Bank Of Granite 8-K Financial statements and exhibits

Exhibit 99 (a)

Bank of Granite Corporation
     News

For Release: July 13, 2004

BANK OF GRANITE CORPORATION REPORTS EARNINGS FOR
SECOND QUARTER AND SIX MONTHS

     Bank of Granite reported that second quarter earnings improved slightly when compared to the first quarter of 2004, but were behind when compared to the second quarter earnings for 2003.

     For the second quarter of 2004, ending June 30, Bank of Granite Corporation (GRAN) reported diluted per share earnings of 24¢ vs. 30¢ for 2003, a decline of 20%. Net income for the quarter was $3,315,690 compared to $3,919,157 for the same period in 2003—a decline of 15.4%.

     For the six-month period, also ending June 30, net income was $6,307,017 in 2004 compared to $7,756,340 for the first six months of 2003—a decline of 18.7%. On a per share basis, earnings for the first six months of 2004 were 46¢ vs. 59¢ for the comparable six month period in 2003—a decline of 22%.

     John A. Forlines, Jr., Chairman and CEO of Bank of Granite Corporation, characterized the first six months’ earnings as “disappointing” and said the Company would be helped going forward by the action of the Federal Reserve Bank, which on June 30, the last business day of the quarter, raised its target rate for overnight funds by 25 basis points to 1.25%. “This should enable our interest margin to increase in the future,” Forlines said. He said it appears likely the Fed will continue to increase rates throughout the year as the economy improves. Negatively impacting year-to-date earnings was a 77.5% decline in earnings of the Company’s mortgage subsidiary, Granite Mortgage, Inc. and the additional expenses of the banking offices added in 2003. Forlines thanked the Bank of Granite staff for their hard work during the period and said he hoped earnings will increase in future quarters as the economy improves and the new offices become more profitable.

     Consolidated balance sheet data at June 30, 2004 revealed total assets of $993,985,159, up 22.5% compared with 2003. Deposits of $744,540,551 were up 24.1% and total loans of $740,931,727 were up 30.6%. All of these amounts are at all-time highs for the bank. Forlines said he expects cash 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 the South Carolina cities of Hilton Head and Charleston. Bank of Granite Corporation has an estimated 6,700 shareholders with approximately 13,466,000 shares of common stock outstanding as of June 30, 2004. Its stock trades on the national NASDAQ Stock Market® under the symbol GRAN. It closed on June 30, 2004 at $20.89 compared the $17.02 on June 30, 2003—an increase of 22.7%

* * * * *

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

5

Bank of Granite Corporation	Three Months Ended									Six Months Ended
Selected Financial Data	June 30,									June 30,
(in thousands except per share data)	2004			2003			% change			2004			2003			% change
Consolidated earnings summary:
Interest income, taxable equivalent	$	14,018		$	12,443			12.7	%	$	27,694		$	24,205			14.4	%
Interest expense		3,073			2,674			14.9	%		6,152			5,061			21.6	%
Net interest income, taxable equivalent		10,945			9,769			12.0	%		21,542			19,144			12.5	%
Taxable equivalent adjustment		340			368			-7.6	%		705			768			-8.2	%
Net interest income		10,605			9,401			12.8	%		20,837			18,376			13.4	%
Loan loss provision		1,104			1,149			-3.9	%		2,349			2,284			2.8	%
Noninterest income		2,875			3,817			-24.7	%		5,524			7,150			-22.7	%
Noninterest expense		7,475			6,136			21.8	%		14,683			11,506			27.6	%
Income before income taxes		4,901			5,933			-17.4	%		9,329			11,736			-20.5	%
Income taxes		1,585			2,014			-21.3	%		3,022			3,980			-24.1	%
Net income	$	3,316		$	3,919			-15.4	%	$	6,307		$	7,756			-18.7	%
Earnings per share — Basic	$	0.25		$	0.30			-16.7	%	$	0.46		$	0.59			-22.0	%
Earnings per share — Diluted		0.24			0.30			-20.0	%		0.46			0.59			-22.0	%
Average shares — Basic		13,522			13,198			2.5	%		13,572			13,244			2.5	%
Average shares — Diluted		13,569			13,200			2.8	%		13,626			13,247			2.9	%
Consolidated balance sheet data at June 30:
Total assets										$	993,985		$	811,086			22.5	%
Total deposits											744,541			600,084			24.1	%
Loans (gross)											740,932			567,301			30.6	%
Shareholders’ equity											140,077			130,040			7.7	%
Consolidated average balance sheet data:
Total assets	$	987,822		$	785,070			25.8	%	$	977,560		$	758,355			28.9	%
Total deposits		738,039			561,512			31.4	%		731,425			561,512			30.3	%
Loans (gross)		732,768			535,295			36.9	%		726,311			548,667			32.4	%
Shareholders’ equity		140,739			128,676			9.4	%		141,613			128,151			10.5	%
Consolidated performance ratios:
Return on average assets*		1.35	%		2.00	%					1.30	%		2.06	%
Return on average equity*		9.48	%		12.22	%					8.96	%		12.20	%
Efficiency ratio		54.09	%		45.16	%					54.25	%		43.76	%
Consolidated asset quality data and ratios:
Nonaccruing loans										$	4,192		$	4,019			4.3	%
Accruing loans 90 days past due											6,274			4,397			42.7	%
Nonperforming loans											10,466			8,416			24.4	%
Foreclosed properties											1,462			2,578			-43.3	%
Nonperforming assets											11,928			10,994			8.5	%
Allowance for loan losses											11,864			8,854			34.0	%
Loans charged off											1,476			2,479			-40.5	%
Recoveries of loans charged off											191			214			-10.7	%
Net loan charge-offs (recoveries)											1,285			2,265			-43.3	%
Net charge-offs to average loans*											0.36	%		0.83	%
Nonperforming loans to total assets											1.05	%		1.04	%
Allowance coverage of nonperforming loans											113.36	%		105.20	%
Allowance for loan losses to gross loans											1.60	%		1.56	%
Allowance for loan losses to net loans											1.63	%		1.59	%
Subsidiary earnings summary:
Bank of Granite
Net interest income	$	9,595		$	7,988			20.1	%	$	19,066		$	15,963			19.4	%
Loan loss provision		1,104			1,149			-3.9	%		2,349			2,284			2.8	%
Noninterest income		1,895			1,863			1.7	%		3,617			3,748			-3.5	%
Noninterest expense		5,538			3,835			44.4	%		11,139			7,574			47.1	%
Income taxes		1,492			1,560			-4.4	%		2,846			3,198			-11.0	%
Net income		3,356			3,307			1.5	%		6,349			6,655			-4.6	%
Granite Mortgage
Net interest income	$	1,081		$	1,389			-22.2	%	$	1,888		$	2,355			-19.8	%
Loan loss provision		—			—			n/a			—			—			n/a
Noninterest income		980			1,954			-49.8	%		1,907			3,415			-44.2	%
Noninterest expense		1,828			2,208			-17.2	%		3,355			3,817			-12.1	%
Income taxes		93			454			-79.5	%		176			781			-77.5	%
Net income		140			681			-79.4	%		264			1,172			-77.5	%

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

6

Bank of Granite Corporation	Quarters Ended
Supplemental Quarterly Financial Data	Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,
(in thousands except per share data)	2004			2004			2003			2003			2003
Consolidated earnings summary:
Interest income, taxable equivalent	$	14,018		$	13,676		$	13,948		$	14,052		$	12,443
Interest expense		3,073			3,078			3,155			3,173			2,674
Net interest income, taxable equivalent		10,945			10,598			10,793			10,879			9,769
Taxable equivalent adjustment		340			365			372			369			368
Net interest income		10,605			10,233			10,421			10,510			9,401
Loan loss provision		1,104			1,245			1,340			1,139			1,149
Noninterest income		2,875			2,649			3,004			4,284			3,817
Noninterest expense		7,475			7,209			7,187			7,171			6,136
Income before income taxes		4,901			4,428			4,898			6,484			5,933
Income taxes		1,585			1,437			1,578			2,253			2,014
Net income	$	3,316		$	2,991		$	3,320		$	4,231		$	3,919
Earnings per share — Basic	$	0.25		$	0.22		$	0.24		$	0.31		$	0.30
Earnings per share — Diluted		0.24			0.22			0.24			0.31			0.30
Average shares — Basic		13,522			13,623			13,640			13,617			13,198
Average shares — Diluted		13,569			13,683			13,740			13,692			13,200
Consolidated ending balance sheet data:
Total assets	$	993,985		$	977,445		$	971,383		$	971,644		$	811,086
Total deposits		744,541			740,846			735,099			728,334			600,084
Loans (gross)		740,932			726,375			715,845			694,465			567,301
Shareholders’ equity		140,077			142,300			141,815			141,762			130,040
Consolidated average balance sheet data:
Total assets	$	987,822		$	967,298		$	970,788		$	959,980		$	785,070
Total deposits		738,039			724,811			730,181			707,876			577,105
Loans (gross)		732,768			719,853			704,721			671,057			535,295
Shareholders’ equity		140,739			142,486			141,615			139,294			128,676
Consolidated performance ratios:
Return on average assets*		1.35	%		1.24	%		1.36	%		1.75	%		2.00	%
Return on average equity*		9.48	%		8.44	%		9.30	%		12.05	%		12.22	%
Efficiency ratio		54.09	%		54.42	%		52.09	%		47.29	%		45.16	%
Consolidated asset quality data and ratios:
Nonaccruing loans	$	4,192		$	4,229		$	8,115		$	6,690		$	4,019
Accruing loans 90 days past due		6,274			2,568			3,218			4,061			4,397
Nonperforming loans		10,466			6,797			11,333			10,751			8,416
Foreclosed properties		1,462			1,709			1,775			2,819			2,578
Nonperforming assets		11,928			8,506			13,108			13,570			10,994
Allowance for loan losses		11,864			11,583			10,799			11,238			8,854
Loans charged off		920			556			1,874			735			1,678
Recoveries of loans charged off		96			95			95			116			66
Net loan charge-offs (recoveries)		824			461			1,779			619			1,612
Net charge-offs to average loans*		0.45	%		0.26	%		1.00	%		0.37	%		1.21	%
Nonperforming loans to total assets		1.05	%		0.70	%		1.17	%		1.11	%		1.04	%
Allowance coverage of nonperforming loans		113.36	%		170.41	%		95.29	%		104.53	%		105.20	%
Allowance for loan losses to gross loans		1.60	%		1.59	%		1.51	%		1.62	%		1.56	%
Allowance for loan losses to net loans		1.63	%		1.62	%		1.53	%		1.64	%		1.59	%
Subsidiary earnings summary:
Bank of Granite
Net interest income	$	9,595		$	9,472		$	9,410		$	8,990		$	7,988
Loan loss provision		1,104			1,245			1,340			1,139			1,149
Noninterest income		1,895			1,722			1,940			1,878			1,863
Noninterest expense		5,538			5,602			5,300			4,607			3,835
Income taxes		1,492			1,354			1,449			1,667			1,560
Net income		3,356			2,993			3,261			3,455			3,307
Granite Mortgage
Net interest income	$	1,081		$	807		$	1,060		$	1,553		$	1,389
Loan loss provision		—			—			—			—			—
Noninterest income		980			927			1,069			2,408			1,954
Noninterest expense		1,828			1,527			1,806			2,496			2,208
Income taxes		93			83			129			586			454
Net income		140			124			194			879			681

* Annualized based on number of days in the period.

7