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

Exhibit 99 (a)

Bank of Granite NEWS

—— C O R P O R A T I O N ——

For Release: April 10, 2006

BANK OF GRANITE CORPORATION REPORTS RECORD
EARNINGS FOR FIRST QUARTER OF 2006

     Bank of Granite Corporation (NASDAQ: GRAN) reported record earnings for the first quarter of 2006. Net income increased 39.5% to $4.45 million for the quarter ended March 31, 2006 compared to $3.19 million for the comparable quarter of 2005. On a per share basis, the Company earned $0.34 per share in the first quarter of 2006 compared to $.24 per share in the first quarter of 2005, an increase of 41.7%.

     The earnings growth also resulted in improvement in some of the Company’s key performance ratios. The annualized return on average assets (ROA) was 1.62% in the first quarter of 2006 compared to 1.25% in the first quarter of 2005, while the annualized return on average equity (ROE) was 12.84% compared to 9.17% for the same periods. The Company’s efficiency ratio for the first quarter was 49.08% in 2006 compared to 53.57% in 2005.

     The Company ended the first quarter of 2006 with total assets of $1.15 billion, total loans of $0.86 billion, and total deposits of $0.92 billion. Total assets grew 10.7%, loans grew 8.1%, and deposits grew 15.5% since the first quarter of 2005. Total assets, total loans, and total deposits were all at record levels at the end of the quarter.

     Charles Snipes, Chairman and Chief Executive Officer, attributed the improved earnings to the growth in loans and deposits and to an improved net interest margin, which was helped by the Federal Reserve’s continued increases in its overnight interest rate in its efforts to control inflation. Snipes said Bank of Granite enjoyed the loan and deposit growth in both the Bank’s legacy and newer markets and he cited his banking team’s focus on relationship banking as the primary reason for the growth.

     Bank of Granite Corporation’s common stock trades on the NASDAQ Stock Market^® under the symbol “GRAN.” Bank of Granite Corporation is the parent company of Bank of Granite and Granite Mortgage. Bank of Granite operates twenty-one full-service banking offices in seven North Carolina counties—Burke, Caldwell, Catawba, Forsyth, Mecklenburg, Watauga, and Wilkes. Granite Mortgage, a mortgage banking company headquartered in Winston-Salem, originates home mortgages in the Central and Southern Piedmont regions of North Carolina, in addition to Bank of Granite’s markets. Granite Mortgage also operates an office in Fayetteville, North Carolina.

* * * * *

Please see the attached supplemental “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.

PO Box 128	www.bankofgranite.com
Granite Falls, NC 28630

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	Three Months Ended
Bank of Granite Corporation	March 31,
Selected Financial Data
(in thousands except per share data)	2006			2005			% change
Consolidated earnings summary:
Interest income, taxable equivalent	$	20,009		$	15,273			31.0	%
Interest expense		6,621			4,076			62.4	%
Net interest income, taxable equivalent		13,388			11,197			19.6	%
Taxable equivalent adjustment		269			311			-13.5	%
Net interest income		13,119			10,886			20.5	%
Loan loss provision		1,235			1,230			0.4	%
Noninterest income		3,001			2,458			22.1	%
Noninterest expense		8,043			7,315			10.0	%
Income before income taxes		6,842			4,799			42.6	%
Income taxes		2,395			1,614			48.4	%
Net income	$	4,447		$	3,185			39.6	%
Earnings per share — Basic	$	0.35		$	0.24			45.8	%
Earnings per share — Diluted		0.34			0.24			41.7	%
Average shares — Basic		12,879			13,285			-3.1	%
Average shares — Diluted		12,923			13,323			-3.0	%
Consolidated balance sheet data at March 31:
Total assets	$	1,150,798		$	1,039,124			10.7	%
Total deposits		919,019			795,929			15.5	%
Loans (gross)		856,470			792,509			8.1	%
Shareholders’ equity		140,641			139,922			0.5	%
Consolidated average balance sheet data:
Total assets	$	1,113,991		$	1,032,133			7.9	%
Total deposits		886,464			772,582			14.7	%
Loans (gross)		847,372			784,679			8.0	%
Shareholders’ equity		140,416			140,889			-0.3	%
Consolidated performance ratios:
Return on average assets*		1.62	%		1.25	%
Return on average equity*		12.84	%		9.17	%
Efficiency ratio		49.08	%		53.57	%
Consolidated asset quality data and ratios:
Nonaccruing loans	$	6,627		$	6,791			-2.4	%
Accruing loans 90 days past due		3,616			4,211			-14.1	%
Nonperforming loans		10,243			11,002			-6.9	%
Foreclosed properties		1,223			1,790			-31.7	%
Nonperforming assets		11,466			12,792			-10.4	%
Allowance for loan losses		15,119			13,970			8.2	%
Loans charged off		173			1,017			-83.0	%
Recoveries of loans charged off		133			92			44.6	%
Net loan charge-offs (recoveries)		40			925			-95.7	%
Net charge-offs to average loans*		0.02	%		0.48	%
Nonperforming loans to total assets		0.89	%		1.06	%
Allowance coverage of nonperforming loans		147.60	%		126.98	%
Allowance for loan losses to gross loans		1.77	%		1.76	%
Allowance for loan losses to net loans		1.80	%		1.79	%
Subsidiary earnings summary:
Bank of Granite
Net interest income	$	12,587		$	10,243			22.9	%
Loan loss provision		1,223			1,224			-0.1	%
Noninterest income		2,092			1,637			27.8	%
Noninterest expense		6,391			5,743			11.3	%
Income taxes		2,377			1,599			48.7	%
Net income		4,688			3,314			41.5	%
Granite Mortgage
Net interest income	$	708		$	708			0.0	%
Loan loss provision		12			6			100.0	%
Noninterest income		909			820			10.9	%
Noninterest expense		1,561			1,483			5.3	%
Income taxes		18			15			20.0	%
Net income		26			24			8.3	%

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

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	Quarters Ended
Bank of Granite Corporation
Supplemental Quarterly Financial Data	Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,
(in thousands except per share data)	2006			2005			2005			2005			2005
Consolidated earnings summary:
Interest income, taxable equivalent	$	20,009		$	19,264		$	18,170		$	16,602		$	15,273
Interest expense		6,621			6,048			5,361			4,688			4,076
Net interest income, taxable equivalent		13,388			13,216			12,809			11,914			11,197
Taxable equivalent adjustment		269			275			276			289			311
Net interest income		13,119			12,941			12,533			11,625			10,886
Loan loss provision		1,235			1,470			1,602			892			1,230
Noninterest income		3,001			2,963			3,338			3,152			2,458
Noninterest expense		8,043			8,665			7,899			7,936			7,315
Income before income taxes		6,842			5,769			6,370			5,949			4,799
Income taxes		2,395			1,992			2,231			2,041			1,614
Net income	$	4,447		$	3,777		$	4,139		$	3,908		$	3,185
Earnings per share — Basic	$	0.35		$	0.29		$	0.32		$	0.30		$	0.24
Earnings per share — Diluted		0.34			0.29			0.32			0.30			0.24
Average shares — Basic		12,879			12,992			13,068			13,184			13,285
Average shares — Diluted		12,923			13,037			13,114			13,222			13,323
Consolidated ending balance sheet data:
Total assets	$	1,150,798		$	1,106,724		$	1,110,546		$	1,069,400		$	1,039,124
Total deposits		919,019			879,111			879,136			833,453			795,929
Loans (gross)		856,470			832,447			819,180			814,518			792,509
Shareholders’ equity		140,641			139,848			140,157			140,567			139,922
Consolidated average balance sheet data:
Total assets	$	1,113,991		$	1,099,276		$	1,078,832		$	1,058,591		$	1,032,133
Total deposits		886,464			869,572			845,567			805,296			772,582
Loans (gross)		847,372			827,409			815,880			807,808			784,679
Shareholders’ equity		140,416			140,031			139,987			139,973			140,889
Consolidated performance ratios:
Return on average assets*		1.62	%		1.36	%		1.52	%		1.48	%		1.25	%
Return on average equity*		12.84	%		10.70	%		11.73	%		11.20	%		9.17	%
Efficiency ratio		49.08	%		53.56	%		48.92	%		52.67	%		53.57	%
Consolidated asset quality data and ratios:
Nonaccruing loans	$	6,627		$	6,424		$	5,514		$	5,599		$	6,791
Accruing loans 90 days past due		3,616			4,208			1,917			3,292			4,211
Nonperforming loans		10,243			10,632			7,431			8,891			11,002
Foreclosed properties		1,223			926			1,391			1,640			1,790
Nonperforming assets		11,466			11,558			8,822			10,531			12,792
Allowance for loan losses		15,119			13,924			12,868			14,065			13,970
Loans charged off		173			525			2,857			851			1,017
Recoveries of loans charged off		133			111			58			55			92
Net loan charge-offs (recoveries)		40			414			2,799			796			925
Net charge-offs to average loans*		0.02	%		0.20	%		1.36	%		0.40	%		0.48	%
Nonperforming loans to total assets		0.89	%		0.96	%		0.67	%		0.83	%		1.06	%
Allowance coverage of nonperforming loans		147.60	%		130.96	%		173.17	%		158.19	%		126.98	%
Allowance for loan losses to gross loans		1.77	%		1.67	%		1.57	%		1.73	%		1.76	%
Allowance for loan losses to net loans		1.80	%		1.70	%		1.60	%		1.76	%		1.79	%
Subsidiary earnings summary:
Bank of Granite
Net interest income	$	12,587		$	12,266		$	11,739		$	10,908		$	10,243
Loan loss provision		1,223			1,458			1,590			886			1,224
Noninterest income		2,092			1,967			2,058			2,111			1,637
Noninterest expense		6,391			6,895			6,023			6,141			5,743
Income taxes		2,377			1,968			2,122			1,975			1,599
Net income		4,688			3,912			4,062			4,017			3,314
Granite Mortgage
Net interest income	$	708		$	785		$	892		$	801		$	708
Loan loss provision		12			12			12			6			6
Noninterest income		909			981			1,148			1,041			820
Noninterest expense		1,561			1,689			1,760			1,673			1,483
Income taxes		18			24			109			66			15
Net income		26			41			159			97			24

* Annualized based on number of days in the period.

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