Bank Of Granite 8-K Financial statements and exhibits

Exhibit 99 (a)

Bank of Granite Corporation
   News

For Release: October 14, 2003

BANK OF GRANITE REPORTS IMPROVED EARNINGS FOR
THIRD QUARTER AND NINE MONTHS

      Bank of Granite Corporation (NASDAQ: GRAN) has reported improved earnings for the third quarter and nine month periods, both ending September 30, 2003.

      For the third quarter, net income was $4,231,091 compared with $3,682,584 earned in the third quarter of 2002—an increase of 14.9%. Quarterly per share income was 31¢ vs 27¢ for 2002’s third quarter, a per share increase of 14.8%.

      For the nine month period, also ending September 30, 2003, earnings were $11,987,431 compared with $10,916,458 for the third period of 2002—an increase of 9.8%. Per share earnings for the nine month period were 89¢ vs 80¢ for 2002, an increase of 11.3%.

      John A. Forlines, Jr., Chairman and Chief Executive Officer of Bank of Granite Corporation, said “these earnings were accomplished despite a very weak economy, particularly in the bank’s primary market area where unemployment remains around 10%.” He said the bank has new opportunities for increasing its future profitability in view of its acquisition of First Commerce Bank, in Charlotte, which was consummated on July 16 and also its new full service offices in Boone and Wilkesboro. The increase in earnings for the quarter and the full year can be attributed almost entirely to earnings produced by our bank’s mortgage company, GLL & Associates. The Company’s earnings for the third quarter, according to Mr. Forlines, met, and slightly exceeded, analysts’ expectations and the bank’s projections.

      Balance sheet numbers were increased because of the merger, with assets totaling $971,644,254, deposits $728,334,153, and loans $694,464,512 at the end of the third quarter. All of these are all-time highs for the bank.

      As he normally does, Mr. Forlines thanked all members of the Bank of Granite family for an “excellent effort” during a very difficult period. He especially commended the staff of GLL & Associates for the outstanding year they are having. Their year-to-date earnings are up 189.7%. Critical key management ratios remain outstanding. Earnings on average assets for the nine month period were 1.94% and the Company earned a 12.15% return on equity. The efficiency ratio was 45.05% and the capital to asset ratio of 15.97% indicates that Bank of Granite remains one of the soundest, best capitalized banks in nation.

      Bank of Granite Corporation is the parent company of Bank of Granite and GLL & Associates. The bank operates eighteen full-service banking offices in Caldwell, Catawba, and Burke Counties—the “Unifour” area of North Carolina, and in Mecklenburg, Watauga, and Wilkes Counties. A nineteenth office is under construction in Conover, in Catawba County, and will open next month. GLL & Associates, headquartered in Winston-Salem, originates home mortgages in the Catawba Valley and the Central and Southern Piedmont regions of North Carolina, in addition to Charlotte, Boone, Wilkesboro, and Hilton Head and Charleston in South Carolina. Bank of Granite Corporation has an estimated 6,000 shareholders with 13,673,401 shares of common stock outstanding as of September 30, 2003. Its stock is traded on the national NASDAQ Stock Market® under the symbol GRAN. It closed at $18.75 per share on September 30.

* * * * *

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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Bank of Granite Corporation				Three Months Ended										Nine Months Ended
Selected Financial Data				September 30,										September 30,
(in thousands except per share data)				2003				2002			% change			2003			2002			% change
Consolidated earnings summary:
	Interest income, taxable equivalent				$	14,052		$	11,721			19.9	%	$	38,257		$	35,323			8.3	%
	Interest expense					3,173			2,668			18.9	%		8,234			8,269			-0.4	%
	Net interest income, taxable equivalent					10,879			9,053			20.2	%		30,023			27,054			11.0	%
	Taxable equivalent adjustment					369			418			-11.7	%		1,137			1,321			-13.9	%
	Net interest income					10,510			8,635			21.7	%		28,886			25,733			12.3	%
	Loan loss provision					1,139			897			27.0	%		3,424			2,695			27.1	%
	Noninterest income					4,284			2,925			46.5	%		11,434			8,043			42.2	%
	Noninterest expense					7,171			5,017			42.9	%		18,677			14,928			25.1	%
	Income before income taxes					6,484			5,646			14.8	%		18,219			16,153			12.8	%
	Income taxes					2,253			1,963			14.8	%		6,232			5,237			19.0	%
	Net income				$	4,231		$	3,683			14.9	%	$	11,987		$	10,916			9.8	%
	Earnings per share — Basic				$	0.31		$	0.27			14.8	%	$	0.90		$	0.80			12.5	%
	Earnings per share — Diluted					0.31			0.27			14.8	%		0.89			0.80			11.3	%
	Average shares — Basic					13,617			13,494			0.9	%		13,370			13,595			-1.7	%
	Average shares — Diluted					13,692			13,502			1.4	%		13,437			13,599			-1.2	%
Consolidated balance sheet data at September 30:
	Total assets													$	971,644		$	732,092			32.7	%
	Total deposits														728,334			537,756			35.4	%
	Loans (gross)														694,465			542,346			28.0	%
	Shareholders’ equity														141,762			127,490			11.2	%
Consolidated average balance sheet data:
	Total assets				$	955,694		$	702,543			36.0	%	$	825,563		$	703,081			17.4	%
	Total deposits					707,876			519,356			36.3	%		610,300			519,356			17.5	%
	Loans (gross)					671,057			529,895			26.6	%		589,463			518,470			13.7	%
	Shareholders’ equity					139,294			126,264			10.3	%		131,865			125,626			5.0	%
Consolidated performance ratios:
	Return on average assets*					1.76	%		2.08	%					1.94	%		2.08	%
	Return on average equity*					12.05	%		11.57	%					12.15	%		11.62	%
	Efficiency ratio					47.29	%		41.89	%					45.05	%		42.53	%
Consolidated asset quality data and ratios:
	Nonaccruing loans													$	6,690		$	2,992			123.6	%
	Accruing loans 90 days past due														4,061			1,558			160.7	%
	Nonperforming loans														10,751			4,550			136.3	%
	Foreclosed properties														2,819			1,197			135.5	%
	Nonperforming assets														13,570			5,747			136.1	%
	Allowance for loan losses														11,238			8,223			36.7	%
	Loans charged off														3,214			1,247			157.7	%
	Recoveries of loans charged off														331			348			-4.9	%
	Net loan charge-offs (recoveries)														2,883			899			220.7	%
	Net charge-offs to average loans*														0.65	%		0.23	%
	Nonperforming loans to total assets														1.11	%		0.62	%
	Allowance coverage of nonperforming loans														104.53	%		180.73	%
	Allowance for loan losses to gross loans														1.62	%		1.52	%
	Allowance for loan losses to net loans														1.64	%		1.54	%
Subsidiary earnings summary:
	Bank of            Net interest income				$	8,990		$	7,915			13.6	%	$	24,952		$	23,472			6.3	%
	Granite             Loan loss provision					1,139			887			28.4	%		3,424			2,625			30.4	%
			Noninterest income			1,878			1,962			-4.3	%		5,626			5,613			0.2	%
			Noninterest expense			4,607			3,730			23.5	%		12,179			11,249			8.3	%
			Income taxes			1,667			1,787			-6.7	%		4,865			4,764			2.1	%
			Net income			3,455			3,473			-0.5	%		10,110			10,447			-3.2	%
	GLL & Net interest income				$	1,553		$	720			115.7	%	$	3,909		$	2,219			76.2	%
	Associates            Loan loss provision					—			10			-100.0	%		—			70			-100.0	%
	(mortgage            Noninterest income					2,408			964			149.8	%		5,824			2,525			130.7	%
		bank)               Noninterest expense				2,496			1,245			100.5	%		6,315			3,564			77.2	%
			Income taxes			586			176			233.0	%		1,367			472			189.6	%
			Net income			879			263			234.2	%		2,051			708			189.7	%

* Annualized based on number of days in the period. More

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			Quarters Ended
Bank of Granite Corporation
Supplemental Quarterly Financial Data			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
(in thousands except per share data)			2003			2003			2003			2002			2002
Consolidated earnings summary:
	Interest income, taxable equivalent		$	14,052		$	12,443		$	11,762		$	12,120		$	11,721
	Interest expense			3,173			2,674			2,386			2,534			2,668
	Net interest income, taxable equivalent			10,879			9,769			9,376			9,586			9,053
	Taxable equivalent adjustment			369			368			400			411			418
	Net interest income			10,510			9,401			8,976			9,175			8,635
	Loan loss provision			1,139			1,149			1,136			797			897
	Noninterest income			4,284			3,817			3,333			3,354			2,925
	Noninterest expense			7,171			6,136			5,371			5,388			5,017
	Income before income taxes			6,484			5,933			5,802			6,344			5,646
	Income taxes			2,253			2,014			1,965			2,158			1,963
	Net income		$	4,231		$	3,919		$	3,837		$	4,186		$	3,683
	Earnings per share — Basic		$	0.31		$	0.30		$	0.29		$	0.31		$	0.27
	Earnings per share — Diluted			0.31			0.30			0.29			0.31			0.27
	Average shares — Basic			13,617			13,198			13,292			13,407			13,494
	Average shares — Diluted			13,692			13,200			13,294			13,414			13,502
Consolidated ending balance sheet data:
	Total assets		$	971,644		$	811,086		$	762,299		$	742,015		$	732,092
	Total deposits			728,334			600,084			566,096			547,249			537,756
	Loans (gross)			694,465			567,301			577,521			565,374			542,346
	Shareholders’ equity			141,762			130,040			127,881			127,443			127,490
Consolidated average balance sheet data:
	Total assets		$	955,694		$	785,070		$	731,640		$	723,712		$	702,543
	Total deposits			707,876			577,105			545,920			537,056			524,366
	Loans (gross)			671,057			535,295			562,039			551,624			529,895
	Shareholders’ equity			139,294			128,676			127,625			127,310			126,264
Consolidated performance ratios:
	Return on average assets*			1.76	%		2.00	%		2.13	%		2.29	%		2.08	%
	Return on average equity*			12.05	%		12.22	%		12.19	%		13.04	%		11.57	%
	Efficiency ratio			47.29	%		45.16	%		42.26	%		41.64	%		41.89	%
Consolidated asset quality data and ratios:
	Nonaccruing loans		$	6,690		$	4,019		$	5,079		$	3,265		$	2,992
	Accruing loans 90 days past due			4,061			4,397			2,241			1,153			1,558
	Nonperforming loans			10,751			8,416			7,320			4,418			4,550
	Foreclosed properties			2,819			2,578			1,203			1,203			1,197
	Nonperforming assets			13,570			10,994			8,523			5,621			5,747
	Allowance for loan losses			11,238			8,854			9,318			8,835			8,223
	Loans charged off			735			1,678			801			308			420
	Recoveries of loans charged off			116			66			149			123			65
	Net loan charge-offs (recoveries)			619			1,612			652			185			355
	Net charge-offs to average loans*			0.37	%		1.21	%		0.47	%		0.13	%		0.27	%
	Nonperforming loans to total assets			1.11	%		1.04	%		0.96	%		0.60	%		0.62	%
	Allowance coverage of nonperforming loans			104.53	%		105.20	%		127.30	%		199.98	%		180.73	%
	Allowance for loan losses to gross loans			1.62	%		1.56	%		1.61	%		1.56	%		1.52	%
	Allowance for loan losses to net loans			1.64	%		1.59	%		1.64	%		1.59	%		1.54	%
Subsidiary earnings summary:
	Bank of            Net interest income		$	8,990		$	7,988		$	7,974		$	8,112		$	7,915
	Granite             Loan loss provision			1,139			1,149			1,136			797			887
		Noninterest income		1,878			1,863			1,885			1,930			1,962
		Noninterest expense		4,607			3,835			3,737			3,662			3,730
		Income taxes		1,667			1,560			1,638			1,826			1,787
		Net income		3,455			3,307			3,348			3,757			3,473
	GLL &            Net interest income		$	1,553		$	1,389		$	966		$	1,070		$	720
	Associates       Loan loss provision			—			—			—			—			10
	(mortgage       Noninterest income			2,408			1,954			1,461			1,425			964
		bank)           Noninterest expense		2,496			2,208			1,609			1,663			1,245
		Income taxes		586			454			327			333			176
		Net income		879			681			491			499			263

* Annualized based on number of days in the period.

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