##### Table of Contents

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U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549



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FORM 10-QSB



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

For the quarterly period ended March 31, 2006



| ̈ | 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



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GREAT PEE DEE BANCORP, INC.

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



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|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 May 5, 2006, 1,790,834 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                                                                            |  |         
|         |  |                                                                                                 
|Item 1 - |  | Financial Statements (Unaudited)                                                                 |  |         
|         |  |                                                                                                 
|         |  | Consolidated Statements of Financial Condition March 31, 2006 and June 30, 2005                  |  | 3       
|         |  |                                                                                                 
|         |  | Consolidated Statements of Operations Three Months and Nine Months Ended March 31, 2006 and 2005 |  | 4       
|         |  |                                                                                                 
|         |  | Consolidated Statements of Stockholders Equity Nine Months Ended March 31, 2006 and 2005        |  | 5       
|         |  |                                                                                                 
|         |  | Consolidated Statements of Cash Flows Nine Months Ended March 31, 2006 and 2005                  |  | 6       
|         |  |                                                                                                 
|         |  | Notes to Consolidated Financial Statements                                                       |  | 7       
|         |  |                                                                                                 
|Item 2 - |  | Managements Discussion and Analysis of Financial Condition and Results of Operations            |  | 9       
|         |  |                                                                                                 
|Item 3 - |  | Controls and Procedures                                                                          |  | 14      
|         |  |                                                                                                 
|Part II. |  | OTHER INFORMATION                                                                                |  |         
|         |  |                                                                                                 
|Item 2 - |  | Unregistered Sales of Equity Securities and Use of Proceeds                                      |  | 15      
|         |  |                                                                                                 
|Item 6 - |  | Exhibits                                                                                         |  | 15      



- 2 -



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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



|                                                                                                   |  |                                                            |         |   |                |   |         |  
|-------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------- | ------- | - | -------------- | - | ------- | -
|                                                                                                   |  | March 31, 2006                                             |         |   | June 30, 2005* |  
|                                                                                                   |  | (Unaudited) (In thousands, except share and per sharedata) |        
|ASSETS                                                                                             |  |                                                            |         |   |                |   |         |  
|                                                                                                   |  |                                                           
|Cash on hand and in banks                                                                          |  | $                                                          | 3,036   |   |                | $ | 1,601   |  
|Interest-earning balances in other banks                                                           |  |                                                            | 341     |   |                |   | 432     |  
|                                                                                                   |  |                                                            |         |   |                |   |         |  
|Cash and cash equivalents                                                                          |  |                                                            | 3,377   |   |                |   | 2,033   |  
|                                                                                                   |  |                                                           
|Investment securities available for sale, at fair value                                            |  |                                                            | 25,310  |   |                |   | 28,779  |  
|                                                                                                   |  |                                                           
|Loans                                                                                              |  |                                                            | 175,558 |   |                |   | 155,724 |  
|Allowance for loan losses                                                                          |  |                                                            | (1,789  | ) |                |   | (1,593  | )
|                                                                                                   |  |                                                            |         |   |                |   |         |  
|Net loans                                                                                          |  |                                                            | 173,769 |   |                |   | 154,131 |  
|                                                                                                   |  |                                                           
|Loans held for sale                                                                                |  |                                                            | 172     |   |                |   | 1,116   |  
|Accrued interest receivable                                                                        |  |                                                            | 1,078   |   |                |   | 890     |  
|Restricted stock, at cost                                                                          |  |                                                            | 1,822   |   |                |   | 1,681   |  
|Premises and equipment, net                                                                        |  |                                                            | 5,038   |   |                |   | 4,098   |  
|Real estate acquired in settlement of loans                                                        |  |                                                            | 215     |   |                |   | 183     |  
|Intangible assets                                                                                  |  |                                                            | 725     |   |                |   | 863     |  
|Other assets                                                                                       |  |                                                            | 2,253   |   |                |   | 1,972   |  
|                                                                                                   |  |                                                            |         |   |                |   |         |  
|TOTAL ASSETS                                                                                       |  | $                                                          | 213,759 |   |                | $ | 195,746 |  
|                                                                                                   |  |                                                            |         |   |                |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                               |  |                                                            |         |   |                |   |         |  
|                                                                                                   |  |                                                           
|LIABILITIES                                                                                        |  |                                                            |         |   |                |   |         |  
|Deposit accounts                                                                                   |  | $                                                          | 156,564 |   |                | $ | 136,573 |  
|Short-term borrowings                                                                              |  |                                                            | 15,575  |   |                |   | 8,448   |  
|Long-term borrowings                                                                               |  |                                                            | 13,600  |   |                |   | 23,000  |  
|Accrued interest payable                                                                           |  |                                                            | 229     |   |                |   | 191     |  
|Advance payments by borrowers for property taxes and insurance                                     |  |                                                            | 98      |   |                |   | 157     |  
|Accrued expenses and other liabilities                                                             |  |                                                            | 1,373   |   |                |   | 1,121   |  
|                                                                                                   |  |                                                            |         |   |                |   |         |  
|TOTAL LIABILITIES                                                                                  |  |                                                            | 187,439 |   |                |   | 169,490 |  
|                                                                                                   |  |                                                            |         |   |                |   |         |  
|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 and outstanding |  |                                                            | 22      |   |                |   | 22      |  
|Additional paid-in capital                                                                         |  |                                                            | 22,063  |   |                |   | 22,009  |  
|Unearned compensation                                                                              |  |                                                            | (742    | ) |                |   | (873    | )
|Retained earnings, substantially restricted                                                        |  |                                                            | 11,552  |   |                |   | 11,242  |  
|Accumulated other comprehensive loss                                                               |  |                                                            | (646    | ) |                |   | (388    | )
|Common stock in treasury, at cost (433,783 and 423,107 shares, respectively)                       |  |                                                            | (5,929  | ) |                |   | (5,756  | )
|                                                                                                   |  |                                                            |         |   |                |   |         |  
|TOTAL STOCKHOLDERS EQUITY                                                                         |  |                                                            | 26,320  |   |                |   | 26,256  |  
|                                                                                                   |  |                                                            |         |   |                |   |         |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                         |  | $                                                          | 213,759 |   |                | $ | 195,746 |  
|                                                                                                   |  |                                                            |         |   |                |   |         |  

---

|* | 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 Ended March 31,          |       | Nine Months Ended March 31,
|                                                    |  | 2006                                  |       | 2005                        |   | 2006  |  | 2005
|                                                    |  | (In thousands, except per share data)
|INTEREST INCOME                                     |  |                                       |       |                             |   |       |  |      |       |  |   |      
|Loans                                               |  | $                                     | 2,975 |                             | $ | 2,235 |  | $    | 8,545 |  | $ | 6,102
|Investments                                         |  |                                       | 271   |                             |   | 274   |  |      | 836   |  |   | 801  
|Deposits in other banks and federal funds sold      |  |                                       | 24    |                             |   | 22    |  |      | 64    |  |   | 50   
|                                                    |  |                                       |       |                             |   |       |  |      |       |  |   |      
|TOTAL INTEREST INCOME                               |  |                                       | 3,270 |                             |   | 2,531 |  |      | 9,445 |  |   | 6,953
|                                                    |  |                                       |       |                             |   |       |  |      |       |  |   |      
|INTEREST EXPENSE                                    |  |                                       |       |                             |   |       |  |      |       |  |   |      
|Deposit accounts                                    |  |                                       | 1,248 |                             |   | 820   |  |      | 3,397 |  |   | 2,169
|Short-term borrowings                               |  |                                       | 174   |                             |   | 35    |  |      | 304   |  |   | 251  
|Long-term borrowings                                |  |                                       | 114   |                             |   | 212   |  |      | 675   |  |   | 299  
|                                                    |  |                                       |       |                             |   |       |  |      |       |  |   |      
|TOTAL INTEREST EXPENSE                              |  |                                       | 1,536 |                             |   | 1,067 |  |      | 4,376 |  |   | 2,719
|                                                    |  |                                       |       |                             |   |       |  |      |       |  |   |      
|NET INTEREST INCOME                                 |  |                                       | 1,734 |                             |   | 1,464 |  |      | 5,069 |  |   | 4,234
|                                                    |  |                                       |       |                            
|PROVISION FOR LOAN LOSSES                           |  |                                       | 23    |                             |   | 32    |  |      | 240   |  |   | 56   
|                                                    |  |                                       |       |                             |   |       |  |      |       |  |   |      
|NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |  |                                       | 1,711 |                             |   | 1,432 |  |      | 4,829 |  |   | 4,178
|                                                    |  |                                       |       |                             |   |       |  |      |       |  |   |      
|NON-INTEREST INCOME                                 |  |                                       | 175   |                             |   | 220   |  |      | 645   |  |   | 782  
|                                                    |  |                                       |       |                             |   |       |  |      |       |  |   |      
|NON-INTEREST EXPENSES                               |  |                                       |       |                             |   |       |  |      |       |  |   |      
|Personnel costs                                     |  |                                       | 586   |                             |   | 601   |  |      | 1,758 |  |   | 1,784
|Occupancy                                           |  |                                       | 141   |                             |   | 103   |  |      | 431   |  |   | 411  
|Other                                               |  |                                       | 506   |                             |   | 500   |  |      | 1,445 |  |   | 1,358
|                                                    |  |                                       |       |                             |   |       |  |      |       |  |   |      
|TOTAL NON-INTEREST EXPENSES                         |  |                                       | 1,233 |                             |   | 1,204 |  |      | 3,634 |  |   | 3,553
|                                                    |  |                                       |       |                             |   |       |  |      |       |  |   |      
|INCOME BEFORE INCOME TAXES                          |  |                                       | 653   |                             |   | 448   |  |      | 1,840 |  |   | 1,407
|                                                    |  |                                       |       |                            
|PROVISION FOR INCOME TAXES                          |  |                                       | 245   |                             |   | 161   |  |      | 708   |  |   | 506  
|                                                    |  |                                       |       |                             |   |       |  |      |       |  |   |      
|NET INCOME                                          |  | $                                     | 408   |                             | $ | 287   |  | $    | 1,132 |  | $ | 901  
|                                                    |  |                                       |       |                             |   |       |  |      |       |  |   |      
|NET INCOME PER SHARE                                |  |                                       |       |                             |   |       |  |      |       |  |   |      
|Basic                                               |  | $                                     | .24   |                             | $ | .17   |  | $    | .66   |  | $ | .53  
|Diluted.                                            |  |                                       | .24   |                             |   | .17   |  |      | .65   |  |   | .52  
|                                                    |  |                                       |       |                            
|CASH DIVIDENDS PER SHARE                            |  | $                                     | .16   |                             | $ | .16   |  | $    | .48   |  | $ | .48  
|                                                    |  |                                       |       |                            
|WEIGHTED AVERAGE SHARES OUTSTANDING                 |  |                                       |       |                             |   |       |  |      |       |  |   |      
|Basic                                               |  |                                       | 1,720 |                             |   | 1,716 |  |      | 1,722 |  |   | 1,715
|Effect of outstanding stock options                 |  |                                       | 7     |                             |   | 16    |  |      | 7     |  |   | 18   
|                                                    |  |                                       |       |                             |   |       |  |      |       |  |   |      
|Assuming dilution                                   |  |                                       | 1,727 |                             |   | 1,732 |  |      | 1,729 |  |   | 1,733
|                                                    |  |                                       |       |                             |   |       |  |      |       |  |   |      

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 of of common stock |  | Additional paid-in capital                      |    |  | Unearned compensation |        |   | Retained earnings |   |        | Accumulated other comprehensive (loss) |  |   | Treasury stock |   |  | Total stockholders equity |     
|                                                                      |  | Issued                 |  | In treasury |                              |  |                                                 |    |  |                       |        |  
|                                                                      |  |                        |  |             |                              |  | (In thousands, except share and per share data) |    |  |                       |        |   |                   |   |        |                                        |  |   |                |  
|Balance at June 30, 2004                                              |  | 2,224,617              |  | 412,833     |                              |  | $                                               | 22 |  | $                     | 21,982 |   |                   | $ | (1,058 | )                                      |  | $ | 11,162         |   |  | $                          | (723 | ) |  | $ | (5,334 | ) |  | $ | 26,051 |  
|                                                                      |  |                        |  |             |                              |  |                                                 |    | 
|Comprehensive income:                                                 |  |                        |  |             |                              |  |                                                 |    |  |                       |        |   |                   |   |        |                                        |  |   |                |   |  |                            |      |   |  |   |        |   |  |   |        |  
|                                                                      |  |                        |  |             |                              |  |                                                 |    | 
|Net income                                                            |  |                       |  |            |                              |  |                                                 |   |  |                       |       |   |                   |   |       |                                        |  |   | 901            |   |  |                            |     |   |  |   |       |   |  |   | 901    |  
|                                                                      |  |                        |  |             |                              |  |                                                 |    | 
|Unrealized gain on securities available for sale, net of income taxes |  |                       |  |            |                              |  |                                                 |   |  |                       |       |   |                   |   |       |                                        |  |   |               |   |  |                            | 228  |   |  |   |       |   |  |   | 228    |  
|                                                                      |  |                        |  |             |                              |  |                                                 |    |  |                       |        |   |                   |   |        |                                        |  |   |                |   |  |                            |      |   |  |   |        |   |  |   |        |  
|Totalcomprehensive income                                             |  |                        |  |             |                              |  |                                                 |    |  |                       |        |   |                   |   |        |                                        |  |   |                |   |  |                            |      |   |  |   |        |   |  |   | 1,129  |  
|                                                                      |  |                        |  |             |                              |  |                                                 |    |  |                       |        |   |                   |   |        |                                        |  |   |                |   |  |                            |      |   |  |   |        |   |  |   |        |  
|Purchase of treasury shares                                           |  |                       |  | 37,064      |                              |  |                                                 |   |  |                       |       |   |                   |   |       |                                        |  |   |               |   |  |                            |     |   |  |   | (574   | ) |  |   | (574   | )
|Exercise of stock options                                             |  |                       |  | (23,093     | )                            |  |                                                 |   |  |                       | (106   | ) |                   |   |       |                                        |  |   |               |   |  |                            |     |   |  |   | 139    |   |  |   | 33     |  
|                                                                      |  |                        |  |             |                              |  |                                                 |    | 
|RRP shares earned                                                     |  |                       |  |            |                              |  |                                                 |   |  |                       |       |   |                   |   | 47     |                                        |  |   |               |   |  |                            |     |   |  |   |       |   |  |   | 47     |  
|                                                                      |  |                        |  |             |                              |  |                                                 |    | 
|Release of ESOP shares                                                |  |                       |  |            |                              |  |                                                 |   |  |                       | 72     |   |                   |   | 94     |                                        |  |   |               |   |  |                            |     |   |  |   |       |   |  |   | 166    |  
|                                                                      |  |                        |  |             |                              |  |                                                 |    | 
|Cash dividends declared ($.48 per share)                              |  |                       |  |            |                              |  |                                                 |   |  |                       |       |   |                   |   |       |                                        |  |   | (811           | ) |  |                            |     |   |  |   |       |   |  |   | (811   | )
|                                                                      |  |                        |  |             |                              |  |                                                 |    |  |                       |        |   |                   |   |        |                                        |  |   |                |   |  |                            |      |   |  |   |        |   |  |   |        |  
|Balance at March 31, 2005                                             |  | 2,224,617              |  | 426,804     |                              |  | $                                               | 22 |  | $                     | 21,948 |   |                   | $ | (917   | )                                      |  | $ | 11,252         |   |  | $                          | (495 | ) |  | $ | (5,769 | ) |  | $ | 26,041 |  
|                                                                      |  |                        |  |             |                              |  |                                                 |    |  |                       |        |   |                   |   |        |                                        |  |   |                |   |  |                            |      |   |  |   |        |   |  |   |        |  
|Balance at June 30, 2005                                              |  | 2,224,617              |  | 423,107     |                              |  | $                                               | 22 |  | $                     | 22,009 |   |                   | $ | (873   | )                                      |  | $ | 11,242         |   |  | $                          | (388 | ) |  | $ | (5,756 | ) |  | $ | 26,256 |  
|                                                                      |  |                        |  |             |                              |  |                                                 |    | 
|Comprehensive income:                                                 |  |                        |  |             |                              |  |                                                 |    |  |                       |        |   |                   |   |        |                                        |  |   |                |   |  |                            |      |   |  |   |        |   |  |   |        |  
|Net income                                                            |  |                       |  |            |                              |  |                                                 |   |  |                       |       |   |                   |   |       |                                        |  |   | 1,132          |   |  |                            |     |   |  |   |       |   |  |   | 1,132  |  
|Change in accumulated other comprehensive loss, net of income taxes   |  |                       |  |            |                              |  |                                                 |   |  |                       |       |   |                   |   |       |                                        |  |   |               |   |  |                            | (258 | ) |  |   |       |   |  |   | (258   | )
|                                                                      |  |                        |  |             |                              |  |                                                 |    |  |                       |        |   |                   |   |        |                                        |  |   |                |   |  |                            |      |   |  |   |        |   |  |   |        |  
|Total comprehensive income                                            |  |                        |  |             |                              |  |                                                 |    |  |                       |        |   |                   |   |        |                                        |  |   |                |   |  |                            |      |   |  |   |        |   |  |   | 874    |  
|                                                                      |  |                        |  |             |                              |  |                                                 |    |  |                       |        |   |                   |   |        |                                        |  |   |                |   |  |                            |      |   |  |   |        |   |  |   |        |  
|Purchase of treasury shares                                           |  |                       |  | 11,721      |                              |  |                                                 |   |  |                       |       |   |                   |   |       |                                        |  |   |               |   |  |                            |     |   |  |   | (182   | ) |  |   | (182   | )
|Exercise of stock options                                             |  |                       |  | (1,045      | )                            |  |                                                 |   |  |                       | (9     | ) |                   |   |       |                                        |  |   |               |   |  |                            |     |   |  |   | 9      |   |  |   |       |  
|RRP and incentive shares earned                                       |  |                       |  |            |                              |  |                                                 |   |  |                       |       |   |                   |   | 43     |                                        |  |   |               |   |  |                            |     |   |  |   |       |   |  |   | 43     |  
|Release of ESOP shares                                                |  |                       |  |            |                              |  |                                                 |   |  |                       | 63     |   |                   |   | 88     |                                        |  |   |               |   |  |                            |     |   |  |   |       |   |  |   | 151    |  
|Cash dividends paid ($0.48 per share)                                 |  |                       |  |            |                              |  |                                                 |   |  |                       |       |   |                   |   |       |                                        |  |   | (822           | ) |  |                            |     |   |  |   |       |   |  |   | (822   | )
|                                                                      |  |                        |  |             |                              |  |                                                 |    |  |                       |        |   |                   |   |        |                                        |  |   |                |   |  |                            |      |   |  |   |        |   |  |   |        |  
|Balance at March 31, 2006                                             |  | 2,224,617              |  | 433,783     |                              |  | $                                               | 22 |  | $                     | 22,063 |   |                   | $ | (742   | )                                      |  | $ | 11,552         |   |  | $                          | (646 | ) |  | $ | (5,929 | ) |  | $ | 26,320 |  
|                                                                      |  |                        |  |             |                              |  |                                                 |    |  |                       |        |   |                   |   |        |                                        |  |   |                |   |  |                            |      |   |  |   |        |   |  |   |        |  

See accompanying notes.



- 5 -



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##### Table of Contents

Great Pee Dee Bancorp, Inc. and Subsidiary

Consolidated Statements of Cash Flows (Unaudited)



|                                                                                  |  |                             |         |   |      |   |         |  
|--------------------------------------------------------------------------------- |  | --------------------------- | ------- | - | ---- | - | ------- | -
|                                                                                  |  | Nine Months Ended March 31, |        
|                                                                                  |  | 2006                        |         |   | 2005 |  
|                                                                                  |  | (In thousands)              |        
|CASH FLOWS FROM OPERATING ACTIVITIES                                              |  |                             |         |   |      |   |         |  
|Net income                                                                        |  | $                           | 1,132   |   |      | $ | 901     |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                             |         |   |      |   |         |  
|Depreciation and amortization                                                     |  |                             | 437     |   |      |   | 452     |  
|(Gain) loss on sale of foreclosed real estate                                     |  |                             | 8       |   |      |   | (89     | )
|Gain on sale of loans held for sale                                               |  |                             | (59     | ) |      |   | (140    | )
|Loss on sale of available for sale investments                                    |  |                             | 24      |   |      |   |        |  
|Provision for loan losses                                                         |  |                             | 240     |   |      |   | 56      |  
|Release of ESOP shares                                                            |  |                             | 151     |   |      |   | 166     |  
|Amortization of stock awards under recognition and retention plan                 |  |                             | 43      |   |      |   | 47      |  
|Proceeds from sales of loans held for sale                                        |  |                             | 21,141  |   |      |   | 10,516  |  
|Originations of loans held for sale                                               |  |                             | (8,952  | ) |      |   | (9,217  | )
|Change in assets and liabilities:                                                 |  |                             |         |   |      |   |         |  
|Increase in accrued interest receivable                                           |  |                             | (188    | ) |      |   | (228    | )
|Increase in accrued interest payable                                              |  |                             | 38      |   |      |   | 75      |  
|Increase in other assets                                                          |  |                             | (119    | ) |      |   | (443    | )
|Increase in other liabilities                                                     |  |                             | 252     |   |      |   | 841     |  
|                                                                                  |  |                             |         |   |      |   |         |  
|NET CASH PROVIDED BY OPERATING ACTIVITIES                                         |  |                             | 14,148  |   |      |   | 2,938   |  
|                                                                                  |  |                             |         |   |      |   |         |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                              |  |                             |         |   |      |   |         |  
|Purchases of available-for-sale investments                                       |  |                             | (345    | ) |      |   | (4,000  | )
|Proceeds from sale and maturities of available-for-sale investments               |  |                             | 3,311   |   |      |   | 4,844   |  
|Proceeds from sale of land                                                        |  |                             | 150     |   |      |   |        |  
|Net increase in loans                                                             |  |                             | (31,271 | ) |      |   | (27,944 | )
|Purchase of restricted stock                                                      |  |                             | (141    | ) |      |   | (528    | )
|Purchases of property and equipment                                               |  |                             | (1,330  | ) |      |   | (105    | )
|Proceeds from sale of foreclosed real estate                                      |  |                             | 167     |   |      |   | 631     |  
|                                                                                  |  |                             |         |   |      |   |         |  
|NET CASH USED BY INVESTING ACTIVITIES                                             |  |                             | (29,459 | ) |      |   | (27,102 | )
|                                                                                  |  |                             |         |   |      |   |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                              |  |                             |         |   |      |   |         |  
|Net increase in deposit accounts                                                  |  |                             | 19,991  |   |      |   | 27,786  |  
|Proceeds from short-term borrowings                                               |  |                             | 1,175   |   |      |   | 2,000   |  
|Proceeds from long-term borrowings                                                |  |                             | 13,600  |   |      |   | 5,000   |  
|Decrease in advances from borrowers                                               |  |                             | (59     | ) |      |   | (15     | )
|Purchase of treasury stock                                                        |  |                             | (182    | ) |      |   | (574    | )
|Repayment of long-term borrowings                                                 |  |                             | (9,048  | ) |      |   |        |  
|Repayment of short-term borrowings                                                |  |                             | (8,000  | ) |      |   |        |  
|Cash dividends paid                                                               |  |                             | (822    | ) |      |   | (811    | )
|Exercise of stock options                                                         |  |                             |        |   |      |   | 33      |  
|                                                                                  |  |                             |         |   |      |   |         |  
|NET CASH PROVIDED BY FINANCING ACTIVITIES                                         |  |                             | 16,655  |   |      |   | 33,419  |  
|                                                                                  |  |                             |         |   |      |   |         |  
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                         |  |                             | 1,344   |   |      |   | 9,255   |  
|                                                                                  |  |                            
|CASH AND CASH EQUIVALENTS, BEGINNING                                              |  |                             | 2,033   |   |      |   | 3,879   |  
|                                                                                  |  |                             |         |   |      |   |         |  
|CASH AND CASH EQUIVALENTS, ENDING                                                 |  | $                           | 3,377   |   |      | $ | 13,134  |  
|                                                                                  |  |                             |         |   |      |   |         |  
|NON-CASH INVESTING ACTIVITIES                                                     |  |                             |         |   |      |   |         |  
|Reclassification of loans to loans held for sale                                  |  | $                           | 11,187  |   |      | $ |        |  
|                                                                                  |  |                             |         |   |      |   |         |  

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 nine-month periods ended March 31, 2006 and 2005, 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 nine-month periods ended March 31, 2006, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2006.

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, 2005. This quarterly report should be read in conjunction with such annual report.

NOTE B - STOCK- BASED COMPENSATION

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 March 31,                  |     |      | Nine Months Ended March 31, |    
|                                                                                                                                      |  | 2006                                          |     | 2005 |                             |     | 2006 |  |   | 2005  |  
|                                                                                                                                      |  | (Amounts in thousands, except per share data) |    
|Net income:                                                                                                                           |  |                                               |     |      |                             |     |      |  |   |       |   |  |   |     |  
|As reported                                                                                                                           |  | $                                             | 408 |      | $                           | 287 |      |  | $ | 1,132 |   |  | $ | 901 |  
|Deduct: Total stock-based employee compensation expense determined under fair value method for all awards, net of related tax
effects |  |                                               |    |      |                             | (22 | )    |  |   | (10   | ) |  |   | (22 | )
|                                                                                                                                      |  |                                               |     |      |                             |     |      |  |   |       |   |  |   |     |  
|Pro forma                                                                                                                             |  | $                                             | 408 |      | $                           | 265 |      |  | $ | 1,122 |   |  | $ | 879 |  
|                                                                                                                                      |  |                                               |     |      |                             |     |      |  |   |       |   |  |   |     |  
|Basic net income per share:                                                                                                           |  |                                               |     |      |                             |     |      |  |   |       |   |  |   |     |  
|As reported                                                                                                                           |  | $                                             | .24 |      | $                           | .17 |      |  | $ | .66   |   |  | $ | .53 |  
|Pro forma                                                                                                                             |  |                                               | .24 |      |                             | .15 |      |  |   | .65   |   |  |   | .51 |  
|                                                                                                                                      |  |                                               |     |     
|Diluted net income per share:                                                                                                         |  |                                               |     |      |                             |     |      |  |   |       |   |  |   |     |  
|As reported                                                                                                                           |  | $                                             | .24 |      | $                           | .17 |      |  | $ | .65   |   |  | $ | .52 |  
|Pro forma                                                                                                                             |  |                                               | .24 |      |                             | .15 |      |  |   | .65   |   |  |   | .51 |  



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##### Table of Contents

Great Pee Dee Bancorp, Inc. and Subsidiary

Notes to Consolidated Financial Statements

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 were not included in the income per share computations.

NOTE D - COMPREHENSIVE INCOME

A
summary of comprehensive income is as follows:



|                                                                                                  |  |                              |     |   |                             |   |      |      |  |   |       |   |  |   |      
|------------------------------------------------------------------------------------------------- |  | ---------------------------- | --- | - | --------------------------- | - | ---- | ---- |  | - | ----- | - |  | - | -----
|                                                                                                  |  | Three Months Ended March 31, |     |   | Nine Months Ended March 31,
|                                                                                                  |  | 2006                         |     |   | 2005                        |   |      | 2006 |  |   | 2005 
|                                                                                                  |  | (In thousands)              
|Net income                                                                                        |  | $                            | 408 |   |                             | $ | 287  |      |  | $ | 1,132 |   |  | $ | 901  
|                                                                                                  |  |                              |     |  
|Other comprehensive income:                                                                       |  |                              |     |   |                             |   |      |      |  |   |       |   |  |   |      
|Net (decrease) increase in the fair value of investment securities available for sale, net of tax |  |                              | (26 | ) |                             |   | (261 | )    |  |   | (258  | ) |  |   | 228  
|                                                                                                  |  |                              |     |   |                             |   |      |      |  |   |       |   |  |   |      
|Total comprehensive income                                                                        |  | $                            | 382 |   |                             | $ | 26   |      |  | $ | 874   |   |  | $ | 1,129
|                                                                                                  |  |                              |     |   |                             |   |      |      |  |   |       |   |  |   |      

NOTE E - NEW ACCOUNTING PRONOUNCEMENTS

In December 2004, the Financial Accounting Standards Board issued SFAS No. 123(R), Accounting for Stock-Based Compensation (SFAS No. 123(R)). SFAS No. 123(R) establishes standards for the
accounting for transactions in which an entity exchanges its equity instruments for goods or services. This Statement focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions.
SFAS No. 123(R) requires that the fair value of such equity instruments be recognized as an expense in the historical financial statements as services are performed. Prior to SFAS No. 123(R), only certain pro forma disclosures of fair
value were required. The provisions of the Statement are effective for the Company for fiscal years beginning after December 15, 2005. Accordingly, we will adopt SFAS No. 123 (R) commencing with the fiscal year beginning July 1,
2006. At this time we expect the adoption of SFAS No. 123(R) is not expected to have a material effect on our consolidated financial statements.

NOTE F - RECLASSIFICATIONS

Certain amounts in the March 2005 financial statements have been reclassified to conform to the March 2006
presentation. The reclassifications had no effect on net income or stockholders equity, as previously reported.



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##### Table of Contents

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. 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.

Comparison of Financial Condition at

March 31, 2006 and June 30, 2005

Total assets increased by $18.1 million during the nine months ended March 31, 2006, from $195.7 million at June 30, 2005, to $213.8 million at March 31, 2006. The Companys increase in assets was largely attributable to
loan growth.

The Companys interest-earning liquid assets, including interest-earning balances in other banks, federal funds sold and investment
securities decreased by $3.5 million, to $25.7 million at March 31, 2006, representing 12.0% of total assets at that date as compared with $29.2 million or 14.9% of total assets at June 30, 2005. The decrease was a result of pay-downs of
mortgage backed securities and the sale of $800,000 in low yielding investment securities.

Loans receivable increased by $19.8 million from $155.7 million
at June 30, 2005, to $175.5 million at March 31, 2006, primarily due to the growth in commercial real estate loans. Of this growth in loans, $11.1 million was the result of entering into participation agreements with other financial
institutions. This growth was partially offset by the sale of approximately $11.1 million dollars of Monthly Medium Cost of Funds SAIF Index loans during the first quarter of 2006. SAIF Index loans are adjustable rate mortgage loans tied to a
lagging market index. These types of loans are no longer used by the Bank and were priced significantly below market rate. Funding for loan growth was provided by a combination of long-term FHLB advances, brokered and customer certificate of deposit
transactions.

Total deposits increased by $20.0 million or 15% from $136.6 million at June 30, 2005, to $156.6 million at March 31, 2006,
primarily due to growth in certificate of deposits, which consisted of $14.6 million attributable to customer deposits and $5.4 million in brokered deposits. Funds provided by the overall increase in deposit accounts were used to fund loan growth.

Total stockholders equity remained at $26.3 million at both March 31, 2006 and June 30, 2005. The increase in stockholders equity
from net income was offset by cash dividends paid and decreases in the fair market value of available for sale securities.

Comparison
of Results of Operations for the

Three Months Ended March 31, 2006 and 2005

Net Income. Net income for the quarter ended March 31, 2006 was $408,000, an increase of $121,000 from net income of $287,000 for the quarter ended
March 31, 2005. On a per share basis, net income for the current quarter was $0.24 per diluted share as compared with $0.17 per diluted share for the third quarter of the last fiscal year. The increase in net income was a result of an increase
in interest income on loans and investments and was partially offset by increases in interest expense. During the quarter management repositioned the balance sheet by selling approximately $11.1 million dollars of low yielding loans and $800,000 in
low yielding investment securities at a net loss of $39,000 and $24,000 respectively.

Net Interest Income.Net interest income for the
quarter ended March 31, 2006 was $1.7 million as compared with $1.5 million during the quarter ended March 31, 2005. Both interest income and interest expense increased primarily due to the increase in average loans and deposits over the
same period last year. The increases in average loans and deposits as well as increases in Wall Street Journal Prime, Federal Funds rates and other market interest rates had a significant impact on our net interest spread and net interest income
during the quarter.



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##### Table of Contents

Provision for Loan Losses.The provision for loan losses totaled $23,000 in the current quarter, compared to
$32,000 in the quarter ended March 31, 2005.

Although we experienced growth in loans receivable during the quarter ended March 31, 2006, of
$867,000, a decrease in non-performing loans from March 31, 2005 to 2006 reduced the necessary amount of provision for loan losses when the changes were analyzed in our allowance for loan loss model and resulted in the provision for loan losses
of $23,000. The decline of non-performing loans reflects an increase in our credit quality. 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 March 31, 2006 and 2005, respectively.



|                                                                                          |  |                                      |       |   |      |   |       |  
|----------------------------------------------------------------------------------------- |  | ------------------------------------ | ----- | - | ---- | - | ----- | -
|                                                                                          |  | For the Three Months Ended
March 31, |      
|                                                                                          |  | 2006                                 |       |   | 2005 |  
|Balance at the beginning of the period                                                    |  | $                                    | 1,760 |   |      | $ | 1,430 |  
|                                                                                          |  |                                     
|Charge-offs:                                                                              |  |                                      |       |   |      |   |       |  
|Real estate mortgage                                                                      |  |                                      |      |   |      |   |      |  
|Installment loans to individuals                                                          |  |                                      | (2    | ) |      |   | (16   | )
|                                                                                          |  |                                      |       |   |      |   |       |  
|                                                                                          |  |                                      | (2    | ) |      |   | (16   | )
|                                                                                          |  |                                      |       |   |      |   |       |  
|Recoveries:                                                                               |  |                                      |       |   |      |   |       |  
|Real estate mortgage                                                                      |  |                                      |      |   |      |   | 13    |  
|Installment loans to individuals                                                          |  |                                      | 8     |   |      |   | 13    |  
|                                                                                          |  |                                      |       |   |      |   |       |  
|                                                                                          |  |                                      | 8     |   |      |   | 26    |  
|                                                                                          |  |                                      |       |   |      |   |       |  
|Net Recoveries (Net charge-offs)                                                          |  |                                      | 6     |   |      |   | 10    |  
|                                                                                          |  |                                      |       |   |      |   |       |  
|Provision for loan losses                                                                 |  |                                      | 23    |   |      |   | 32    |  
|                                                                                          |  |                                      |       |   |      |   |       |  
|Balance at end of period                                                                  |  | $                                    | 1,789 |   |      | $ | 1,472 |  
|                                                                                          |  |                                      |       |   |      |   |       |  
|Ratio of net charge-offs during the period to average loans outstanding during the period |  |                                      |      | % |      |   |      | %

Non-Interest Income. Non-interest income decreased by $45,000, from $220,000 for the three months ended
March 31, 2005 to $175,000 for the three months ended March 31, 2006. This decrease is due primarily to a loss on sale of investment securities of $24,000 and a loss on sale of SAIF Index loans of $39,000.

Non-Interest Expenses. Non-interest expenses increased $29,000 for the three months ending March 31, 2006 when compared to the same period in 2005. This
increase was largely attributable to other expenses including data processing compared to the March 2005 quarter.

Provision for Income Taxes. The
provision for income taxes, as a percentage of income before income taxes, was 37.5% and 35.9% for the quarters ended March 31, 2006 and 2005, respectively.

Comparison of Results of Operations for the

Nine Months Ended March 31, 2006 and
2005

Net Income. Net income for the nine months ended March 31, 2006 was $1.1 million, an increase of $231,000 over net income of
$901,000 for the nine months ended March 31, 2005. The increase in net income was a result of an increase in interest income on loans and investments and was partially offset by an increase in interest expense. During the third quarter
management repositioned the balance sheet by selling approximately $11.1 million of low yielding loans and $800,000 in low yielding investment securities at a net loss of $39,000 and $24,000 respectively.



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##### Table of Contents

Net Interest Income.Net interest income for the nine months ended March 31, 2006, was $5.1 million as
compared with $4.2 million during the nine months ended March 31, 2005. Both interest income and interest expense increased primarily due to increases in average loans of $23.2 million, average deposits of $13 million, and average long-term
borrowings of $1.4 million over the same period last year. The increases in average loans and deposits as well as increases in Wall Street Journal Prime, Federal Funds rates and other market interest rates had a significant impact on our net
interest spread and net interest income during the quarter.

Provision for Loan Losses.The provision for loan losses totaled $240,000 in the
current nine month period, compared to $56,000 for the same period ended March 31, 2005.

The significant growth in loans receivable during the
current nine month period of $19.8 million and our ongoing evaluation of the allowance for loan losses resulted in the loan loss reserve provision of $240,000. Our loan loss 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 nine months ended March 31, 2006 and 2005, respectively.



|                                                                                          |  |                                     |       |   |      |   |       |  
|----------------------------------------------------------------------------------------- |  | ----------------------------------- | ----- | - | ---- | - | ----- | -
|                                                                                          |  | For the Nine Months Ended
March 31, |      
|                                                                                          |  | 2006                                |       |   | 2005 |  
|Balance at the beginning of the period                                                    |  | $                                   | 1,593 |   |      | $ | 1,532 |  
|                                                                                          |  |                                    
|Charge-offs:                                                                              |  |                                     |       |   |      |   |       |  
|Real estate mortgage                                                                      |  |                                     | (6    | ) |      |   | (44   | )
|Installment loans to individuals                                                          |  |                                     | (66   | ) |      |   | (109  | )
|                                                                                          |  |                                     |       |   |      |   |       |  
|                                                                                          |  |                                     | (72   | ) |      |   | (153  | )
|                                                                                          |  |                                     |       |   |      |   |       |  
|Recoveries:                                                                               |  |                                     |       |   |      |   |       |  
|Real estate mortgage                                                                      |  |                                     | 1     |   |      |   | 22    |  
|Installment loans to individuals                                                          |  |                                     | 27    |   |      |   | 15    |  
|                                                                                          |  |                                     |       |   |      |   |       |  
|                                                                                          |  |                                     | 28    |   |      |   | 37    |  
|                                                                                          |  |                                     |       |   |      |   |       |  
|Net charge-offs                                                                           |  |                                     | (44   | ) |      |   | (116  | )
|                                                                                          |  |                                     |       |   |      |   |       |  
|Provision for loan losses                                                                 |  |                                     | 240   |   |      |   | 56    |  
|                                                                                          |  |                                     |       |   |      |   |       |  
|Balance at end of period                                                                  |  | $                                   | 1,789 |   |      | $ | 1,472 |  
|                                                                                          |  |                                     |       |   |      |   |       |  
|Ratio of net charge-offs during the period to average loans outstanding during the period |  |                                     | 0.02  | % |      |   | 0.09  | %

Non-Interest Income. Non-interest income deceased by $137,000, from $782,000 for the nine months ended
March 31, 2005 to $645,000 for the nine months ended March 31, 2006. This decrease is due to a loss of $24,000 on sale of investment securities, a $39,000 loss on sale of SAIF loans and a $44,000 drop in mortgage loan and related fees when
compared to the same period last year. These decreases were offset by increases in income in financial services income of $83,000 and an increase of $39,000 in service charges and fees.

Non-Interest Expenses. Non-interest expenses increased $81,000 from $3.5 million for the nine months ending March 31, 2005 to $3.6 million for the same period in 2006. Other expenses including data
processing, advertising, and audit increased from the 2005 to the 2006 period.

Provision for Income Taxes. The provision for income taxes, as a
percentage of income before income taxes, was 38.5% and 36.0% for the nine months ended March 31, 2006 and 2005 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 serves as the basis for determining, on a monthly basis, the allowance for loan losses and any resulting



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##### Table of Contents

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.



|                                                 |  |                        |        |   |               |   |        |                |  |   |        |  
|------------------------------------------------ |  | ---------------------- | ------ | - | ------------- | - | ------ | -------------- |  | - | ------ | -
|                                                 |  | March 31, 2006         |        |   | June 30, 2005 |   |        | March 31, 2005 | 
|                                                 |  | (Dollars in thousands) |       
|Nonaccrual loans                                 |  | $                      | 549    |   |               | $ | 1,106  |                |  | $ | 1,062  |  
|Restructured loans                               |  |                        |       |   |               |   |       |                |  |   |       |  
|                                                 |  |                        |        |   |               |   |        |                |  |   |        |  
|Total nonperforming loans                        |  |                        | 549    |   |               |   | 1,106  |                |  |   | 1,062  |  
|Real estate and other assets owned               |  |                        | 215    |   |               |   | 183    |                |  |   | 188    |  
|                                                 |  |                        |        |   |               |   |        |                |  |   |        |  
|Total nonperforming assets                       |  | $                      | 764    |   |               | $ | 1,289  |                |  | $ | 1,250  |  
|                                                 |  |                        |        |   |               |   |        |                |  |   |        |  
|Accruing loans past due 90 days or more          |  | $                      |       |   |               | $ |       |                |  | $ |       |  
|Allowance for loan losses                        |  |                        | 1,789  |   |               |   | 1,593  |                |  |   | 1,472  |  
|Nonperforming loans to period-end loans          |  |                        | 0.31   | % |               |   | 0.71   | %              |  |   | 0.74   | %
|Allowance for loan losses to period-end loans    |  |                        | 1.02   | % |               |   | 1.03   | %              |  |   | 1.03   | %
|Allowance for loan losses to nonperforming loans |  |                        | 325.87 | % |               |   | 144.03 | %              |  |   | 138.61 | %
|Nonperforming assets to total assets             |  |                        | 0.36   | % |               |   | 0.66   | %              |  |   | 0.65   | %

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.

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.



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##### Table of Contents

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.

Managements determination of the adequacy of the allowance is based primarily on a mathematical model that estimates the appropriate allowance for
loan losses. This model has two components. The first component involves the estimation of losses on loans defined as impaired loans. A loan is considered to be impaired when, based on current information and events, it is probable the
Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. The estimated valuation allowance is the difference, if any, between the loan balance outstanding and the value of the impaired loan as
determined by either 1) an estimate of the cash flows that the Company expects to receive from the borrower discounted at the loans effective rate, or 2) in the case of a collateral-dependent loan, the fair value of the collateral.

The second component of the allowance model is to estimate losses for all loans not considered to be impaired loans. First, loans that have been risk graded by the
Company as having more than standard risk but are not considered being impaired are assigned estimated loss percentages generally accepted in the banking industry. Loans that are classified by the Company as having normal credit risk are
segregated by loan type, and estimated loss percentages are assigned to each loan type, based on the historical losses, current economic conditions, and operational conditions specific to each loan type. Non-performing loans typically have a higher
risk grade and therefore are assigned a higher loss percentage.

The reserve estimated for impaired loans is then added to the reserve estimated for all
other loans. This becomes the Companys allocated allowance. In addition to the allocated allowance derived from the model, management also evaluates other data such as the ratio of the allowance for loan losses to total loans, net
loan growth information, nonperforming asset levels and trends in such data. Based on this additional analysis, the Company may determine that an additional amount of allowance for loan losses is necessary to reserve for probable loan losses. This
additional amount, if any, is the Companys unallocated allowance. The sum of the allocated allowance and the unallocated allowance is compared to the actual allowance for loan losses recorded on the books of the Company and any
adjustment necessary for the recorded allowance to equal the computed allowance is recorded as a provision for loan losses. The provision for loan losses is a direct charge to earnings in the period recorded.

Although management uses the best information available to make evaluations, future adjustments may be necessary if economic, operational, or other conditions change. In
addition, various regulatory agencies, as an integral part of their examination process, periodically review the Companys allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance based on the
examiners judgment about information available to them at the time of their examinations.

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 March 31, 2006 |        |                                                  | As of June 30, 2005 |  
|                                     |  | Amount               |        | Percent of loans in each category to total
loans |                     |   | Amount |   | Percent of loans in each category to total
loans | 
|Commercial, Financial & Agricultural |  | $                    | 91     |                                                  | 3.30                | % |        | $ | 125                                              |  | 6.46   | %
|Real Estate - construction           |  |                      | 72     |                                                  | 5.49                | % |        |   | 59                                               |  | 5.03   | %
|Real Estate - mortgage               |  |                      | 1,268  |                                                  | 88.69               | % |        |   | 1,019                                            |  | 85.61  | %
|Installment loans to individuals     |  |                      | 82     |                                                  | 2.35                | % |        |   | 154                                              |  | 2.86   | %
|Other                                |  |                      | 44     |                                                  | 0.17                | % |        |   | 33                                               |  | 0.04   | %
|Unallocated                          |  |                      | 232    |                                                  | N/A                 |   |        |   | 203                                              |  | N/A    |  
|                                     |  |                      |        |                                                  |                     |   |        |   |                                                  |  |        |  
|                                     |  |                      | $1,789 |                                                  | 100.00              | % |        | $ | 1,593                                            |  | 100.00 | %
|                                     |  |                      |        |                                                  |                     |   |        |   |                                                  |  |        |  



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Liquidity and Capital Resources

During the nine months ended March 31, 2006 the Company paid cash dividends of $0.48 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 March 31,
2006, liquid assets (cash, interest-earning deposits, and investment securities) were approximately $28.7 million, which represents 18% of deposits. At that date, outstanding loan commitments were $2.3 million. The undisbursed portion of
construction loans was $5.6 million and undrawn lines of credit totaled $8.7 million. The brokered CDs scheduled to mature within the next year total $8.6 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 March 31, 2006, 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. In fiscal 2005, no dividends were paid by the Bank to Great Pee Dee. At March 31, 2006, 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 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
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

Repurchases of registered common stock by the
Company:



|                                          |  |                                      |  |                              |       |                                                                                      |   |                                                                                |       
|----------------------------------------- |  | ------------------------------------ |  | ---------------------------- | ----- | ------------------------------------------------------------------------------------ | - | ------------------------------------------------------------------------------ | ------
|Period                                    |  | Total Number of Shares Purchased (1) |  | Average Price Paid per Share |       | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) |   | Maximum Number of Shares that May Yet Be
Purchased Under the Plans or Programs
|January 1st through January 31st , 2006   |  |                                     |  |                              |      |                                                                                      |  |                                                                                | 59,739
|                                          |  |                                      |  |                             
|February 1st through February 28th , 2006 |  |                                     |  |                              |      |                                                                                      |  |                                                                                | 59,739
|                                          |  |                                      |  |                             
|March 1st through March 31st , 2006       |  | 11,721                               |  | $                            | 15.55 |                                                                                      |  |                                                                                | 48,018

---

|(1) | The repurchases of common stock for the quarter were not part of the publicly announced share repurchase program. The repurchases were a result of a privately negotiated
transaction.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The existing stock repurchase plan was announced on August 15, 2000 and approved the repurchase of up to 10% of shares of outstanding common stock at that time (168,600 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: May 9, 2006 |  | By:                         |  | /s/ John S. Long       
|                  |  |                             |  | John S. Long           
|                  |  |                             |  | Chief Executive Officer
|                  |  |                            
|Date: May 9, 2006 |  | By:                         |  | /s/ John M. Digby      
|                  |  |                             |  | John M. Digby          
|                  |  |                             |  | Chief Financial Officer



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