##### Table of Contents





U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549





FORM 10-QSB







|x | Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------

For the quarterly period ended December 31, 2007



| ̈ | Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------

For the transition period ended

Commission File Number 0-23521





GREAT PEE DEE BANCORP, INC.

(Exact name of small business issuer as specified
in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|DELAWARE                                                       |  | 56-2050592                          
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification Number)

901 CHESTERFIELD HIGHWAY, CHERAW, SC 29520

(Address of principal executive office)

(843) 537-7656

(Issuers telephone number)





Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  x

As of February 12, 2008, 1,814,671 shares of the issuers common stock, $.01 par value, were outstanding. The registrant has no other classes of securities outstanding.

Transitional Small Business Disclosure Format    Yes   ̈    No  x









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##### Table of Contents

|                                                                                                   |  |         
|-------------------------------------------------------------------------------------------------- |  | --------
|                                                                                                   |  | Page No.
|Part I. FINANCIAL INFORMATION                                                                      |  | 3       
|                                                                                                   | 
|Item 1 - Financial Statements (Unaudited)                                                          |  | 3       
|                                                                                                   | 
|Consolidated Statements of Financial Condition December 31, 2007 and June 30, 2007                 |  | 3       
|                                                                                                   | 
|Consolidated Statements of Operations Three Months and Six Months Ended December 31, 2007 and 2006 |  | 4       
|                                                                                                   | 
|Consolidated Statements of Stockholders Equity Six Months Ended December 31, 2007 and 2006        |  | 5       
|                                                                                                   | 
|Consolidated Statements of Cash Flows Six Months Ended December 31, 2007 and 2006                  |  | 6       
|                                                                                                   | 
|Notes to Consolidated Financial Statements                                                         |  | 7       
|                                                                                                   | 
|Item 2 - Managements Discussion and Analysis of Financial Condition and Results of Operations     |  | 10      
|                                                                                                   | 
|Item 3 - Controls and Procedures                                                                   |  | 16      
|                                                                                                   | 
|Part II. OTHER INFORMATION                                                                         |  |         
|                                                                                                   | 
|Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds                               |  | 17      
|                                                                                                   | 
|Item 6 - Exhibits                                                                                  |  | 17      



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##### Table of Contents

Part l. FINANCIAL INFORMATION

Item 1 - Financial Statements

Great Pee Dee Bancorp, Inc. and Subsidiary

Consolidated Statements of Financial Condition





|                                                                                           |  |                                                 |         |   |               |   |         |  
|------------------------------------------------------------------------------------------ |  | ----------------------------------------------- | ------- | - | ------------- | - | ------- | -
|                                                                                           |  | December 31, 2007(Unaudited)                    |         |   | June 30,2007* |  
|                                                                                           |  | (In thousands, except share and per share data) |        
|ASSETS                                                                                     |  |                                                 |         |   |               |   |         |  
|Cash on hand and due from banks                                                            |  | $                                               | 2,230   |   |               | $ | 3,207   |  
|Interest-earning balances in other banks                                                   |  |                                                 | 612     |   |               |   | 368     |  
|Federal funds sold                                                                         |  |                                                 |        |   |               |   | 12,220  |  
|                                                                                           |  |                                                 |         |   |               |   |         |  
|Cash and cash equivalents                                                                  |  |                                                 | 2,842   |   |               |   | 15,795  |  
|                                                                                           |  |                                                
|Investment securities available for sale, at fair value                                    |  |                                                 | 17,191  |   |               |   | 20,025  |  
|                                                                                           |  |                                                
|Loans                                                                                      |  |                                                 | 173,862 |   |               |   | 178,687 |  
|Allowance for loan losses                                                                  |  |                                                 | (2,001  | ) |               |   | (1,938  | )
|                                                                                           |  |                                                 |         |   |               |   |         |  
|Net Loans                                                                                  |  |                                                 | 171,861 |   |               |   | 176,749 |  
|                                                                                           |  |                                                
|Loans held for sale                                                                        |  |                                                 | 17,951  |   |               |   | 12,318  |  
|Accrued interest receivable                                                                |  |                                                 | 1,171   |   |               |   | 1,166   |  
|Restricted stock, at cost                                                                  |  |                                                 | 2,208   |   |               |   | 2,253   |  
|Premises and equipment, net                                                                |  |                                                 | 4,840   |   |               |   | 4,902   |  
|Real estate                                                                                |  |                                                 | 620     |   |               |   | 558     |  
|Intangible assets                                                                          |  |                                                 | 401     |   |               |   | 494     |  
|Other assets                                                                               |  |                                                 | 2,350   |   |               |   | 2,487   |  
|                                                                                           |  |                                                 |         |   |               |   |         |  
|TOTAL ASSETS                                                                               |  | $                                               | 221,435 |   |               | $ | 236,747 |  
|                                                                                           |  |                                                 |         |   |               |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                       |  |                                                 |         |   |               |   |         |  
|                                                                                           |  |                                                
|LIABILITIES                                                                                |  |                                                 |         |   |               |   |         |  
|Deposit accounts                                                                           |  | $                                               | 155,373 |   |               | $ | 171,204 |  
|Short-term borrowings                                                                      |  |                                                 | 6,739   |   |               |   | 4,500   |  
|Long-term borrowings                                                                       |  |                                                 | 29,900  |   |               |   | 31,900  |  
|Accrued interest payable                                                                   |  |                                                 | 353     |   |               |   | 392     |  
|Advance payments by borrowers for property taxes and insurance                             |  |                                                 | 76      |   |               |   | 117     |  
|Accrued expenses and other liabilities                                                     |  |                                                 | 1,195   |   |               |   | 1,320   |  
|                                                                                           |  |                                                 |         |   |               |   |         |  
|TOTAL LIABILITIES                                                                          |  |                                                 | 193,636 |   |               |   | 209,433 |  
|                                                                                           |  |                                                 |         |   |               |   |         |  
|STOCKHOLDERS EQUITY                                                                       |  |                                                 |         |   |               |   |         |  
|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      |   |               |   | 22      |  
|Additional paid-in capital                                                                 |  |                                                 | 22,268  |   |               |   | 22,131  |  
|Unearned compensation                                                                      |  |                                                 | (530    | ) |               |   | (582    | )
|Retained earnings, substantially restricted                                                |  |                                                 | 12,052  |   |               |   | 12,194  |  
|Accumulated other comprehensive loss                                                       |  |                                                 | (307    | ) |               |   | (487    | )
|Common stock in treasury, at cost (411,493 and 434,636 shares, respectively)               |  |                                                 | (5,706  | ) |               |   | (5,964  | )
|                                                                                           |  |                                                 |         |   |               |   |         |  
|TOTAL STOCKHOLDERS EQUITY                                                                 |  |                                                 | 27,799  |   |               |   | 27,314  |  
|                                                                                           |  |                                                 |         |   |               |   |         |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                 |  | $                                               | 221,435 |   |               | $ | 236,747 |  
|                                                                                           |  |                                                 |         |   |               |   |         |  



|* | Derived from audited consolidated financial statements
|- | ------------------------------------------------------

See
accompanying notes.



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##### Table of Contents

Great Pee Dee Bancorp, Inc. and Subsidiary

Consolidated Statements of Operations (Unaudited)





|                                                    |  |                                       |       |                              |   |       |  |      |       |  |   |      
|--------------------------------------------------- |  | ------------------------------------- | ----- | ---------------------------- | - | ----- |  | ---- | ----- |  | - | -----
|                                                    |  | Three Months EndedDecember 31,        |       | Six Months EndedDecember 31,
|                                                    |  | 2007                                  |       | 2006                         |   | 2007  |  | 2006
|                                                    |  | (In thousands, except per share data)
|INTEREST INCOME                                     |  |                                       |       |                              |   |       |  |      |       |  |   |      
|Loans                                               |  | $                                     | 3,586 |                              | $ | 3,414 |  | $    | 7,251 |  | $ | 6,700
|Investments                                         |  |                                       | 226   |                              |   | 226   |  |      | 467   |  |   | 458  
|Deposits in other banks and federal funds sold      |  |                                       | 16    |                              |   | 13    |  |      | 51    |  |   | 40   
|                                                    |  |                                       |       |                              |   |       |  |      |       |  |   |      
|TOTAL INTEREST INCOME                               |  |                                       | 3,828 |                              |   | 3,653 |  |      | 7,769 |  |   | 7,198
|                                                    |  |                                       |       |                              |   |       |  |      |       |  |   |      
|INTEREST EXPENSE                                    |  |                                       |       |                              |   |       |  |      |       |  |   |      
|Deposit accounts                                    |  |                                       | 1,785 |                              |   | 1,603 |  |      | 3,624 |  |   | 3,053
|Short-term borrowings                               |  |                                       | 39    |                              |   | 140   |  |      | 204   |  |   | 273  
|Long-term borrowings                                |  |                                       | 338   |                              |   | 269   |  |      | 563   |  |   | 510  
|                                                    |  |                                       |       |                              |   |       |  |      |       |  |   |      
|TOTAL INTEREST EXPENSE                              |  |                                       | 2,162 |                              |   | 2,012 |  |      | 4,391 |  |   | 3,836
|                                                    |  |                                       |       |                              |   |       |  |      |       |  |   |      
|NET INTEREST INCOME                                 |  |                                       | 1,666 |                              |   | 1,641 |  |      | 3,378 |  |   | 3,362
|                                                    |  |                                       |       |                             
|PROVISION FOR LOAN LOSSES                           |  |                                       | 100   |                              |   | 60    |  |      | 167   |  |   | 107  
|                                                    |  |                                       |       |                              |   |       |  |      |       |  |   |      
|NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |  |                                       | 1,566 |                              |   | 1,581 |  |      | 3,211 |  |   | 3,255
|                                                    |  |                                       |       |                              |   |       |  |      |       |  |   |      
|NON-INTEREST INCOME                                 |  |                                       | 269   |                              |   | 257   |  |      | 544   |  |   | 547  
|                                                    |  |                                       |       |                              |   |       |  |      |       |  |   |      
|NON-INTEREST EXPENSES                               |  |                                       |       |                              |   |       |  |      |       |  |   |      
|Personnel costs                                     |  |                                       | 607   |                              |   | 572   |  |      | 1,261 |  |   | 1,149
|Occupancy                                           |  |                                       | 137   |                              |   | 153   |  |      | 285   |  |   | 305  
|Other                                               |  |                                       | 547   |                              |   | 495   |  |      | 1,322 |  |   | 997  
|                                                    |  |                                       |       |                              |   |       |  |      |       |  |   |      
|TOTAL NON-INTEREST EXPENSES                         |  |                                       | 1,291 |                              |   | 1,220 |  |      | 2,868 |  |   | 2,451
|                                                    |  |                                       |       |                              |   |       |  |      |       |  |   |      
|INCOME BEFORE INCOME TAXES                          |  |                                       | 544   |                              |   | 618   |  |      | 887   |  |   | 1,351
|PROVISION FOR INCOME TAXES                          |  |                                       | 229   |                              |   | 237   |  |      | 477   |  |   | 517  
|                                                    |  |                                       |       |                              |   |       |  |      |       |  |   |      
|NET INCOME                                          |  | $                                     | 315   |                              | $ | 381   |  | $    | 410   |  | $ | 834  
|                                                    |  |                                       |       |                              |   |       |  |      |       |  |   |      
|NET INCOME PER SHARE                                |  |                                       |       |                              |   |       |  |      |       |  |   |      
|Basic                                               |  | $                                     | 0.18  |                              | $ | 0.22  |  | $    | 0.24  |  | $ | 0.49 
|Diluted                                             |  |                                       | 0.18  |                              |   | 0.22  |  |      | 0.23  |  |   | 0.49 
|                                                    |  |                                       |       |                             
|CASH DIVIDENDS PER SHARE                            |  | $                                     | 0.16  |                              | $ | 0.16  |  | $    | 0.32  |  | $ | 0.32 
|                                                    |  |                                       |       |                             
|WEIGHTED AVERAGE SHARES OUTSTANDING                 |  |                                       |       |                              |   |       |  |      |       |  |   |      
|Basic                                               |  |                                       | 1,736 |                              |   | 1,705 |  |      | 1,732 |  |   | 1,709
|Effect of outstanding stock options                 |  |                                       | 12    |                              |   | 6     |  |      | 11    |  |   | 6    
|                                                    |  |                                       |       |                              |   |       |  |      |       |  |   |      
|Assuming dilution                                   |  |                                       | 1,748 |                              |   | 1,711 |  |      | 1,743 |  |   | 1,715
|                                                    |  |                                       |       |                              |   |       |  |      |       |  |   |      

See accompanying notes.



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##### Table of Contents

Great Pee Dee Bancorp, Inc. and Subsidiary

Consolidated Statements of Stockholders Equity
(Unaudited)





|                                                                    |  |                                                 |  |             |                         |  |                          |    |  |                      |        |   |                  |   |      |                                   |  |   |               |   |  |                          |      |   |  |   |        |   |  |   |        |  
|------------------------------------------------------------------- |  | ----------------------------------------------- |  | ----------- | ----------------------- |  | ------------------------ | -- |  | -------------------- | ------ | - | ---------------- | - | ---- | --------------------------------- |  | - | ------------- | - |  | ------------------------ | ---- | - |  | - | ------ | - |  | - | ------ | -
|                                                                    |  | Shares of common stock                          |  |             | Par value ofcommonstock |  | Additionalpaid-incapital |    |  | Unearnedcompensation |        |   | Retainedearnings |   |      | Accumulatedothercomprehensiveloss |  |   | Treasurystock |   |  | Totalstockholdersequity |     
|                                                                    |  | Issued                                          |  | In treasury |                         |  |                          |    |  |                      |        |  
|                                                                    |  | (In thousands, except share and per share data) | 
|Balance at June 30, 2006                                            |  | 2,224,617                                       |  | 434,448     |                         |  | $                        | 22 |  | $                    | 22,094 |   |                  | $ | (707 | )                                 |  | $ | 11,746        |   |  | $                        | (675 | ) |  | $ | (5,940 | ) |  | $ | 26,540 |  
|Comprehensive income:                                               |  |                                                 |  |             |                         |  |                          |    |  |                      |        |   |                  |   |      |                                   |  |   |               |   |  |                          |      |   |  |   |        |   |  |   |        |  
|Net income                                                          |  |                                                |  |            |                         |  |                          |   |  |                      |       |   |                  |   |     |                                   |  |   | 834           |   |  |                          |     |   |  |   |       |   |  |   | 834    |  
|Change in accumulated other comprehensive loss, net of income taxes |  |                                                |  |            |                         |  |                          |   |  |                      |       |   |                  |   |     |                                   |  |   |              |   |  |                          | 276  |   |  |   |       |   |  |   | 276    |  
|                                                                    |  |                                                 |  |             |                         |  |                          |    |  |                      |        |   |                  |   |      |                                   |  |   |               |   |  |                          |      |   |  |   |        |   |  |   |        |  
|Total comprehensive income                                          |  |                                                 |  |             |                         |  |                          |    |  |                      |        |   |                  |   |      |                                   |  |   |               |   |  |                          |      |   |  |   |        |   |  |   | 1,110  |  
|                                                                    |  |                                                 |  |             |                         |  |                          |    |  |                      |        |   |                  |   |      |                                   |  |   |               |   |  |                          |      |   |  |   |        |   |  |   |        |  
|Purchase of treasury shares                                         |  |                                                |  | 9,073       |                         |  |                          |   |  |                      |       |   |                  |   |     |                                   |  |   |              |   |  |                          |     |   |  |   | (139   | ) |  |   | (139   | )
|Exercise of stock options                                           |  |                                                |  | (4,385      | )                       |  |                          |   |  |                      | (19    | ) |                  |   |     |                                   |  |   |              |   |  |                          |     |   |  |   | 54     |   |  |   | 35     |  
|Stock based compensation                                            |  |                                                |  |            |                         |  |                          |   |  |                      | 29     |   |                  |   |     |                                   |  |   |              |   |  |                          |     |   |  |   |       |   |  |   | 29     |  
|Tax benefit option exercise                                         |  |                                                |  |            |                         |  |                          |   |  |                      | 9      |   |                  |   |     |                                   |  |   |              |   |  |                          |     |   |  |   |       |   |  |   | 9      |  
|Reclassification of unearned compensation                           |  |                                                |  |            |                         |  |                          |   |  |                      | (19    | ) |                  |   | 19   |                                   |  |   |              |   |  |                          |     |   |  |   |       |   |  |   |       |  
|RRP shares issued                                                   |  |                                                |  | (4,000      | )                       |  |                          |   |  |                      | (55    | ) |                  |   |     |                                   |  |   |              |   |  |                          |     |   |  |   | 55     |   |  |   |       |  
|Release of ESOP shares                                              |  |                                                |  |            |                         |  |                          |   |  |                      | 43     |   |                  |   | 55   |                                   |  |   |              |   |  |                          |     |   |  |   |       |   |  |   | 98     |  
|Cash dividends paid ($0.32 per share)                               |  |                                                |  |            |                         |  |                          |   |  |                      |       |   |                  |   |     |                                   |  |   | (545          | ) |  |                          |     |   |  |   |       |   |  |   | (545   | )
|                                                                    |  |                                                 |  |             |                         |  |                          |    |  |                      |        |   |                  |   |      |                                   |  |   |               |   |  |                          |      |   |  |   |        |   |  |   |        |  
|Balance at December 31, 2006                                        |  | 2,224,617                                       |  | 435,136     |                         |  | $                        | 22 |  | $                    | 22,082 |   |                  | $ | (633 | )                                 |  | $ | 12,035        |   |  | $                        | (399 | ) |  | $ | (5,970 | ) |  | $ | 27,137 |  
|                                                                    |  |                                                 |  |             |                         |  |                          |    |  |                      |        |   |                  |   |      |                                   |  |   |               |   |  |                          |      |   |  |   |        |   |  |   |        |  
|Balance at June 30, 2007                                            |  | 2,224,617                                       |  | 434,636     |                         |  | $                        | 22 |  | $                    | 22,131 |   |                  | $ | (582 | )                                 |  | $ | 12,194        |   |  | $                        | (487 | ) |  | $ | (5,964 | ) |  | $ | 27,314 |  
|Comprehensive income:                                               |  |                                                 |  |             |                         |  |                          |    |  |                      |        |   |                  |   |      |                                   |  |   |               |   |  |                          |      |   |  |   |        |   |  |   |        |  
|Net income                                                          |  |                                                |  |            |                         |  |                          |   |  |                      |       |   |                  |   |     |                                   |  |   | 410           |   |  |                          |     |   |  |   |       |   |  |   | 410    |  
|Change in accumulated other comprehensive loss, net of income taxes |  |                                                |  |            |                         |  |                          |   |  |                      |       |   |                  |   |     |                                   |  |   |              |   |  |                          | 180  |   |  |   |       |   |  |   | 180    |  
|                                                                    |  |                                                 |  |             |                         |  |                          |    |  |                      |        |   |                  |   |      |                                   |  |   |               |   |  |                          |      |   |  |   |        |   |  |   |        |  
|Total comprehensive income                                          |  |                                                 |  |             |                         |  |                          |    |  |                      |        |   |                  |   |      |                                   |  |   |               |   |  |                          |      |   |  |   |        |   |  |   | 590    |  
|                                                                    |  |                                                 |  |             |                         |  |                          |    |  |                      |        |   |                  |   |      |                                   |  |   |               |   |  |                          |      |   |  |   |        |   |  |   |        |  
|Purchase of treasury shares                                         |  |                                                |  | 1,000       |                         |  |                          |   |  |                      |       |   |                  |   |     |                                   |  |   |              |   |  |                          |     |   |  |   | (22    | ) |  |   | (22    | )
|Exercise of stock options                                           |  |                                                |  | (24,143     | )                       |  |                          |   |  |                      | 15     |   |                  |   |     |                                   |  |   |              |   |  |                          |     |   |  |   | 280    |   |  |   | 295    |  
|Stock based compensation                                            |  |                                                |  |            |                         |  |                          |   |  |                      | 8      |   |                  |   |     |                                   |  |   |              |   |  |                          |     |   |  |   |       |   |  |   | 8      |  
|Release of ESOP shares                                              |  |                                                |  |            |                         |  |                          |   |  |                      | 79     |   |                  |   | 52   |                                   |  |   |              |   |  |                          |     |   |  |   |       |   |  |   | 131    |  
|Tax benefit option exercise                                         |  |                                                |  |            |                         |  |                          |   |  |                      | 35     |   |                  |   |     |                                   |  |   |              |   |  |                          |     |   |  |   |       |   |  |   | 35     |  
|Cash dividends paid ($0.32 per share)                               |  |                                                |  |            |                         |  |                          |   |  |                      |       |   |                  |   |     |                                   |  |   | (552          | ) |  |                          |     |   |  |   |       |   |  |   | (552   | )
|                                                                    |  |                                                 |  |             |                         |  |                          |    |  |                      |        |   |                  |   |      |                                   |  |   |               |   |  |                          |      |   |  |   |        |   |  |   |        |  
|Balance at December 31, 2007                                        |  | 2,224,617                                       |  | 411,493     |                         |  | $                        | 22 |  | $                    | 22,268 |   |                  | $ | (530 | )                                 |  | $ | 12,052        |   |  | $                        | (307 | ) |  | $ | (5,706 | ) |  | $ | 27,799 |  
|                                                                    |  |                                                 |  |             |                         |  |                          |    |  |                      |        |   |                  |   |      |                                   |  |   |               |   |  |                          |      |   |  |   |        |   |  |   |        |  

See accompanying notes.



- 5 -



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##### Table of Contents

Great Pee Dee Bancorp, Inc. and Subsidiary

Consolidated Statements of Cash Flows (Unaudited)



|                                                                                            |  |                              |         |   |      |   |         |  
|------------------------------------------------------------------------------------------- |  | ---------------------------- | ------- | - | ---- | - | ------- | -
|                                                                                            |  | Six Months EndedDecember 31, |        
|                                                                                            |  | 2007                         |         |   | 2006 |  
|                                                                                            |  | (In thousands)               |        
|CASH FLOWS FROM OPERATING ACTIVITIES                                                        |  |                              |         |   |      |   |         |  
|Net income                                                                                  |  | $                            | 410     |   |      | $ | 834     |  
|Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |                              |         |   |      |   |         |  
|Depreciation and amortization                                                               |  |                              | 233     |   |      |   | 258     |  
|Loss (gain) on sale of foreclosed real estate                                               |  |                              | 28      |   |      |   | (4      | )
|Gain on sale of loans held for sale                                                         |  |                              | (33     | ) |      |   | (42     | )
|(Gain)loss on sale of available for sale investments                                        |  |                              | (12     | ) |      |   | 7       |  
|Provision for loan losses                                                                   |  |                              | 167     |   |      |   | 107     |  
|Release of ESOP shares                                                                      |  |                              | 131     |   |      |   | 98      |  
|Stock based compensation                                                                    |  |                              | 8       |   |      |   | 29      |  
|Proceeds from sales of loans held for sale                                                  |  |                              | 3,581   |   |      |   | 5,016   |  
|Originations of loans held for sale                                                         |  |                              | (9,181  | ) |      |   | (4,219  | )
|Change in assets and liabilities:                                                           |  |                              |         |   |      |   |         |  
|Increase in accrued interest receivable                                                     |  |                              | (5      | ) |      |   | (146    | )
|Increase (decrease) in accrued interest payable                                             |  |                              | (39     | ) |      |   | 90      |  
|Decrease (increase) in other assets                                                         |  |                              | 27      |   |      |   | (28     | )
|Decrease in other liabilities                                                               |  |                              | (125    | ) |      |   | (195    | )
|                                                                                            |  |                              |         |   |      |   |         |  
|NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                         |  |                              | (4,810  | ) |      |   | 1,805   |  
|                                                                                            |  |                              |         |   |      |   |         |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                        |  |                              |         |   |      |   |         |  
|Purchases of available-for-sale investments                                                 |  |                              | (14     | ) |      |   | (397    | )
|Proceeds from sale and maturities of available-for-sale investments                         |  |                              | 3,151   |   |      |   | 1,715   |  
|Net (increase) decrease in loans                                                            |  |                              | 4,510   |   |      |   | (9,640  | )
|Purchase of restricted stock                                                                |  |                              | (158    | ) |      |   | (36     | )
|Sale of restricted stock                                                                    |  |                              | 203     |   |      |   |        |  
|Purchases of property and equipment                                                         |  |                              | (79     | ) |      |   | (135    | )
|Proceeds from sale of foreclosed real estate                                                |  |                              | 121     |   |      |   | 312     |  
|                                                                                            |  |                              |         |   |      |   |         |  
|NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                                         |  |                              | 7,734   |   |      |   | (8,181  | )
|                                                                                            |  |                              |         |   |      |   |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                        |  |                              |         |   |      |   |         |  
|Net increase (decrease) in deposit accounts                                                 |  |                              | (15,831 | ) |      |   | 6,253   |  
|Proceeds from long-term borrowings                                                          |  |                              | 22,600  |   |      |   | 10,800  |  
|Proceeds from short-term borrowings                                                         |  |                              | 4,739   |   |      |   |        |  
|Decrease in advances from borrowers                                                         |  |                              | (41     | ) |      |   | (95     | )
|Purchase of treasury stock                                                                  |  |                              | (22     | ) |      |   | (139    | )
|Repayment of long-term borrowings                                                           |  |                              | (24,600 | ) |      |   | (10,000 | )
|Repayment of short-term borrowings                                                          |  |                              | (2,500  | ) |      |   |        |  
|Cash dividends paid                                                                         |  |                              | (552    | ) |      |   | (545    | )
|Tax benefit from exercise of stock options                                                  |  |                              | 35      |   |      |   | 9       |  
|Exercise of stock options                                                                   |  |                              | 295     |   |      |   | 35      |  
|                                                                                            |  |                              |         |   |      |   |         |  
|NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                         |  |                              | (15,877 | ) |      |   | 6,318   |  
|                                                                                            |  |                              |         |   |      |   |         |  
|NET DECREASE IN CASH AND CASH EQUIVALENTS                                                   |  |                              | (12,953 | ) |      |   | (58     | )
|CASH AND CASH EQUIVALENTS, BEGINNING                                                        |  |                              | 15,795  |   |      |   | 4,701   |  
|                                                                                            |  |                              |         |   |      |   |         |  
|CASH AND CASH EQUIVALENTS, ENDING                                                           |  | $                            | 2,842   |   |      | $ | 4,643   |  
|                                                                                            |  |                              |         |   |      |   |         |  
|NON-CASH INVESTING ACTIVITIES                                                               |  |                              |         |   |      |   |         |  
|Real-estate acquired in satisfaction of loans                                               |  | $                            | 210     |   |      | $ |        |  
|                                                                                            |  |                              |         |   |      |   |         |  

See accompanying notes.



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##### Table of Contents

Great Pee Dee Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements



NOTE A - BASIS OF PRESENTATION

In managements opinion, the unaudited financial information presented in this document reflects all adjustments (consisting solely of normal
recurring adjustments) necessary for a fair presentation of the financial information as of and for the three-month and six-month periods ended December 31, 2007 and 2006, in conformity with accounting principles generally accepted in the
United States of America.

The consolidated financial statements include the accounts of Great Pee Dee Bancorp, Inc. (the Company) and its
wholly-owned subsidiary, Sentry Bank & Trust (Sentry or the Bank). Operating results for the three-month and six-month periods ended December 31, 2007, are not necessarily indicative of the results that may be
expected for the fiscal year ending June 30, 2008.

The organization and business of the Company, accounting policies followed by the Company and
other information are contained in the notes to the consolidated financial statements filed as part of the Companys Annual Report on Form 10-KSB for the year ended June 30, 2007. This quarterly report should be read in conjunction with
such annual report.

NOTE B - MERGER BETWEEN GREAT PEE DEE BANCORP, INC. AND FIRST BANCORP

On July 12, 2007, Great Pee Dee Bancorp, Inc. entered into a merger agreement with First Bancorp. Pursuant to the agreement, the Company will be merged with and into
First Bancorp. Under the terms of the merger agreement, each share of Company common stock issued and outstanding at the effective time of the merger will be converted into and exchanged for the right to receive 1.15 shares of First Bancorp common
stock. The total transaction price is valued at approximately $38.2 million. Closing of the merger, which is expected to occur in the second quarter of 2008, is subject to certain conditions, including the approval of the shareholders of the
Company, regulatory approvals, and other customary closing conditions. The Banks offices will become branch offices of First Bank, the wholly-owned subsidiary of First Bancorp.

In connection with the announced merger, the Bank expects to incur additional liabilities related to compensation and other merger costs that will range from $1.7 million to $2.0 million.

NOTE C - NET INCOME PER SHARE

Basic income per share has been
computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. In accordance with accounting principles generally accepted in the United States of America, Employee Stock Ownership Plan
(ESOP) shares are only considered outstanding for earnings per share calculations when they are earned or committed to be released. Diluted net income per share reflects the dilutive effects of outstanding common stock options.
Anti-dilutive options are not included in income per share computations. No options were anti-dilutive for the quarter and six months ending December 31, 2007. Approximately 88,000 options were anti-dilutive for the quarter and six months
ending December 31, 2006.



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Great Pee Dee Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements



NOTE D - COMPREHENSIVE INCOME

A summary of comprehensive income is as follows:



|                                                                                       |  |                                |     |                              |      |   |      |  |   |      |   |  |   |      
|-------------------------------------------------------------------------------------- |  | ------------------------------ | --- | ---------------------------- | ---- | - | ---- |  | - | ---- | - |  | - | -----
|                                                                                       |  | Three Months EndedDecember 31, |     | Six Months EndedDecember 31,
|                                                                                       |  | 2007                           |     |                              | 2006 |   | 2007 |  |   | 2006
|                                                                                       |  | (In thousands)                
|Net income                                                                             |  | $                              | 315 |                              |      | $ | 381  |  | $ | 410  |   |  | $ | 834  
|                                                                                       |  |                                |     |                             
|Reclassification adjustment for (gains) losses realized in income, net of tax          |  |                                | (7  | )                            |      |   |     |  |   | (7   | ) |  |   | 4    
|                                                                                       |  |                                |     |                             
|Other comprehensive income:                                                            |  |                                |     |                              |      |   |      |  |   |      |   |  |   |      
|Net increase in the fair value of investment securities available for sale, net of tax |  |                                | 79  |                              |      |   | 129  |  |   | 187  |   |  |   | 272  
|                                                                                       |  |                                |     |                              |      |   |      |  |   |      |   |  |   |      
|Total comprehensive income                                                             |  | $                              | 387 |                              |      | $ | 510  |  | $ | 590  |   |  | $ | 1,110
|                                                                                       |  |                                |     |                              |      |   |      |  |   |      |   |  |   |      

NOTE E - NEW ACCOUNTING PRONOUNCEMENTS

The following is a summary of recent authoritative pronouncements that could impact the accounting, reporting, and or disclosure of financial information by the Company.

In September 2006, the Financial Account Standards Board (the FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157
Fair Value Measurement, which enhances existing guidance for measuring assets and liabilities using fair value and requires additional disclosure about the use of fair value for measurement. The statement is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company does not expect the adoption of SFAS 157 to materially impact the Companys consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities  Including an
amendment of SFAS No. 115. This statement permits, but does not require, entities to measure many financial instruments at fair value. The objective is to provide entities with an opportunity to mitigate volatility in reported earnings
caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. Entities electing this option will apply it when the entity first recognizes an eligible instrument and will report
unrealized gains and losses on such instruments in current earnings. This statement 1) applies to all entities, 2) specifies certain election dates, 3) can be applied on an instrumentbyinstrument basis with some exceptions, 4) is
irrevocable and 5) applies only to entire instruments. One exception is demand deposit liabilities which are explicitly excluded as qualifying for fair value. SFAS No. 159 is effective for financial statements issued for fiscal years beginning
after November 15, 2007, and interim periods within those fiscal years. SFAS No. 159 does contain an early election option that would allow the Company to elect the fair value option for existing eligible items as of the beginning of a
fiscal year that begins on or before November 15, 2007. The Company has not early adopted SFAS 159 and does not expect the adoption of SFAS 159 to materially impact the Companys consolidated financial statements.

NOTE F - RECLASSIFICATIONS

Certain amounts in the December 2006
income statement have been reclassified to conform to the December 2007 presentation. The reclassifications had no effect on net income or stockholders equity, as previously reported.



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##### Table of Contents

Great Pee Dee Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements



NOTE G - INCOME TAXES

The Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxesand Interpretation of FASB Statement No. 109
(FIN 48), effective for the Company July 1, 2007. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in financial statements and requires the impact of a tax position be recognized in the financial
statements if that position is more likely than not of being sustained by the taxing authority. The adoption of FIN 48 did not have a material effect on the Companys consolidated financial position or results of operations.



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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Forward-looking Statements

This Quarterly Report on Form 10-QSB may contain certain forward-looking statements consisting of
estimates with respect to the financial condition, results of operations and business of the Company that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include, but are not
limited to, general economic conditions, changes in interest rates, deposit flows, loan demand, real estate values, and competition; changes in accounting principles, policies, or guidelines; changes in legislation or regulation; and other economic,
competitive, governmental, regulatory, and technological factors affecting the Companys operations, pricing, products and services. These factors should be considered in evaluating forward-looking statements and undue reliance should not be
placed on such statements. We do not undertake any obligation to update any forward-looking statement to reflect circumstances and events that occur after the date on which the forward-looking statement was made.

Critical Accounting Policies and Estimates

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

The Company considers the following accounting policies to be most critical in their potential effect on its financial position
or results of operations:

Allowance for Loan Losses

Due to the estimation process and the potential materiality of the amounts involved, the Company has identified the accounting for the allowance for loan losses and the related provision for loan losses as an accounting policy critical to
the Companys consolidated financial statements. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when
management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for
loan losses is evaluated on a regular basis by management and is based upon managements periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that
may affect the borrowers ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more
information becomes available.

The allowance consists of specific, general and unallocated components. The specific component relates to loans that are
classified as either doubtful, substandard or special mention. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is
lower than the carrying value of that loan. The general component covers non-classified loans and is based on historical loss experience adjusted for qualitative factors. An unallocated component is maintained to cover uncertainties that could
affect managements estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the
portfolio.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the
scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting
scheduled principal and interest payments when due. All non-accrual loans are considered impaired.

Loans that experience insignificant payment delays and
payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking



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##### Table of Contents

into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the
borrowers prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis by either the present value of expected future cash flows discounted at the
loans effective interest rate or the fair value of the collateral if the loan is collateral dependent.

Large groups of smaller balance homogeneous
loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and certain residential loans for impairment disclosures, unless such loans are the subject of a restructuring agreement.

Interest Income Recognition

The accrual of
interest on loans is discontinued at the time the loan is 90 days past due or impaired. Past due status is based on contractual terms of the loan. In all cases, loans are placed on non-accrual status at an earlier date if collection of principal or
interest is considered doubtful according to internal evaluation policies.

All interest accrued but not collected for loans that are placed on non-accrual
or charged off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and
interest amounts contractually due are brought current and future payments are reasonably assured.

Loans are also placed on non-accrual status in cases
where it is uncertain as to whether the borrower can satisfy the contractual terms of the loan agreement. Amounts received on non-accrual loans generally are applied first to interest and then to principal only after all past due interest has been
collected. Restructured loans are those for which concessions, including the reduction of interest rates below a rate otherwise available to that borrower or the deferral of interest or principal have been granted due to the borrowers weakened
financial condition. Interest is accrued on restructured loans at the restructured rates when it is anticipated that no loss of original principal will occur.

Recent Accounting Pronouncements

See Note E to the financial statements for a full description of recent
accounting pronouncements including the respective expected dates of adoption and effects on results of operations and financial condition.

Comparison of Financial Condition at

December 31, 2007 and June 30, 2007

Total assets decreased by $15.3 million, from $236.7 million at June 30, 2007, to $221.4 million at December 31, 2007. The Companys decrease in assets
was largely attributable to decreases in federal funds sold and cash that were used to fund the maturities of borrowings and brokered certificates of deposit.

The Companys interest-earning liquid assets, including interest-earning balances in other banks, federal funds sold and investment securities decreased by $14.8 million, to $17.8 million at December 31, 2007, representing 8% of
total assets at that date as compared with $32.6 million or 13.8% of total assets at June 30, 2007.

Loans receivable decreased by $4.8 million from
$178.7 million at June 30, 2007, to $173.9 million at December 31, 2007, primarily due to a decrease in real estate loans due to a decline in loan request volume.

Total deposits decreased by $15.8 million from $171.2 million at June 30, 2007, to $155.4 million at December 31, 2007, primarily due to decreases in large customer certificates of deposit and maturing
brokered certificates of deposit.

Total stockholders equity increased by $485,000 from $27.3 million at June 30, 2007, to $27.8 million at
December 31, 2007. The increase in stockholders equity from net income, the exercise of stock options and increases in the fair market value of available for sale securities were offset by cash dividends paid and treasury stock
repurchases.



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##### Table of Contents

Comparison of Results of Operations for the

Three Months Ended December 31, 2007 and 2006

Net Income. Net income for the quarter ended December 31, 2007 was $315,000, a decrease of $66,000 from net income of $381,000 for the quarter ended December 31, 2006. On a per share basis, net income for the current
quarter was $0.18 per diluted share as compared with $0.22 per diluted share for the first quarter of the last fiscal year. The decrease in net income was primarily a result of incurred nondeductible merger costs of $57,000.

Net Interest Income.Net interest income for each of the quarters ended December 31, 2007 and 2006 was $1.6 million. Both interest income and interest
expense increased primarily due to the increase in average loans, deposits and borrowings over the same period last year. Decreases in Wall Street Journal Prime and Federal Funds rates and other market interest rates had no significant impact on the
Companys net interest income quarter over quarter.

Provision for Loan Losses.The provision for loan losses totaled $100,000 in the current
quarter, compared to $60,000 in the quarter ended December 31, 2006.

We experienced changes in the loan portfolio mix as well as increases in
non-performing loans from December 31, 2006 to 2007, both of which increased the necessary amount of the allowance for loan losses when the changes were analyzed in our allowance for loan loss model. We also increased our qualitative factor
related to regional economic conditions which impacted the allowance for loan losses and this resulted in the provision for loan losses of $100,000 for the three months ended December 31, 2007. Our loan loss methodology allowance model takes
into consideration the different levels of risk for all outstanding loans. (see  Analysis of Allowance for Loan Losses). The following table provides the changes in the allowance for loan losses for the quarters ended
December 31, 2007 and 2006, respectively.



|                                                                                          |  |                                        |        |   |      |   |        |  
|----------------------------------------------------------------------------------------- |  | -------------------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                          |  | For the Three Months EndedDecember 31, |       
|                                                                                          |  | 2007                                   |        |   | 2006 |  
|Balance at the beginning of the period                                                    |  | $                                      | 1,987  |   |      | $ | 1,940  |  
|                                                                                          |  |                                       
|Charge-offs:                                                                              |  |                                        |        |   |      |   |        |  
|Real estate mortgage                                                                      |  |                                        | 84     |   |      |   |       |  
|Installment loans to individuals                                                          |  |                                        | 5      |   |      |   | 12     |  
|                                                                                          |  |                                        |        |   |      |   |        |  
|                                                                                          |  |                                        | 89     |   |      |   | 12     |  
|                                                                                          |  |                                        |        |   |      |   |        |  
|Recoveries:                                                                               |  |                                        |        |   |      |   |        |  
|Real estate mortgage                                                                      |  |                                        | 2      |   |      |   |       |  
|Installment loans to individuals                                                          |  |                                        | 1      |   |      |   | 1      |  
|                                                                                          |  |                                        |        |   |      |   |        |  
|                                                                                          |  |                                        | 3      |   |      |   | 1      |  
|                                                                                          |  |                                        |        |   |      |   |        |  
|Net charge-offs                                                                           |  |                                        | 86     |   |      |   | 11     |  
|                                                                                          |  |                                        |        |   |      |   |        |  
|Provision for loan losses                                                                 |  |                                        | 100    |   |      |   | 60     |  
|                                                                                          |  |                                        |        |   |      |   |        |  
|Balance at end of period                                                                  |  | $                                      | 2,001  |   |      | $ | 1,989  |  
|                                                                                          |  |                                        |        |   |      |   |        |  
|Ratio of net charge-offs during the period to average loans outstanding during the period |  |                                        | 0.0450 | % |      |   | 0.0001 | %

Non-Interest Income. Non-interest income increased by $12,000, from $257,000 for the three months ended
December 31, 2006 to $269,000 for the three months ended December 31, 2007. This increase is due primarily to a gain on sale of investment securities of $12,000 and increases in deposit service charges $12,000 and decreases in investment
service income of $10,000.

Non-Interest Expenses. Non-interest expenses increased $71,000 for the three months ending December 31, 2007 when
compared to the same period in 2006. This increase was largely attributable to expenses related to the merger of $57,000 and a loss on sale of REO of $28,000, offset by decreases in occupancy cost of $16,000, when compared to the December 2006
quarter.



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Provision for Income Taxes. The provision for income taxes, as a percentage of income before income taxes, was
42.1% and 38.3% for the quarters ended December 31, 2007 and 2006, respectively. The increase in the provision for income tax was due to merger costs treated as nondeductible permanent differences for income tax purposes.

Comparison of Results of Operations for the

Six Months Ended December 31, 2007 and 2006

Net Income. Net income for the six months ended
December 31, 2007 was $410,000, a decrease of $424,000 from net income of $834,000 for the six months ended December 31, 2006. On a per share basis, net income for the current quarter was $0.24 per diluted share as compared with $0.49 per
diluted share for the first six months of the last fiscal year. The decrease in net income was primarily a result of incurred nondeductible merger costs of $361,000.

Net Interest Income.Net interest income for each of six months ended December 31, 2007 and 2006 was $3.4 million. Both interest income and interest expense increased primarily due to the increase in
average loans, deposits and borrowings over the same period last year. Decreases in Wall Street Journal Prime and Federal Funds rates and other market interest rates had no significant impact on the Companys net interest income during the six
months ended December 31, 2007.

Provision for Loan Losses.The provision for loan losses totaled $167,000 in the current six month period,
compared to $107,000 for the six months ended December 31, 2006.

We experienced changes in the loan portfolio mix as well as increases in
non-performing loans from December 31, 2006 to 2007, both of which increased the necessary amount of the allowance for loan losses when the changes were analyzed in our allowance for loan loss model. We also increased our qualitative factor
related to regional economic conditions which impacted the allowance for loan losses. The changes when analyzed in our model resulted in the provision for loan losses of $167,000 for the six months ended December 31, 2007. Our loan loss
methodology allowance model takes into consideration the different levels of risk for all outstanding loans. (see  Analysis of Allowance for Loan Losses). The following table provides the changes in the allowance for loan losses
for the six months ended December 31, 2007 and 2006, respectively.



|                                                                                          |  |                                      |        |   |      |   |        |  
|----------------------------------------------------------------------------------------- |  | ------------------------------------ | ------ | - | ---- | - | ------ | -
|                                                                                          |  | For the Six Months EndedDecember 31, |       
|                                                                                          |  | 2007                                 |        |   | 2006 |  
|Balance at the beginning of the period                                                    |  | $                                    | 1,938  |   |      | $ | 1,901  |  
|                                                                                          |  |                                     
|Charge-offs:                                                                              |  |                                      |        |   |      |   |        |  
|Real estate mortgage                                                                      |  |                                      | 84     |   |      |   | 1      |  
|Installment loans to individuals                                                          |  |                                      | 24     |   |      |   | 20     |  
|                                                                                          |  |                                      |        |   |      |   |        |  
|                                                                                          |  |                                      | 108    |   |      |   | 21     |  
|                                                                                          |  |                                      |        |   |      |   |        |  
|Recoveries:                                                                               |  |                                      |        |   |      |   |        |  
|Real estate mortgage                                                                      |  |                                      | 3      |   |      |   |       |  
|Installment loans to individuals                                                          |  |                                      | 1      |   |      |   | 2      |  
|                                                                                          |  |                                      |        |   |      |   |        |  
|                                                                                          |  |                                      | 4      |   |      |   | 2      |  
|                                                                                          |  |                                      |        |   |      |   |        |  
|Net charge-offs                                                                           |  |                                      | 104    |   |      |   | 19     |  
|                                                                                          |  |                                      |        |   |      |   |        |  
|Provision for loan losses                                                                 |  |                                      | 167    |   |      |   | 107    |  
|                                                                                          |  |                                      |        |   |      |   |        |  
|Balance at end of period                                                                  |  | $                                    | 2,001  |   |      | $ | 1,989  |  
|                                                                                          |  |                                      |        |   |      |   |        |  
|Ratio of net charge-offs during the period to average loans outstanding during the period |  |                                      | 0.0425 | % |      |   | 0.0001 | %

Non-Interest Income. Non-interest income decreased by $3,000, from $547,000 for the six months ended
December 31, 2006 to $544,000 for the six months ended December 31, 2007. This decrease is due primarily to decreases in other income of $60,000 offset by increases in investment service income and deposit service charges of $29,000 and
$22,000, respectively.



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Non-Interest Expenses. Non-interest expenses increased $417,000 for the six months ended December 31, 2007
when compared to the same period in 2006. This increase was largely attributable to expenses related to the merger of $361,000 and a loss on sale of REO of $28,000.

Provision for Income Taxes. The provision for income taxes, as a percentage of income before income taxes, was 53.8% and 38.3% for the six months ended December 31, 2007 and 2006, respectively. The
increase in the provision for income tax was due to merger costs treated as nondeductible permanent differences for income tax purposes.

Asset Quality

The Company considers asset quality to be of primary importance, and employs a formal internal loan review process to
ensure adherence to the Lending Policy as approved by the Board of Directors. An ongoing systematic evaluation process serves as the basis for determining, on a monthly basis, the allowance for loan losses and any resulting provision to be charged
against earnings. Consideration is given to historical loan loss experience, nature and volume of the loan portfolio, adverse situations that may affect the borrowers ability to repay, the value and adequacy of collateral, and prevailing
economic conditions in the Companys market area. For loans determined to be impaired, the allowance is based on discounted cash flows using the loans initial effective interest rate or the fair value of the collateral if the loan is
collateral dependent. This evaluation is inherently subjective as it requires material estimates, including the amounts and timing of future cash flows expected to be received on impaired loans that may be susceptible to significant revision. The
provision for loan losses charged to operations is an amount sufficient to bring the allowance for loan losses to an estimated balance considered adequate to absorb probable losses inherent in the portfolio.

The Companys policy regarding past due loans normally requires a prompt charge-off to the allowance for loan losses when uncollectibility of the loan balance is
confirmed. Further collection efforts are then pursued through various means available. Subsequent recoveries, if any, are credited to the allowance. Loans carried in a non-accrual status are generally collateralized, and probable future losses are
considered in the determination of the allowance for loan losses.

Nonperforming Assets

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



|                                                 |  |                        |        |   |              |   |        |                  |  |   |        |  
|------------------------------------------------ |  | ---------------------- | ------ | - | ------------ | - | ------ | ---------------- |  | - | ------ | -
|                                                 |  | December 31,2007       |        |   | June 30,2007 |   |        | December 31,2006 | 
|                                                 |  | (Dollars in thousands) |       
|Nonaccrual loans                                 |  | $                      | 1,006  |   |              | $ | 1,248  |                  |  | $ | 872    |  
|Restructured loans                               |  |                        |       |   |              |   |       |                  |  |   |       |  
|                                                 |  |                        |        |   |              |   |        |                  |  |   |        |  
|Total nonperforming loans                        |  |                        | 1,006  |   |              |   | 1,248  |                  |  |   | 872    |  
|Real estate and other assets owned               |  |                        | 155    |   |              |   | 94     |                  |  |   | 27     |  
|                                                 |  |                        |        |   |              |   |        |                  |  |   |        |  
|Total nonperforming assets                       |  | $                      | 1,161  |   |              | $ | 1,342  |                  |  | $ | 899    |  
|                                                 |  |                        |        |   |              |   |        |                  |  |   |        |  
|Accruing loans past due 90 days or more          |  | $                      |       |   |              | $ |       |                  |  | $ |       |  
|Allowance for loan losses                        |  |                        | 2,001  |   |              |   | 1,938  |                  |  |   | 1,989  |  
|Nonperforming loans to period-end loans          |  |                        | 0.58   | % |              |   | 0.70   | %                |  |   | 0.47   | %
|Allowance for loan losses to period-end loans    |  |                        | 1.15   | % |              |   | 1.08   | %                |  |   | 1.07   | %
|Allowance for loan losses to nonperforming loans |  |                        | 198.91 | % |              |   | 155.29 | %                |  |   | 228.10 | %
|Nonperforming assets to total assets             |  |                        | 0.52   | % |              |   | 0.56   | %                |  |   | 0.41   | %

The nonperforming loans as of December 31, 2007 consist primarily of one commercial real-estate loan and
several one - four family mortgage loans. Our portfolio typically includes a small amount of non-performing loans; these loans are not the result of any trend.

The accrual of interest on loans is discontinued at the time the loan is 90 days past due or impaired unless the credit is well-secured and in process of collection. Past due status is based on contractual terms of the loan. In all cases,
loans are placed on non-accrual status at an earlier date if collection of principal or interest is considered doubtful according to internal evaluation policies.



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All interest accrued but not collected for loans that are placed on non-accrual or charged off is reversed against
interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are
brought current and future payments are reasonably assured.

Loans are also placed on non-accrual status in cases where it is uncertain as to whether the
borrower can satisfy the contractual terms of the loan agreement. Amounts received on non-accrual loans generally are applied first to interest and then to principal only after all past due interest has been collected. Restructured loans are those
for which concessions, including the reduction of interest rates below a rate otherwise available to that borrower or the deferral of interest or principal have been granted due to the borrowers weakened financial condition. Interest is
accrued on restructured loans at the restructured rates when it is anticipated that no loss of original principal will occur.

Analysis of Allowance for Loan Losses

The provision for loan losses charged to operations is an amount sufficient to bring the
allowance for loan losses to an estimated balance considered adequate to absorb probable losses inherent in the portfolio. The following table outlines the allocation of the allowance for loan losses for each reported period and reflects the result
of the allowance for loan loss model as discussed above.

Allocation of the Allowance for Loan Losses (dollars in thousands)



|                                     |  |                         |       |                                                |                     |   |        |   |                                                |  |        |  
|------------------------------------ |  | ----------------------- | ----- | ---------------------------------------------- | ------------------- | - | ------ | - | ---------------------------------------------- |  | ------ | -
|                                     |  | As of December 31, 2007 |       |                                                | As of June 30, 2007 |  
|                                     |  | Amount                  |       | Percent of loansin each categoryto total loans |                     |   | Amount |   | Percent of loansin each categoryto total loans | 
|Commercial, Financial & Agricultural |  | $                       | 160   |                                                | 5.54                | % |        | $ | 157                                            |  | 4.37   | %
|Real Estate - construction           |  |                         | 254   |                                                | 18.82               | % |        |   | 241                                            |  | 17.61  | %
|Real Estate - mortgage               |  |                         | 1,151 |                                                | 72.99               | % |        |   | 1,154                                          |  | 75.39  | %
|Installment loans to individuals     |  |                         | 80    |                                                | 2.10                | % |        |   | 90                                             |  | 2.04   | %
|Other                                |  |                         | 85    |                                                | 0.55                | % |        |   | 71                                             |  | 0.59   | %
|Unallocated                          |  |                         | 271   |                                                | N/A                 |   |        |   | 225                                            |  | N/A    |  
|                                     |  |                         |       |                                                |                     |   |        |   |                                                |  |        |  
|                                     |  | $                       | 2,001 |                                                | 100.00              | % |        | $ | 1,938                                          |  | 100.00 | %
|                                     |  |                         |       |                                                |                     |   |        |   |                                                |  |        |  

Liquidity and Capital Resources

During the six months ended December 31, 2007 the Company paid cash dividends of $0.32 per share. Although the Company 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 and merger 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 December 31, 2007, liquid assets (cash, interest-earning deposits, and investment securities) were approximately $20.0 million, which represents 12.0% of deposits. At that date, outstanding loan commitments were $1.2 million. The
undisbursed portion of construction loans was $7.0 million and undrawn lines of credit totaled $18.8 million. Brokered certificates of deposit scheduled to mature within the next year total $13.3 million. Funding for these commitments is expected to
be provided from deposits, loan principal repayments, maturing investments, income generated from operations and, to the extent necessary, from borrowings.



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Under federal capital regulations, Sentry must satisfy certain minimum leverage ratio requirements and risk-based capital
requirements. Failure to meet such requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Companys consolidated financial
statements. At December 31, 2007, Sentry exceeded all such requirements and is considered well capitalized under current regulatory capital guidelines.

The Bank is restricted in its ability to pay dividends and to make distributions. A significant source of Great Pee Dees funds is dividends received from the Bank. No dividends were paid by the Bank to Great Pee
Dee in the six months ended December 31, 2007. Under Office of Thrift Supervision regulations, prior notice is required to be given to the Office of Thrift Supervision for any payment of dividends from Sentry Bank & Trust to Great Pee
Dee.



|Item 3. | CONTROLS AND PROCEDURES
|------- | -----------------------

As of the end of the period covered by
this report, the Company carried out an evaluation under the supervision and with the participation of the Companys management, including the Companys Principal Executive Officer and Principal Financial Officer, of the effectiveness of
the design and operation of the Companys disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15(e). Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the
Companys disclosure controls and procedures are effective in alerting management, in a timely manner, to material information relating to the Company required to be included in the Companys periodic SEC Filings. There have been no
changes in internal control over financial reporting during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.



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##### Table of Contents

Part II. OTHER INFORMATION



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

The
following table sets forth information with respect to stock repurchased during the quarter ended December 31, 2007.



|              |  |                                 |  |                             |       |                                                                               |   |                                                                             |       
|------------- |  | ------------------------------- |  | --------------------------- | ----- | ----------------------------------------------------------------------------- | - | --------------------------------------------------------------------------- | ------
|Period        |  | Total Number ofShares Purchased |  | Average PricePaid Per Share |       | Total Number ofShares Purchased as PartOf Publicly AnnouncedPlans or
Programs |   | Maximum Number ofShares that May
Yet BePurchased Under the Plans orPrograms
|October 2007  |  | 500                             |  | $                           | 22.99 |                                                                               |  |                                                                             | 37,853
|November 2007 |  |                                |  | $                           |      |                                                                               |  |                                                                             | 37,853
|December 2007 |  |                                |  | $                           |      |                                                                               |  |                                                                             | 37,853



|(1) | The existing stock repurchase plan was announced on August 15, 2000 and approved the repurchase of up to 10% shares of outstanding common stock at that time (168,000 shares of
common stock). Subsequently, this plan was adjusted by the 10% stock dividend in November 2001. The program does not contain an expiration date. The Company does not intend to discontinue stock repurchases under this plan.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 6. | Exhibits
|------- | --------



|          |  |                                                                        
|--------- |  | -----------------------------------------------------------------------
|Exhibit # |  | Description                                                            
|31.1      |  | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)
|          | 
|31.2      |  | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)
|          | 
|32        |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



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##### Table of Contents

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                        |  |                             |  |                        
|----------------------- |  | --------------------------- |  | -----------------------
|                        |  | GREAT PEE DEE BANCORP, INC.
|                        |  |                            
|Date: February 12, 2008 |  | By:                         |  | /s/ John S. Long       
|                        |  |                             |  | John S. Long           
|                        |  |                             |  | Chief Executive Officer
|                        |  |                            
|Date: February 12, 2008 |  | By:                         |  | /s/ John M. Digby      
|                        |  |                             |  | John M. Digby          
|                        |  |                             |  | Chief Financial Officer



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