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

Exhibit 99 (a)

NEWS

NEWS FOR IMMEDIATE RELEASE: April 24, 2008

BANK OF GRANITE CORPORATION
REPORTS FIRST QUARTER RESULTS

     Bank of Granite Corporation (NASDAQ: GRAN) (“the Company”) reported earnings of $1.72 million, or $0.11 per share, for the quarter ended March 31, 2008, a decrease of 57.6% from the $4.04 million, or $0.25 per share, reported for the first quarter of 2007. As of March 31, 2008, the Company’s total assets, loans, and deposits were all at higher levels compared to March 31, 2007. The Company and its banking subsidiary remained well capitalized according to regulatory capital measures.

     The earnings decrease for the quarter primarily resulted from decreases in interest and fee income from loans and higher noninterest expenses. The decline in loan income was due to a combination of lower loan yields on the Company’s variable rate loans and higher levels of nonperforming loans. The Company’s net interest margin decreased to 3.81% in the first quarter of 2008 compared to 4.95% in the first quarter of 2007, primarily due to the lower loan income without comparable decreases in funding costs. The Company also reported a 15.9% increase in its noninterest expenses related primarily to increased costs of personnel, professional, and consulting fees.

     The Company’s nonperforming loans of $41.23 million as of March 31, 2008 were up significantly compared to March 31, 2007 as the Company’s banking subsidiary continued to work through problem commercial loans. Scott Anderson, CEO, said, “While we were disappointed in our first quarter results, we continue to focus on strengthening our credit quality and underwriting as we resolve our problem loans. This is a difficult and necessary process, and I commend our employees for their commitment and dedication in dealing with our challenges and opportunities.”

     As of March 31, 2008, the Company’s total assets were $1.24 billion, total loans were $0.95 billion, and total deposits were $1.01 billion. Total assets grew 1.6%, loans grew 1.8%, and deposits grew 3.8% from March 31, 2007. Total assets, total loans, and total deposits were at record levels as of March 31, 2008. The Company’s leverage, Tier 1, and total risk-based capital ratios were 8.63%, 9.83%, and 11.08%, respectively, as of March 31, 2008.

     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, Inc. Bank of Granite operates twenty-two full-service banking offices in eight North Carolina counties—Burke, Caldwell, Catawba, Forsyth, Iredell, Mecklenburg, Watauga, and Wilkes, as well as a loan production office in Guilford County. Granite Mortgage, a mortgage banking company headquartered in Winston-Salem, originates home mortgages in these counties as well as in Cumberland and Rowan counties.

PO Box 128
Granite Falls, NC 28630  

www.bankofgranite.com

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Please see the attached supplemental “Financial Data” tables.
For further information, please contact:
Karen Clark-Caruso, Public Relations, 828.345.6863 or kcaruso@bankofgranite.com, or Kirby Tyndall, Chief Financial Officer, 828.496.2026 or ktyndall@bankofgranite.com

Disclosures about Forward Looking Statements

     The discussions included in this document contain statements that may be deemed forward looking statements within the meaning of the Private Securities Litigation Act of 1995, including Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from these statements. For the purposes of these discussions, any statements that are not statements of historical fact may be deemed to be forward looking statements. Such statements are often characterized by the use of qualifying words such as “expects,” “anticipates,” “believes,” “estimates,” “plans,” “projects,” or other statements concerning opinions or judgments of our Company and our management about future events. The accuracy of such forward looking statements could be affected by certain factors, including but not limited to, the financial success or changing conditions or strategies of our customers or vendors, fluctuations in interest rates, actions of government regulators, the availability of capital and personnel, and general economic conditions. For additional factors that could affect the matters discussed in forward looking statements, see the “Risk Factors” section of the Company’s most recent Annual Report onForm 10-K/A filed with the Securities and Exchange Commission.

* * * * *

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Bank of Granite Corporation

	Three Months Ended
Selected Financial Data	March 31,
(in thousands except per share data)	2008			2007			% change
Consolidated earnings summary:
Interest income, taxable equivalent	$	19,159		$	22,635			-15.4	%
Interest expense		8,611			8,960			-3.9	%
Net interest income, taxable equivalent		10,548			13,675			-22.9	%
Taxable equivalent adjustment (1)		197			232			-15.1	%
Net interest income		10,351			13,443			-23.0	%
Loan loss provision		1,411			1,917			-26.4	%
Noninterest income		3,220			3,151			2.2	%
Noninterest expense		9,659			8,336			15.9	%
Income before income taxes		2,501			6,341			-60.6	%
Income taxes		786			2,297			-65.8	%
Net income	$	1,715		$	4,044			-57.6	%
Earnings per share — Basic	$	0.11		$	0.25			-56.0	%
Earnings per share — Diluted		0.11			0.25			-56.0	%
Average shares — Basic		15,438			16,018			-3.6	%
Average shares — Diluted		15,457			16,074			-3.8	%
Consolidated balance sheet data at March 31:
Total assets	$	1,235,624		$	1,215,633			1.6	%
Total deposits		1,011,717			974,754			3.8	%
Loans (gross)		949,065			932,186			1.8	%
Stockholders’ equity		115,434			148,248			-22.1	%
Consolidated average balance sheet data:
Total assets	$	1,214,147		$	1,202,007			1.0	%
Total deposits		988,626			960,524			2.9	%
Loans (gross)		948,732			927,001			2.3	%
Stockholders’ equity		117,681			149,277			-21.2	%
Consolidated performance ratios:
Return on average assets*		0.57	%		1.36	%
Return on average equity*		5.86	%		10.99	%
Net interest margin*		3.81	%		4.95	%
Efficiency ratio (2)		70.16	%		49.54	%
Consolidated asset quality data and ratios:
Nonaccruing loans	$	40,260		$	13,087			207.6	%
Accruing loans 90 days past due		969			1,615			-40.0	%
Nonperforming loans		41,229			14,702			180.4	%
Foreclosed properties		2,511			1,453			72.8	%
Nonperforming assets		43,740			16,155			170.8	%
Allowance for loan losses		15,459			16,672			-7.3	%
Loans charged off		4,602			1,134			305.8	%
Recoveries of loans charged off		976			101			866.3	%
Net loan charge-offs		3,626			1,033			251.0	%
Net charge-offs to average loans*		1.54	%		0.45	%
Nonperforming loans to total assets		3.34	%		1.21	%
Allowance coverage of nonperforming loans		37.50	%		113.40	%
Allowance for loan losses to gross loans		1.63	%		1.79	%
Allowance for loan losses to net loans		1.66	%		1.82	%
Subsidiary earnings summary:
Bank of Granite
Net interest income	$	9,601		$	12,944			-25.8	%
Loan loss provision		1,399			1,905			-26.6	%
Noninterest income		2,177			2,256			-3.5	%
Noninterest expense		7,847			6,771			15.9	%
Income taxes		711			2,225			-68.0	%
Net income		1,821			4,299			-57.6	%
Granite Mortgage
Net interest income	$	842		$	748			12.6	%
Loan loss provision		12			12			0.0	%
Noninterest income		1,043			895			16.5	%
Noninterest expense		1,685			1,451			16.1	%
Income taxes		75			72			4.2	%
Net income		113			108			4.6	%

*	Annualized based on number of days in the period.
(1)	Yields and interest income on tax-exempt investments have been adjusted to tax equivalent basis using a 35% tax rate.
(2)	Calculated by dividing noninterest expense by the sum of tax equivalent net interest income and noninterest income.

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Bank of Granite Corporation

	Quarters Ended
Supplemental Quarterly Financial Data	Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,
(in thousands except per share data)	2008			2007			2007			2007			2007
Consolidated earnings summary:
Interest income, taxable equivalent	$	19,159		$	22,318		$	22,152		$	23,246		$	22,635
Interest expense		8,611			9,309			9,387			9,192			8,960
Net interest income, taxable equivalent		10,548			13,009			12,765			14,054			13,675
Taxable equivalent adjustment (1)		197			205			205			216			232
Net interest income		10,351			12,804			12,560			13,838			13,443
Loan loss provision		1,411			3,006			42,737			7,471			1,917
Noninterest income		3,220			3,490			3,150			3,210			3,151
Noninterest expense		9,659			10,496			9,380			8,789			8,336
Income (loss) before tax expense (benefit)		2,501			2,792			(36,407	)		788			6,341
Income tax expense (benefit)		786			860			(14,391	)		51			2,297
Net income (loss)	$	1,715		$	1,932		$	(22,016	)	$	737		$	4,044
Earnings (loss) per share — Basic	$	0.11		$	0.12		$	(1.40	)	$	0.05		$	0.25
Earnings (loss) per share — Diluted		0.11			0.12			(1.40	)		0.05			0.25
Average shares — Basic		15,438			15,468			15,694			15,928			16,018
Average shares — Diluted		15,457			15,490			15,694			15,970			16,074
Consolidated ending balance sheet data:
Total assets	$	1,235,624		$	1,219,148		$	1,189,176		$	1,221,282		$	1,215,633
Total deposits		1,011,717			971,989			979,365			984,153			974,754
Loans (gross)		949,065			946,326			909,653			941,884			932,186
Stockholders’ equity		115,434			115,265			116,112			143,843			148,248
Consolidated average balance sheet data:
Total assets	$	1,214,147		$	1,198,879		$	1,212,281		$	1,210,595		$	1,202,007
Total deposits		988,626			971,663			977,049			970,408			960,524
Loans (gross)		948,732			929,342			942,154			934,891			927,001
Stockholders’ equity		117,681			117,042			143,726			149,011			149,277
Consolidated performance ratios:
Return on average assets*		0.57	%		0.64	%		-7.21	%		0.24	%		1.36	%
Return on average equity*		5.86	%		6.55	%		-60.77	%		1.98	%		10.99	%
Net interest margin*		3.81	%		4.69	%		4.48	%		4.99	%		4.95	%
Efficiency ratio (2)		70.16	%		63.62	%		58.94	%		50.91	%		49.54	%
Consolidated asset quality data and ratios:
Nonaccruing loans	$	40,260		$	36,450		$	27,267		$	22,549		$	13,087
Accruing loans 90 days past due		969			162			491			2,830			1,615
Nonperforming loans		41,229			36,612			27,758			25,379			14,702
Foreclosed properties		2,511			2,491			2,605			3,416			1,453
Nonperforming assets		43,740			39,103			30,363			28,795			16,155
Allowance for loan losses		15,459			17,673			17,569			22,102			16,672
Loans charged off		4,602			3,140			47,308			2,081			1,134
Recoveries of loans charged off		976			237			39			40			101
Net loan charge-offs		3,626			2,903			47,269			2,041			1,033
Net charge-offs to average loans*		1.54	%		1.24	%		19.90	%		0.88	%		0.45	%
Nonperforming loans to total assets		3.34	%		3.00	%		2.33	%		2.08	%		1.21	%
Allowance coverage of nonperforming loans		37.50	%		48.27	%		63.29	%		87.09	%		113.40	%
Allowance for loan losses to gross loans		1.63	%		1.87	%		1.93	%		2.35	%		1.79	%
Allowance for loan losses to net loans		1.66	%		1.90	%		1.97	%		2.40	%		1.82	%
Subsidiary earnings summary:
Bank of Granite
Net interest income	$	9,601		$	12,252		$	11,906		$	13,169		$	12,944
Loan loss provision		1,399			2,994			42,725			7,459			1,905
Noninterest income		2,177			2,574			2,117			2,138			2,256
Noninterest expense		7,847			8,777			7,584			6,973			6,771
Income tax expense (benefit)		711			852			(14,456	)		(58	)		2,225
Net income (loss)		1,821			2,203			(21,830	)		933			4,299
Granite Mortgage
Net interest income	$	842		$	751		$	857		$	893		$	748
Loan loss provision		12			12			12			12			12
Noninterest income		1,043			916			1,033			1,072			895
Noninterest expense		1,685			1,635			1,715			1,681			1,451
Income taxes		75			8			65			109			72
Net income		113			12			98			163			108

*	Annualized based on number of days in the period.
(1)	Yields and interest income on tax-exempt investments have been adjusted to tax equivalent basis using a 35% tax rate.
(2)	Calculated by dividing noninterest expense by the sum of tax equivalent net interest income and noninterest income.

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