Bank Of Granite 8-K Financial statements and exhibits

Exhibit 99 (a)

Bank of Granite Corporation
     News

For Release: July 14, 2003

BANK OF GRANITE REPORTS INCREASED EARNINGS FOR
SECOND QUARTER AND FIRST SIX MONTHS OF 2003

     Despite a rather uncertain economic environment and high unemployment in its primary market area, Bank of Granite Corporation (Nasdaq: GRAN) has reported increased earnings for the second quarter and for the six month periods, both ending June 30, 2003.

     For the second quarter, ending June 30, 2003, net income was $3,919,157 compared with $3,451,535 for the second quarter of 2002—an increase of 13.6%. Second quarter earnings per share was 30¢ vs 25¢ in 2003, an increase of 20%.

     For the six-month period, also ending June 30, 2003, net income was $7,756,340 compared with $7,233,874—an increase of 7.2%. Per share earnings for the six month period were 59¢ vs 53¢ in the comparable 2002 period, an increase of 11.3%.

     John A. Forlines, Jr., Chairman and Chief Executive Officer, said these earnings were “very satisfactory” in view of prevailing weak economic conditions. “Once again, our mortgage loan subsidiary, GLL & Associates, fueled by the lowest interest rates in fifty years, was a huge contributor to these earnings. We also continued a strong effort to control expenses.” He said the Federal Reserve’s recent reduction in interest rates, its 13th consecutive reduction in the past two and a half years, was squeezing the bank’s interest margin as never before. He said he expected the economy and the bank to continue to struggle throughout the remainder of 2003.

     Assets reached $811,085,586 at the end of the six-month period, a new high for the Company and a 15.7% increase over June 30, 2002. Deposits reached $600,083,716, another new high, reflecting a 14.9% increase over 2002’s June 30 figures. Loans totaled a record $567,301,335, an increase of 12.1%. Non-performing assets were up 143%, to $10,994,720. The loan loss reserve, at the end of June 30, 2003, totaled $8,854,445 or 1.59% of net loans outstanding.

     Also, during the second quarter of 2003, directors increased the quarterly dividend to 12¢ per share compared to the rate of 11¢ per share paid in 2002. This represents a 9.1% increase in the quarterly rate. 2003 will mark the 50th consecutive year of increased cash dividends to Bank of Granite shareholders.

     Bank of Granite Corporation is the parent company of Bank of Granite, which operates thirteen full service banking offices and two loan production offices in Caldwell, Catawba, Burke, Watauga, and Wilkes Counties in North Carolina, and GLL & Associates, Inc. a mortgage banking company headquartered in Winston-Salem. Bank of Granite Corporation has an estimated 5,300 shareholders, with approximately 13.2 million shares of common stock currently outstanding. The stock trades on the Nasdaq Stock Market® System under the symbol GRAN. with a price of $18.40 at the end of the first quarter in 2002.

* * * * *

Please see “Financial Data” tables, which are attached.
For further information, contact Kirby A. Tyndall, Senior Vice President and Chief Financial
Officer at Voice (828) 496-2026, Fax (828) 496-2010 or Internet:
ktyndall@bankofgranite.com.

Bank of Granite Corporation, PO Box 128, Granite Falls, NC 28630 www.bankofgranite.com

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			Three Months Ended									Six Months Ended
Bank of Granite Corporation			June 30,									June 30,
Selected Financial Data
(in thousands except per share data)			2003			2002			% change			2003			2002			% change
Consolidated earnings summary:
	Interest income, taxable equivalent		$	12,443		$	11,693			6.4	%	$	24,205		$	23,601			2.6	%
	Interest expense			2,674			2,703			-1.1	%		5,061			5,601			-9.6	%
	Net interest income, taxable equivalent			9,769			8,990			8.7	%		19,144			18,000			6.4	%
	Taxable equivalent adjustment			368			440			-16.4	%		768			901			-14.8	%
	Net interest income			9,401			8,550			10.0	%		18,376			17,099			7.5	%
	Loan loss provision			1,149			1,007			14.1	%		2,284			1,798			27.0	%
	Noninterest income			3,817			2,468			54.7	%		7,150			5,118			39.7	%
	Noninterest expense			6,136			5,090			20.6	%		11,506			9,911			16.1	%
	Income before income taxes			5,933			4,921			20.6	%		11,736			10,508			11.7	%
	Income taxes			2,014			1,469			37.1	%		3,980			3,274			21.6	%
	Net income		$	3,919		$	3,452			13.5	%	$	7,756		$	7,234			7.2	%
	Earnings per share — Basic		$	0.30		$	0.25			20.0	%	$	0.59		$	0.53			11.3	%
	Earnings per share — Diluted			0.30			0.25			20.0	%		0.59			0.53			11.3	%
	Average shares — Basic			13,198			13,600			-3.0	%		13,244			13,646			-2.9	%
	Average shares — Diluted			13,200			13,611			-3.0	%		13,247			13,649			-2.9	%
Consolidated balance sheet data at June 30:
	Total assets											$	811,086		$	701,295			15.7	%
	Total deposits												600,084			522,040			14.9	%
	Loans (gross)												618,039			517,851			19.3	%
	Shareholders’ equity												130,040			126,118			3.1	%
Consolidated average balance sheet data:
	Total assets		$	785,070		$	698,931			12.3	%	$	758,355		$	703,350			7.8	%
	Total deposits			577,105			521,259			10.7	%		561,512			516,851			8.6	%
	Loans (gross)			603,001			514,203			17.3	%		582,520			512,758			13.6	%
	Shareholders’ equity			128,676			125,441			2.6	%		128,151			125,308			2.3	%
Consolidated performance ratios:
	Return on average assets*			2.00	%		1.98	%					2.06	%		2.07	%
	Return on average equity*			12.22	%		11.04	%					12.20	%		11.64	%
	Efficiency ratio			45.16	%		44.42	%					43.76	%		42.87	%
Consolidated asset quality data and ratios:
	Nonaccruing loans											$	4,019		$	2,746			46.4	%
	Accruing loans 90 days past due												4,397			1,252			251.2	%
	Nonperforming loans												8,416			3,998			110.5	%
	Foreclosed properties												2,578			527			389.2	%
	Nonperforming assets												10,994			4,525			143.0	%
	Allowance for loan losses												8,854			7,681			15.3	%
	Loans charged off												2,479			827			199.8	%
	Recoveries of loans charged off												214			283			-24.4	%
	Net loan charge-offs (recoveries)												2,265			544			316.4	%
	Net charge-offs to average loans*												0.78	%		0.21	%
	Nonperforming loans to total assets												1.04	%		0.57	%
	Allowance coverage of nonperforming loans												105.20	%		192.12	%
	Allowance for loan losses to gross loans												1.43	%		1.48	%
	Allowance for loan losses to net loans												1.45	%		1.51	%
Subsidiary earnings summary:
	Bank of                     Net interest income		$	7,988		$	7,835			2.0	%	$	15,963		$	15,557			2.6	%
	Granite                      Loan loss provision			1,149			977			17.6	%		2,284			1,738			31.4	%
		Noninterest income		1,863			1,700			9.6	%		3,748			3,651			2.7	%
		Noninterest expense		3,835			3,871			-0.9	%		7,574			7,519			0.7	%
		Income taxes		1,560			1,341			16.3	%		3,198			2,977			7.4	%
		Net income		3,307			3,346			-1.2	%		6,655			6,974			-4.6	%
	GLL &                      Net interest income		$	1,389		$	709			95.9	%	$	2,355		$	1,499			57.1	%
	Associates                 Loan loss provision			—			30			-100.0	%		—			60			-100.0	%
	(mortgage                 Noninterest income			1,954			765			155.4	%		3,415			1,561			118.8	%
	bank)                         Noninterest expense			2,208			1,153			91.5	%		3,817			2,318			64.7	%
		Income taxes		454			128			254.7	%		781			297			163.0	%
		Net income		681			193			252.8	%		1,172			445			163.4	%

* Annualized based on number of days in the period More

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			Quarters Ended
Bank of Granite Corporation
Supplemental Quarterly Financial Data			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,
(in thousands except per share data)			2003			2003			2002			2002			2002
Consolidated earnings summary:
	Interest income, taxable equivalent		$	12,443		$	11,762		$	12,120		$	11,721		$	11,693
	Interest expense			2,674			2,386			2,534			2,668			2,703
	Net interest income, taxable equivalent			9,769			9,376			9,586			9,053			8,990
	Taxable equivalent adjustment			368			400			411			418			440
	Net interest income			9,401			8,976			9,175			8,635			8,550
	Loan loss provision			1,149			1,136			797			897			1,007
	Noninterest income			3,817			3,333			3,354			2,925			2,468
	Noninterest expense			6,136			5,371			5,388			5,017			5,090
	Income before income taxes			5,933			5,802			6,344			5,646			4,921
	Income taxes			2,014			1,965			2,158			1,963			1,469
	Net income		$	3,919		$	3,837		$	4,186		$	3,683		$	3,452
	Earnings per share — Basic		$	0.30		$	0.29		$	0.31		$	0.27		$	0.25
	Earnings per share — Diluted			0.30			0.29			0.31			0.27			0.25
	Average shares — Basic			13,198			13,292			13,407			13,494			13,600
	Average shares — Diluted			13,200			13,294			13,414			13,502			13,611
Consolidated ending balance sheet data:
	Total assets		$	811,086		$	762,299		$	742,015		$	732,092		$	701,295
	Total deposits			600,084			566,096			547,249			537,756			522,040
	Loans (gross)			618,039			577,521			565,374			542,346			517,851
	Shareholders’ equity			130,040			127,881			127,443			127,490			126,118
Consolidated average balance sheet data:
	Total assets		$	785,070		$	731,640		$	723,712		$	702,543		$	698,931
	Total deposits			577,105			545,920			537,056			524,366			521,259
	Loans (gross)			603,001			562,039			551,624			529,895			514,203
	Shareholders’ equity			128,676			127,625			127,310			126,264			125,441
Consolidated performance ratios:
	Return on average assets*			2.00	%		2.13	%		2.29	%		2.08	%		1.98	%
	Return on average equity*			12.22	%		12.19	%		13.04	%		11.57	%		11.04	%
	Efficiency ratio			45.16	%		42.26	%		41.64	%		41.89	%		44.42	%
Consolidated asset quality data and ratios:
	Nonaccruing loans		$	4,019		$	5,079		$	3,265		$	2,992		$	2,746
	Accruing loans 90 days past due			4,397			2,241			1,153			1,558			1,252
	Nonperforming loans			8,416			7,320			4,418			4,550			3,998
	Foreclosed properties			2,578			1,203			1,203			1,197			527
	Nonperforming assets			10,994			8,523			5,621			5,747			4,525
	Allowance for loan losses			8,854			9,318			8,835			8,223			7,681
	Loans charged off			1,678			801			308			420			526
	Recoveries of loans charged off			66			149			123			65			55
	Net loan charge-offs (recoveries)			1,612			652			185			355			471
	Net charge-offs to average loans*			1.07	%		0.47	%		0.13	%		0.27	%		0.37	%
	Nonperforming loans to total assets			1.04	%		0.96	%		0.60	%		0.62	%		0.57	%
	Allowance coverage of nonperforming loans			105.20	%		127.30	%		199.98	%		180.73	%		192.12	%
	Allowance for loan losses to gross loans			1.43	%		1.61	%		1.56	%		1.52	%		1.48	%
	Allowance for loan losses to net loans			1.45	%		1.64	%		1.59	%		1.54	%		1.51	%
Subsidiary earnings summary:
	Bank of                     Net interest income		$	7,988		$	7,974		$	8,112		$	7,915		$	7,835
	Granite                      Loan loss provision			1,149			1,136			797			887			977
		Noninterest income		1,863			1,885			1,930			1,962			1,700
		Noninterest expense		3,835			3,737			3,662			3,730			3,871
		Income taxes		1,560			1,638			1,826			1,787			1,341
		Net income		3,307			3,348			3,757			3,473			3,346
	GLL &                      Net interest income		$	1,389		$	966		$	1,070		$	720		$	709
	Associates                 Loan loss provision			—			—			—			10			30
	(mortgage                 Noninterest income			1,954			1,461			1,425			964			765
	bank)                         Noninterest expense			2,208			1,609			1,663			1,245			1,153
		Income taxes		454			327			333			176			128
		Net income		681			491			499			263			193

* Annualized based on number of days in the period.

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