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: January 8, 2007

BANK OF GRANITE CORPORATION REPORTS
IMPROVED EARNINGS FOR FOURTH QUARTER OF 2006
AND RECORD EARNINGS FOR FULL-YEAR 2006

     Bank of Granite Corporation (NASDAQ: GRAN) reported improved earnings for the fourth quarter of 2006 and record earnings for the full-year 2006. For the quarter ended December 31, 2006, net income increased 20.2% to $4.54 million compared to $3.78 million for the comparable quarter of 2005. On a diluted earnings per share basis, the Company earned $0.28 per share in the fourth quarter of 2006 compared to $0.23 per share in the fourth quarter of 2005, an increase of 21.7%. For the year ended December 31, 2006, net income increased 20.1% to $18.03 million compared to $15.01 million in 2005. On a diluted earnings per share basis, the Company earned $1.12 per share in 2006 compared to $0.91 per share in 2005, an increase of 23.1%. Earnings for the 2005 quarterly and year-to-date periods included a one-time charge of approximately $1,265,000 before tax and $759,000 after tax, or 5¢ per share, for a retirement bonus granted by the Board of Directors to the Company’s retiring chairman. In addition, 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 1.52% in the fourth quarter of 2006 compared to 1.36% in the fourth quarter of 2005, while the annualized return on average equity (ROE) was 12.28% compared to 10.70% for the same periods. The Company’s efficiency ratio for the fourth quarter was 46.76% in 2006 compared to 53.56% in 2005.

     The Company ended 2006 with total assets of $1.20 billion, total loans of $0.91 billion, and total deposits of $0.96 billion. Total assets grew 8.4%, loans grew 9.6%, and deposits grew 9.6% from the end of 2005. Total assets, total loans, and total deposits were all at record levels at the end of 2006.

     Charles Snipes, Chairman and CEO, was pleased with the continued earnings improvement, which he attributed to healthy loan and deposit growth and a higher net interest margin. Snipes noted, “Each quarter’s earnings in 2006 were better than the comparable quarterly earnings in 2005, and this is encouraging.” 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

5

Bank of Granite Corporation	Three Months Ended									Twelve Months Ended
Selected Financial Data	December 31,									December 31,
(in thousands except per share data)	2006			2005			% change			2006			2005			% change
Consolidated earnings summary:
Interest income, taxable equivalent	$	23,108		$	19,264			20.0	%	$	87,538		$	69,310			26.3	%
Interest expense		8,988			6,048			48.6	%		31,778			20,173			57.5	%
Net interest income, taxable equivalent		14,120			13,216			6.8	%		55,760			49,137			13.5	%
Taxable equivalent adjustment		237			275			-13.8	%		996			1,151			-13.5	%
Net interest income		13,883			12,941			7.3	%		54,764			47,986			14.1	%
Loan loss provision		1,876			1,470			27.6	%		6,414			5,194			23.5	%
Noninterest income		3,028			2,963			2.2	%		12,507			11,911			5.0	%
Noninterest expense		8,029			8,665			-7.3	%		32,945			31,814			3.6	%
Income before income taxes		7,006			5,769			21.4	%		27,912			22,889			21.9	%
Income taxes		2,465			1,992			23.7	%		9,880			7,879			25.4	%
Net income	$	4,541		$	3,777			20.2	%	$	18,032		$	15,010			20.1	%
Earnings per share — Basic*	$	0.28		$	0.23			21.7	%	$	1.12		$	0.91			23.1	%
Earnings per share — Diluted*		0.28			0.23			21.7	%		1.12			0.91			23.1	%
									��
Average shares — Basic*		16,022			16,240			-1.3	%		16,048			16,414			-2.2	%
Average shares — Diluted*		16,081			16,295			-1.3	%		16,104			16,469			-2.2	%
Consolidated balance sheet data at December 31:
Total assets										$	1,199,772		$	1,106,724			8.4	%
Total deposits											963,837			879,111			9.6	%
Loans (gross)											912,492			832,447			9.6	%
Shareholders’ equity											148,517			139,848			6.2	%
Consolidated average balance sheet data:
Total assets	$	1,189,093		$	1,099,276			8.2	%	$	1,155,474		$	1,067,208			8.3	%
Total deposits		953,872			869,572			9.7	%		923,902			823,254			12.2	%
Loans (gross)		898,875			827,409			8.6	%		872,514			808,944			7.9	%
Shareholders’ equity		147,413			140,031			5.3	%		143,495			140,220			2.3	%
Consolidated performance ratios:
Return on average assets**		1.52	%		1.36	%					1.56	%		1.41	%
Return on average equity**		12.22	%		10.70	%					12.57	%		10.70	%
Efficiency ratio		46.82	%		53.56	%					48.26	%		52.11	%
Consolidated asset quality data and ratios:
Nonaccruing loans										$	9,289		$	6,424			44.6	%
Accruing loans 90 days past due											5,074			4,208			20.6	%
Nonperforming loans											14,363			10,632			35.1	%
Foreclosed properties											1,162			926			25.5	%
Nonperforming assets											15,525			11,558			34.3	%
Allowance for loan losses											15,787			13,924			13.4	%
Loans charged off											5,203			5,250			-0.9	%
Recoveries of loans charged off											652			315			107.0	%
Net loan charge-offs (recoveries)											4,551			4,935			-7.8	%
Net charge-offs to average loans**											0.52	%		0.61	%
Nonperforming loans to total assets											1.20	%		0.96	%
Allowance coverage of nonperforming loans											109.91	%		130.96	%
Allowance for loan losses to gross loans											1.73	%		1.67	%
Allowance for loan losses to net loans											1.76	%		1.70	%
Subsidiary earnings summary:
Bank of Granite
Net interest income	$	13,426		$	12,266			9.5	%	$	52,561		$	45,156			16.4	%
Loan loss provision		1,864			1,458			27.8	%		6,366			5,158			23.4	%
Noninterest income		2,177			1,967			10.7	%		8,415			7,773			8.3	%
Noninterest expense		6,439			6,895			-6.6	%		26,031			24,803			5.0	%
Income taxes		2,418			1,968			22.9	%		9,613			7,664			25.4	%
Net income		4,882			3,912			24.8	%		18,966			15,304			23.9	%
Granite Mortgage
Net interest income	$	765		$	785			-2.5	%	$	3,225		$	3,186			1.2	%
Loan loss provision		12			12			0.0	%		48			36			33.3	%
Noninterest income		851			981			-13.3	%		3,975			3,991			-0.4	%
Noninterest expense		1,486			1,689			-12.0	%		6,484			6,606			-1.8	%
Income taxes		47			24			95.8	%		267			214			24.8	%
Net income		71			41			73.2	%		401			321			24.9	%

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

6

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)	2006			2006			2006			2006			2005
Consolidated earnings summary:
Interest income, taxable equivalent	$	23,108		$	22,683		$	21,738		$	20,009		$	19,264
Interest expense		8,988			8,653			7,516			6,621			6,048
Net interest income, taxable equivalent		14,120			14,030			14,222			13,388			13,216
Taxable equivalent adjustment		237			237			254			269			275
Net interest income		13,883			13,793			13,968			13,119			12,941
Loan loss provision		1,876			1,388			1,915			1,235			1,470
Noninterest income		3,028			3,184			3,294			3,001			2,963
Noninterest expense		8,029			8,488			8,384			8,043			8,665
Income before income taxes		7,006			7,101			6,963			6,842			5,769
Income taxes		2,465			2,519			2,501			2,395			1,992
Net income	$	4,541		$	4,582		$	4,462		$	4,447		$	3,777
Earnings per share — Basic*	$	0.28		$	0.29		$	0.28		$	0.28		$	0.23
Earnings per share — Diluted*		0.28			0.29			0.28			0.28			0.23
Average shares — Basic*		16,022			16,017			16,058			16,098			16,240
Average shares — Diluted*		16,081			16,072			16,108			16,153			16,295
Consolidated ending balance sheet data:
Total assets	$	1,199,772		$	1,184,469		$	1,176,472		$	1,150,798		$	1,106,724
Total deposits		963,837			950,544			945,665			919,019			879,111
Loans (gross)		912,492			887,218			876,879			856,470			832,447
Shareholders’ equity		148,517			146,033			142,045			140,641			139,848
Consolidated average balance sheet data:
Total assets	$	1,189,093		$	1,174,606		$	1,144,205		$	1,113,991		$	1,099,276
Total deposits		953,872			942,103			913,170			886,464			869,572
Loans (gross)		898,875			874,656			869,151			847,372			827,409
Shareholders’ equity		147,413			143,992			142,160			140,416			140,031
Consolidated performance ratios:
Return on average assets**		1.52	%		1.55	%		1.56	%		1.62	%		1.36	%
Return on average equity**		12.22	%		12.62	%		12.59	%		12.84	%		10.70	%
Efficiency ratio		46.82	%		49.31	%		47.86	%		49.08	%		53.56	%
Consolidated asset quality data and ratios:
Nonaccruing loans	$	9,289		$	9,012		$	7,635		$	6,627		$	6,424
Accruing loans 90 days past due		5,074			4,319			3,603			3,616			4,208
Nonperforming loans		14,363			13,331			11,238			10,243			10,632
Foreclosed properties		1,162			1,217			851			1,223			926
Nonperforming assets		15,525			14,548			12,089			11,466			11,558
Allowance for loan losses		15,787			14,921			13,912			15,119			13,924
Loans charged off		1,140			668			3,222			173			525
Recoveries of loans charged off		130			289			101			133			111
Net loan charge-offs (recoveries)		1,010			379			3,121			40			414
Net charge-offs to average loans**		0.45	%		0.17	%		1.44	%		0.02	%		0.20	%
Nonperforming loans to total assets		1.20	%		1.13	%		0.96	%		0.89	%		0.96	%
Allowance coverage of nonperforming loans		109.91	%		111.93	%		123.79	%		147.60	%		130.96	%
Allowance for loan losses to gross loans		1.73	%		1.68	%		1.59	%		1.77	%		1.67	%
Allowance for loan losses to net loans		1.76	%		1.71	%		1.61	%		1.80	%		1.70	%
Subsidiary earnings summary:
Bank of Granite
Net interest income	$	13,426		$	13,232		$	13,316		$	12,587		$	12,266
Loan loss provision		1,864			1,376			1,903			1,223			1,458
Noninterest income		2,177			2,059			2,086			2,092			1,967
Noninterest expense		6,439			6,712			6,488			6,391			6,895
Income taxes		2,418			2,407			2,410			2,377			1,968
Net income		4,882			4,796			4,601			4,688			3,912
Granite Mortgage
Net interest income	$	765		$	861		$	891		$	708		$	785
Loan loss provision		12			12			12			12			12
Noninterest income		851			1,125			1,090			909			981
Noninterest expense		1,486			1,694			1,742			1,561			1,689
Income taxes		47			112			91			18			24
Net income		71			168			136			26			41

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

7