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

Exhibit 99 (a)

Bank of Granite Corporation
  News

For Release: January 9, 2006

BANK OF GRANITE CORPORATION REPORTS INCREASED EARNINGS FOR
FOURTH QUARTER AND FOR FULL YEAR OF 2005

     Bank of Granite Corporation has reported increased earnings for the fourth quarter of 2005 and also for the full year, both periods ending on December 31, 2005. Net income for the fourth quarter of 2005 totaled $3,776,873 compared to $3,293,285 for the fourth quarter of 2004, an increase of 14.7%. On a per share basis, this equates to 29¢ vs. 25¢ for 2004, an increase of 16%. For the full year, also ending December 31, 2005, net income totaled $15,009,544 compared to $12,718,220 for the full year of 2004, an increase of 18%. On a per share basis, this translates to $1.14 for 2005 compared to $0.94 for 2004, an increase of 21.3%. As previously announced, earnings for the quarterly and year-to-date periods of 2005 included a one-time charge of approximately $1,265,000 before tax and $759,000, or 6¢ per share, after tax for the retirement bonus granted in December by the Board of Directors to the Company’s retiring chairman.

     Charles M. Snipes, President and CEO, expressed pleasure with the positive trend in earnings. “Each quarter’s earnings in 2005 were better than comparable quarterly earnings in 2004 and this is a step in the right direction,” Snipes said. He attributed the improved earnings to a healthy demand for loans and an increase in the interest rate margin, which was helped by the Federal Reserve’s actions to increase rates in order to keep inflation under control. The only negative factor was a decline in the earnings of the Company’s mortgage banking subsidiary. Snipes, as always, thanked the entire Bank of Granite staff for their dedicated work during a very difficult year.

     Total assets as of December 31, 2005 reached $1,106,724,022 compared to $1,032,238,449 at year-end 2004, an increase of 7.2%. Deposits totaled $879,111,425, a 17.2% increase, and loans reached a record $832,447,148, up 7% for the year.

     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 and Wilkesboro. Bank of Granite Corporation has an estimated 6,700 shareholders with 12,911,922 shares of common stock outstanding as of December 31, 2005. Its stock trades on the national NASDAQ Stock Market® under the symbol “GRAN.” The stock closed 2005 at a price of $18.53 per share.

* * * * *

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

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Bank of Granite Corporation		Three Months Ended									Twelve Months Ended
Selected Financial Data		December 31,									December 31,
(in thousands except per share data)		2005			2004			% change			2005			2004			% change
Consolidated earnings summary:
Interest income, taxable equivalent		$	19,264		$	14,818			30.0	%	$	69,310		$	56,614			22.4	%
Interest expense			6,048			3,697			63.6	%		20,173			13,108			53.9	%
Net interest income, taxable equivalent			13,216			11,121			18.8	%		49,137			43,506			12.9	%
Taxable equivalent adjustment			275			321			-14.3	%		1,151			1,348			-14.6	%
Net interest income			12,941			10,800			19.8	%		47,986			42,158			13.8	%
Loan loss provision			1,470			1,412			4.1	%		5,194			5,439			-4.5	%
Noninterest income			2,963			2,883			2.8	%		11,911			11,257			5.8	%
Noninterest expense			8,665			7,356			17.8	%		31,814			29,116			9.3	%
Income before income taxes			5,769			4,915			17.4	%		22,889			18,860			21.4	%
Income taxes			1,992			1,622			22.8	%		7,879			6,142			28.3	%
Net income		$	3,777		$	3,293			14.7	%	$	15,010		$	12,718			18.0	%
Earnings per share — Basic		$	0.29		$	0.25			16.0	%	$	1.14		$	0.94			21.3	%
Earnings per share — Diluted			0.29			0.25			16.0	%		1.14			0.94			21.3	%
Average shares — Basic			12,992			13,352			-2.7	%		13,132			13,481			-2.6	%
Average shares — Diluted			13,037			13,401			-2.7	%		13,176			13,531			-2.6	%
Consolidated balance sheet data at December 31:
Total assets											$	1,106,724		$	1,032,238			7.2	%
Total deposits												879,111			749,862			17.2	%
Loans (gross)												832,447			778,137			7.0	%
Shareholders’ equity												139,848			141,016			-0.8	%
Consolidated average balance sheet data:
Total assets		$	1,099,276		$	1,016,830			8.1	%	$	1,067,208		$	993,022			7.5	%
Total deposits			869,572			759,430			14.5	%		823,254			746,481			10.3	%
Loans (gross)			827,409			762,644			8.5	%		808,944			740,316			9.3	%
Shareholders’ equity			140,031			140,756			-0.5	%		140,220			141,023			-0.6	%
Consolidated performance ratios:
Return on average assets*			1.36	%		1.29	%					1.41	%		1.28	%
Return on average equity*			10.70	%		9.31	%					10.70	%		9.02	%
Efficiency ratio			53.56	%		52.53	%					52.11	%		53.17	%
Consolidated asset quality data and ratios:
Nonaccruing loans											$	6,424		$	6,634			-3.2	%
Accruing loans 90 days past due												4,208			4,227			-0.4	%
Nonperforming loans												10,632			10,861			-2.1	%
Foreclosed properties												926			1,280			-27.7	%
Nonperforming assets												11,558			12,141			-4.8	%
Allowance for loan losses												13,924			13,665			1.9	%
Loans charged off												5,250			3,038			72.8	%
Recoveries of loans charged off												315			465			-32.3	%
Net loan charge-offs (recoveries)												4,935			2,573			91.8	%
Net charge-offs to average loans*												0.61	%		0.35	%
Nonperforming loans to total assets												0.96	%		1.05	%
Allowance coverage of nonperforming loans												130.96	%		125.82	%
Allowance for loan losses to gross loans												1.67	%		1.76	%
Allowance for loan losses to net loans												1.70	%		1.79	%
Subsidiary earnings summary:
Bank of	Net interest income	$	12,266		$	9,960			23.2	%	$	45,156		$	38,755			16.5	%
Granite	Loan loss provision		1,458			1,406			3.7	%		5,158			5,431			-5.0	%
	Noninterest income		1,967			1,870			5.2	%		7,773			7,414			4.8	%
	Noninterest expense		6,895			5,516			25.0	%		24,803			22,058			12.4	%
	Income taxes		1,968			1,523			29.2	%		7,664			5,786			32.5	%
	Net income		3,912			3,385			15.6	%		15,304			12,894			18.7	%
Granite	Net interest income	$	785		$	926			-15.2	%	$	3,186		$	3,673			-13.3	%
Mortgage	Loan loss provision		12			6			100.0	%		36			8			350.0	%
	Noninterest income		981			1,014			-3.3	%		3,991			3,844			3.8	%
	Noninterest expense		1,701			1,693			0.5	%		6,642			6,625			0.3	%
	Income taxes		24			99			-75.8	%		214			357			-40.1	%
	Net income		41			148			-72.3	%		321			535			-40.0	%

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

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Bank of Granite Corporation		Quarters Ended
Supplemental Quarterly Financial Data		Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,
(in thousands except per share data)		2005			2005			2005			2005			2004
Consolidated earnings summary:
Interest income, taxable equivalent		$	19,264		$	18,170		$	16,602		$	15,273		$	14,818
Interest expense			6,048			5,361			4,688			4,076			3,697
Net interest income, taxable equivalent			13,216			12,809			11,914			11,197			11,121
Taxable equivalent adjustment			275			276			289			311			321
Net interest income			12,941			12,533			11,625			10,886			10,800
Loan loss provision			1,470			1,602			892			1,230			1,412
Noninterest income			2,963			3,338			3,152			2,458			2,883
Noninterest expense			8,665			7,899			7,936			7,315			7,356
Income before income taxes			5,769			6,370			5,949			4,799			4,915
Income taxes			1,992			2,231			2,041			1,614			1,622
Net income		$	3,777		$	4,139		$	3,908		$	3,185		$	3,293
Earnings per share — Basic		$	0.29		$	0.32		$	0.30		$	0.24		$	0.25
Earnings per share — Diluted			0.29			0.32			0.30			0.24			0.25
Average shares — Basic			12,992			13,068			13,184			13,285			13,352
Average shares — Diluted			13,037			13,114			13,222			13,323			13,401
Consolidated ending balance sheet data:
Total assets		$	1,106,724		$	1,110,546			$1,069,400		$	1,039,124		$	1,032,238
Total deposits			879,111			879,136			833,453			795,929			749,862
Loans (gross)			832,447			819,180			814,518			792,509			778,137
Shareholders’ equity			139,848			140,157			140,567			139,922			141,016
Consolidated average balance sheet data:
Total assets		$	1,099,276		$	1,078,832			$1,058,591		$	1,032,133		$	1,016,830
Total deposits			869,572			845,567			805,296			772,582			759,430
Loans (gross)			827,409			815,880			807,808			784,679			762,644
Shareholders’ equity			140,031			139,987			139,973			140,889			140,756
Consolidated performance ratios:
Return on average assets*			1.36	%		1.52	%		1.48	%		1.25	%		1.29	%
Return on average equity*			10.70	%		11.73	%		11.20	%		9.17	%		9.31	%
Efficiency ratio			53.56	%		48.92	%		52.67	%		53.57	%		52.53	%
Consolidated asset quality data and ratios:
Nonaccruing loans		$	6,424		$	5,514		$	5,599		$	6,791		$	6,634
Accruing loans 90 days past due			4,208			1,917			3,292			4,211			4,227
Nonperforming loans			10,632			7,431			8,891			11,002			10,861
Foreclosed properties			926			1,391			1,640			1,790			1,280
Nonperforming assets			11,558			8,822			10,531			12,792			12,141
Allowance for loan losses			13,924			12,868			14,065			13,970			13,665
Loans charged off			525			2,857			851			1,017			688
Recoveries of loans charged off			111			58			55			92			139
Net loan charge-offs (recoveries)			414			2,799			796			925			549
Net charge-offs to average loans*			0.20	%		1.36	%		0.40	%		0.48	%		0.29	%
Nonperforming loans to total assets			0.96	%		0.67	%		0.83	%		1.06	%		1.05	%
Allowance coverage of nonperforming loans			130.96	%		173.17	%		158.19	%		126.98	%		125.82	%
Allowance for loan losses to gross loans			1.67	%		1.57	%		1.73	%		1.76	%		1.76	%
Allowance for loan losses to net loans			1.70	%		1.60	%		1.76	%		1.79	%		1.79	%
Subsidiary earnings summary:
Bank of	Net interest income	$	12,266		$	11,739		$	10,908		$	10,243		$	9,960
Granite	Loan loss provision		1,458			1,590			886			1,224			1,406
	Noninterest income		1,967			2,058			2,111			1,637			1,870
	Noninterest expense		6,895			6,023			6,141			5,743			5,516
	Income taxes		1,968			2,122			1,975			1,599			1,523
	Net income		3,912			4,062			4,017			3,314			3,385
Granite	Net interest income	$	785		$	892		$	801		$	708		$	926
Mortgage	Loan loss provision		12			12			6			6			6
	Noninterest income		981			1,148			1,041			820			1,014
	Noninterest expense		1,701			1,772			1,679			1,489			1,693
	Income taxes		24			109			66			15			99
	Net income		41			159			97			24			148

* Annualized based on number of days in the period.

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