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: July 10, 2006

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

     Bank of Granite Corporation (NASDAQ: GRAN) reported record earnings for the second quarter of 2006. Net income increased 14.2% to $4.46 million for the quarter ended June 30, 2006 compared to $3.91 million for the comparable quarter of 2005. On a diluted earnings per share basis, the Company earned $0.35 per share in the second quarter of 2006 compared to $0.30 per share in the second quarter of 2005, an increase of 16.7%. For the six-months ended June 30, 2006, net income increased 25.6% to $8.91 million compared to $7.09 million for the comparable six-month period of 2005. On a diluted earnings per share basis, the Company earned $0.69 per share for the first six months of 2006 compared to $0.53 per share in the comparable period of 2005, an increase of 30.2%.

     The earnings growth also resulted in improvement in some of the Company’s key performance ratios. The annualized return on average assets (ROA) was 1.56% in the second quarter of 2006 compared to 1.48% in the second quarter of 2005, while the annualized return on average equity (ROE) was 12.59% compared to 11.20% for the same periods. The Company’s efficiency ratio for the second quarter was 47.86% in 2006 compared to 52.67% in 2005.

     The Company ended the second quarter of 2006 with total assets of $1.18 billion, total loans of $0.88 billion, and total deposits of $0.95 billion. Total assets grew 10.0%, loans grew 7.7%, and deposits grew 13.5% since the second 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 second quarter earnings improvement to continued 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. 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 these counties as well as in Cumberland, Guilford, and Rowan counties.

* * * * *

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
Granite Falls, NC 28630 www.bankofgranite.com

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Bank of Granite Corporation
Selected Financial Data

	Three Months Ended									Six Months Ended
	June 30,									June 30,
(in thousands except per share data)	2006			2005			% change			2006			2005			% change
Consolidated earnings summary:
Interest income, taxable equivalent	$	21,738		$	16,602			30.9	%	$	41,747		$	31,875			31.0	%
Interest expense		7,516			4,688			60.3	%		14,137			8,764			61.3	%
Net interest income, taxable equivalent		14,222			11,914			19.4	%		27,610			23,111			19.5	%
Taxable equivalent adjustment		254			289			-12.1	%		523			599			-12.7	%
Net interest income		13,968			11,625			20.2	%		27,087			22,512			20.3	%
Loan loss provision		1,915			892			114.7	%		3,150			2,122			48.4	%
Noninterest income		3,294			3,152			4.5	%		6,295			5,610			12.2	%
Noninterest expense		8,384			7,936			5.6	%		16,427			15,252			7.7	%
Income before income taxes		6,963			5,949			17.0	%		13,805			10,748			28.4	%
Income taxes		2,501			2,041			22.5	%		4,896			3,655			34.0	%
Net income	$	4,462		$	3,908			14.2	%	$	8,909		$	7,093			25.6	%
Earnings per share — Basic	$	0.35		$	0.30			16.7	%	$	0.69		$	0.54			27.8	%
Earnings per share — Diluted		0.35			0.30			16.7	%		0.69			0.53			30.2	%
Average shares — Basic		12,847			13,184			-2.6	%		12,863			13,234			-2.8	%
Average shares — Diluted		12,887			13,222			-2.5	%		12,905			13,277			-2.8	%
Consolidated balance sheet data at June 30:
Total assets										$	1,176,472		$	1,069,400			10.0	%
Total deposits											945,665			833,453			13.5	%
Loans (gross)											876,879			814,518			7.7	%
Shareholders’ equity											142,045			140,567			1.1	%
Consolidated average balance sheet data:
Total assets	$	1,144,205		$	1,058,591			8.1	%	$	1,129,098		$	1,045,362			8.0	%
Total deposits		913,170			805,296			13.4	%		899,817			788,939			14.1	%
Loans (gross)		869,151			807,808			7.6	%		858,262			796,244			7.8	%
Shareholders’ equity		142,160			139,973			1.6	%		141,288			140,431			0.6	%
Consolidated performance ratios:
Return on average assets*		1.56	%		1.48	%					1.59	%		1.37	%
Return on average equity*		12.59	%		11.20	%					12.72	%		10.19	%
Efficiency ratio		47.86	%		52.67	%					48.45	%		53.10	%
Consolidated asset quality data and ratios:
Nonaccruing loans										$	7,635		$	5,599			36.4	%
Accruing loans 90 days past due											3,603			3,292			9.4	%
Nonperforming loans											11,238			8,891			26.4	%
Foreclosed properties											851			1,640			-48.1	%
Nonperforming assets											12,089			10,531			14.8	%
Allowance for loan losses											13,912			14,065			-1.1	%
Loans charged off											3,395			1,868			81.7	%
Recoveries of loans charged off											233			147			58.5	%
Net loan charge-offs (recoveries)											3,162			1,721			83.7	%
Net charge-offs to average loans*											0.74	%		0.44	%
Nonperforming loans to total assets											0.96	%		0.83	%
Allowance coverage of nonperforming loans											123.79	%		158.19	%
Allowance for loan losses to gross loans											1.59	%		1.73	%
Allowance for loan losses to net loans											1.61	%		1.76	%
Subsidiary earnings summary:
Bank of     Net interest income	$	13,316		$	10,908			22.1	%	$	25,903		$	21,151			22.5	%
Granite      Loan loss provision		1,903			886			114.8	%		3,126			2,110			48.2	%
Noninterest income		2,086			2,111			-1.2	%		4,178			3,749			11.4	%
Noninterest expense		6,488			6,141			5.7	%		12,879			11,886			8.4	%
Income taxes		2,410			1,975			22.0	%		4,788			3,574			34.0	%
Net income		4,601			4,017			14.5	%		9,288			7,330			26.7	%
Granite      Net interest income	$	891		$	801			11.2	%	$	1,599		$	1,509			6.0	%
Mortgage   Loan loss provision		12			6			100.0	%		24			12			100.0	%
Noninterest income		1,090			1,041			4.7	%		1,999			1,862			7.4	%
Noninterest expense		1,742			1,679			3.8	%		3,304			3,157			4.7	%
Income taxes		91			66			37.9	%		108			81			33.3	%
Net income		136			97			40.2	%		162			121			33.9	%

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

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Bank of Granite Corporation

Selected Financial Data

		Quarters Ended
		Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,
(in thousands except per share data)		2006			2006			2005			2005			2005
Consolidated earnings summary:
Interest income, taxable equivalent		$	21,738		$	20,009		$	19,264		$	18,170		$	16,602
Interest expense			7,516			6,621			6,048			5,361			4,688
Net interest income, taxable equivalent			14,222			13,388			13,216			12,809			11,914
Taxable equivalent adjustment			254			269			275			276			289
Net interest income			13,968			13,119			12,941			12,533			11,625
Loan loss provision			1,915			1,235			1,470			1,602			892
Noninterest income			3,294			3,001			2,963			3,338			3,152
Noninterest expense			8,384			8,043			8,665			7,899			7,936
Income before income taxes			6,963			6,842			5,769			6,370			5,949
Income taxes			2,501			2,395			1,992			2,231			2,041
Net income		$	4,462		$	4,447		$	3,777		$	4,139		$	3,908
Earnings per share — Basic		$	0.35		$	0.35		$	0.29		$	0.32		$	0.30
Earnings per share — Diluted			0.35			0.34			0.29			0.32			0.30
Average shares — Basic			12,847			12,879			12,992			13,068			13,184
Average shares — Diluted			12,887			12,923			13,037			13,114			13,222
Consolidated ending balance sheet data:
Total assets		$	1,176,472		$	1,150,798		$	1,106,724		$	1,110,546		$	1,069,400
Total deposits			945,665			919,019			879,111			879,136			833,453
Loans (gross)			876,879			856,470			832,447			819,180			814,518
Shareholders’ equity			142,045			140,641			139,848			140,157			140,567
Consolidated average balance sheet data:
Total assets		$	1,144,205		$	1,113,991		$	1,099,276		$	1,078,832		$	1,058,591
Total deposits			913,170			886,464			869,572			845,567			805,296
Loans (gross)			869,151			847,372			827,409			815,880			807,808
Shareholders’ equity			142,160			140,416			140,031			139,987			139,973
Consolidated performance ratios:
Return on average assets*			1.56	%		1.62	%		1.36	%		1.52	%		1.48	%
Return on average equity*			12.59	%		12.84	%		10.70	%		11.73	%		11.20	%
Efficiency ratio			47.86	%		49.08	%		53.56	%		48.92	%		52.67	%
Consolidated asset quality data and ratios:
Nonaccruing loans		$	7,635		$	6,627		$	6,424		$	5,514		$	5,599
Accruing loans 90 days past due			3,603			3,616			4,208			1,917			3,292
Nonperforming loans			11,238			10,243			10,632			7,431			8,891
Foreclosed properties			851			1,223			926			1,391			1,640
Nonperforming assets			12,089			11,466			11,558			8,822			10,531
Allowance for loan losses			13,912			15,119			13,924			12,868			14,065
Loans charged off			3,222			173			525			2,857			851
Recoveries of loans charged off			101			133			111			58			55
Net loan charge-offs (recoveries)			3,121			40			414			2,799			796
Net charge-offs to average loans*			1.44	%		0.02	%		0.20	%		1.36	%		0.40	%
Nonperforming loans to total assets			0.96	%		0.89	%		0.96	%		0.67	%		0.83	%
Allowance coverage of nonperforming loans			123.79	%		147.60	%		130.96	%		173.17	%		158.19	%
Allowance for loan losses to gross loans			1.59	%		1.77	%		1.67	%		1.57	%		1.73	%
Allowance for loan losses to net loans			1.61	%		1.80	%		1.70	%		1.60	%		1.76	%
Subsidiary earnings summary:
Bank of	Net interest income	$	13,316		$	12,587		$	12,266		$	11,739		$	10,908
Granite	Loan loss provision		1,903			1,223			1,458			1,590			886
	Noninterest income		2,086			2,092			1,967			2,058			2,111
	Noninterest expense		6,488			6,391			6,895			6,023			6,141
	Income taxes		2,410			2,377			1,968			2,122			1,975
	Net income		4,601			4,688			3,912			4,062			4,017
Granite	Net interest income	$	891		$	708		$	785		$	892		$	801
Mortgage	Loan loss provision		12			12			12			12			6
	Noninterest income		1,090			909			981			1,148			1,041
	Noninterest expense		1,742			1,561			1,689			1,760			1,673
	Income taxes		91			18			24			109			66
	Net income		136			26			41			159			97

* Annualized based on number of days in the period.

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