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:	October 10, 2006

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

     Bank of Granite Corporation (NASDAQ: GRAN) reported record earnings for the third quarter of 2006. Net income increased 10.6% to $4.58 million for the quarter ended September 30, 2006 compared to $4.14 million for the comparable quarter of 2005. On a diluted earnings per share basis, the Company earned $0.29 per share in the third quarter of 2006 compared to $0.25 per share in the third quarter of 2005, an increase of 16%. For the nine-months ended September 30, 2006, net income increased 20.1% to $13.49 million compared to $11.23 million for the comparable nine-month period of 2005. On a diluted earnings per share basis, the Company earned $0.84 per share for the first nine months of 2006 compared to $0.68 per share in the comparable period of 2005, an increase of 23.5%. Earnings per share for the 2005 periods have been restated for the five-for-four stock split distributed in September of 2006.

     The earnings growth also resulted in improvement in some of the Company’s key performance ratios. The annualized return on average assets (ROA) was 1.55% in the third quarter of 2006 compared to 1.52% in the third quarter of 2005, while the annualized return on average equity (ROE) was 12.62% compared to 11.73% for the same periods. The Company’s efficiency ratio for the third quarter was 49.31% in 2006 compared to 48.92% in 2005.

     The Company ended the third quarter of 2006 with total assets of $1.18 billion, total loans of $0.89 billion, and total deposits of $0.95 billion. Total assets grew 6.7%, loans grew 8.3%, and deposits grew 8.1% since the third 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, continued to attribute the third quarter earnings improvement to growth in loans and deposits and to an improved net interest margin, which was helped by the Federal Reserve’s increases in its overnight interest rate over the past twelve months. 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. Snipes gave special thanks to the Company’s employees for making these results possible.

     Bank of Granite Corporation’s common stock trades on the NASDAQ Global Select Market^SM under the symbol “GRAN.” Bank of Granite Corporation is the parent company of Bank of Granite and Granite Mortgage. Bank of Granite operates twenty-two full-service banking offices in eight North Carolina counties—Burke, Caldwell, Catawba, Forsyth, Iredell, 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	www.bankofgranite.com
Granite Falls, NC 28630

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Bank of Granite Corporation
Selected Financial Data

		Three Months Ended									Nine Months Ended
		September 30,									September 30,
(in thousands except per share data)		2006			2005			% change			2006			2005			% change
Consolidated earnings summary:
Interest income, taxable equivalent		$	22,683		$	18,170			24.8	%	$	64,430		$	50,046			28.7	%
Interest expense			8,653			5,361			61.4	%		22,790			14,125			61.3	%
Net interest income, taxable equivalent			14,030			12,809			9.5	%		41,640			35,921			15.9	%
Taxable equivalent adjustment			237			276			-14.1	%		759			876			-13.4	%
Net interest income			13,793			12,533			10.1	%		40,881			35,045			16.7	%
Loan loss provision			1,388			1,602			-13.4	%		4,537			3,724			21.8	%
Noninterest income			3,184			3,338			-4.6	%		9,479			8,948			5.9	%
Noninterest expense			8,488			7,899			7.5	%		24,917			23,149			7.6	%
Income before income taxes			7,101			6,370			11.5	%		20,906			17,120			22.1	%
Income taxes			2,519			2,231			12.9	%		7,415			5,887			26.0	%
Net income		$	4,582		$	4,139			10.7	%	$	13,491		$	11,233			20.1	%
Earnings per share — Basic*		$	0.29		$	0.25			16.0	%	$	0.84		$	0.68			23.5	%
Earnings per share — Diluted*			0.29			0.25			16.0	%		0.84			0.68			23.5	%
Average shares — Basic*			16,017			16,334			-1.9	%		16,057			16,472			-2.5	%
Average shares — Diluted*			16,072			16,392			-2.0	%		16,111			16,528			-2.5	%
Consolidated balance sheet data at September 30:
Total assets											$	1,184,469		$	1,110,546			6.7	%
Total deposits												950,544			879,136			8.1	%
Loans (gross)												887,218			819,180			8.3	%
Shareholders’ equity												146,033			140,157			4.2	%
Consolidated average balance sheet data:
Total assets		$	1,174,606		$	1,078,832			8.9	%	$	1,144,267		$	1,056,519			8.3	%
Total deposits			942,103			845,567			11.4	%		913,912			807,815			13.1	%
Loans (gross)			874,656			815,880			7.2	%		863,727			802,789			7.6	%
Shareholders’ equity			143,992			139,987			2.9	%		142,189			140,283			1.4	%
Consolidated performance ratios:
Return on average assets**			1.55	%		1.52	%					1.58	%		1.42	%
Return on average equity**			12.62	%		11.73	%					12.69	%		10.71	%
Efficiency ratio			49.31	%		48.92	%					48.74	%		51.59	%
Consolidated asset quality data and ratios:
Nonaccruing loans											$	9,012		$	5,514			63.4	%
Accruing loans 90 days past due												4,319			1,917			125.3	%
Nonperforming loans												13,331			7,431			79.4	%
Foreclosed properties												1,217			1,391			-12.5	%
Nonperforming assets												14,548			8,822			64.9	%
Allowance for loan losses												14,921			12,868			16.0	%
Loans charged off												4,063			4,725			-14.0	%
Recoveries of loans charged off												523			205			155.1	%
Net loan charge-offs (recoveries)												3,540			4,520			-21.7	%
Net charge-offs to average loans**												0.55	%		0.75	%
Nonperforming loans to total assets												1.13	%		0.67	%
Allowance coverage of nonperforming loans												111.93	%		173.17	%
Allowance for loan losses to gross loans												1.68	%		1.57	%
Allowance for loan losses to net loans												1.71	%		1.60	%
Subsidiary earnings summary:
Bank of Granite	Net interest income	$	13,232		$	11,739			12.7	%	$	39,135		$	32,890			19.0	%
	Loan loss provision		1,376			1,590			-13.5	%		4,501			3,700			21.6	%
	Noninterest income		2,059			2,058			0.0	%		6,238			5,806			7.4	%
	Noninterest expense		6,712			6,023			11.4	%		19,592			17,907			9.4	%
	Income taxes		2,407			2,122			13.4	%		7,195			5,696			26.3	%
	Net income		4,796			4,062			18.1	%		14,085			11,393			23.6	%
Granite Mortgage	Net interest income	$	861		$	892			-3.5	%	$	2,460		$	2,401			2.5	%
	Loan loss provision		12			12			0.0	%		36			24			50.0	%
	Noninterest income		1,125			1,148			-2.0	%		3,124			3,010			3.8	%
	Noninterest expense		1,694			1,760			-3.8	%		4,998			4,916			1.7	%
	Income taxes		112			109			2.8	%		220			190			15.8	%
	Net income		168			159			5.7	%		330			281			17.4	%

*	Prior period amounts restated for the 5-for-4 stock split distributed in September 2006.
**	Annualized based on number of days in the period.

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Bank of Granite Corporation
Supplemental Quarterly Financial Data

		Quarters Ended
		Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,
(in thousands except per share data)		2006			2006			2006			2005			2005
Consolidated earnings summary:
Interest income, taxable equivalent		$	22,683		$	21,738		$	20,009		$	19,264		$	18,170
Interest expense			8,653			7,516			6,621			6,048			5,361
Net interest income, taxable equivalent			14,030			14,222			13,388			13,216			12,809
Taxable equivalent adjustment			237			254			269			275			276
Net interest income			13,793			13,968			13,119			12,941			12,533
Loan loss provision			1,388			1,915			1,235			1,470			1,602
Noninterest income			3,184			3,294			3,001			2,963			3,338
Noninterest expense			8,488			8,384			8,043			8,665			7,899
Income before income taxes			7,101			6,963			6,842			5,769			6,370
Income taxes			2,519			2,501			2,395			1,992			2,231
Net income		$	4,582		$	4,462		$	4,447		$	3,777		$	4,139
Earnings per share — Basic*		$	0.29		$	0.28		$	0.28		$	0.23		$	0.25
Earnings per share — Diluted*			0.29			0.28			0.28			0.23			0.25
Average shares — Basic*			16,017			16,058			16,098			16,240			16,334
Average shares — Diluted*			16,072			16,108			16,153			16,295			16,392
Consolidated ending balance sheet data:
Total assets		$	1,184,469		$	1,176,472		$	1,150,798		$	1,106,724		$	1,110,546
Total deposits			950,544			945,665			919,019			879,111			879,136
Loans (gross)			887,218			876,879			856,470			832,447			819,180
Shareholders’ equity			146,033			142,045			140,641			139,848			140,157
Consolidated average balance sheet data:
Total assets		$	1,174,606		$	1,144,205		$	1,113,991		$	1,099,276		$	1,078,832
Total deposits			942,103			913,170			886,464			869,572			845,567
Loans (gross)			874,656			869,151			847,372			827,409			815,880
Shareholders’ equity			143,992			142,160			140,416			140,031			139,987
Consolidated performance ratios:
Return on average assets**			1.55	%		1.56	%		1.62	%		1.36	%		1.52	%
Return on average equity**			12.62	%		12.59	%		12.84	%		10.70	%		11.73	%
Efficiency ratio			49.31	%		47.86	%		49.08	%		53.56	%		48.92	%
Consolidated asset quality data and ratios:
Nonaccruing loans		$	9,012		$	7,635		$	6,627		$	6,424		$	5,514
Accruing loans 90 days past due			4,319			3,603			3,616			4,208			1,917
Nonperforming loans			13,331			11,238			10,243			10,632			7,431
Foreclosed properties			1,217			851			1,223			926			1,391
Nonperforming assets			14,548			12,089			11,466			11,558			8,822
Allowance for loan losses			14,921			13,912			15,119			13,924			12,868
Loans charged off			668			3,222			173			525			2,857
Recoveries of loans charged off			289			101			133			111			58
Net loan charge-offs (recoveries)			379			3,121			40			414			2,799
Net charge-offs to average loans**			0.17	%		1.44	%		0.02	%		0.20	%		1.36	%
Nonperforming loans to total assets			1.13	%		0.96	%		0.89	%		0.96	%		0.67	%
Allowance coverage of nonperforming loans			111.93	%		123.79	%		147.60	%		130.96	%		173.17	%
Allowance for loan losses to gross loans			1.68	%		1.59	%		1.77	%		1.67	%		1.57	%
Allowance for loan losses to net loans			1.71	%		1.61	%		1.80	%		1.70	%		1.60	%
Subsidiary earnings summary:
Bank of Granite	Net interest income	$	13,232		$	13,316		$	12,587		$	12,266		$	11,739
	Loan loss provision		1,376			1,903			1,223			1,458			1,590
	Noninterest income		2,059			2,086			2,092			1,967			2,058
	Noninterest expense		6,712			6,488			6,391			6,895			6,023
	Income taxes		2,407			2,410			2,377			1,968			2,122
	Net income		4,796			4,601			4,688			3,912			4,062
Granite Mortgage	Net interest income	$	861		$	891		$	708		$	785		$	892
	Loan loss provision		12			12			12			12			12
	Noninterest income		1,125			1,090			909			981			1,148
	Noninterest expense		1,694			1,742			1,561			1,689			1,760
	Income taxes		112			91			18			24			109
	Net income		168			136			26			41			159

*	Prior period amounts restated for the 5-for-4 stock split distributed in September 2006.
**	Annualized based on number of days in the period.

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