Bank Of Granite 8-K Bank of Granite Corporation Reports Earnings Decline for First Quarter of 2004

Exhibit 99 (a)

Bank of Granite Corporation
     News

For Release: April 12, 2004

BANK OF GRANITE CORPORATION REPORTS EARNINGS DECLINE
FOR FIRST QUARTER OF 2004

     Bank of Granite Corporation (NASDAQ: GRAN) reported a decline in earnings for the first quarter of 2004, caused by a weak economy, continued compressed interest spreads, a substantial decline in mortgage income, and a non-recurring charge to earnings of approximately 2¢ per share relating to a previously announced personnel matter.

     First quarter per share earnings were 22¢ in 2004 vs. 29¢ in 2003 – a decline of 24.1%. Net income for the quarter was $2,991,327 compared to $3,837,183 for the comparable quarter of 2003 – a decline of 22%. John A. Forlines, Jr., Chairman and Chief Executive Officer, said the Bank’s earnings, aside from the one-time charge, were down only 1.8%, but that overall Company earnings were further impacted by a 74.8% decline in earnings of its mortgage subsidiary. He said he expected improvement in future quarters in interest margin as interest rates trend upward, coupled with a pick-up in loan demand as the economy improves. Forlines, as he always does, thanked the entire Bank of Granite staff for their hard work during a very challenging quarter.

     Consolidated balance sheet data revealed total assets of $977,444,679, up 28.2% compared with the first quarter of 2003. Deposits of $740,845,652 were up 30.9% and total loans of $726,375,496, up 33.6%. All these amounts are all-time highs for the bank. Forlines said he expects dividends to increase for the 51st consecutive year in 2004, a record for any banking company in the country.

     Bank of Granite Corporation is the parent company of Bank of Granite and Granite Mortgage, Inc. (formerly GLL & Associates). The bank operates nineteen full-service banking offices in Caldwell, Catawba, and Burke Counties—the “Unifour” area of North Carolina, and in Mecklenburg, Watauga, and Wilkes Counties. Granite Mortgage, headquartered in Winston- Salem, originates home mortgages in the Catawba Valley and the Central and Southern Piedmont regions of North Carolina, in addition to Boone, Wilkesboro, and Hilton Head in South Carolina. Bank of Granite Corporation has an estimated 6,700 shareholders with 13,567,013 shares of common stock outstanding as of March 31, 2004. Its stock trades on the national NASDAQ Stock Market® under the symbol GRAN. It closed on March 31, 2004 at $20.67 compared to $16.61 on March 31, 2003—an increase of 24.4%.

* * * * *

Please see “Financial Data” tables, which are attached.
For further information, contact Kirby Tyndall, Chief Financial Officer
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
Selected Financial Data			March 31,
(in thousands except per share data)			2004			2003			% change
Consolidated earnings summary:
	Interest income, taxable equivalent		$	13,676		$	11,762			16.3	%
	Interest expense			3,078			2,386			29.0	%
	Interest income, taxable equivalent			10,598			9,376			13.0	%
	Taxable equivalent adjustment			365			400			-8.8	%
	Net interest income			10,233			8,976			14.0	%
	Loan loss provision			1,245			1,136			9.6	%
	Noninterest income			2,649			3,333			-20.5	%
	Noninterest expense			7,209			5,371			34.2	%
	Income before income taxes			4,428			5,802			-23.7	%
	Income taxes			1,437			1,965			-26.9	%
	Net income		$	2,991		$	3,837			-22.0	%
	Earnings per share — Basic		$	0.22		$	0.29			-24.1	%
	Earnings per share — Diluted			0.22			0.29			-24.1	%
	Average shares — Basic			13,623			13,292			2.5	%
	Average shares — Diluted			13,683			13,294			2.9	%
Consolidated balance sheet data at March 31:
	Total assets		$	977,445		$	762,299			28.2	%
	Total deposits			740,846			566,096			30.9	%
	Loans (gross)			726,375			577,521			25.8	%
	Shareholders’ equity			142,300			127,881			11.3	%
Consolidated average balance sheet data:
	Total assets		$	967,298		$	731,640			32.2	%
	Total deposits			724,811			545,920			32.8	%
	Loans (gross)			719,853			562,039			28.1	%
	Shareholders’ equity			142,486			127,625			11.6	%
Consolidated performance ratios:
	Return on average assets*			1.24	%		2.13	%
	Return on average equity*			8.44	%		12.19	%
	Efficiency ratio			54.42	%		42.26	%
Consolidated asset quality data and ratios:
	Nonaccruing loans		$	4,229		$	5,079			-16.7	%
	Accruing loans 90 days past due			2,568			2,241			14.6	%
	Nonperforming loans			6,797			7,320			-7.1	%
	Foreclosed properties			1,709			1,203			42.1	%
	Nonperforming assets			8,506			8,523			-0.2	%
	Allowance for loan losses			11,583			9,318			24.3	%
	Loans charged off			556			801			-30.6	%
	Recoveries of loans charged off			95			149			-36.2	%
	Net loan charge-offs (recoveries)			461			652			-29.3	%
	Net charge-offs to average loans*			0.26	%		0.47	%
	Nonperforming loans to total assets			0.70	%		0.96	%
	Allowance coverage of nonperforming loans			170.41	%		127.30	%
	Allowance for loan losses to gross loans			1.59	%		1.61	%
	Allowance for loan losses to net loans			1.62	%		1.64	%
Subsidiary earnings summary:
	Bank of Granite
		Net interest income	$	9,472		$	7,974			18.8	%
		Loan loss provision		1,245			1,136			9.6	%
		Noninterest income		1,722			1,885			-8.6	%
		Noninterest expense		5,602			3,737			49.9	%
		Income taxes		1,354			1,638			-17.3	%
		Net income		2,993			3,348			-10.6	%
	Granite Mortgage
		Net interest income	$	807		$	966			-16.5	%
		Loan loss provision		—			—			n/a
		Noninterest income		927			1,461			-36.6	%
		Noninterest expense		1,527			1,609			-5.1	%
		Income taxes		83			327			-74.6	%
		Net income		124			491			-74.7	%

* Annualized based on number of days in the period More

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Bank of Granite Corporation			Quarters Ended
Supplemental Quarterly Financial Data			Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,
(in thousands except per share data)			2004			2003			2003			2003			2003
Consolidated earnings summary:
	Interest income, taxable equivalent		$	13,676		$	13,948		$	14,052		$	12,443		$	11,762
	Interest expense			3,078			3,155			3,173			2,674			2,386
	Net interest income, taxable equivalent			10,598			10,793			10,879			9,769			9,376
	Taxable equivalent adjustment			365			372			369			368			400
	Net interest income			10,233			10,421			10,510			9,401			8,976
	Loan loss provision			1,245			1,340			1,139			1,149			1,136
	Noninterest income			2,649			3,004			4,284			3,817			3,333
	Noninterest expense			7,209			7,187			7,171			6,136			5,371
	Income before income taxes			4,428			4,898			6,484			5,933			5,802
	Income taxes			1,437			1,578			2,253			2,014			1,965
	Net income		$	2,991		$	3,320		$	4,231		$	3,919		$	3,837
	Earnings per share — Basic		$	0.22		$	0.24		$	0.31		$	0.30		$	0.29
	Earnings per share — Diluted			0.22			0.24			0.31			0.30			0.29
	Average shares — Basic			13,623			13,640			13,617			13,198			13,292
	Average shares — Diluted			13,683			13,740			13,692			13,200			13,294
Consolidated ending balance sheet data:
	Total assets		$	977,445		$	971,383		$	971,644		$	811,086		$	762,299
	Total deposits			740,846			735,099			728,334			600,084			566,096
	Loans (gross)			726,375			715,845			694,465			567,301			577,521
	Shareholders’ equity			142,300			141,815			141,762			130,040			127,881
Consolidated average balance sheet data:
	Total assets		$	967,298		$	970,788		$	959,980		$	785,070		$	731,640
	Total deposits			724,811			730,181			707,876			577,105			545,920
	Loans (gross)			719,853			704,721			671,057			535,295			562,039
	Shareholders’ equity			142,486			141,615			139,294			128,676			127,625
Consolidated performance ratios:
	Return on average assets*			1.24	%		1.36	%		1.75	%		2.00	%		2.13	%
	Return on average equity*			8.44	%		9.30	%		12.05	%		12.22	%		12.19	%
	Efficiency ratio			54.42	%		52.09	%		47.29	%		45.16	%		42.26	%
Consolidated asset quality data and ratios:
	Nonaccruing loans		$	4,229		$	8,115		$	6,690		$	4,019		$	5,079
	Accruing loans 90 days past due			2,568			3,218			4,061			4,397			2,241
	Nonperforming loans			6,797			11,333			10,751			8,416			7,320
	Foreclosed properties			1,709			1,775			2,819			2,578			1,203
	Nonperforming assets			8,506			13,108			13,570			10,994			8,523
	Allowance for loan losses			11,583			10,799			11,238			8,854			9,318
	Loans charged off			556			1,874			735			1,678			801
	Recoveries of loans charged off			95			95			116			66			149
	Net loan charge-offs (recoveries)			461			1,779			619			1,612			652
	Net charge-offs to average loans*			0.26	%		1.00	%		0.37	%		1.21	%		0.47	%
	Nonperforming loans to total assets			0.70	%		1.17	%		1.11	%		1.04	%		0.96	%
	Allowance coverage of nonperforming loans			170.41	%		95.29	%		104.53	%		105.20	%		127.30	%
	Allowance for loan losses to gross loans			1.59	%		1.51	%		1.62	%		1.56	%		1.61	%
	Allowance for loan losses to net loans			1.62	%		1.53	%		1.64	%		1.59	%		1.64	%
Subsidiary earnings summary:
	Bank of Granite Net interest income		$	9,472		$	9,410		$	8,990		$	7,988		$	7,974
		Loan loss provision		1,245			1,340			1,139			1,149			1,136
		Noninterest income		1,722			1,940			1,878			1,863			1,885
		Noninterest expense		5,602			5,300			4,607			3,835			3,737
		Income taxes		1,354			1,449			1,667			1,560			1,638
		Net income		2,993			3,261			3,455			3,307			3,348
	Granite Mortgage
		Net interest income	$	807		$	1,060		$	1,553		$	1,389		$	966
		Loan loss provision		—			—			—			—			—
		Noninterest income		927			1,069			2,408			1,954			1,461
		Noninterest expense		1,527			1,806			2,496			2,208			1,609
		Income taxes		83			129			586			454			327
		Net income		124			194			879			681			491

* Annualized based on number of days in the period.

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