Bank Of Granite 8-K Results of Operations and Financial Condition

Exhibit 99 (a)

Bank of Granite Corporation
     News

For Release: July 11, 2005

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

     Despite a rather fragile economy in its core market area, Bank of Granite Corporation (NASDAQ: GRAN) reported increased earnings for the second quarter and for the six month period, both ending June 30, 2005.

     For the second quarter, ending June 30, Bank of Granite Corporation (GRAN) reported diluted per share earnings of 30¢ per share vs. 24¢ for 2004, an increase of 25%. Net income for the quarter was $3,908,030 compared to $3,315,690 in 2004—an increase of 17.9%.

     For the six-month period, also ending June 30, 2005, net income was $7,093,267 vs. $6,307,017 for the first six months of 2004—an increase of 12.5%. On a per share basis, earnings for the first six months of 2005 were 53¢ vs. 46¢ for the comparable six-month period of 2004—an increase of 15.2%.

     Charles M. Snipes, President and CEO, said he was “proud to announce these improved earnings” and he expressed thanks to the entire Bank of Granite family for their hard work during the period. Snipes attributed the increase in earnings to loan growth and the Federal Reserve’s recent rise in short-term rates. The Fed has increased short-term interest rates nine times within the past year. The target Fed Funds rate is now 3¹/4%, up from 1¹/4% a year ago. He said he hoped earnings would show further improvement in future quarters as the economy strengthens and the bank’s newly opened offices become more profitable.

     Consolidated balance sheet data as of June 30, 2005, revealed total assets of $1,069,400,263 compared with $993,985,159 in 2004, a gain of 7.6%. Deposits of $833,453,066 were up 11.9%, from $744,540,551, and total loans of $814,518,341, compared with $740,931,727, an increase of 9.9%. All of these balance sheet numbers were all-time highs for the bank. Snipes said he expects cash dividends to increase for the 52nd consecutive year in 2005, 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. The bank operates 21 full-service banking offices in Caldwell, Catawba, and Burke counties—the “Unifour” area of North Carolina, and in Mecklenburg, Watauga, Forsyth 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, South Carolina. Bank of Granite Corporation has an estimated 6,900 shareholders with approximately 13,120,000 shares of common stock outstanding as of June 30, 2005. Its stock trades on the national NASDAQ Stock Market^® under the symbol GRAN. The closing price of the stock on June 30, 2005 was $19.14.

* * * * *

Please see the attached “Financial Data” tables.
For further information, contact Kirby Tyndall, 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

5

Bank of Granite Corporation	Three Months Ended									Six Months Ended
Selected Financial Data	June 30,									June 30,
(in thousands except per share data)	2005			2004			% change			2005			2004			% change
Consolidated earnings summary:
Interest income, taxable equivalent	$	16,602		$	14,018			18.4	%	$	31,875		$	27,694			15.1	%
Interest expense		4,688			3,073			52.6	%		8,764			6,152			42.5	%
Net interest income, taxable equivalent		11,914			10,945			8.9	%		23,111			21,542			7.3	%
Taxable equivalent adjustment		289			340			-15.0	%		599			705			-15.0	%
Net interest income		11,625			10,605			9.6	%		22,512			20,837			8.0	%
Loan loss provision		892			1,104			-19.2	%		2,122			2,349			-9.7	%
Noninterest income		3,152			2,875			9.6	%		5,610			5,524			1.6	%
Noninterest expense		7,936			7,475			6.2	%		15,252			14,683			3.9	%
Income before income taxes		5,949			4,901			21.4	%		10,748			9,329			15.2	%
Income taxes		2,041			1,585			28.8	%		3,655			3,022			20.9	%
Net income	$	3,908		$	3,316			17.9	%	$	7,093		$	6,307			12.5	%
Earnings per share — Basic	$	0.30		$	0.25			20.0	%	$	0.54		$	0.46			17.4	%
Earnings per share — Diluted		0.30			0.24			25.0	%		0.53			0.46			15.2	%
Average shares — Basic		13,184			13,522			-2.5	%		13,234			13,572			-2.5	%
Average shares — Diluted		13,222			13,569			-2.6	%		13,277			13,626			-2.6	%
Consolidated balance sheet data at June 30:
Total assets										$	1,069,400		$	993,985			7.6	%
Total deposits											833,453			744,541			11.9	%
Loans (gross)											814,518			740,932			9.9	%
Shareholders’ equity											140,567			140,077			0.3	%
Consolidated average balance sheet data:
Total assets	$	1,058,591		$	987,822			7.2	%	$	1,045,362		$	977,560			6.9	%
Total deposits		805,296			731,425			10.1	%		788,939			731,425			7.9	%
Loans (gross)		807,808			732,768			10.2	%		796,244			726,311			9.6	%
Shareholders’ equity		139,973			140,739			-0.5	%		140,431			141,613			-0.8	%
Consolidated performance ratios:
Return on average assets*		1.48	%		1.35	%					1.37	%		1.30	%
Return on average equity*		11.20	%		9.48	%					10.19	%		8.96	%
Efficiency ratio		52.67	%		54.09	%					53.10	%		54.25	%
Consolidated asset quality data and ratios:
Nonaccruing loans										$	5,599		$	4,192			33.6	%
Accruing loans 90 days past due											3,292			6,274			-47.5	%
Nonperforming loans											8,891			10,466			-15.0	%
Foreclosed properties											1,640			1,462			12.2	%
Nonperforming assets											10,531			11,928			-11.7	%
Allowance for loan losses											14,065			11,864			18.6	%
Loans charged off											1,868			1,476			26.6	%
Recoveries of loans charged off											147			191			-23.0	%
Net loan charge-offs (recoveries)											1,721			1,285			33.9	%
Net charge-offs to average loans*											0.44	%		0.36	%
Nonperforming loans to total assets											0.83	%		1.05	%
Allowance coverage of nonperforming loans											158.19	%		113.36	%
Allowance for loan losses to gross loans											1.73	%		1.60	%
Allowance for loan losses to net loans											1.76	%		1.63	%
Subsidiary earnings summary:
Bank of Granite
Net interest income	$	10,908		$	9,595			13.7	%	$	21,151		$	19,066			10.9	%
Loan loss provision		886			1,104			-19.7	%		2,110			2,349			-10.2	%
Noninterest income		2,111			1,895			11.4	%		3,749			3,617			3.6	%
Noninterest expense		6,141			5,538			10.9	%		11,886	��		11,139			6.7	%
Income taxes		1,975			1,492			32.4	%		3,574			2,846			25.6	%
Net income		4,017			3,356			19.7	%		7,330			6,349			15.5	%
Granite Mortgage
Net interest income	$	801		$	1,081			-25.9	%	$	1,509		$	1,888			-20.1	%
Loan loss provision		6			—			n/a			12			—			n/a
Noninterest income		1,041			980			6.2	%		1,862			1,907			-2.4	%
Noninterest expense		1,679			1,828			-8.2	%		3,169			3,355			-5.5	%
Income taxes		66			93			-29.0	%		81			176			-54.0	%
Net income		97			140			-30.7	%		121			264			-54.2	%

* 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)	2005			2005			2004			2004			2004
Consolidated earnings summary:
Interest income, taxable equivalent	$	16,602		$	15,273		$	14,818		$	14,100		$	14,018
Interest expense		4,688			4,076			3,697			3,259			3,073
Net interest income, taxable equivalent		11,914			11,197			11,121			10,841			10,945
Taxable equivalent adjustment		289			311			321			321			340
Net interest income		11,625			10,886			10,800			10,520			10,605
Loan loss provision		892			1,230			1,412			1,678			1,104
Noninterest income		3,152			2,458			2,883			2,850			2,875
Noninterest expense		7,936			7,315			7,356			7,075			7,475
Income before income taxes		5,949			4,799			4,915			4,617			4,901
Income taxes		2,041			1,614			1,622			1,499			1,585
Net income	$	3,908		$	3,185		$	3,293		$	3,118		$	3,316
Earnings per share — Basic	$	0.30		$	0.24		$	0.25		$	0.23		$	0.25
Earnings per share — Diluted		0.30			0.24			0.25			0.23			0.24
Average shares — Basic		13,184			13,285			13,352			13,426			13,522
Average shares — Diluted		13,222			13,323			13,401			13,468			13,569
Consolidated ending balance sheet data:
Total assets	$	1,069,400		$	1,039,124		$	1,032,238		$	1,004,006		$	993,985
Total deposits		833,453			795,929			749,862			772,672			744,541
Loans (gross)		814,518			792,509			778,137			753,335			740,932
Shareholders’ equity		140,567			139,922			141,016			140,993			140,077
Consolidated average balance sheet data:
Total assets	$	1,058,591		$	1,032,133		$	1,016,830		$	1,000,136		$	987,822
Total deposits		805,296			772,582			759,430			763,643			738,039
Loans (gross)		807,808			784,679			762,644			745,999			732,768
Shareholders’ equity		139,973			140,889			140,756			140,111			140,739
Consolidated performance ratios:
Return on average assets*		1.48	%		1.25	%		1.29	%		1.24	%		1.35	%
Return on average equity*		11.20	%		9.17	%		9.31	%		8.85	%		9.48	%
Efficiency ratio		52.67	%		53.57	%		52.53	%		51.68	%		54.09	%
Consolidated asset quality data and ratios:
Nonaccruing loans	$	5,599		$	6,791		$	6,634		$	5,533		$	4,192
Accruing loans 90 days past due		3,292			4,211			4,227			3,927			6,274
Nonperforming loans		8,891			11,002			10,861			9,460			10,466
Foreclosed properties		1,640			1,790			1,280			1,352			1,462
Nonperforming assets		10,531			12,792			12,141			10,812			11,928
Allowance for loan losses		14,065			13,970			13,665			12,801			11,864
Loans charged off		851			1,017			688			875			920
Recoveries of loans charged off		55			92			139			135			96
Net loan charge-offs (recoveries)		796			925			549			740			824
Net charge-offs to average loans*		0.40	%		0.48	%		0.29	%		0.39	%		0.45	%
Nonperforming loans to total assets		0.83	%		1.06	%		1.05	%		0.94	%		1.05	%
Allowance coverage of nonperforming loans		158.19	%		126.98	%		125.82	%		135.32	%		113.36	%
Allowance for loan losses to gross loans		1.73	%		1.76	%		1.76	%		1.70	%		1.60	%
Allowance for loan losses to net loans		1.76	%		1.79	%		1.79	%		1.73	%		1.63	%
Subsidiary earnings summary:
Bank of Granite
Net interest income	$	10,908		$	10,243		$	9,960		$	9,728		$	9,595
Loan loss provision		886			1,224			1,406			1,676			1,104
Noninterest income		2,111			1,637			1,870			1,926			1,895
Noninterest expense		6,141			5,743			5,516			5,401			5,538
Income taxes		1,975			1,599			1,523			1,417			1,492
Net income		4,017			3,314			3,385			3,160			3,356
Granite Mortgage
Net interest income	$	801		$	708		$	926		$	859		$	1,081
Loan loss provision		6			6			6			2			—
Noninterest income		1,041			820			1,014			924			980
Noninterest expense		1,679			1,489			1,693			1,579			1,828
Income taxes		66			15			99			82			93
Net income		97			24			148			122			140

* Annualized based on number of days in the period.

7