A secondary mortgage loan department began full operations in our Florence
office this year, further diversifying the company's resources. This department
sold over $11 million in loans on the secondary market and had over $3.6 million
outstanding in the pipeline at year end. In addition, First Federal began
participating in the Private Business Receivables program and had over $2.1
million of these loans outstanding on June 30.

High levels of customer service, operating efficiency and accessibility have
contributed to the company's performance this year. Construction has begun on
our new Florence office at 452 Second Loop Road. The new office, scheduled to
open in March 2002 is much more visible and accessible than the leased facility
we now occupy in Florence. A new, state-of-the-art data processing and check
processing system will go on-line in August, enabling the bank to improve
services to our customers. The company now has 24 employees serving its
customers in two locations, and offers convenient customer access through ATMS
as well as telephone banking. Our investment subsidiary, First Federal
Investment Services, also performed very well this year.

Total stockholders' equity now stands at $25.1 million after the company paid
cash dividends of $.43 per share during the year and repurchased 157,000 shares
of stock for a total of $1.6 million.

The Board of Directors will continue to review means by which shareholder value
can be enhanced, including expansion, payment of regular cash dividends, special
dividends, and additional repurchases of common stock.

The Board of Directors, Management and staff wish to thank you for your
confidence and loyalty as demonstrated by your investment in Great Pee Dee
Bancorp, Inc.

Sincerely,

/s/ Herbert W. Watts

Herbert W. Watts
President and Chief Executive Officer

                                       -1-

<PAGE>

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

<TABLE>
<CAPTION>
                                                                          At or for the year ended June 30,
                                                                      2001              2000              1999
                                                                 --------------    --------------    --------------
                                                                               (Dollars in thousands)
<S>                                                              <C>               <C>               <C>
Financial Condition Data:
   Total assets                                                  $      115,997    $      103,842    $       72,601
   Investments/(1)/                                                      10,154            14,332             5,321
   Loans receivable                                                      97,804            84,758            64,411
   Loans held for sale                                                    3,431               155               525
   Deposits                                                              77,624            70,254            41,332
   Borrowings                                                            12,800             7,000             1,200
   Stockholders' equity                                                  25,130            26,266            29,813
Operating Data:
   Interest income                                               $        7,905    $        6,020    $        5,067
   Interest expense                                                       4,477             2,835             1,960
                                                                 --------------    --------------    --------------
     Net interest income                                                  3,428             3,185             3,107
   Provision for loan losses                                                 45               128                96
                                                                 --------------    --------------    --------------
     Net interest income after provision for
        loan losses                                                       3,383             3,057             3,011
   Noninterest income                                                       583               165                85
   Noninterest expense                                                    2,631             1,958             1,718
                                                                 --------------    --------------    --------------
     Income before income taxes                                           1,335             1,264             1,378
   Income tax expense                                                       488               451               488
                                                                 --------------    --------------    --------------
     Net income                                                  $          847    $          813    $          890
                                                                 ==============    ==============    ==============

Per Common Share Data:
   Net income, basic                                             $         0.56    $         0.48    $         0.45
   Net income, diluted                                                     0.56              0.47              0.45
   Regular cash dividends                                                  0.43              0.39              0.36
   Dividend payment ratio                                                 76.79%            81.25%            80.00%

Selected Other Data:
   Number of:
     Outstanding loans                                                    2,944             2,598             2,084
     Deposit accounts                                                     7,061             6,657             4,329
     Full-service offices open                                                2                 2                 1
   Return on average assets                                                0.78%             0.97%             1.28%
   Return on average equity                                                3.34%             2.94%             2.88%
   Average equity to average assets                                       23.48%            33.10%            44.30%
   Interest rate spread                                                    2.23%             2.43%             2.39%
   Net yield on average interest-earning assets                            3.33%             3.98%             4.58%
   Average interest-earning assets to average interest-
     bearing liabilities                                                 125.41%           143.63%           175.79%
   Ratio of noninterest expense to average total assets                    2.44%             2.34%             2.46%
   Nonperforming assets to total assets                                    0.52%             0.20%             0.41%
   Allowance for loan losses to nonperforming loans at
     period end                                                          100.35%           298.39%           163.84%
</TABLE>

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

                                      -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" or "Parent") was incorporated under
the laws of the State of Delaware for the purpose of becoming the savings and
loan holding company of First Federal Savings and Loan Association of Cheraw
(the "Bank" or "First Federal") in connection with First Federal's conversion
from a federally-chartered mutual savings and loan association to a
federally-chartered stock savings 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 used one half of the net proceeds received to
acquire all of the outstanding common stock of the Bank and commenced
operations. On March 9, 2000, Great Pee Dee formed a second wholly-owned
subsidiary, First Federal Investment Services, Inc.

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 and Trust (the "ESOP")
which was formed in connection with the Conversion. First Federal'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,
2001, approximately 91% of the Bank's total loans were composed of real estate
loans.

Great Pee Dee's principal sources of income 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 First Federal are derived primarily from
interest on loans. First Federal also receives interest income from its
investment securities and interest-earning deposit balances and various types of
non-interest income. The major expenses of First Federal are interest on
deposits and general and administrative expenses such as personnel costs,
occupancy, and federal deposit insurance premiums. First Federal's deposits are
insured up to applicable limits by the Federal Deposit Insurance Corporation.
First Federal Investment Services, Inc., through an unaffiliated broker dealer,
provides customers of First Federal and others with uninsured securities
products and services and earns revenues through sharing of commissions. 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.

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.

                                      -3-

<PAGE>

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

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, 2001
                                             -------------------------------------------------------------------------
                                                              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                       $      19,725  $     17,570    $       908    $           -  $     38,203
       Fixed rate                                    5,282         2,644          6,710           36,652        51,288
     Other loans                                     3,793         2,344          2,060              686         8,883
   Loans held for sale                               3,431             -              -                -         3,431
   Interest-earning balances in other banks          2,045             -              -                -         2,045
   Federal funds sold                                  648             -              -                -           648
   Investment securities available for sale          1,779         1,300          2,657            1,000         6,736
   Stock in FHLB of Atlanta(1)                           -             -              -              725           725
                                             -------------  ------------    -----------    -------------  ------------

       Total interest-earning assets         $      36,703  $     23,858    $    12,335    $      39,063  $    111,959
                                             =============  ============    ===========    =============  ============

INTEREST-BEARING LIABILITIES:
   Deposit accounts:
     Demand                                  $      27,638  $          -    $         -    $           -  $     27,638
     Time                                           30,594         5,978            530              133        37,235
     Time over $100,000                             11,710           835            206                -        12,751
   Borrowings                                        7,800         5,000              -                -        12,800
                                             -------------  ------------    -----------    -------------  ------------

       Total interest-bearing liabilities    $      77,742  $     11,813    $       736    $         133  $     90,424
                                             =============  ============    ===========    =============  ============

INTEREST SENSITIVITY GAP PER
   PERIOD                                    $     (41,039) $    12,045     $    11,599    $      38,930  $     21,535

CUMULATIVE INTEREST SENSITIVITY
   GAP                                       $     (41,039) $   (28,994)    $   (17,395)   $      21,535  $     21,535

CUMULATIVE GAP AS A PERCENTAGE
   OF TOTAL INTEREST-EARNING
   ASSETS                                           (36.66%)     (25.90%)        (15.54%)          19.23%        19.23%

CUMULATIVE INTEREST-EARNING
   ASSETS AS A PERCENTAGE OF
   INTEREST-BEARING LIABILITIES                      47.21%       67.62%          80.73%          123.82%       123.82%
</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, 2001 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 which will be received throughout
the lives of the loans. The interest rate sensitivity of the Company's assets
and liabilities illustrated in the following 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, 2001 was a negative 36.66%. At June 30,
2001, the Company's three-year and five-year cumulative interest sensitivity
gaps as a percentage of total interest-earning assets were a negative 25.90% and
a negative 15.54%, 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 First Federal's NPV
of instantaneous and permanent 100 to 300 basis point increases in market
interest rates.

The following table presents information regarding possible changes in the
Bank's NPV as of June 30, 2001, based on information provided by the Office of
Thrift Supervision's Risk Management Division:

<TABLE>
<CAPTION>
                                                                 Net portfolio value
                                                 --------------------------------------------------
         Change in interest rates                                     Change in        Percentage
         in basis points (rate shock)                Amount            amount            change
         ---------------------------             --------------    --------------    --------------
         <S>                                     <C>               <C>               <C>
         Up 300 basis points                     $       19,982    $       (5,480)        (22%)

         Up 200 basis points                             22,121            (3,341)        (13%)

         Up 100 basis points                             23,902            (1,560)         (6%)

               Static                                    25,462                 -           -

         Down 100 basis points                           26,718             1,256           5%

         Down 200 basis points                           28,000             2,538          10%

         Down 300 basis points                           29,370             3,907          15%
</TABLE>

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, First Federal would be expected to experience a 13% decrease
in NPV.

                                      -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, 2001 and 2000. 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, 2001               Year Ended June 30, 2000
                                                       ------------------------------------    ----------------------------------
                                                        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                            $  4,627       $    281         6.07%  $   2,887   $     188        6.51%
   Investments                                             6,370            422         6.62%      5,182         332        6.41%
   Loans                                                  91,994          7,202         7.83%     71,969       5,499        7.64%
                                                        --------       --------     --------   ---------   ---------    --------

     Total interest-earning assets                       102,991          7,905         7.68%     80,038       6,019        7.52%
                                                                       --------     --------               ---------    --------

Other assets                                               4,973                                   3,537
                                                        --------                               ---------

     Total assets                                       $107,964                               $  83,575
                                                        ========                               =========

Interest-bearing liabilities:
   Deposits                                             $ 73,053          3,940         5.39%  $  49,831       2,476        4.97%
   Borrowings                                              9,069            537         5.92%      5,893         359        6.09%
                                                        --------       --------     --------   ---------   ---------    --------

     Total interest-bearing liabilities                   82,122          4,477         5.45%     55,724       2,835        5.09%
                                                                       --------     --------               ---------    --------

Other liabilities                                            494                                     190

Stockholders' equity                                      25,348                                  27,661
                                                        --------                               ---------

     Total liabilities and stockholders' equity         $107,964                               $  83,575
                                                        ========                               =========

Net interest income and interest rate spread                           $  3,428         2.23%              $   3,184        2.43%
                                                                       ========     ========               =========    ========

Net yield on average interest-earning assets                                            3.33%                               3.98%
                                                                                    ========                            ========

Ratio of average interest-earning assets to
average interest-bearing liabilities                      125.41%                                143.63%
                                                        ========                               ========
</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.

<TABLE>
<CAPTION>
                                                               Year Ended June 30, 2001 vs. 2000
                                                     ----------------------------------------------------
                                                                  Increase (Decrease) Due To
                                                     ----------------------------------------------------
                                                         Volume              Rate               Total
                                                     --------------     --------------     --------------
                                                                    (Dollars in thousands)
         <S>                                         <C>                <C>                <C>
         Interest income:
            Interest-earning balances                $          109     $          (16)    $           93
            Investments                                          77                 13                 90
            Loans                                             1,548                155              1,703
                                                     --------------     --------------     --------------
                    Total interest income                     1,734                152              1,886
                                                     --------------     --------------     --------------
         Interest expense:
            Deposits                                          1,205                259              1,464
            Borrowings                                          191                (13)               178
                                                     --------------     --------------     --------------
                    Total interest expense                    1,396                246              1,642
                                                     --------------     --------------     --------------

         Net interest income                         $          338     $          (94)    $          244
                                                     ==============     ==============     ==============
</TABLE>

           Comparison of Financial Condition at June 30, 2001 and 2000

The Company had expanded to two branch offices in March of 2000 with the
acquisition of its branch in Florence, South Carolina. Accordingly, both
branches were fully operational throughout the fiscal year ended June 30, 3001.
During the year, total assets increased by $12.2 million, from $103.8 million at
June 30, 2000 to $116.0 million at end of the year. The Company has experienced
strong loan demand, with the result that loan growth exceeded overall asset
growth during the year. Net loans receivable increased by $13.0 million or
15.4%, from $84.8 million to $97.8 million. While one-to-four family residential
mortgage loans continue to comprise the most significant component of the
Company's loan portfolio, most of the growth during the year was in other types
of lending. The Company has diversified the portfolio to include larger
concentrations of loans that yield higher rates and have shorter maturities than
do residential mortgage loans. One-to-four family residential mortgage loans
grew by $2.4 million to $66.8 million, but represented only 68.3% of net loans
receivable at June 30, 2001 as compared to 75.9% of net loans receivable at the
beginning of the year. Three years ago, on June 30, 1998, one-to-four family
residential mortgage loans comprised almost 90% of the Company's net loans.

The branch expansion undertaken during fiscal 2000 has enabled the Company to
continue to focus its lending growth in other types of loans. Commercial real
estate loans, net construction loans and home improvement loans increased by
$3.9 million, $1.9 million and $2.0 million, respectively. Non-residential
consumer and commercial loans increased by $1.1 million and $1.6 million
respectively. Despite the reduced concentration of one-to-four family
residential mortgage loans in the net loan portfolio, however, the Company has
continued to be very competitive in making such loans. During the fiscal year
ended June 30, 2001, the Company substantially increased the origination of
one-to-four family residential mortgage loans for sale in the secondary market,
with the result that loans held for sale totaled at $3.4 million at June 30,
2001 as compared to $155,000 at June 30, 2000.

                                      -7-

<PAGE>

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

The Company's secondary market activity contributed substantially to an increase
in non-interest income during the year. On a combined basis, net loans
receivable and loans held for sale increased by $16.3 million to $101.2 million
at June 30, 2001.

Customer deposit accounts increased by $7.4 million during the year, including
an increase of $5.2 million or 22.9% in demand accounts. In addition to deposit
growth of $7.4 million, other sources of funding generated during the fiscal
year ended June 30, 2001 included an increase of $5.8 million in advances from
the Federal Home Loan Bank, a decrease of $4.2 million in interest-earning cash
balances in other banks, and cash of $1.5 million generated by operations. The
total funds generated of $18.9 million were used principally to fund the loan
growth discussed above, to provide for the repurchase of approximately 157,000
shares of common stock at a total cost of $1.6 million, and to pay dividends
aggregating $655,000 during the year.

During the year ended June 30, 2001, total stockholders' equity decreased by
$1.1 million to $25.1 million, principally as a result of the purchase during
the year of treasury shares at a cost of $1.6 million. Dividends aggregated
$655,000 or $.43 per share for the year, as compared with $686,000 or $.39 per
share for the previous year. The Company's board of directors increased the
regular quarterly dividend from $.10 per share to $.11 per share beginning with
the second quarter of the current fiscal year. At June 30, 2001, both the
Company and the Bank continued to significantly exceed all applicable regulatory
capital requirements.

 Comparison of Results of Operations for the Years Ended June 30, 2001 and 2000

Net Income. Net income for the year ended June 30, 2001 was $847,000, or basic
earnings per share of $.56, as compared with net income of $813,000, or $.48 per
share, for the year ended June 30, 2000, increases of $34,000 or 4.2% in net
income and $.08 or 16.7% in net income per share. Net income per share increased
by a higher percentage than did net income because treasury share repurchases
resulted in a reduction in the weighted average number of common shares
outstanding.

Net income was significantly impacted during both fiscal years by the Company's
acquisition of a full service branch in Florence, South Carolina, on March 3,
2000. During the year ended June 30, 2000, the Company recognized $154,000 of
non-recurring expenses incurred in connection with that branch acquisition, as
well as higher day-to-day operating costs from the date of acquisition to the
end of the fiscal year. In addition, during fiscal 2000, the Company recorded
amortization of $89,000 on intangible assets acquired in connection with the
Florence branch purchase. The Company's ownership and operation of the Florence
branch throughout fiscal 2001 contributed to increases in substantially all
elements of operations, including interest income and expense and non-interest
income and expenses. Increased non-interest expenses associated with the
full-year operation of two branches during the current fiscal year more than
offset cost decreases relating to the non-recurring charges in fiscal 2000 and a
decrease of $131,000 in costs associated with the Company's Recognition and
Retention Plan.

Net Interest Income. Net interest income for the year ended June 30, 2001 was
$3.4 million as compared with $3.2 million during the year ended June 30, 2000,
an increase of $244,000. The Company's net interest margin decreased from 2.43%
during the year ended June 30, 2000 to 2.23% for the year ended June 30, 2001,
largely as a result of the payment of attractive interest rates on deposits to
retain customers in the newly acquired Florence branch and to build market
share. The weighted average yield on interest-earning assets increased by 16
basis points while the weighted average cost of interest-bearing liabilities
increased by 36 basis points. Net interest income was further affected by a
decrease of $3.4 million in the average balance of net interest earning assets
during the current year as compared with the previous year. This decrease in net

                                      -8-

<PAGE>

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

interest earning assets resulted principally from the purchase of treasury
shares and from the Florence branch purchase which in March of 2000 increased
interest-bearing liabilities by an amount approximately $2.3 greater than the
corresponding increase in net interest earning assets.

Provision for Loan Losses. The provision for loan losses was $45,000 for the
year ended June 30, 2001, as compared with a provision of $128,000 for the year
ended June 30, 2000. The larger provision in fiscal 2000 related principally to
the significant increase in loans arising during that year from the purchase of
the Florence branch. There were net loan charge-offs of $30,000 during fiscal
2001 as compared with $17,000 for fiscal 2000. At June 30, 2001, nonaccrual
loans, all of which Management considers to be well collateralized, aggregated
$568,000 while the allowance for loan losses stood at $570,000.

Non-Interest Income. Non-interest income increased by $418,000, from $165,000 in
fiscal 2000 to $583,000 in fiscal 2001. Service fees and charges increased by
$111,000 to $194,000 principally as a result of the significant increase in
demand accounts generated by the Florence branch purchase in the second half of
fiscal 2000 and by current year account growth. The increased level of
origination and sale of one-to-four family residential mortgage loans generated
an increase in income from mortgage operations of $160,000. In addition, the
brokerage subsidiary that the Company formed in March of 2000 was fully
operational throughout fiscal 2001, generating income of $152,000 during the
current fiscal year as compared with income of only $12,000 during generated
during the short portion of fiscal 2000 operations.

Non-Interest Expenses. Non-interest expenses increased to $2.6 million for the
year ended June 30, 2001 as compared with $2.0 million for the year ended June
30, 2000, an increase of $674,000. Except for the elimination in fiscal 2001 of
non-recurring costs of $154,000 incurred in fiscal 2000 in connection with the
acquisition of the Florence branch, all components of non-interest expenses
increased in fiscal 2001 because of that branch acquisition. This includes
amortization of intangible assets arising from the Florence branch addition,
which increased to $268,000 for fiscal 2001 as compared with $89,000 for fiscal
2000. In addition, costs associated with the Company's brokerage subsidiary
increased from $13,000 in fiscal 2000 to $120,000 in fiscal 2001. The only
significant item of expense reduction during the current year is the decrease in
Recognition and Retention Plan expenses described under the caption "Net Income"
above.

Provision for Income Taxes. The provision for income taxes, as a percentage of
income before income taxes, was 36.5% and 35.7% for the years ended June 30,
2001 and 2000, respectively.

                                  Asset Quality

Non-performing assets include non-accrual loans, accruing loans contractually
past due 90 days or more, restructured loans, other real estate and other real
estate under contract for sale. Loans are placed on non-accrual when management
has concerns relating to the ability to collect the loan principal and interest,
and generally when such loans are 90 days or more past due. While non-performing
assets represent potential losses to the Company, management does not anticipate
any aggregate material losses since most loans are believed to be adequately
secured. Management believes the allowance for loan losses is sufficient to
absorb known risks in the portfolio. No assurance can be given that economic
conditions will not adversely affect borrowers and result in increased losses.
The following table summarizes non-performing assets by type at the dates
indicated. Other than the amounts listed, there were no other loans that (i)
represent or result from trends or uncertainties which management reasonably
expects will materially impact future operating results, liquidity or capital
resources or (ii) represent material credits about which management has
information that causes them to have serious doubts as to the ability of such
borrowers to comply with the loan repayment terms.

                                      -9-

<PAGE>

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

<TABLE>
<CAPTION>
                                                                               At June 30,
                                                                         -------------------------
                                                                            2001           2000
                                                                         ----------     ----------
         <S>                                                             <C>            <C>
         Non-performing assets:
           Non-accrual loans                                             $      568     $      186
           Loans past due 90 days or more and still accruing                      -              -
           Other real estate                                                     37             22
           Renegotiated troubled debt                                             -              -
                                                                         ----------     ----------

           Total non-performing assets                                   $      605     $      208
                                                                         ==========     ==========
</TABLE>

                         Liquidity and Capital Resources

During the year ended June 30, 2001, Great Pee Dee Bancorp, Inc. paid cash
dividends of $.43 per share, having increased the regular quarterly dividend
from $.10 per share to $.11 per share effective for the second fiscal quarter.
Although Great Pee Dee Bancorp, Inc. 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.

Maintaining adequate liquidity while managing interest rate risk is the primary
goal of Great Pee Dee Bancorp'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, 2001, liquid assets (cash, interest-earning deposits, federal
funds sold and marketable investment securities) were approximately $10.1
million, which represents 13.0% of deposits. At that date, outstanding loan
commitments were $4.1 million, the undisbursed portion of construction loans was
$5.8 million and undrawn lines of credit totaled $2.1 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.

Under federal capital regulations, First Federal 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 First Federal's financial statements. At June 30, 2001 and
2000, First Federal 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 2002, 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.

                                      -10-

<PAGE>

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

                               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.

                     Impact of Inflation and Changing Prices

The financial statements and notes thereto presented herein have been prepared
in accordance with generally accepted accounting principles, which require the
measurement of financial position and operating results in terms of historical
dollars without considering the change in the relative purchasing power of money
over time and due to inflation. The impact of inflation is reflected in the
increased cost of the Company's operations. Unlike most industrial companies,
nearly all the Company's assets and liabilities are monetary in nature. As a
result, interest rates have a greater impact on the Company's performance than
do the effects of general levels of inflation. Interest rates do not necessarily
move in the same direction or to the same extent as the price of goods and
services.

                           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.

                                      -11-

<PAGE>

                                     [LOGO]
                                DIXON ODOM PLLC
                  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, 2001 and 2000 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 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, 2001 and 2000, 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 24, 2001

                                      -12-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
June 30, 2001 and 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
ASSETS                                                                              2001                2000
                                                                              ----------------    -----------------
<S>                                                                           <C>                 <C>
Cash on hand and in banks                                                     $        660,777    $         488,661
Interest-earning balances in other banks                                             2,045,422            6,214,918
Federal funds sold                                                                     647,809            2,427,464
Investment securities available for sale,
  at fair value (Note B)                                                               471,800              404,504
Investment securities held to maturity,
  at amortized cost (Note B)                                                         6,264,399            4,712,270
Loans receivable, net (Note C)                                                      97,804,261           84,757,561
Loans held for sale                                                                  3,430,665              155,000
Accrued interest receivable                                                            736,391              548,657
Premises and equipment, net (Note D)                                                 1,061,612            1,102,570
Foreclosed real estate                                                                  36,750               22,400
Stock in the Federal Home Loan Bank, at cost                                           725,000              573,100
Other assets                                                                         2,112,275            2,434,524
                                                                              ----------------    -----------------

                                                             TOTAL ASSETS     $    115,997,161    $     103,841,629
                                                                              ================    =================

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
   Deposit accounts (Note G)                                                  $     77,624,333    $      70,253,670
   Advances from Federal Home Loan Bank (Note H)                                    12,800,000            7,000,000
   Accrued interest payable                                                             52,281              172,188
   Advance payments by borrowers for property taxes
      and insurance                                                                    127,528               96,850
   Accrued expenses and other liabilities                                              263,186               53,172
                                                                              ----------------    -----------------

                                                        TOTAL LIABILITIES           90,867,328           77,575,880
                                                                              ----------------    -----------------

COMMITMENTS AND CONTINGENCIES (Notes C and M)

STOCKHOLDERS' EQUITY (Note 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                                                       21,561,318           21,548,318
   Unearned compensation (Note I)                                                   (1,369,127)          (1,570,812)
   Retained earnings, substantially restricted                                      12,324,763           12,133,288
   Accumulated other comprehensive loss                                                (17,700)             (59,796)
   Common stock in treasury, at cost (606,372 and
     454,506 shares, respectively)                                                  (7,391,667)          (5,807,495)
                                                                              ----------------    -----------------

                                               TOTAL STOCKHOLDERS' EQUITY           25,129,833           26,265,749
                                                                              ----------------    -----------------

                               TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $    115,997,161    $     103,841,629
                                                                              ================    =================
</TABLE>

See accompansying notes.

                                      -13-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended June 30, 2001 and 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                    2001                 2000
                                                                              ----------------    -----------------
<S>                                                                           <C>                 <C>
INTEREST INCOME
   Loans                                                                      $      7,201,973    $       5,499,219
   Investments                                                                         422,714              332,318
   Deposits in other banks and federal funds sold                                      280,729              187,771
                                                                              ----------------    -----------------

                                                    TOTAL INTEREST INCOME            7,905,416            6,019,308
                                                                              ----------------    -----------------

INTEREST EXPENSE
   Deposits (Note G)                                                                 3,939,761            2,475,494
   Borrowed funds                                                                      537,758              359,287
                                                                              ----------------    -----------------

                                                   TOTAL INTEREST EXPENSE            4,477,519            2,834,781
                                                                              ----------------    -----------------

                                                      NET INTEREST INCOME            3,427,897            3,184,527

PROVISION FOR LOAN LOSSES (Note C)                                                      45,000              128,000
                                                                              ----------------    -----------------

                                                NET INTEREST INCOME AFTER
                                                PROVISION FOR LOAN LOSSES            3,382,897            3,056,527
                                                                              ----------------    -----------------

NON-INTEREST INCOME
   Service fees and charges                                                            193,761               82,702
   Mortgage operations                                                                 200,667               40,957
   Brokerage operations                                                                151,702               12,339
   Other                                                                                37,306               29,474
                                                                              ----------------    -----------------
                                                                                       583,436              165,472
                                                                              ----------------    -----------------

NON-INTEREST EXPENSES
   Personnel costs                                                                   1,202,755              983,618
   Occupancy                                                                           302,361              161,632
   Data processing                                                                     221,978              156,436
   Amortization of intangibles                                                         268,380               89,450
   Other                                                                               636,151              566,935
                                                                              ----------------    -----------------

                                              TOTAL NON-INTEREST EXPENSES            2,631,625            1,958,071
                                                                              ----------------    -----------------

                                               INCOME BEFORE INCOME TAXES            1,334,708            1,263,928

INCOME TAXES (Note K)                                                                  487,800              450,800
                                                                              ----------------    -----------------

                                                               NET INCOME     $        846,908    $         813,128
                                                                              ================    =================

EARNINGS PER COMMON SHARE (Note A)
   Basic                                                                      $            .56    $            0.48
                                                                              ================    =================
   Diluted                                                                    $            .56    $            0.47
                                                                              ================    =================
</TABLE>

See accompanying notes.

                                      -14-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended June 30, 2001 and 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                 Par value of    Additional
                                     Shares of common stock        of common      paid-in        Unearned
                                     -------------------------
                                      Issued       In treasury      stock         capital      compensation
                                     ----------   ------------   ------------   ------------   ------------
<S>                                  <C>          <C>            <C>            <C>            <C>
Balance at June 30, 1999              2,224,617        138,664   $     22,246   $ 21,530,265   $ (1,938,390)

Comprehensive income:
   Net income                                 -              -              -              -              -
   Unrealized loss on securities
     available for sale, net of
     income taxes of $35,700                  -              -              -              -              -

        Total comprehensive income            -              -              -              -              -

Purchase of treasury stock                    -        315,842              -              -              -
Recognition and Retention
   Plan (RRP) shares earned                   -              -              -              -        241,347
Release of ESOP shares                        -              -              -         18,053        126,231
Cash dividends paid ($.39 per
   share)                                     -              -              -              -              -
                                     ----------   ------------   ------------   ------------   ------------

Balance at June 30, 2000              2,224,617        454,506         22,246     21,548,318     (1,570,812)

Comprehensive income:
   Net income                                 -              -              -              -              -
   Unrealized gain on securities
     available for sale, net of
     income taxes of $25,200                  -              -              -              -              -

        Total comprehensive income

Purchase of treasury stock                    -        157,101              -              -              -
Issuance of RRP shares                        -         (4,000)             -              -        (42,000)
Issuance of non-qualified
   compensation plan shares                   -         (1,235)             -              -              -
RRP shares earned                             -              -              -              -        110,840
Release of ESOP shares                        -              -              -         13,000        132,845
Cash dividends paid ($.43
   per share)                                 -              -              -              -              -
                                     ----------   ------------   ------------   ------------   ------------

Balance at June 30, 2001              2,224,617        606,372   $     22,246   $ 21,561,318   $ (1,369,127)
                                     ==========   ============   ============   ============   ============

<CAPTION>
                                                     Accumulated
                                                        other                        Total
                                       Retained     comprehensive     Treasury      stockholders'
                                       earnings          loss          stock         equity
                                     ------------   -------------   -------------   ------------
<S>                                  <C>            <C>             <C>             <C>
Balance at June 30, 1999             $ 12,006,012    $          -   $  (1,807,006)  $ 29,813,127

Comprehensive income:
   Net income                             813,128               -               -        813,128
   Unrealized loss on securities
     available for sale, net of
     income taxes of $35,700                    -         (59,796)              -        (59,796)
                                                                                    ------------
        Total comprehensive income              -               -               -        753,332

Purchase of treasury stock                      -               -      (4,000,489)    (4,000,489)
Recognition and Retention
   Plan (RRP) shares earned                     -               -               -        241,347
Release of ESOP shares                          -               -               -        144,284
Cash dividends paid ($.39 per
   share)                                (685,852)              -               -       (685,852)
                                     ------------    ------------   -------------   ------------

Balance at June 30, 2000               12,133,288         (59,796)     (5,807,495)    26,265,749

Comprehensive income:
   Net income                             846,908               -               -        846,908
   Unrealized gain on securities
     available for sale, net of
     income taxes of $25,200                    -          42,096               -         42,096
                                                                                    ------------
        Total comprehensive income                                                       889,004
                                                                                    ------------

Purchase of treasury stock                      -               -      (1,638,522)    (1,638,522)
Issuance of RRP shares                          -               -          42,000              -
Issuance of non-qualified
   compensation plan shares                     -               -          12,350         12,350
RRP shares earned                               -               -               -        110,840
Release of ESOP shares                          -               -               -        145,845
Cash dividends paid ($.43
   per share)                            (655,433)              -               -       (655,433)
                                     ------------    ------------   -------------   ------------

Balance at June 30, 2001             $ 12,324,763    $    (17,700)  $  (7,391,667)  $ 25,129,833
                                     ============    ============   =============   ============
</TABLE>

See accompanying notes.

                                      -15-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended June 30, 2001 and 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                    2001                 2000
                                                                              ----------------    -----------------
<S>                                                                           <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                                 $        846,908    $         813,128
   Adjustments to reconcile net income to net cash
      provided (used) by operating activities:
        Depreciation                                                                   147,209               89,218
        Amortization                                                                   268,380              128,634
        Provision for loan losses                                                       45,000              128,000
        Loss on sale of foreclosed real estate                                          10,900                9,700
        Deferred income taxes                                                          (33,800)              35,177
        Deferred compensation                                                           12,350                    -
        ESOP contribution expense                                                      145,845              144,284
        Vesting of deferred recognition and retention plan                             110,840              241,347
        Change in assets and liabilities:
           Increase in accrued interest receivable                                    (187,734)            (172,178)
           (Increase) decrease in loans held for sale                               (3,275,665)             370,000
           (increase) decrease in other assets                                          62,469              (11,628)
           increase (decrease) in accrued interest payable                            (119,907)                 983
           Increase (decrease) in accrued expenses and other
             liabilities                                                               210,014              (86,334)
                                                                              ----------------    -----------------

                                                 NET CASH PROVIDED (USED)
                                                  BY OPERATING ACTIVITIES           (1,757,191)           1,690,331
                                                                              ----------------    -----------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of available-for-sale securities                                                 -              (50,000)
   Purchases of held to maturity investment securities                              (5,227,244)          (1,200,000)
   Proceeds from maturities and calls of
      held to maturity investment securities                                         3,675,115              109,027
   Purchase of Federal Home Loan Bank stock                                           (151,900)             (49,100)
   Net increase in loans                                                           (13,123,150)          (9,615,936)
   Purchase of premises and equipment                                                 (106,251)            (114,783)
   Net cash received in branch acquisition                                                   -           11,570,302
   Proceeds from sale of foreclosed real estate                                          6,200                1,200
                                                                              ----------------    -----------------

                                                 NET CASH PROVIDED (USED)
                                                  BY INVESTING ACTIVITIES          (14,927,230)             650,710
                                                                              ----------------    -----------------
</TABLE>

See accompanying notes.

                                      -16-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended June 30, 2001 and 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                    2001                 2000
                                                                              ----------------    -----------------
<S>                                                                           <C>                 <C>
CASH FLOWS FROM FINANCING ACTIVITIES
   Net increase in demand accounts                                            $      5,156,309    $         975,970
   Net increase in certificates of deposit                                           2,214,354            3,092,695
   Increase in advance payments by borrowers
      for taxes and insurance                                                           30,678               24,208
   Net increase in advances from Federal
      Home Loan Bank                                                                 5,800,000            5,800,000
   Purchase of treasury stock                                                       (1,638,522)          (4,000,489)
   Cash dividends paid                                                                (655,433)            (685,852)
                                                                              ----------------    -----------------

                                                        NET CASH PROVIDED
                                                  BY FINANCING ACTIVITIES           10,907,386            5,206,532
                                                                              ----------------    -----------------

                                               NET INCREASE (DECREASE) IN
                                                CASH AND CASH EQUIVALENTS           (5,777,035)           7,547,573

CASH AND CASH EQUIVALENTS, BEGINNING                                                 9,131,043            1,583,470
                                                                              ----------------    -----------------

                                                           CASH AND CASH
                                                      EQUIVALENTS, ENDING     $      3,354,008    $       9,131,043
                                                                              ================    =================

SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION
   Cash paid during the year for:
      Interest                                                                $      4,597,426    $       2,713,034
                                                                              ================    =================

      Income taxes                                                            $        413,000    $         468,432
                                                                              ================    =================

SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES
   Loans receivable transferred to real estate acquired
    in settlement of loans                                                    $         31,450    $               -
                                                                              ================    =================

   Net unrealized gain (loss) on investment securities
    available for sale, net of deferred income taxes                          $         42,096    $         (59,796)
                                                                              ================    =================

   Award of shares under the
    Recognition and Retention Plan                                            $         42,000    $               -
                                                                              ================    =================
</TABLE>

   Noncash assets acquired and liabilities assumed in branch acquisition are
presented in Note E.

See accompanying notes.

                                      -17-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

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, First Federal Savings and Loan Association of Cheraw
("First Federal" or the "Bank") 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 First Federal upon its conversion to stock form. On
March 9, 2000, Great Pee Dee formed a second wholly-owned subsidiary, First
Federal 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
------------------

First Federal 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. First Federal 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. First Federal
Investment Services, Inc. engages in the brokerage of a variety of investment
products.

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 generally accepted
accounting principles 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 losses on loans 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 losses on
loans and foreclosed real estate, management obtains independent appraisals for
significant properties.

                                      -18-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

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
losses on loans 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.

                                      -19-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

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.

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

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.

                                      -20-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

NOTE A - SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

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 all entities to adopt a fair value based
method of accounting for employee stock compensation plans, whereby compensation
cost is measured at the grant date based on the value of the award and is
recognized over the service period, which is usually the vesting period.
However, it also allows an entity to continue to measure compensation cost for
those plans using the intrinsic value based method of accounting prescribed by
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees, whereby compensation cost is the excess, if any, of the quoted market
price of the stock at the grant date (or other measurement date) over the amount
an employee must pay to acquire the stock. Stock options issued under the
Company's stock option plan have no intrinsic value at the grant date, and,
under Opinion No. 25, no compensation cost is recognized for them. The Company
has elected to continue with the accounting methodology in Opinion No. 25 and,
as a result, has provided pro forma disclosures of net income and earnings per
share and other disclosures, as if the fair value based method of accounting had
been applied.

                                      -21-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

NOTE A - SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

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

<TABLE>
<CAPTION>
                                                                                        Years Ended June 30,
                                                                                    -------------------------------
                                                                                          2001            2000
                                                                                    --------------   --------------
         <S>                                                                        <C>              <C>
         Average number of common shares outstanding
           used to calculate basic earnings per common share                             1,505,980        1,708,877

         Effect of dilutive options                                                            165            3,759
                                                                                    --------------   --------------

         Average number of common shares outstanding
           used to calculate diluted earnings per common share                           1,506,145        1,712,636
                                                                                    ==============   ==============
</TABLE>

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.

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

In June 2001, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standard (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.

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
paid a premium of $1,850,000 for the deposits acquired (see Note E). The
non-compete agreement is being amortized using the straight-line method over
that agreement's three-year term. Through June 30, 2001, the deposit premium has
been amortized using the straight-line method over ten years, resulting in a net
carrying value of $1,603,000 at that date.

                                      -22-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

NOTE A - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Intangible Assets (Continued)
-----------------

In preparing for adoption of SFAS No. 141, the Company re-evaluated its
accounting for the Florence branch acquisition, and determined that the deposit
premium paid represents a combination of the intangible value of core deposits
acquired of $621,000 and goodwill of $1,229,000. Applying amortization using the
straight-line method over ten years, at July 1, 2001 the carrying values of the
core deposit intangible and goodwill are $538,000 and $1,065,000, respectively.
The Company adopted SFAS No. 141 and No. 142 on July 1, 2001; accordingly, the
$1,603,000 carrying value of the unamortized deposit premium has been
reclassified as a core deposit intangible of $538,000 and goodwill of $1,065,000
on that date. Additionally, the Company has ceased to amortize goodwill
effective July 1, 2001, and in the future will, at least annually, evaluate it
for impairment. The Company will continue to amortize the core deposit
intangible using the straight-line method over ten years. The adoption of SFAS
No. 141 and No. 142 on July 1, 2001 has no effect on previously reported
operating results.

All intangible assets arising from the Florence branch acquisition are included
in other assets in the accompanying consolidated statements of financial
condition.

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

In July 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standard (SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities, which establishes accounting and reporting
standards requiring balance sheet recognition of all derivative instruments at
fair value. SFAS No. 133 was subsequently amended by SFAS No. 137 in June 1999
and by SFAS No. 138 in June 2000. The Company adopted this statement on July 1,
2000. The statement, as amended, specifies that changes in the fair value of
derivative instruments be recognized currently in earnings unless specific hedge
accounting criteria are met. Special accounting for qualifying hedges allows
derivative gains and losses to offset related results on hedged items in the
income statement. The statement is effective for fiscal years beginning after
June 15, 2000. The adoption of this statement on July 1, 2000 did not affect the
Company's financial statements.

In September 2000, the FASB issued SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities." SFAS No. 140
is a replacement of SFAS No. 125, although SFAS No. 140 carried forward most of
the provisions of SFAS No. 125 without change. SFAS No. 140 is effective for
transfers occurring after March 31, 2001 and for disclosures relating to
securitizations, retained interests, and collateral received and pledged in
reverse repurchase agreements for fiscal years ending after December 15, 2000.
The new statement eliminates the prior requirement to record collateral received
under certain securities financing transactions and requires reclassification in
the balance sheet of assets pledged under certain conditions. The adoption of
SFAS No. 140 did not have a significant impact on the Company's financial
statements.

                                      -23-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

NOTE B - INVESTMENT SECURITIES

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

<TABLE>
<CAPTION>
                                                                            June 30, 2001
                                                -------------------------------------------------------------------
                                                                      Gross             Gross
                                                   Amortized       unrealized        unrealized           Fair
                                                     cost             gains            losses             value
                                                --------------   --------------    --------------    --------------
<S>                                             <C>              <C>                <C>              <C>
Securities available for sale:
   Marketable equity securities                 $     500,000    $             -    $     28,200     $      471,800
                                                =============    ===============    ============     ==============

Securities held to maturity:
   U. S. government securities and
     obligations of U. S. government
     agencies                                   $   6,244,000    $        28,595    $      8,416     $    6,264,179
   FHLMC mortgage-backed securities                    20,399                  -             166             20,233
                                                -------------    ---------------    ------------     --------------

                                                $   6,264,399    $        28,595    $      8,852     $    6,284,412
                                                =============    ===============    ============     ==============


                                                                            June 30, 2000
                                                -------------------------------------------------------------------
                                                                      Gross             Gross
                                                   Amortized       unrealized        unrealized           Fair
                                                     cost             gains            losses             value
                                                --------------   --------------    --------------    --------------

Securities available for sale:
   Marketable equity securities                 $     500,000    $             -    $     95,496     $      404,504
                                                =============    ===============    ============     ==============

Securities held to maturity:
   U. S. government securities and
     obligations of U. S. government
     agencies                                   $   4,700,000    $           281    $    115,009     $    4,585,272
   FHLMC mortgage-backed securities                    12,270                  -             270             12,000
                                                -------------    ---------------    ------------     --------------

                                                $   4,712,270    $           281    $    115,279     $    4,597,272
                                                =============    ===============    ============     ==============
</TABLE>

The amortized cost and fair values of securities held to maturity at June 30,
2001 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.

<TABLE>
<CAPTION>

                                                            Securities Held to Maturity
                                                         ---------------------------------
                                                             Amortized          Fair
                                                               cost             value
                                                         --------------     --------------
         <S>                                             <C>                <C>
         Due within one year                             $    1,307,845     $    1,313,245
         Due after one year through five years                3,956,554          3,973,432
         Due after five years through ten years               1,000,000            997,735
         Due after ten years                                          -                  -
                                                         --------------     --------------

                                                         $    6,264,399     $    6,284,412
                                                         ==============     ==============
</TABLE>

                                      -24-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

NOTE B - INVESTMENT SECURITIES (Continued)

Proceeds from maturities and calls of investment securities held to maturity
during the years ended June 30, 2001 and 2000 were $3,675,115 and $109,027,
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, 2001 or 2000.

Securities with a carrying value of $735,116 and $1,505,763 and a fair value of
$709,283 and $1,465,167 at June 30, 2001 and 2000, respectively, were pledged to
secure public monies on deposit as required by law.

The following table sets forth certain information regarding the carrying
values, weighted average yields and contractual maturities of the Company's
investment portfolio and other interest-earning assets at June 30, 2001.
Marketable equity securities which have no stated maturities, and are readily
available, are assumed to mature in less than one year, while FHLB common stock,
a nonmarketable equity security, substantially all of which is required to be
maintained, is assumed to mature in periods greater than ten years.

<TABLE>
<CAPTION>
                                                       After one       After five
                                     One year        year through    years through       After ten
                                      or less         five years        ten years          years             Total
                                  --------------    ---------------  --------------     -------------    --------------
                                                                (Dollars in thousands)
<S>                               <C>               <C>              <C>                <C>              <C>
Securities available for sale:
   Marketable equity
     securities                   $          471    $             -  $             -    $          -     $          471
                                            7.46%                 -                -               -               7.46%
Securities held to maturity:
   U. S. government and
     agency securities                     1,304              3,940            1,000               -              6,244
                                            4.79%              6.13%            5.85%               -              5.81%
   Mortgage-backed
     securities                                4                 17                -               -                 21
                                            7.93%              8.84%               -               -               8.67%
Other:
   Interest-earning balances
     in other banks                        2,045                  -                -               -              2,045
                                            3.67%                 -                -               -               3.67%
   Federal Home Loan
     Bank Stock                                -                  -                -             725                725
                                               -                  -                -            6.75%              6.75%
                                  --------------    ---------------  ---------------    ------------     --------------

Total                             $        3,824    $         3,957  $         1,000    $        725     $        9,506
                                            4.52%              6.14%            5.85%           6.75%              5.51%
                                  ==============    ===============  ===============    ============     ==============
</TABLE>

                                      -25-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

NOTE C - LOANS RECEIVABLE

Loans receivable consist of the following:

<TABLE>
<CAPTION>
                                                             2001                               2000
                                              ---------------------------------    --------------------------------
                                                                   Percentage                          Percentage
                                                    Amount          of total           Amount           of total
                                              ----------------   --------------    --------------    --------------
         <S>                                  <C>                <C>               <C>               <C>
         Type of loan:
           Real estate loans:
             One-to-four family
                residential                   $     66,768,260         68.27%      $    64,346,222           75.92%
             Commercial                             11,643,624         11.90%            7,703,676            9.09%
             Construction                           10,959,325         11.21%            6,221,594            7.34%
             Home improvement loans                  6,135,026          6.27%            4,129,789            4.87%
                                              ----------------   ------------      ---------------   --------------

               Total real estate loans              95,506,235         97.65%           82,401,281           97.22%
                                              ----------------   ------------      ---------------   --------------

           Other loans:
             Commercial                              4,351,689          4.45%            3,204,989            3.79%
             Consumer                                4,236,032          4.33%            2,596,481            3.06%
             Loans secured by deposits                 295,491          0.30%              278,300            0.32%
                                              ----------------   ------------      ---------------   --------------

               Total other loans                     8,883,212          9.08%            6,079,770            7.17%
                                              ----------------   ------------      ---------------   --------------

                 Total loans                       104,389,447        106.73%           88,481,051          104.39%

         Less:
           Construction loans in process             5,775,975          5.91%           2,947,499             3.48%
           Allowance for loan losses                   570,312          0.58%             554,987             0.65%
           Deferred loan origination fees,
             net of costs                              238,899          0.24%             221,004             0.26%
                                              ----------------   ------------      --------------    --------------

                                              $     97,804,261        100.00%      $   84,757,561           100.00%
                                              ================   ============      ==============    ==============
</TABLE>

The allowance for loan losses is summarized as follows:

<TABLE>
<CAPTION>
                                                                                         2001              2000
                                                                                   --------------    --------------
         <S>                                                                       <C>               <C>
         Balance at beginning of year                                              $      554,987    $      443,951
         Provision for loan losses                                                         45,000           128,000
         Charge-offs                                                                      (29,675)          (16,964)
         Recoveries                                                                             -                 -
                                                                                   --------------    --------------

         Balance at end of year                                                    $      570,312    $      554,987
                                                                                   ==============    ==============
</TABLE>

                                      -26-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

NOTE C - LOANS RECEIVABLE (Continued)

The allocation of the allowance for loan losses is summarized as follows:

<TABLE>
<CAPTION>
                                                 2001                                       2000
                              -----------------------------------------  ------------------------------------------
                                              Percent of      Percent                      Percent        Percent
                                               allowance     of loans                     allowance      of loans
                                Amount of      to total      to gross       Amount of     to total       to gross
                                allowance      allowance       loans        allowance     allowance        loans
                              ------------  -------------  ------------  -------------  -------------  ------------
<S>                           <C>           <C>            <C>           <C>            <C>            <C>
Real estate loans:
   One-to-four family
     residential              $    259,000          45.41%        63.96% $      233,000         41.99%        72.72%
   Commercial                      175,000          30.68%        11.15%         77,000         13.87%         8.71%
   Construction                     13,000           2.28%        10.50%         15,000          2.70%         7.03%
   Home improvement loans           31,000           5.44%         5.88%         25,000          4.50%         4.67%
                              ------------  -------------  ------------  -------------- -------------  ------------

   Total real estate loans         478,000          83.81%        91.49%        350,000         63.06%        93.13%
                              ------------  -------------  ------------  -------------- -------------  ------------

Other loans:
   Commercial                       45,000           7.89%         4.17%         39,000          7.03%         3.62%
   Consumer                         33,000           5.79%         4.06%         14,000          2.52%         2.93%
   Loans secured by deposits             -              -%           28%          1,000          0.18%         0.32%
                              ------------  -------------  ------------  -------------- -------------  ------------

   Total other loans                78,000          13.68%         8.51%         54,000          9.73%         6.87%
                              ------------  -------------  ------------  -------------- -------------  ------------

Unallocated                         14,312           2.51%            -         150,987         27.21%            -
                              ------------  -------------  ------------  -------------- -------------  ------------

Total allowance for loan
   losses                     $    570,312         100.00%       100.00% $      554,987        100.00%       100.00%
                              ============  =============  ============  ============== =============  ============
</TABLE>

At June 30, 2001 and 2000, the Bank had loans totaling $568,387 and $186,428,
respectively, which were in a nonaccrual status. Interest income that was
foregone on nonaccrual loans for the years ended June 30, 2001, and 2000
amounted to approximately $21,454 and $5,070, respectively.

At June 30, 2001, the Bank had loan commitments outstanding of $4,103,785,
including loans of $962,200 to be originated at fixed interest rates ranging
from 7.75% to 14%. 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:

<TABLE>
<CAPTION>
                                                                                            2001           2000
                                                                                        ------------   ------------
         <S>                                                                            <C>            <C>
         Balance at beginning of year                                                   $    398,388   $    372,105
         Additional borrowings                                                               247,085         46,400
         Loan repayments                                                                     (22,319)       (20,117)
                                                                                        ------------   ------------

         Balance at end of year                                                         $    623,154   $    398,388
                                                                                        ============   ============
</TABLE>

                                      -27-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

NOTE D - PREMISES AND EQUIPMENT

Premises and equipment consist of the following:

<TABLE>
<CAPTION>
                                                                                        2001               2000
                                                                                  --------------     --------------
         <S>                                                                      <C>                <C>
         Land                                                                     $      420,687     $      420,687
         Building and improvements                                                       470,453            428,492
         Furniture and equipment                                                         756,112            698,939
                                                                                  --------------     --------------

                                                                                       1,647,252          1,548,118
         Accumulated depreciation                                                       (585,640)          (445,548)
                                                                                  --------------     --------------

                                                                                  $    1,061,612     $    1,102,570
                                                                                  ==============     ==============
</TABLE>

NOTE E - ACQUISITION OF BRANCH OFFICE

On March 3, 2000, the Bank completed, through the purchase of certain assets and
the assumption of certain liabilities, the acquisition of a full-service branch
office located in Florence, South Carolina. A summary of assets acquired and
liabilities assumed follows:

<TABLE>
         <S>                                                                      <C>
         Assets:
           Cash and cash equivalents                                              $   11,570,302
           Loans receivable, net                                                      10,897,431
           Premises and equipment                                                        336,994
           Deposit premium - See Note A                                                1,850,000
           Non-compete agreement                                                         250,000
           Other assets                                                                   81,412
                                                                                  --------------

                                                                                  $   24,986,139
                                                                                  ==============

         Liabilities:
           Deposits accounts                                                      $   24,852,560
           Other liabilities                                                             133,579
                                                                                  --------------

                                                                                  $   24,986,139
                                                                                  ==============
</TABLE>

NOTE F - FEDERAL INSURANCE OF DEPOSITS

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

                                      -28-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

NOTE G - DEPOSIT ACCOUNTS

A comparative summary of deposit accounts at June 30, 2001 and 2000 follows:

<TABLE>
<CAPTION>
                                                             2001                               2000
                                                --------------------------------   --------------------------------
                                                                    Weighted                            Weighted
                                                    Balance         avg. rate          Balance          avg. rate
                                                --------------   --------------    --------------    --------------
         <S>                                    <C>              <C>               <C>               <C>
         Demand accounts:
           Non-interest bearing                 $    2,392,549             -%      $    1,861,552                -%
           Savings                                   2,161,708          2.99%           2,353,533             2.86%
           Money market and NOW                     23,084,320          4.57%          18,267,183             4.21%
                                                --------------                     --------------
             Total demand accounts                  27,638,577          4.05%          22,482,268             3.72%

         Certificates of deposit                    49,985,756          6.05%          47,771,402             5.96%
                                                --------------                     --------------

             Total deposit accounts             $   77,624,333          5.34%      $   70,253,670             5.24%
                                                ==============                     ==============
</TABLE>

A summary of certificate accounts by maturity as of June 30, 2001 follows:

<TABLE>
<CAPTION>
                                                                    Less than         $100,000
                                                                    $100,000           or more            Total
                                                                 --------------    --------------    --------------
         <S>                                                     <C>               <C>               <C>
         One year or less                                        $   30,593,496    $   11,710,131    $   42,303,627
         More than one year to three years                            5,978,373           834,914         6,813,287
         More than three years to five years                            529,669           205,718           735,387
         More than five years                                           133,455                 -           133,455
                                                                 --------------    --------------    --------------

         Total certificate accounts                              $   37,234,993    $   12,750,763    $   49,985,756
                                                                 ==============    ==============    ==============
</TABLE>

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

<TABLE>
<CAPTION>
                                                                                        2001               2000
                                                                                  --------------     --------------
         <S>                                                                      <C>                <C>
         Checking accounts                                                        $       41,579     $      441,215
         Passbook savings accounts                                                        62,902             57,604
         Money market savings accounts                                                   747,890            227,514
         Certificates of deposit                                                       3,093,634          1,756,873
                                                                                  --------------     --------------

                                                                                       3,946,005          2,483,206
         Penalties for early withdrawal                                                   (6,244)            (7,712)
                                                                                  --------------     --------------

                                                                                  $    3,939,761     $    2,475,494
                                                                                  ==============     ==============
</TABLE>

                                      -29-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

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:

<TABLE>
<CAPTION>
                                                          At June 30,
                                               ---------------------------------
                                                     2001               2000
                                               ---------------    --------------
         <S>                                   <C>                <C>
         4.86% due on July 19, 2001            $     1,200,000    $            -
         4.69% due on March 22, 2002                 2,500,000                 -
         4.20% due on May 30, 2002                   4,100,000                 -
         4.31% due on April 6, 2003                  5,000,000                 -
         Advances repaid in 2001                             -         7,000,000
                                               ---------------    --------------

                                               $    12,800,000    $    7,000,000
                                               ===============    ==============
</TABLE>

At June 30, 2001, the Bank also had $14,000,000 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. An
additional 4,000 shares were granted on January 22, 2001. This grant was funded
with 4,000 shares of previously purchased treasury stock at a value of $10.50
per share on the date of grant. The Company will recognize compensation costs
over the vesting period of the RRP shares granted and is including such
compensation costs in operations as rapidly as is permissible, resulting in the
recognition of costs of $241,000 and $111,000 during the years ended June 30,
2001 and 2000, 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 220,212 shares of the Company's common stock through
June 30, 2001. Options granted to directors were fully vested on the date of
grant, while options granted to executive officers and employees have vested
one-third on the date of grant and one-third annually thereafter. All options
will expire if not exercised within ten years from the date of grant.

                                      -30-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

NOTE I - EMPLOYEE AND DIRECTOR BENEFIT PLANS (Continued)

Stock Option Plan (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, 1999                 29,728          190,484    $        12.00          107,537     $       12.00

     Options granted                       -                -                 -                -                 -
     Options vested                        -                -                 -            1,474             12.00
                              --------------    -------------    --------------     ------------     -------------

     At June 30, 2000                 29,728          190,484             12.00          149,011             12.00

     Options granted                 (10,000)          10,000             10.50                -                 -
     Options vested                        -                -                 -           44,806             11.89
     Options forfeited                13,212          (13,212)            12.00          (13,212)            12.00
                              --------------    -------------    --------------     ------------     -------------

     At June 30, 2001                 32,940          187,272    $        11.92          180,605     $       11.97
                              ==============    =============    ==============     ============     =============
</TABLE>

As permitted by SFAS No. 123, the Company has applied APB Opinion No. 25 for
measurement of stock-based compensation in the accompanying financial
statements. If the Company had used the fair value based method of accounting
for stock-based compensation, operating results for the year ended June 30, 2001
and 2000 would have been affected as set forth below:

<TABLE>
<CAPTION>
                                                                                   As Reported         Pro Forma
                                                                                ----------------  -----------------
       <S>                                                                      <C>               <C>
       2001 net income                                                          $        846,908  $         785,820
       2001 net income per share, basic and diluted                             $           0.56  $            0.52

       2000 net income                                                          $        813,128  $         702,347
       2000 net income per share, basic                                         $           0.48  $            0.41
       2000 net income per share, diluted                                       $           0.47  $            0.41
</TABLE>

In determining the pro forma disclosures above, the fair value of options
granted during the year ended June 30, 2001 was estimated as of the grant date
under the Black-Scholes Option Pricing Model using the following assumptions: a
risk-free interest rate of 5.0%, a dividend yield of 3.8%, an expected life of 8
years, and a volatility ratio of 25%. The effects of applying SFAS No. 123 in
the above pro forma disclosure are not indicative of future amounts.

                                      -31-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

NOTE I - EMPLOYEE AND DIRECTOR BENEFIT PLANS (Continued)

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

In the mutual to stock conversion, the First Federal Savings and Loan
Association 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 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, 2001, the outstanding balance of the
note is $1,302,207 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 $145,845 and $144,284 has been incurred in connection with the ESOP
during the years ended June 30, 2001 and 2000, respectively. The expense
includes, in addition to the cash contribution necessary to fund the ESOP,
$13,000 and $18,053 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, 2001 and 2000, respectively. The Bank has credited this amount to additional
paid-in capital.

At June 30, 2001, 44,124 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 $1.4
million at June 30, 2001.

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 financial statements. Expenses for
this plan for the year ended June 30, 2001 were $19,850. There were no expenses
to this plan for the year ended June 30, 2000.

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

The Bank maintains for the benefit of its eligible employees a 401(k) plan.
Under the plan, the Bank matches fifty-percent of participant's elective
contributions up to one and one-half percent of base compensation. The only
eligibility requirement is completion of one year's full-time service. At June
30, 2001 and 2000, 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 $6,579 and $6,313 for the years ended June
30, 2001 and 2000, respectively.

                                      -32-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

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 repurchased a total of 665,307 shares
of its common stock at an aggregate cost of $8.1 million of which 57,700 shares
were reissued as grants under the RRP, 1,235 shares were issued under the
deferred compensation plan, and 606,372 shares are held as treasury stock at
June 30, 2001.

NOTE K - INCOME TAXES

The components of income tax expense are as follows for the years ended June 30,
2001 and 2000:

<TABLE>
<CAPTION>
                                                                                        2001               2000
                                                                                  --------------     --------------
         <S>                                                                      <C>                <C>
         Current tax expense                                                      $      521,600     $      415,623
         Deferred tax expense (benefit)                                                  (33,800)            35,177
                                                                                  --------------     --------------

         Provision for income taxes                                               $      487,800     $      450,800
                                                                                  ==============     ==============
</TABLE>

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, 2001 and 2000:

<TABLE>
<CAPTION>
                                                                                        2001               2000
                                                                                  --------------     --------------
         <S>                                                                      <C>                <C>
         Income tax at federal statutory rate                                     $      453,801     $      429,736
         State income tax, net of federal tax benefit                                     28,303             23,147
         ESOP expense differences                                                          4,940              6,860
         Other                                                                               756             (8,943)
                                                                                  --------------     ---------------

         Provision for income taxes                                               $      487,800     $      450,800
                                                                                  ==============     ==============
</TABLE>

Deferred tax assets and liabilities arising from temporary differences at June
30, 2001 and 2000 are summarized as follows:

<TABLE>
<CAPTION>
                                                                                        2001               2000
                                                                                  --------------     --------------
         <S>                                                                      <C>                <C>
         Deferred tax assets relating to:
            Deferred compensation                                                 $      143,395     $      175,332
            Allowance for loan losses                                                    215,217            208,126
            Unrealized securities losses                                                  10,500             35,700
            Amortization of intangibles                                                   64,973                  -
                                                                                  --------------     --------------

            Total deferred tax assets                                                    434,085            419,158
                                                                                  --------------     --------------

         Deferred tax liabilities relating to:
            Premises and equipment                                                       (52,576)           (46,249)
            FHLB stock dividends                                                         (72,314)           (72,314)
                                                                                  --------------     --------------

            Total deferred tax liabilities                                              (124,890)          (118,563)
                                                                                  --------------     --------------

            Net deferred tax asset                                                $      309,195     $      300,595
                                                                                  ==============     ==============
</TABLE>

                                      -33-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

NOTE K - INCOME TAXES (Continued)

Retained earnings at June 30, 2001 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, 2001, that the Bank meets all
capital adequacy requirements to which it is subject.

As of June 30, 2001, 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. A reconciliation of stockholders' equity to the Bank's
regulatory capital at June 30, 2001 is as follows.

<TABLE>
         <S>                                                                  <C>
         Consolidated stockholders' equity                                    $      25,129,833
         Less:   Separate equity of Great Pee Dee Bancorp, Inc.                      (1,507,355)
                 Intangible assets                                                   (1,742,170)
                                                                              -----------------
         Tier 1 and tangible capital                                                 21,880,308
         Add general loan loss allowance                                                570,312
                                                                              -----------------

         Risk-based capital                                                   $      22,450,620
                                                                              =================
</TABLE>

                                      -34-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

NOTE L - REGULATORY MATTERS (Continued)

The Bank's regulatory capital amounts and ratios are presented below.

<TABLE>
<CAPTION>
                                                                                            Minimum to be well
                                                              Minimum for capital        capitalized under prompt
                                      Actual                   adequacy purposes       corrective action provisions
                           ---------------------------   ---------------------------   ----------------------------
                              Amount          Ratio         Amount          Ratio          Amount          Ratio
                           ------------   ------------   ------------   ------------   -------------   ------------
<S>                        <C>            <C>            <C>            <C>            <C>             <C>
As of June 30, 2001
   Total Capital
     (to Risk Weighted
     Assets)               $ 22,450,620       30.32%     $  5,923,338        8.0%       $  7,404,172         10.0%
   Tier 1 Capital
     (to Risk Weighted
     Assets)                 21,880,308       29.55%        2,961,669        4.0%          4,442,503          6.0%
   Tier 1 Capital
     (to Adjusted Assets)    21,880,308       20.27%        4,318,280        4.0%          5,397,850          5.0%


As of June 30, 2000
   Total Capital
     (to Risk Weighted
     Assets)               $ 21,943,392        38.8%     $  4,524,411        8.0%       $  5,655,513         10.0%
   Tier 1 Capital
     (to Risk Weighted
     Assets)                 21,388,405        37.8%        2,263,323        4.0%          3,394,985          6.0%
   Tier 1 Capital
     (to Adjusted Assets)    21,388,405        21.2%        3,026,661        3.0%          5,044,435          5.0%
</TABLE>


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.

                                      -35-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

NOTE M - CONCENTRATION OF CREDIT RISK AND OFF-BALANCE SHEET RISK (Continued)

A summary of the approximate contract amount of the Bank's exposure to
off-balance sheet risk as of June 30, 2001 is as follows:

<TABLE>
         <S>                                                                    <C>
         Financial instruments whose contract amounts represent credit risk:
           Commitments to extend credit                                         $    4,103,785
           Undisbursed construction loans in process                                 5,775,975
           Lines of credit                                                           2,075,339
</TABLE>


NOTE N - DISCLOSURES ABOUT FAIR VALUES OF FINANCIAL INSTRUMENTS

The Bank has implemented Statement of Financial Accounting Standards No. 107,
Disclosures About Fair Value of Financial Instruments ("SFAS 107"), 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.

     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.

                                      -36-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

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

     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 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 the discounted value
          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.

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, 2001 and 2000:

<TABLE>
<CAPTION>
                                                             2001                               2000
                                                --------------------------------    -------------------------------
                                                   Carrying         Estimated         Carrying          Estimated
                                                    amount         fair value          amount          fair value
                                                --------------   --------------     -------------    ------------
   <S>                                          <C>              <C>                <C>              <C>
   Financial assets:
     Cash, interest-earning balances,
        federal funds sold                      $    3,354,008   $    3,354,008     $   9,131,043    $    9,131,043
     Investment securities                           6,736,199        6,756,212         5,116,774         5,001,776
     Loans receivable                               97,804,261       99,322,000        84,757,561        83,847,000
     Loans held for sale                             3,430,665        3,430,665           155,000           155,000
     Stock in Federal Home Loan Bank
        of Atlanta                                     725,000          725,000           573,100           573,100
   Financial liabilities:
     Deposits                                       77,624,333       78,200,000        70,253,670        70,051,000
     Advances from Federal Home
        Loan Bank                                   12,800,000       12,847,000         7,000,000         7,018,000
</TABLE>

                                      -37-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

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, First Federal 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 First Federal in
exchange for the common stock of First Federal 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.

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, 2001 and 2000:

<TABLE>
<CAPTION>
                                         Condensed Statements of Financial Condition

                                                                                        2001               2000
                                                                                  --------------     --------------
         Assets:
         <C>                                                                      <C>                <C>
           Cash on hand and in banks                                              $       17,267     $       91,268
           Interest bearing balances in other banks                                            -             57,098
           Investment securities, available for sale                                     471,800            404,504
           Note receivable from First Federal                                            931,741          2,188,496
           Investment in First Federal                                                23,622,478         23,398,955
           Accrued interest receivable                                                     9,060              7,839
           Other assets                                                                   77,487            117,589
                                                                                  --------------     --------------

                                                                                  $   25,129,833     $   26,265,749
                                                                                  ==============     ==============
         Stockholders' equity:
           Common stock                                                           $       22,246     $       22,246
           Additional paid-in capital                                                 21,561,318         21,548,318
           ESOP loan receivable and unearned compensation                             (1,369,127)        (1,570,812)
           Retained earnings                                                          12,324,763         12,133,288
           Accumulated other comprehensive loss                                          (17,700)           (59,796)
           Treasury stock                                                             (7,391,667)        (5,807,495)
                                                                                  --------------     --------------

                                                                                  $   25,129,833     $   26,265,749
                                                                                  ==============     ==============
</TABLE>

                                      -38-

<PAGE>

GREAT PEE DEE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2001 and 2000
--------------------------------------------------------------------------------

NOTE P - PARENT COMPANY FINANCIAL DATA (Continued)

                       Condensed Statements of Operations
                       Years Ended June 30, 2001 and 2000

<TABLE>
<CAPTION>
                                                                                        2001               2000
                                                                                  --------------     --------------
         <S>                                                                      <C>                <C>
         Equity in earnings of subsidiaries                                       $      776,334     $      683,357
         Interest and other income                                                       346,085            343,831
         Operating expenses                                                             (219,511)          (144,760)
         Income taxes                                                                    (56,000)           (69,300)
                                                                                  --------------     --------------

         Net income                                                               $      846,908     $      813,128
                                                                                  ==============     ==============
</TABLE>

                        Condensed Statement of Cash Flows
                       Years Ended June 30, 2001 and 2000

<TABLE>
<CAPTION>
                                                                                        2001               2000
                                                                                  --------------     --------------
<S>                                                                               <C>                <C>
Cash flows from operating activities:

    Net income                                                                    $      846,908     $      813,128
    Adjustments to reconcile net income to net cash
       provided by operating activities:
         Equity in income of subsidiary                                                 (776,334)          (683,357)
         Other                                                                            39,031             34,682
                                                                                  --------------     --------------

Net cash provided by operating activities                                                109,605            164,453
                                                                                  --------------     --------------

Cash flows from investing activities:

    Decrease in note receivable from subsidiary                                        1,256,755          3,761,987
    ESOP loan receipt                                                                    132,846            126,231
    Increase in investment in subsidiary                                                 (61,350)           (60,753)
    Cash dividends received from subsidiary                                              725,000            800,000
    Purchase of available-for-sale securities                                                  -            (50,000)
                                                                                  --------------     --------------

Net cash provided by investing activities                                              2,053,251          4,577,465
                                                                                  --------------     --------------

Cash flows from financing activities:

    Purchase of treasury stock                                                        (1,638,522)        (4,000,489)
    Cash dividends paid                                                                 (655,433)          (685,852)
                                                                                  --------------     --------------

Net cash used by financing activities                                                 (2,293,955)        (4,686,341)
                                                                                  --------------     --------------

Net increase (decrease) in cash and cash equivalents                                    (131,099)            55,577

Cash and cash equivalents, beginning                                                     148,366             92,789
                                                                                  --------------     --------------

Cash and cash equivalents, ending                                                 $       17,267     $      148,366
                                                                                  ==============     ==============
</TABLE>

                                      -39-

<PAGE>

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

<TABLE>
<S>                                      <C>                                       <C>

                                                Executive Officers

                                                 Herbert W. Watts
                                                President and CEO

             John S. Long                                                               Johnnie L. Craft
         Vice President and COO                                                         Secretary and CFO
                                               Michael O. Blakeley
                                                  Vice President

                                                    Directors

           William R. Butler             James C. Crawford, III - Chairman             Henry P. Duvall, IV
         Owner, P & H Pharmacy             COO, B.C. Moore & Sons, Inc.            Retired Corporate Executive

             John S. Long                        Herbert W. Watts                      Cornelius B. Young
         Vice President and COO                  President and CEO                 Retired Corporate Executive
         Great Pee Dee Bancorp, Inc.        Great Pee Dee Bancorp, Inc.

                                                  H. Malloy Evans
                                                   President/CEO
                                                 Cheraw Yarn Mills
</TABLE>

                              Stock Transfer Agent

                         Registrar and Transfer Company
                                10 Commerce Drive
                           Cranford, New Jersey 07016

                              Special Legal Counsel

                      Luse Lehman Gorman Pomerenk & Schick
                       5335 Wisconsin Ave. N.W., Suite 400
                              Washington, DC 20015

                              Independent Auditors

                                 Dixon Odom PLLC
                                408 Summit Drive
                                Sanford, NC 27330

                                Office Locations

                                   Main Office
                                515 Market Street
                                Cheraw, SC 29520

                                  Branch Office
                                1385 Alice Drive
                               Florence, SC 29505


                                 Annual Meeting

The annual meeting of stockholders of Great Pee Dee Bancorp, Inc. will be held
at 2:00 p.m. on October 16, 2001 at the Matheson Memorial Library, Huger Street,
Cheraw, SC.

                             Market for Common Stock

The Company's stock began trading on December 31, 1997. There are 1,618,245
shares of common stock outstanding which were held by approximately 378
stockholders of record (excluding shares held in street name) on June 30, 2001.
The Company's common stock is quoted on the NASDAQ National market under the
symbol "PEDE". The following table reflects the stock trading and dividend
payment frequency of the Company for the years ended June 30, 2001 and 2000.

                                     Stock Price         Dividends
                                 ------------------
                                  High         Low       per share
                                 ------       -----      ---------

  For the year ended
    June 30, 2001:
     First quarter..........       11.00        9.75         0.10
     Second quarter.........       11.25       10.38         0.11
     Third quarter..........       11.38       10.25         0.11
     Fourth quarter.........       11.55       10.57         0.11

  For the year ended
    June 30, 2000:
     First quarter..........    $  13.13    $  12.25     $   0.09
     Second quarter.........       13.13       11.63         0.10
     Third quarter..........       12.38        9.19         0.10
     Fourth quarter.........       11.50        9.00         0.10

                                   Form 10-KSB

A copy of Form 10-KSB as filed with the Securities and Exchange Commission will
be furnished without charge to the Company's stockholders for the Company's most
recent fiscal year upon written request to Herbert W. Watts, President, Great
Pee Dee Bancorp, Inc., 515 Market Street, Cheraw, SC 29520.

This annual report has not been reviewed or confirmed for accuracy or relevance
by the Federal Deposit Insurance Corporation.

                                      -40-