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 September 30,
2003



 ̈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.

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



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



515 MARKET STREET,
CHERAW, SC 29520

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(Address of principal executive office)



(843) 537-7656

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(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 ̈



As of
November 7, 2003, 1,777,955 shares of the issuers common stock, $.01 par value, were outstanding. The registrant has no other classes of securities outstanding.



This report contains 13 pages.



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|         |  |                                                                                       |  | Page No.
|-------- |  | ------------------------------------------------------------------------------------- |  | --------
|         |  |                                                                                      
|Part l.  |  | FINANCIAL INFORMATION                                                                 |  |         
|         |  |                                                                                      
|Item 1  |  | Financial Statements (Unaudited)                                                      |  |         
|         |  |                                                                                      
|         |  | Consolidated Statements of Financial Condition September 30, 2003 and June 30, 2003   |  | 3       
|         |  |                                                                                      
|         |  | Consolidated Statements of Operations Three Months Ended September 30, 2003 and 2002  |  | 4       
|         |  |                                                                                      
|         |  | Consolidated Statements of Cash Flows Three Months Ended September 30, 2003 and 2002  |  | 5       
|         |  |                                                                                      
|         |  | Notes to Consolidated Financial Statements                                            |  | 6       
|         |  |                                                                                      
|Item 2  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 8       
|         |  |                                                                                      
|Item 3  |  | Controls and Procedures                                                               |  | 11      
|         |  |                                                                                      
|Part II. |  | OTHER INFORMATION                                                                     |  |         
|         |  |                                                                                      
|Item 6  |  | Exhibits and Reports on Form 8-K                                                      |  | 12      





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Part l. FINANCIAL INFORMATION



Item 1Financial Statements



Great Pee Dee Bancorp, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

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|                                                                                           |  | September 30,2003(Unaudited) |         |   | June 30,2003* |  
|------------------------------------------------------------------------------------------ |  | ---------------------------- | ------- | - | ------------- | -
|ASSETS                                                                                     |  | (In Thousands)               |        
|Cash on hand and in banks                                                                  |  | $                            | 1,227   |   |               | $
|Interest-earning balances in other banks                                                   |  |                              | 308     |   |               |  
|Federal funds sold                                                                         |  |                              | 208     |   |               |  
|Investment securities available for sale, at fair value                                    |  |                              | 443     |   |               |  
|Investment securities held to maturity, at amortized cost                                  |  |                              | 30,487  |   |               |  
|Loans receivable                                                                           |  |                              | 113,501 |   |               |  
|Allowance for loan losses                                                                  |  |                              | (1,411  | ) |               |  
|                                                                                           |  |                              |         |   |               |  
|Loans receivable, net                                                                      |  |                              | 112,090 |   |               |  
|Loans held for sale                                                                        |  |                              | 2,064   |   |               |  
|Accrued interest receivable                                                                |  |                              | 816     |   |               |  
|Premises and equipment, net                                                                |  |                              | 2,771   |   |               |  
|Stock in the Federal Home Loan Bank, at cost                                               |  |                              | 974     |   |               |  
|Real estate acquired in settlement of loans                                                |  |                              | 99      |   |               |  
|Intangible assets                                                                          |  |                              | 1,187   |   |               |  
|Other assets                                                                               |  |                              | 797     |   |               |  
|                                                                                           |  |                              |         |   |               |  
|TOTAL ASSETS                                                                               |  | $                            | 153,471 |   |               | $
|                                                                                           |  |                              |         |   |               |  
|                                                                                           |  |                             
|LIABILITIES AND STOCKHOLDERS EQUITY                                                       |  |                              |         |   |               |  
|                                                                                           |  |                             
|LIABILITIES                                                                                |  |                              |         |   |               |  
|Deposit accounts                                                                           |  | $                            | 108,760 |   |               | $
|Advances from Federal Home Loan Bank                                                       |  |                              | 18,000  |   |               |  
|Accrued interest payable                                                                   |  |                              | 92      |   |               |  
|Advance payments by borrowers for property taxes and insurance                             |  |                              | 177     |   |               |  
|Accrued expenses and other liabilities                                                     |  |                              | 214     |   |               |  
|                                                                                           |  |                              |         |   |               |  
|TOTAL LIABILITIES                                                                          |  |                              | 127,243 |   |               |  
|                                                                                           |  |                              |         |   |               |  
|                                                                                           |  |                             
|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      |   |               |  
|Additional paid in capital                                                                 |  |                              | 22,253  |   |               |  
|Unearned compensation                                                                      |  |                              | (1,047  | ) |               |  
|Retained earnings, substantially restricted                                                |  |                              | 10,716  |   |               |  
|Accumulated other comprehensive loss                                                       |  |                              | (35     | ) |               |  
|                                                                                           |  |                              |         |   |               |  
|                                                                                           |  |                              | 31,909  |   |               |  
|Common stock in treasury, at cost (456,862 and 461,002 shares, respectively)               |  |                              | (5,681  | ) |               |  
|                                                                                           |  |                              |         |   |               |  
|TOTAL STOCKHOLDERS EQUITY                                                                 |  |                              | 26,228  |   |               |  
|                                                                                           |  |                              |         |   |               |  
|TOTAL LIABILITIES ANDSTOCKHOLDERS EQUITY                                                  |  | $                            | 153,471 |   |               | $
|                                                                                           |  |                              |         |   |               |  

* Derived from audited financial statements



See accompanying notes.





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Great Pee Dee Bancorp, Inc. and Subsidiaries

Consolidated Statements of Operations (Unaudited)

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|                                                   |  | Three Months EndedSeptember 30,              
|-------------------------------------------------- |  | ---------------------------------------------
|                                                   |  | 2003                                         
|                                                   |  | (In thousands except shareand per share data)
|INTEREST INCOME                                    |  |                                              
|Loans                                              |  | $                                            
|Investments                                        |  |                                              
|Deposits in other banks and federal funds sold     |  |                                              
|                                                   |  |                                              
|TOTAL INTEREST INCOME                              |  |                                              
|                                                   |  |                                              
|INTEREST EXPENSE                                   |  |                                              
|Deposit accounts                                   |  |                                              
|Advances from FHLB                                 |  |                                              
|                                                   |  |                                              
|TOTAL INTEREST EXPENSE                             |  |                                              
|                                                   |  |                                              
|NET INTEREST INCOME                                |  |                                              
|PROVISION FOR LOAN LOSSES                          |  |                                              
|                                                   |  |                                              
|NET INTEREST INCOME AFTERPROVISION FOR LOAN LOSSES |  |                                              
|                                                   |  |                                              
|NON-INTEREST INCOME                                |  |                                              
|                                                   |  |                                              
|NON-INTEREST EXPENSES                              |  |                                              
|Personnel costs                                    |  |                                              
|Occupancy                                          |  |                                              
|Other                                              |  |                                              
|                                                   |  |                                              
|TOTAL NON-INTEREST EXPENSES                        |  |                                              
|                                                   |  |                                              
|INCOME BEFORE INCOME TAXES                         |  |                                              
|                                                   |  |                                              
|PROVISION FOR INCOME TAXES                         |  |                                              
|                                                   |  |                                              
|NET INCOME                                         |  | $                                            
|                                                   |  |                                              
|NET INCOME PER SHARE                               |  |                                              
|Basic                                              |  | $                                            
|Diluted                                            |  |                                              
|CASH DIVIDEND PER SHARE                            |  | $                                            
|                                                   |  |                                              
|WEIGHTED AVERAGE SHARES OUTSTANDING                |  |                                              
|Basic                                              |  |                                              
|Assuming dilution                                  |  |                                              



See accompanying notes.





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Great Pee Dee Bancorp, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (Unaudited)

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|                                                                                  |  | Three Months EndedSeptember 30, |        
|--------------------------------------------------------------------------------- |  | ------------------------------- | -------
|                                                                                  |  | 2003                            |        
|                                                                                  |  | (In Thousands)                  |        
|CASH FLOWS FROM OPERATING ACTIVITIES                                              |  |                                 |        
|Net income                                                                        |  | $                               | 330    
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                                 |        
|Depreciation and amortization                                                     |  |                                 | 99     
|Provision for loan losses                                                         |  |                                 | 150    
|Release of ESOP shares                                                            |  |                                 | 41     
|Amortization of stock awards under recognition                                    |  |                                 |        
|and retention plan                                                                |  |                                 | 4      
|Treasury stock issued as compensation                                             |  |                                 | 34     
|(Increase) decrease in loans held for sale                                        |  |                                 | (8     
|Change in assets and liabilities:                                                 |  |                                 |        
|Increase in accrued interest receivable                                           |  |                                 | (24    
|Increase (decrease) in accrued interest payable                                   |  |                                 | (4     
|Other                                                                             |  |                                 | (33    
|                                                                                  |  |                                 |        
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                         |  |                                 | 589    
|                                                                                  |  |                                 |        
|CASH FLOWS FROM INVESTING ACTIVITIES                                              |  |                                 |        
|Purchases of held to maturity investment securities                               |  |                                 | (14,112
|Proceeds from maturities of held-to-maturity investments                          |  |                                 | 1,681  
|Net increase in loans                                                             |  |                                 | (4,349 
|Purchase of Federal Home Loan Bank stock                                          |  |                                 | (299   
|Purchases of property and equipment                                               |  |                                 | (475   
|                                                                                  |  |                                 |        
|NET CASH USED BY INVESTING ACTIVITIES                                             |  |                                 | (17,554
|                                                                                  |  |                                 |        
|CASH FLOWS FROM FINANCING ACTIVITIES                                              |  |                                 |        
|Net increase (decrease) in deposit accounts                                       |  |                                 | (52    
|Proceeds from FHLB advances                                                       |  |                                 | 10,000 
|Increase in advances from borrowers                                               |  |                                 | 69     
|Purchase of treasury stock                                                        |  |                                 |       
|Cash dividends paid                                                               |  |                                 | (221   
|                                                                                  |  |                                 |        
|NET CASH PROVIDED BY FINANCING ACTIVITIES                                         |  |                                 | 9,796  
|                                                                                  |  |                                 |        
|                                                                                  |  |                                
|NET INCREASE (DECREASE) INCASH AND CASH EQUIVALENTS                               |  |                                 | (7,169 
|CASH AND CASH EQUIVALENTS, BEGINNING                                              |  |                                 | 8,912  
|                                                                                  |  |                                 |        
|CASH AND CASH EQUIVALENTS, ENDING                                                 |  | $                               | 1,743  
|                                                                                  |  |                                 |        



See accompanying notes.



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Great Pee Dee Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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NOTE ABASIS OF PRESENTATION



In managements opinion, the financial information, which is unaudited, 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 periods ended September 30, 2003 and 2002, 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 subsidiaries, Sentry Bank & Trust (Sentry or the Bank) and Sentry Investment Services, Inc. Operating results for the three month period ended September 30, 2003 are not
necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2004.



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
2003 annual report on Form 10-KSB. This quarterly report should be read in conjunction with such annual report.



NOTE BSIGNIFICANT ACCOUNTING POLICIES



Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, encourages all entities to adopt a fair value
based method of accounting for employee stock compensation plans, whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. However, it
also allows an entity to continue to measure compensation cost for those plans using the intrinsic value based method of accounting prescribed by Accounting Principles Board Opinion No. 25 (Opinion No. 25), Accounting for Stock Issued
to Employees,whereby compensation cost is the excess, if any, of the quoted market price of the stock at the grant date (or other measurement date) over the amount an employee must pay to acquire the stock. Stock options issued under the
Companys stock option plan have no intrinsic value at the grant date, and, under Opinion No. 25, no compensation cost is recognized for them. The Company has elected to continue with the accounting methodology in Opinion No. 25 and, as a
result, has provided pro forma disclosures of net income and earnings per share and other disclosures, as if the fair value based method of accounting had been applied.



|                                                                                                                                      |  | Three Months Ended                          
|------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------
|                                                                                                                                      |  | September 30,                               
|                                                                                                                                      |  | 2003                                        
|                                                                                                                                      |  | (Amounts in thousands,except per share data)
|Net income:                                                                                                                           |  |                                             
|As reported                                                                                                                           |  | $                                           
|Deduct: Total stock-based employee compensation expense determined under fair value method for all awards, net of related tax
effects |  |                                             
|                                                                                                                                      |  |                                             
|Pro forma                                                                                                                             |  | $                                           
|                                                                                                                                      |  |                                             
|Basic net income per share:                                                                                                           |  |                                             
|As reported                                                                                                                           |  | $                                           
|Pro forma                                                                                                                             |  |                                             
|Diluted net income per share:                                                                                                         |  |                                             
|As reported                                                                                                                           |  | $                                           
|Pro forma                                                                                                                             |  |                                             



- 6 -



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Great Pee Dee Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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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.



NOTE DCOMPREHENSIVE INCOME



A summary of comprehensive income is as follows:



|                                                                                       |  | Three Months EndedSeptember 30, |    
|-------------------------------------------------------------------------------------- |  | ------------------------------- | ---
|                                                                                       |  | 2003                            |    
|                                                                                       |  | (In thousands)                  |    
|Net income                                                                             |  | $                               | 330
|Other comprehensive income                                                             |  |                                 |    
|Net decrease in the fair value of investment securities available for sale, net of tax |  |                                 | (4 
|                                                                                       |  |                                 |    
|Total comprehensive income                                                             |  | $                               | 326
|                                                                                       |  |                                 |    





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



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.



Comparison of Financial Condition at

September 30, 2003 and June 30, 2003



Total assets increased by $10.2 million during the quarter ended September 30, 2003, from
$143.3 million at June 30, 2003 to $153.5 million at the end of the quarter. The Companys growth during the period was primarily a result of the utilization of $10.0 million of additional Federal Home Loan Bank (FHLB) advances that
were utilized to purchase mortgage-backed securities, which were classified as held to maturity. Total investment securities held to maturity increased by $12.4 million, while net loans receivable grew by $4.1 million, from $108.0 million at June
30, 2003 to $112.1 million at September 30, 2003. Funding for this loan growth and for the additional growth in investment securities held to maturity was provided by utilization of cash and cash equivalents, which decreased by $7.2 million during
the quarter, from $8.9 million to $1.7 million. Premises and equipment increased by $431,000 during the quarter as a result of costs incurred in construction of the Companys new headquarters/branch office facility in Cheraw. The total balance
of customer deposits was essentially unchanged during the quarter. Total stockholders equity was $26.2 million at September 30, 2003 as compared with $26.0 million at June 30, 2003, an increase of $184,000 resulting principally from retention
of a portion of the net income of $330,000 earned during the quarter. At September 30, 2003, the Bank continued to significantly exceed all applicable regulatory capital requirements.



Comparison of Results of Operations for the

Three Months Ended September 30, 2003 and 2002



Net Income. Net income for the quarter ended September 30, 2003 was $330,000, a decrease of $39,000 from net income of $369,000 for the quarter ended September 30,
2002. On a per share basis, net income for the current quarter was $.19 per diluted share as compared with $.22 per diluted for the first quarter of the last fiscal year. The primary reason for the decrease in income was a doubling of the provision
for loan losses to $150,000 for the current quarter as compared to $75,000 for the quarter ended September 30, 2002.



Net Interest Income.Net interest income for the quarter ended September 30, 2003 was $1,294,000 as compared with $1,253,000 during the quarter ended September 30,
2002, an increase of $41,000. This increase resulted from growth in interest earning assets, as the continuing decline in interest rates resulted in a slight narrowing of the Companys interest rate spread and net interest margin. Average
interest earning assets increased from $130.9 million for the three months ended September 30, 2002 to $139.7 million for the current three months, while average interest bearing liabilities increased from $111.3 million to $119.7 million. For the
quarter ended September 30, 2003, the Companys interest rate spread was 3.33%, and its net interest margin was 3.71%. In comparison, for the quarter ended September 30, 2002, the Companys interest rate spread was 3.35%, and its net
interest margin was 3.83%.



Provision for Loan Losses.The provision for
loan losses was $150,000 for the current quarter, double the $75,000 provision made for the quarter ended September 30, 2002. There were net loan charge-offs of $155,000 during the current quarter as compared to no net loan charge-offs during the
quarter ended September 30, 2002. Most of the net charge-offs during the quarter represented losses for which specific allocations of the allowance for loan losses had been made at June 30, 2003. At September 30, 2003, nonaccrual loans aggregated
$3.1 million while the allowance for loan losses stood at $1,411,000.



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Non-Interest Income. Non-interest income increased by $84,000, from $161,000 for the three months ended September
30, 2002 to $245,000 for the three months ended September 30, 2003. This increase resulted principally from an increase in income generated by originations of mortgage loans for sale in the secondary market, which increased by $46,000 from $44,000
for the three months ended September 30, 2002 to $90,000 for the three months ended September 30, 2003, and from an increase of $38,000 in nonsufficient funds fees.



Non-Interest Expenses. Non-interest expenses increased from $743,000 for the three months ended September 30, 2002 to $862,000 for
the current quarter, an increase of $119,000. This increase resulted from additional personnel costs of $84,000 and an increase of $33,000 in other non-interest expenses that were related principally to growth.



Provision for Income Taxes. The provision for income taxes, as a percentage of income
before income taxes, was 37.4% and 38.1% for the quarters ended September 30, 2003 and 2002, respectively.



Asset Quality



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



The Companys policy regarding past due loans normally
requires a prompt charge-off to the allowance for loan losses following timely collection efforts and a thorough review. Further efforts are then pursued through various means available.



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.



|                                                 |  | September 30,          |       |   | June 30, |   |       | September 30, | 
|------------------------------------------------ |  | ---------------------- | ----- | - | -------- | - | ----- | ------------- | 
|                                                 |  | 2003                   |       |   | 2003     |   |       | 2002          | 
|                                                 |  | (Dollars in thousands) |      
|Nonaccrual loans                                 |  | $                      | 3,103 |   |          | $ | 2,252 |               | 
|Restructured loans                               |  |                        |      |   |          |   |      |               | 
|                                                 |  |                        |       |   |          |   |       |               | 
|Total nonperforming loans                        |  |                        | 3,103 |   |          |   | 2,252 |               | 
|Real estate owned                                |  |                        | 99    |   |          |   | 36    |               | 
|                                                 |  |                        |       |   |          |   |       |               | 
|Total nonperforming assets                       |  | $                      | 3,202 |   |          | $ | 2,288 |               | 
|                                                 |  |                        |       |   |          |   |       |               | 
|Accruing loans past due 90 days or more          |  | $                      |      |   |          | $ |      |               | 
|Allowance for loan losses                        |  |                        | 1,411 |   |          |   | 1,416 |               | 
|Nonperforming loans to period-end loans          |  |                        | 2.73  | % |          |   | 2.00  | %             | 
|Allowance for loan losses to period-end loans    |  |                        | 1.22  | % |          |   | 1.26  | %             | 
|Allowance for loan losses to nonperforming loans |  |                        | 45.47 | % |          |   | 62.88 | %             | 
|Nonperforming assets to total assets             |  |                        | 2.09  | % |          |   | 1.60  | %             | 



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



Analysis of Allowance for Loan Losses



The allowance for loan losses is established through charges to earnings in the form of a provision for loan losses. The allowance for loan losses is increased by
provisions charged to operations and by recoveries of amounts previously charged off, and reduced by loans charged off. The Company evaluates the adequacy of the allowance monthly. In addition, on a monthly basis the board of directors reviews the
loan portfolio, conducts an evaluation of credit quality and reviews the computation of the loan loss provision, recommending changes as may be required. In evaluating the adequacy of the allowance, the Company considers the growth, composition and
industry diversification of the portfolio, historical loan loss experience, current delinquency levels, adverse situations that may affect a borrowers ability to repay, estimated value of any underlying collateral, prevailing economic
conditions and other relevant factors. In addition, regulatory agencies, as an integral part of their examination process, periodically review the allowance for loan losses and may require the Company to make adjustments to the allowance for loan
losses based upon judgments different from those of Management.



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



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



The allowance for loan losses represents Managements estimate of an amount adequate to provide for known and inherent losses in the loan portfolio in the normal course of business. The Company makes specific allowances that are
allocated to certain individual loans and pools of loans based on risk characteristics, as discussed above. In addition to the allocated portion of the allowance for loan losses, the Company maintains an unallocated portion that is not assigned to
any specific category of loans. This unallocated portion is intended to reserve for the inherent risk in the portfolio and the intrinsic inaccuracies associated with the estimation of the allowance for loan losses and its allocation to specific loan
categories. While Management believes that it uses the best information available to establish the allowance for loan losses, future adjustments to the allowance may be necessary and results of operations could be adversely affected if circumstances
differ substantially from the assumptions used in



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making the determinations. Furthermore, while Management believe the Company has established the allowance for loan
losses in conformity with generally accepted accounting principles, there can be no assurance that regulators, in reviewing the portfolio, will not require an adjustment to the allowance for loan losses. In addition, because future events affecting
borrowers and collateral cannot be predicted with certainty, there can be no assurance that the existing allowance for loan losses is adequate or that increases will not be necessary should the quality of any loans deteriorate as a result of the
factors discussed herein. Any material increase in the allowance for loan losses may adversely affect the Companys financial condition and results of operations.



Liquidity and Capital Resources



During the three months ended September 30, 2003, the Company paid cash dividends of $.14 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 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 September 30, 2003, liquid assets (cash, interest-earning deposits, federal funds sold
and investment securities) were approximately $32.7 million, which represents 30.0% of deposits. At that date, outstanding loan commitments were $4.8 million, the undisbursed portion of construction loans was $2.8 million and undrawn lines of credit
totaled $6.2 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.



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 September 30, 2003, Sentry exceeded all such requirements.



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



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 Chief Executive Officer and Chief 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 Chief Executive Officer and Chief Financial Officer
concluded that the Companys disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Companys periodic SEC Filings. There were no changes in
the Companys internal control over financial reporting or in other factors that have materially affected, or are reasonable likely to materially affect, the Companys internal control over financial reporting.



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Part II. OTHER INFORMATION



Item 6. Exhibits and Reports on Form 8-K



(a)
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



(b) Reports on Form 8-K.



During the quarter ended September 30, 2003, the Company filed two
reports on Form 8-K. The first was filed on July 24, 2003 to report earnings for the three months and year ended June 30, 2003. The second was filed on July 30, 2003 to revise amounts reported for total stockholders equity and book value per
share in the July 24, 2003 Form 8-K.



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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: November 11, 2003 |  | By:                        
|                        |  |                            
|                        |  |                            
|                        |  |                            
|Date: November 11, 2003 |  | By:                        
|                        |  |                            
|                        |  |                            





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