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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 29549
FORM 10-Q
(mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 2001
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OR
[ ] Transition report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the transition period from _______________ to _______________
Commission file number 0-15956
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BANK OF GRANITE CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 56-1550545
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
POST OFFICE BOX 128, GRANITE FALLS, N.C. 28630
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(Address of principal executive offices) (Zip Code)
(828) 496-2000
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(Registrant's telephone number, including area code)
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(Former name, former address and former
fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [x] No [_]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
COMMON STOCK, $1 PAR VALUE
11,103,797 SHARES OUTSTANDING AS OF JULY 31, 2001
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Exhibit Index begins on page 23
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 1 of 23
2
INDEX
Begins
on Page
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets
June 30, 2001 and December 31, 2000 3
Consolidated Statements of Income
Three Months Ended June 30, 2001 and 2000
And Six Months Ended June 30, 2001 and 2000 4
Consolidated Statements of Comprehensive Income
Three Months Ended June 30, 2001 and 2000
And Six Months Ended June 30, 2001 and 2000 5
Consolidated Statements of Changes in Shareholders' Equity
Six Months Ended June 30, 2001 and 2000 6
Consolidated Statements of Cash Flows
Six Months Ended June 30, 2001 and 2000 7
Notes to Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 18
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 19
Item 2. Changes in Securities and Use of Proceeds 19
Item 3. Defaults Upon Senior Securities 19
Item 4. Submission of Matters to a Vote of Security Holders 19
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 19
Signatures 22
Exhibit Index 23
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 2 of 23
3
ITEM 1. FINANCIAL STATEMENTS
BANK OF GRANITE CORPORATION JUNE 30, December 31,
Consolidated Balance Sheets 2001 2000
(UNAUDITED)
ASSETS:
Cash and cash equivalents:
Cash and due from banks $ 24,841,596 $ 23,603,938
Interest-bearing deposits 499,424 423,142
Federal funds sold 20,025,000 6,600,000
--------------------------------
Total cash and cash equivalents 45,366,020 30,627,080
--------------------------------
Investment securities:
Available for sale, at fair value 76,750,293 85,296,735
Held to maturity, at amortized cost 82,090,414 82,208,485
Loans 485,037,913 450,398,252
Allowance for loan losses (8,452,032) (6,351,756)
--------------------------------
Net loans 476,585,881 444,046,496
--------------------------------
Premises and equipment, net 8,814,255 9,239,836
Accrued interest receivable 5,723,812 6,268,844
Other assets 5,373,816 3,935,336
--------------------------------
Total assets $700,704,491 $661,622,812
================================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Deposits:
Demand accounts $ 93,700,794 $ 94,326,293
NOW accounts 79,841,364 80,283,789
Money market accounts 35,182,024 29,993,262
Savings accounts 25,191,862 23,717,236
Time deposits of $100,000 or more 130,001,319 124,437,284
Other time deposits 173,266,304 164,523,636
--------------------------------
Total deposits 537,183,667 517,281,500
Overnight borrowings 13,028,785 12,768,442
Other borrowings 24,028,730 7,840,267
Accrued interest payable 2,592,860 2,796,811
Other liabilities 942,427 1,620,455
--------------------------------
Total liabilities 577,776,469 542,307,475
--------------------------------
Shareholders' equity:
Common stock, $1 par value
Authorized - 25,000,000 shares
Issued - 11,537,515 shares in 2001 and 11,517,084 shares in 2000
Outstanding - 11,116,247 shares in 2001 and 11,152,949 shares in 2000 11,537,515 11,517,084
Capital surplus 23,577,604 23,260,188
Retained earnings 95,823,890 91,794,837
Accumulated other comprehensive income,
net of deferred income taxes 740,729 358,923
Less: Cost of common shares in treasury;
Held - 421,268 shares in 2001 and 364,135 shares in 2000 (8,751,716) (7,615,695)
--------------------------------
Total shareholders' equity 122,928,022 119,315,337
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Total liabilities and shareholders' equity $700,704,491 $661,622,812
================================
See notes to consolidated financial statements.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 3 of 23
4
BANK OF GRANITE CORPORATION Three Months Six Months
Consolidated Statements of Income Ended June 30, Ended June 30,
(unaudited) 2001 2000 2001 2000
INTEREST INCOME:
Interest and fees on loans $ 11,034,390 $ 11,125,482 $ 22,593,727 $ 21,294,192
Federal funds sold 325,813 241,071 523,665 636,316
Interest-bearing deposits 7,392 6,641 15,557 12,110
Investments:
U.S. Treasury 44,314 121,318 159,017 263,949
U.S. Government agencies 1,123,283 1,283,141 2,330,814 2,312,123
States and political subdivisions 802,110 814,414 1,630,226 1,670,371
Other 162,307 157,470 342,962 340,617
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Total interest income 13,499,609 13,749,537 27,595,968 26,529,678
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INTEREST EXPENSE:
Time deposits of $100,000 or more 2,018,254 1,584,194 4,149,954 3,120,830
Other deposits 3,104,417 2,623,185 6,282,396 5,068,774
Overnight borrowings 118,269 162,772 220,279 308,506
Other borrowings 192,211 117,038 324,744 200,540
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Total interest expense 5,433,151 4,487,189 10,977,373 8,698,650
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Net interest income 8,066,458 9,262,348 16,618,595 17,831,028
Provision for loan losses 2,010,680 788,427 2,710,578 1,433,427
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Net interest income after
provision for loan losses 6,055,778 8,473,921 13,908,017 16,397,601
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OTHER INCOME:
Service charges on deposit accounts 1,335,919 1,278,950 2,597,216 2,161,113
Other service charges, fees and commissions 904,781 747,062 1,807,345 1,380,339
Securities gains 9,214 - 137,549 -
Other 80,031 22,960 234,692 167,201
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Total other income 2,329,945 2,048,972 4,776,802 3,708,653
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OTHER EXPENSES:
Salaries and wages 2,402,606 2,098,179 4,683,509 4,098,232
Employee benefits 315,187 449,107 826,810 882,780
Occupancy expense, net 211,278 209,254 426,606 417,434
Equipment expense 387,661 360,624 767,023 689,882
Other 1,245,886 1,159,022 2,359,286 2,296,299
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Total other expenses 4,562,618 4,276,186 9,063,234 8,384,627
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Income before income taxes 3,823,105 6,246,707 9,621,585 11,721,627
Income taxes 1,192,598 2,159,277 3,142,972 3,972,721
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Net income $ 2,630,507 $ 4,087,430 $ 6,478,613 $ 7,748,906
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PER SHARE AMOUNTS:
Net income - Basic $ 0.24 $ 0.36 $ 0.58 $ 0.68
Net income - Diluted 0.24 0.36 0.58 0.68
Cash dividends 0.11 0.10 0.22 0.20
Book value 11.06 10.26
See notes to consolidated financial statements.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 4 of 23
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BANK OF GRANITE CORPORATION Three Months Six Months
Consolidated Statements of Ended June 30, Ended June 30,
Comprehensive Income 2001 2000 2001 2000
(unaudited)
Net income $ 2,630,507 $ 4,087,430 $ 6,478,613 $ 7,748,906
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ITEMS OF OTHER COMPREHENSIVE
INCOME:
Items of other comprehensive
income (losses), before tax:
Unrealized gains (losses) on
securities available for sale 92,277 (52,121) 772,564 (504,099)
Less: Reclassification
adjustments for gains
included in net income 9,214 - 137,549 -
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Items of other comprehensive
income (losses), before tax 83,063 (52,121) 635,015 (504,099)
Less: Change in deferred income
taxes related to change in
unrealized gains or losses on
securities available for sale 33,122 (20,784) 253,209 (201,017)
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Other comprehensive
income (losses), net of tax 49,941 (31,337) 381,806 (303,082)
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Comprehensive income $ 2,680,448 $ 4,056,093 $ 6,860,419 $ 7,445,824
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See notes to consolidated financial statements.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 5 of 23
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BANK OF GRANITE CORPORATION Six Months
Consolidated Statements of Changes in Ended June 30,
Shareholders' Equity (unaudited) 2001 2000
COMMON STOCK, $1 PAR VALUE
At beginning of period $ 11,517,084 $ 11,495,897
Shares issued under incentive stock option plans 20,431 -
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At end of period 11,537,515 11,495,897
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CAPITAL SURPLUS
At beginning of period 23,260,188 22,987,562
Shares issued under incentive stock option plans 317,416 -
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At end of period 23,577,604 22,987,562
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RETAINED EARNINGS
At beginning of period 91,794,837 80,976,641
Net income 6,478,613 7,748,906
Cash dividends paid (2,449,560) (2,282,119)
--------------------------------
At end of period 95,823,890 86,443,428
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ACCUMULATED OTHER COMPREHENSIVE INCOME,
NET OF DEFERRED INCOME TAXES
At beginning of period 358,923 (746,948)
Net change in unrealized gains or losses on securities
available for sale, net of deferred income taxes 381,806 (303,082)
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At end of period 740,729 (1,050,030)
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COST OF COMMON SHARES HELD IN TREASURY
At beginning of period (7,615,695) (1,262,043)
Cost of common shares repurchased (1,136,021) (2,482,753)
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At end of period (8,751,716) (3,744,796)
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TOTAL SHAREHOLDERS' EQUITY $122,928,022 $116,132,061
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SHARES ISSUED
At beginning of period 11,517,084 11,495,897
Shares issued under incentive stock option plans 20,431 -
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At end of period 11,537,515 11,495,897
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SHARES HELD IN TREASURY
At beginning of period (364,135) (56,696)
Common shares repurchased (57,133) (125,139)
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At end of period (421,268) (181,835)
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TOTAL SHARES OUTSTANDING 11,116,247 11,314,062
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See notes to consolidated financial statements.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 6 of 23
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BANK OF GRANITE CORPORATION Six Months
Consolidated Statements of Cash Flows Ended June 30,
(unaudited) 2001 2000
INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS:
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest received $ 28,203,545 $ 26,096,856
Fees and commissions received 4,639,253 3,708,653
Interest paid (11,181,324) (8,631,983)
Cash paid to suppliers and employees (9,706,131) (8,823,805)
Income taxes paid (4,292,561) (4,000,017)
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Net cash provided by operating activities 7,662,782 8,349,704
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CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities and/or calls of
securities available for sale 26,276,226 7,725,000
Proceeds from maturities and/or calls of
securities held to maturity 8,455,275 7,876,750
Proceeds from sales of securities
available for sale 130,755 -
Purchase of securities available for sale (17,073,366) (24,112,660)
Purchase of securities held to maturity (8,414,358) (5,407,858)
Net increase in loans (35,249,963) (32,900,692)
Capital expenditures (151,775) (389,368)
Proceeds from sale of fixed assets 125 750
Proceeds from sale of other real estate - 88,759
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Net cash used by investing activities (26,027,081) (47,119,319)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand, NOW, money market
and savings deposits 5,595,464 10,758,382
Net increase in time deposits 14,306,703 7,600,521
Net increase in overnight borrowings 260,343 3,725,505
Net increase in other borrowings 16,188,463 1,129,790
Net proceeds from issuance of common stock 337,847 -
Dividend paid (2,449,560) (2,282,119)
Purchases of common stock for treasury (1,136,021) (2,482,753)
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Net cash provided by financing activities 33,103,239 18,449,326
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Net increase (decrease) in cash equivalents 14,738,940 (20,320,289)
Cash and cash equivalents at beginning of period 30,627,080 51,138,496
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Cash and cash equivalents at end of period $ 45,366,020 $ 30,818,207
================================
See notes to consolidated financial statements.
(continued on next page)
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 7 of 23
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BANK OF GRANITE CORPORATION Six Months
Consolidated Statements of Cash Flows Ended June 30,
(unaudited) - (concluded) 2001 2000
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED
BY OPERATING ACTIVITIES:
Net Income $ 6,478,613 $ 7,748,906
--------------------------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 573,030 506,943
Provision for loan loss 2,710,578 1,433,427
Premium amortization, net 62,545 98,774
Deferred income taxes (764,028) (373,079)
Gains on sales or calls of securities
available for sale (137,549) -
Losses (gains) on disposal or sale of equipment 4,201 (750)
Increase (decrease) in taxes payable (385,561) 345,783
Decrease (increase) in accrued interest receivable 545,032 (531,596)
Increase (decrease) in interest payable (203,951) 66,667
Increase in other assets (927,661) (636,359)
Decrease in other liabilities (292,467) (309,012)
--------------------------------
Net adjustments to reconcile net income to
net cash provided by operating activities 1,184,169 600,798
--------------------------------
Net cash provided by operating activities $ 7,662,782 $ 8,349,704
================================
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS:
Increase (decrease) in unrealized gains or
losses on securities available for sale $ 635,015 $ (504,099)
Decrease (increase) in deferred income taxes
on unrealized gains or losses on
securities available for sale 253,209 (201,017)
Transfer from loans to other real estate owned 153,128 170,626
See notes to consolidated financial statements.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 8 of 23
9
BANK OF GRANITE CORPORATION
Notes to Consolidated Financial Statements
June 30, 2001
1. In the opinion of management, the accompanying consolidated financial
statements contain all adjustments necessary to present fairly the financial
position of Bank of Granite Corporation (the "Company") as of June 30, 2001 and
December 31, 2000, and the results of its operations for the three and six month
periods ended June 30, 2001 and 2000, and its cash flows for the six month
periods ended June 30, 2001 and 2000.
The consolidated financial statements include the Company's two wholly-owned
subsidiaries, the Bank of Granite (the "Bank"), a full service commercial bank,
and GLL & Associates, Inc. ("GLL"), a mortgage banking company.
The accounting policies followed are set forth in Note 1 to the Company's 2000
Annual Report to Shareholders on file with the Securities and Exchange
Commission.
2. Earnings per share have been computed using the weighted average number of
shares of common stock and potentially dilutive common stock equivalents
outstanding as follows:
Three Months Six Months
Ended June 30, Ended June 30,
(in shares) 2001 2000 2001 2000
Weighted average shares outstanding 11,116,219 11,350,996 11,128,864 11,385,111
Potentially dilutive effect of stock options 626 10,185 2,665 9,710
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Weighted average shares outstanding,
including potentially dilutive effect of
stock options 11,116,845 11,361,181 11,131,529 11,394,821
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3. In the normal course of business there are various commitments and contingent
liabilities such as commitments to extend credit, which are not reflected on the
financial statements. Management does not anticipate any significant losses to
result from these transactions. The unfunded portion of loan commitments and
standby letters of credit as of June 30, 2001 and December 31, 2000 were as
follows:
JUNE 30, December 31,
2001 2000
Unfunded commitments $ 77,913,464 $ 81,135,503
Letters of credit 3,635,772 2,865,570
</Table>
4. New Accounting Standards - In June 1998, the Financial Accounting Standards
Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No.
133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No.
133 was amended by SFAS No. 138, "Accounting for Certain Derivative Instrument
and Certain Hedging Activities." SFAS No. 133, as amended, establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, (collectively referred to as
derivatives) and for hedging activities. The new standard requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
SFAS No. 133 was amended by SFAS No. 137, "Accounting for Derivative Instruments
and Hedging Activities - Deferral of the Effective Date for FASB Statement No.
133," which delayed the Company's effective date until January 1, 2001.
Effective January 1, 2001, the Company adopted the Standard. The Standard did
not have an impact on the Company's financial statements and current
disclosures.
In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities." SFAS No. 140
revises the standards for accounting for securitization and other transfers of
financial assets and collateral and requires certain disclosures, but carries
over most of the provisions of SFAS No. 125 without reconsideration. The
statement is effective for transfers and servicing of financial assets and
extinguishment of liabilities occurring after March 31, 2001. The Standard did
not have an impact on the Company's financial statements and current
disclosures.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 9 of 23
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CHANGES IN FINANCIAL CONDITION
June 30, 2001 Compared With December 31, 2000
Total assets increased $39,081,679, or 5.91%, from December 31, 2000 to
June 30, 2001. Earning assets increased $39,476,430, or 6.32%, over the same six
month period. Loans, the largest earning asset, increased $34,639,661, or 7.69%,
over the same period, primarily because of a $16,413,171, or 165.27%, increase
as of June 30, 2001 in the level of mortgage loans of GLL and a $18,226,490, or
4.14%, increase in the Bank's loans. Cash and cash equivalents increased of
$14,738,940, or 48.12%, primarily because Federal funds sold increased of
$13,425,000, or 203.41%. Investment securities decreased $8,664,513, or 5.17%,
because of calls of debt securities due to lower interest rates.
Funding the asset growth was a combination of deposit growth, growth in
overnight and other borrowings and earnings retained. Deposits increased
$19,902,167, or 3.85%, from December 31, 2000 to June 30, 2001. Savings, NOW and
money market deposits increased $6,220,963, or 4.64%, while total time deposits
increased $14,306,703, or 4.95%, over the same period. The Company's loan to
deposit ratio was 90.29% as of June 30, 2001 compared to 87.07% as of December
31, 2000, while the Bank's loan to deposit ratio was 83.42% compared to 83.17%
when comparing the same periods.
The Company has sources of funding, in addition to deposits, in the form of
overnight and other short-term borrowings as well as other longer-term
borrowings. Overnight borrowings are primarily in the form of federal funds
purchased and commercial deposit products that sweep balances overnight into
securities sold under agreements to repurchase or commercial paper issued by the
Company. From December 31, 2000 to June 30, 2001, such overnight borrowings
increased $260,343, or 2.04%. Other borrowings increased $16,188,463, or
206.48%, reflecting an increase in temporary borrowings by GLL primarily due to
higher mortgage origination activity.
Common stock outstanding decreased 36,702 shares, or 0.33%, from December
31, 2000 to June 30, 2001, primarily due to shares repurchased under the
Company's current stock repurchase plan. From December 31, 2000 through June 30,
2001, the Company repurchased 57,133 shares of its common stock at an average
price of $19.88. During the same period, the Company issued 20,431 shares of its
common stock at an average price of $16.54 under its Incentive Stock Option
Plan. Earnings retained were $4,029,053 for the first six months of 2001, after
paying cash dividends of $2,449,560. Accumulated other comprehensive income, net
of deferred income taxes, increased $381,806, or 106.38%, from December 31, 2000
to June 30, 2001, primarily because the value of securities available for sale
rose when interest rates on longer term bonds fell during the period.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 10 of 23
11
LIQUIDITY, INTEREST RATE SENSITIVITY AND MARKET RISKS
The objectives of the Company's liquidity management policy include
providing adequate funds to meet the needs of depositors and borrowers at all
times, as well as providing funds to meet the basic needs for on-going
operations of the Company and regulatory requirements. The Company's liquidity
position remained strong during the six month period ended June 30, 2001.
The Company places great significance on monitoring and managing the
Company's asset/liability position. The Company's policy for managing its
interest margin (or net yield on interest-earning assets) is to maximize net
interest income while maintaining a stable deposit base. The Company's deposit
base has not historically been subject to the levels of volatility experienced
in national financial markets in recent years; however, the Company does realize
the importance of minimizing such volatility while at the same time maintaining
and improving earnings. Gap analysis, a common method historically used to
estimate interest rate sensitivity, measures the difference or gap between the
volume of interest-earning assets and interest-bearing liabilities repricing
over various time periods. However, this method addresses only the magnitude of
funding mismatches and does not address the magnitude or relative timing of rate
changes. Therefore, management prepares on a regular basis earnings projections
based on a range of interest rate scenarios of rising, flat and declining rates
in order to more accurately measure interest rate risk.
Interest-bearing liabilities and the loan portfolio are generally repriced
to current market rates. The Company's balance sheet is asset-sensitive, meaning
that in a given period there will be more assets than liabilities subject to
immediate repricing as the market rates change. Because most of the Company's
loans are at variable rates, they reprice more rapidly than rate sensitive
interest-bearing deposits. During periods of rising rates, this results in
increased net interest income. The opposite occurs during periods of declining
rates.
In response to a slowing economy during the first six-months of 2001, the
Federal Reserve lowered its rate on short-term overnight funds by 275 basis
points. Because of its asset sensitivity, the Company experienced a 97 basis
point decline in its net interest margin, which was 5.41% in the first
six-months of 2001 compared with 6.38% in the first six-months of 2000. For the
second quarter, the margin declined 141 basis points to 5.12% in 2001 compared
with 6.53% in 2000. The Company's variable rate loans, and certain investments
that matured or were called, repriced immediately at the lower rates. The
Company's time deposits will reprice as they mature over the next several
quarters. The Company believes that the Federal Reserve may further reduce
short-term rates as the economy continues to show signs of weakness. The Federal
Reserve lowers rates to reduce borrowing costs with the goal of increasing loan
demand to stimulate the economy. Such increases in loan demand, should they
occur, could mitigate the effects of the Company's repricing differences
discussed above.
The Bank uses several modeling techniques to measure interest rate risk
including the gap analysis previously discussed, the simulation of net interest
income under varying interest rate scenarios and the theoretical impact of
immediate and sustained rate changes referred to as "rate shocks." "Rate shocks"
measure the estimated theoretical impact on the Bank's tax equivalent net
interest income and market value of equity from hypothetical immediate changes
of plus and minus 1%, 2%, 3% and 4% as compared to the estimated theoretical
impact of rates remaining unchanged. The prospective effects of these
hypothetical interest rate changes is based upon numerous assumptions including
relative and estimated levels of key interest rates. "Rate shocks" modeling is
of limited usefulness because it does not take into account the pricing
strategies management would undertake in response to the depicted sudden and
sustained rate changes.
The Company has not experienced a change in the mix of its rate-sensitive
assets and liabilities or in interest rates in the market that it believes would
result in a material change in its interest rate sensitivity since reported at
December 31, 2000.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 11 of 23
12
RESULTS OF OPERATIONS
For the Three Month Period Ended June 30, 2001 Compared With
the Same Period in 2000 and for the Six Month Period Ended
June 30, 2001 Compared With the Same Period in 2000
During the three month period ended June 30, 2001, the Company's net income
decreased to $2,630,507, or 35.64%, from $4,087,430 earned in the same period of
2000. The decline primarily resulted from lower net interest margins and higher
provisions for possible loan losses. For essentially the same reasons,
year-to-date net income was also lower. For the first six months of 2001 net
income was $6,478,613, down $1,270,293, or 16.39%, from $7,748,906 earned in the
same year-to-date period of 2000.
NET INTEREST INCOME FOR THE QUARTERLY PERIODS
During the three month period ended June 30, 2001, the Company's net
interest income decreased $1,195,890, or 12.91%, compared to the three months
ended June 30, 2000, primarily due to the Company's asset-sensitive balance
sheet in a declining rate environment. For a discussion of the Company's
asset-sensitivity and the related effects on the Company's net interest income
and net interest margins, please see "Liquidity, Interest Rate Sensitivity and
Market Risks" above.
During the quarter ended June 30, 2001, interest income decreased $249,928,
or 1.82%, from the same period last year, primarily because of lower rates on
loan and investment assets, partially offset by higher volumes of loans.
Interest and fees on loans decreased $91,092, or 0.82%, due to lower average
rates during the quarter. Yields on loans averaged 9.21% for the quarter, down
from 10.77% for the same quarter last year. The prime lending rate during the
three month period averaged 7.59% compared to 9.14% during the same period in
2000. Gross loans averaged $480,700,426 compared to $415,395,605 last year, an
increase of $65,304,821, or 15.72%. Average loans of the Bank were $456,590,659
compared to $403,868,857 last year, an increase of $52,721,802, or 13.05%, while
average loans of GLL were $24,109,767 compared to $11,526,748 last year, an
increase of $12,583,019, or 109.16%. Interest on securities and overnight
investments decreased $158,836, or 6.05%, also due to lower rates during the
quarter. Average securities and overnight investments were $185,221,898 compared
to $182,318,251 last year, an increase of $2,903,647, or 1.59%.
Interest expense increased $945,962, or 21.08%, primarily because of higher
volumes and rates of time deposits, a substantial portion of which were opened
during the third and fourth quarters of 2000 when interest rates were at or near
their highest recent levels. Time deposits generally pay a higher rate of
interest than most other types of deposits. Overall, rates on interest-bearing
deposits averaged 4.58% for the quarter, up from 4.34% for the same quarter last
year, primarily because of growth in time deposits. Total interest-bearing
deposits averaged $448,373,316 compared to $390,337,630 last year, an increase
of $58,035,686, or 14.87%. Savings, NOW and money market deposits averaged
$136,436,877 compared to $137,997,700 last year, a decrease of $1,560,823, or
1.13%. Time deposits averaged $311,936,439 compared to $252,339,930 last year,
an increase of $59,596,509, or 23.62%. Overnight borrowings averaged $11,310,511
compared to $14,180,572 last year, a decrease of $2,870,061, or 20.24%,
reflecting decreases in both securities sold under agreements to repurchase and
commercial paper related to the commercial deposit sweep arrangements. Other
borrowings averaged $21,531,732 compared to $9,770,351 last year, an increase of
$11,761,381, or 120.38%, due to an increase in temporary borrowings of GLL
primarily due to higher mortgage origination activity. Other borrowings were the
principal source of funding for the mortgage origination activities of GLL. The
Company has not historically relied upon "out-of-market" or "brokered" deposits
as a source of funding.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 12 of 23
13
NET INTEREST INCOME FOR THE YEAR-TO-DATE PERIODS
As was the case for the second quarter, the Company's net interest income
decreased for the year-to-date period. Although higher loan volumes helped to
buffer the year-to-date decline, falling loan yields in 2001 and growth in
higher cost time deposits during the last six months of 2000 caused the
Company's net interest income to decrease $1,212,433, or 6.80%, during the six
month period ended June 30, 2001 compared to the same period in 2000. For a
discussion of the Company's asset-sensitivity and the related effects on the
Company's net interest income and net interest margins, please see "Liquidity,
Interest Rate Sensitivity and Market Risks" above.
During the first six months of 2001, interest income increased $1,066,290,
or 4.02%, from the same period last year due to due to higher volumes of loans,
which outpaced lower interest rates on loans and other interest-earning assets.
Interest and fees on loans increased $1,299,535, or 6.10%, due to the higher
average volumes during the year-to-date period. Yields on loans averaged 9.66%
for the year-to-date period, down from 10.55% for the same period last year. The
prime rate during the six month period averaged 8.20% compared to 8.90% during
the same period in 2000. Gross loans averaged $471,679,628 compared to
$406,008,376 last year, an increase of $65,671,252, or 16.17%. Average loans of
the Bank were $451,309,816 compared to $395,687,627 last year, an increase of
$55,622,189, or 14.06%, while average loans of GLL were $20,369,812 compared to
$10,320,749 last year, an increase of $10,049,063, or 97.37%. Interest on
securities and overnight investments decreased $233,245, or 4.46%, due to both
lower average volumes invested during the period and lower rates received on
such investments. Average securities and overnight investments were $180,146,215
compared to $184,694,748 last year, a decrease of $4,548,533, or 2.46%.
Interest expense increased $2,278,723, or 26.20%, primarily because of
higher rates on and volumes of time deposits, a substantial portion of which
were opened during the third and fourth quarters of 2000 when interest rates
were at or near their highest recent levels. Rates on all interest-bearing
deposits averaged 4.77% for the year-to-date period, up from 4.24% for the same
period last year. Interest-bearing deposits averaged $440,941,213 compared to
$388,433,980 last year, an increase of $52,507,233, or 13.52%. Overnight
borrowings, principally in the form of commercial paper related to the Bank's
commercial deposit sweep arrangements, averaged $10,261,198 compared to
$13,633,041 last year, a decrease of $3,371,843, or 24.73%. Other borrowings
averaged $17,978,965 compared to $8,635,515 last year, an increase of
$9,343,450, or 108.20%, reflecting an increase in temporary borrowings of GLL
primarily due to higher mortgage origination activity. Other borrowings were the
principal source of funding for the mortgage origination activities of GLL. The
Company has not historically relied upon "out-of-market" or "brokered" deposits
as a source of funding.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 13 of 23
14
PROVISIONS FOR POSSIBLE LOAN LOSSES, ALLOWANCE FOR LOAN LOSSES
AND DISCUSSIONS OF ASSET QUALITY
Management determines the allowance for loan losses based on a number of
factors including reviewing and evaluating the Company's loan portfolio in order
to identify potential problem loans, credit concentrations and other risk
factors connected to the loan portfolio, as well as current and projected
economic conditions locally and nationally. Upon loan origination, management
evaluates the relative quality of each loan and assigns a corresponding loan
grade. All loans are periodically reviewed to determine whether any changes in
these loan grades are necessary. The loan grading system assists management in
determining the overall risk in the loan portfolio.
General economic trends greatly affect loan losses, and no assurances can
be made that further charges to the loan loss allowance may not be significant
in relation to the amount provided during a particular period or that further
evaluation of the loan portfolio based on conditions then prevailing may not
require sizable additions to the allowance, thus necessitating similarly sizable
charges to operations. Due to unfavorable economic trends in the Company's
market area and due to higher levels of nonperforming loans resulting from the
weakened local economy, management believed it prudent to charge operations in
the amounts of $2,010,680 and $2,710,578 for the three and six month periods
ended June 30, 2001, respectively, to provide for possible future losses related
to uncollectible loans. At June 30, 2001, the loan loss reserve was 1.77% of net
loans outstanding compared to 1.43% as of December 31, 2000. The following table
and subsequent discussion presents an analysis of changes in the allowance for
loan losses for the quarter-to-date and year-to-date periods.
Three Months Six Months
Ended June 30, Ended June 30,
2001 2000 2001 2000
Allowance for loan losses, beginning of period $ 6,918,760 $ 5,199,748 $ 6,351,756 $ 4,746,692
---------------------------------------------------------------
Net charge-offs:
Loans charged off:
Real estate 62,129 46,115 62,129 111,403
Commercial, financial and agricultural 152,083 68,468 178,285 236,777
Credit cards and related plans 4,942 3,049 10,986 4,956
Installment loans to individuals 242,093 106,248 330,247 139,705
Demand deposit overdraft program 105,628 89,482 215,367 89,482
---------------------------------------------------------------
Total charge-offs 566,875 313,362 797,014 582,323
---------------------------------------------------------------
Recoveries of loans previously charged off:
Real estate - - 26,327 12,449
Commercial, financial and agricultural 11,869 21,569 16,517 59,129
Credit cards and related plans 2,297 2,076 2,542 2,597
Installment loans to individuals 25,770 18,677 28,292 45,164
Demand deposit overdraft program 49,531 3,883 113,034 3,883
---------------------------------------------------------------
Total recoveries 89,467 46,205 186,712 123,222
---------------------------------------------------------------
Total net charge-offs 477,408 267,157 610,302 459,101
---------------------------------------------------------------
Loss provisions charged to operations 2,010,680 788,427 2,710,578 1,433,427
---------------------------------------------------------------
Allowance for loan losses, end of period $ 8,452,032 $ 5,721,018 $ 8,452,032 $ 5,721,018
===============================================================
Ratio of annualized net charge-offs during the
period to average loans during the period 0.40% 0.26% 0.26% 0.23%
Allowance coverage of annualized net charge-offs 441.39% 533.89% 686.76% 617.95%
Allowance as a percentage of gross loans 1.74% 1.35%
Allowance as a percentage of net loans 1.77% 1.37%
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 14 of 23
15
Nonperforming assets at June 30, 2001 and December 31, 2000 were as
follows:
JUNE 30, December 31,
2001 2000
Nonperforming assets:
Nonaccrual loans $ 2,593,567 $ 1,502,019
Loans past due 90 days or more and
still accruing interest 2,399,557 1,982,926
--------------------------------
Total nonperforming loans 4,993,124 3,484,945
Foreclosed properties 286,973 133,846
--------------------------------
Total nonperforming assets $ 5,280,097 $ 3,618,791
================================
Nonperforming loans to total loans 1.03% 0.77%
Allowance coverage of nonperforming loans 169.27% 164.16%
Nonperforming assets to total assets 0.75% 0.55%
</Table>
If interest from restructured loans, foreclosed properties and nonaccrual
loans had been recognized in accordance with the original terms of the loans,
net income for the second quarter would not have been materially different from
the amount reported.
The Company's investment in impaired loans at June 30, 2001 and December
31, 2000 was as follows:
JUNE 30, December 31,
2001 2000
Investment in impaired loans:
Impaired loans still accruing interest $ 4,111,000 $ 545,351
Accrued interest on accruing impaired loans 198,401 24,181
Impaired loans not accruing interest 2,593,567 1,502,019
Accrued interest on nonaccruing impaired loans 92,519 53,034
--------------------------------
Total investment in impaired loans $ 6,995,487 $ 2,124,585
================================
Loan loss allowance related to impaired loans $ 2,444,999 $ 1,009,562
================================
When comparing June 30, 2001 with June 30, 2000, the recorded investment in
loans that are considered to be impaired under SFAS No. 114 was $6,995,487
($2,686,086 of which was on a non-accrual basis) and $1,734,516 ($1,207,725 of
which was on a non-accrual basis), respectively. The average recorded balance of
impaired loans during the first six months of 2001 and 2000 was not
significantly different from the balance at June 30, 2001 and 2000,
respectively. The related allowance for loan losses determined in accordance
with SFAS No. 114 for these loans was $4,550,487 and $878,086 at June 30, 2001
and 2000, respectively. For the six months ended June 30, 2001 and 2000, the
Company recognized interest income on those impaired loans of approximately
$290,920 and $67,829, respectively.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 15 of 23
16
NONINTEREST INCOME AND EXPENSES FOR THE QUARTERLY PERIODS
For the quarter ended June 30, 2001, total noninterest income was
$2,329,945, up $280,973, or 13.71%, from $2,048,972 earned in the same period of
2000, primarily because of higher fees on deposit accounts and from mortgage
originations. Fees on deposit accounts were $1,335,919 during the second
quarter, up $56,969, or 4.45%, from $1,278,950 earned in the second quarter of
2000, primarily due to additional fees associated with the new demand deposit
overdraft program designed for retail customers and introduced in April 2000.
Other service fees and commissions were $904,781 for the second quarter of 2001,
up $157,719, or 21.11%, from $747,062 earned in the same period of 2000.
Included in other service fees was mortgage origination fee income of $710,505
for 2001, up $143,171, or 25.24%, from $567,334 earned in the same period of
2000. As mortgage rates began to drop in the third quarter of 2000, mortgage
origination activity increased and continued at higher levels throughout the
second quarter of 2001. There were no significant gains or losses on sales of
securities in the second quarter of 2001 or 2000. Other noninterest income was
$80,031 for the second quarter of 2001, up $57,071, or 248.57%, from $22,960
earned in the second quarter of 2000, primarily due to increased annuity sales.
Management continued to place emphasis on nontraditional banking services such
as annuities, life insurance, and sales of mortgage and small business loans,
which produced $799,989 in nontraditional fee income during the second quarter
of 2001, up 33.74% from the second quarter of 2000.
Second quarter 2001 noninterest expenses, or overhead, totaled $4,562,618,
up $286,432, or 6.70%, from $4,276,186 in the same quarter of 2000, primarily
because of higher costs associated with the increase in mortgage origination
activities. Personnel costs, the largest of the overhead expenses, were
$2,717,793 during the quarter, up $170,507, or 6.69%, from $2,547,286 in 2000.
Of the $170,507 increase in personnel costs, $214,392 were related to mortgage
operations, partially offset by a $43,885 decrease in the personnel costs of the
Bank. Salaries and wages were $2,402,606 during the quarter, up $304,427, or
14.51%, from $2,098,179 in 2000, while employee benefits were $315,187, down
$133,920, or 29.82%, compared to $449,107 in the second quarter of 2000,
primarily due to lower profit sharing expenses for the Bank. Bank salaries rose
$99,825 or 6.51%, while mortgage-related salaries rose $204,602 or 36.25%.
Noninterest expenses other than for personnel increased $115,925, or 6.71%,
to $1,844,825 during the quarter from $1,728,900 incurred in the same period of
2000. Of the $115,925 increase, the nonpersonnel costs of the Bank increased
$70,183 while the nonpersonnel costs of GLL increased $42,406. Occupancy
expenses for the quarter were up less than 1% for the quarter. Equipment
expenses were $387,661 during the second quarter, up $27,037, or 7.50%, from
$360,624 in the same period of 2000. Second quarter other noninterest expenses
were $1,245,886 in 2001, up $86,864, or 7.49%, from $1,159,022 in the same
quarter a year ago, with the other noninterest costs of the Bank increasing
$29,236 and GLL's other noninterest costs increasing $54,292. Income tax expense
was $1,192,598 for the quarter, down $966,679, or 44.77%, from $2,159,277 for
the 2000 second quarter. The effective tax rates were 31.19% and 34.57% for the
second quarters of 2001 and 2000, respectively. Net income decreased to
$2,630,507 during the quarter, or 35.64%, from $4,087,430 earned in the same
period of 2000.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 16 of 23
17
NONINTEREST INCOME AND EXPENSES FOR THE YEAR-TO-DATE PERIODS
For the six months ended June 30, 2001, total noninterest income was
$4,776,802, up $1,068,149, or 28.80%, from $3,708,653 earned in the first six
months of 2000, primarily because of higher fees on deposit accounts and higher
fees from mortgage originations. Fees on deposit accounts were $2,597,216 during
the first six months of 2001, up $436,103, or 20.18%, from $2,161,113 in the
same period of 2000, primarily due to additional fees associated with the new
demand deposit overdraft program designed for retail customers and introduced in
April 2000. Also for the year-to-date period, other service fees and commissions
were $1,807,345, up $427,006, or 30.93%, from $1,380,339 in 2000, primarily
because of higher fees from mortgage originations in the first six months of
2000. Included in other service fees was mortgage origination fee income of
$1,380,009 for 2001, up $415,891, or 43.14%, from $964,118 earned in the same
period of 2000. As was the case for the quarter, the drop in mortgage rates that
began in late 2000 increased mortgage origination activity, which continued
throughout the 2001 year-to-date period. Year-to-date gains on sales of
securities were $137,549, most of which was reported in the first quarter of
2001. Other noninterest income was $234,692 during the six months ended June 30,
2001, up $67,491, or 40.37%, from $167,201 in the same period of 2000.
Management continued to place emphasis on nontraditional banking services such
as annuities, life insurance, and sales of mortgage and small business loans,
which produced $1,507,906 in nontraditional fee income during the first six
months of 2001, up 45.17% from 2000.
Total noninterest expenses were $9,063,234 during the first six months of
2001, up $678,607, or 8.09%, from $8,384,627 in the same period of 2000,
primarily because of higher costs associated with the increase in mortgage
origination activities. Total personnel costs, the largest of the overhead
expenses, were $5,510,319 during the first six months of 2001, up $529,307, or
10.63%, from $4,981,012 in the same period of 2000. Included in the change in
personnel costs was an increase of $585,277 in salaries and wages that was
partially offset by a decrease of $55,970 in employee benefits. Also, $163,150
of the increase in personnel costs, was related to banking operations and
$366,157 were related to mortgage operations.
Noninterest expenses other than for personnel increased to $3,552,915
during the first six months of 2001, or 4.39%, from $3,403,615 incurred in the
same period of 2000. Of the $149,300 increase, $118,420 were related to banking
operations, while $38,338 were related to mortgage operations. Year-to-date
occupancy expenses were $426,606, up $9,172, or 2.20%, from $417,434 in 2000,
and equipment expenses were $767,023, up $77,141, or 11.18%, from $689,882 in
the same year-to-date period of 2000. Other noninterest expenses were $2,359,286
for the six months ended June 30, 2001, up $62,987, or 2.74%, from $2,296,299 in
the same period of 2000. Of the $62,987 increase in other noninterest expenses,
$6,376 were related to banking operations, while $64,069 were related to
mortgage operations, partially offset by a small decrease in holding company
expenses. Year-to-date income tax expense was $3,142,972 in 2001, down $829,749,
or 20.89%, from $3,972,721 in 2000. The year-to-date effective tax rates were
32.67% and 33.89% for 2001 and 2000, respectively. Net income was $6,478,613
during the first six months of 2001, down $1,270,293, or 16.39%, from $7,748,906
earned in the same year-to-date period of 2000.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 17 of 23
18
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this item is included in Item 2, Management's
Discussion of Financial Condition and Results of Operations, above, under the
caption "Liquidity, Interest Rate Sensitivity and Market Risk."
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. 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 the
Company and its management about future events. The accuracy of such forward
looking statements could be affected by such factors as, including but not
limited to, the financial success or changing conditions or strategies of the
Company's customers or vendors, fluctuations in interest rates, actions of
government regulators, the availability of capital and personnel and general
economic conditions.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 18 of 23
19
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
Not applicable.
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
The following proposals were considered and acted upon at the annual
meeting of shareholders of the Company held on April 23, 2001:
Proposal 1. To consider the election of seven persons named as
director/nominees in the Proxy Statement dated March 23, 2001.
John N. Bray FOR 9,674,123 WITHHELD 95,209
Paul M. Fleetwood, III, CPA FOR 9,754,306 WITHHELD 15,026
John A. Forlines, Jr. FOR 9,514,183 WITHHELD 255,149
Barbara F. Freiman FOR 9,717,399 WITHHELD 51,933
Hugh R. Gaither FOR 9,629,742 WITHHELD 139,590
Charles M. Snipes FOR 9,470,591 WITHHELD 298,741
Boyd C. Wilson, Jr., CPA FOR 9,753,726 WITHHELD 15,606
Proposal 2. To consider the Company's proposed 2001 Incentive
Stock Option Plan.
FOR 9,367,856 AGAINST 223,167 ABSTAIN 178,308
Proposal 3. To consider the ratification of the selection of
Deloitte & Touche LLP as the Company's independent Certified
Public Accountants for the fiscal year ending December 31,
2001.
FOR 9,717,888 AGAINST 10,426 ABSTAIN 41,018
No other business came before the meeting, or any adjournment
or adjournments thereof.
ITEM 5 - OTHER INFORMATION
Not applicable.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 19 of 23
20
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
* Exhibits, Financial Statement Schedules and Reports on Forms 8-K included in
or incorporated by reference into this filing were filed with the Securities and
Exchange Commission. Bank of Granite Corporation provides these documents
through its Internet site at www.bankofgranite.com or by mail upon written
request.
(a) 1. Financial Statements
The information required by this item is set forth under Item 1
2. Financial Statement Schedules
None
3. Exhibits
(a) Certificate of Incorporation
Bank of Granite Corporation's Restated Certificate of
Incorporation, as amended, filed as Exhibit 3.(a) to the
Quarterly Report to Shareholders on Form 10-Q for the quarterly
period ended March 31, 2001 is incorporated herein by
reference.
(b) Bylaws of the Registrant
Bank of Granite Corporation's Bylaws, filed as Exhibit D of
Pre-Effective Amendment No. 1 to the Registrant's Registration
Statement on Form S-4 (Registration Statement No. 33-11876) on
February 23, 1987 is incorporated herein by reference
10. Material Contracts
1. Bank of Granite Employees' Profit Sharing Plan and Trust, as
amended December 31, 1996, filed as Exhibit 10.1 to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 2000 is incorporated herein by reference
2. Bank of Granite Supplemental Executive Retirement Plan filed as
Exhibit 10.2 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 2000 is incorporated herein
by reference
3. Bank of Granite Corporation's 1997 Incentive Stock Option
Plan, filed as Exhibit 4.1 to the Registrant's Registration
Statement on Form S-8 (Registration Statement No. 333-29157)
on June 13, 1997 is incorporated herein by reference
4. Employment and Noncompetition Agreement, dated June 1, 1999,
between GLL & Associates, Inc. and Gary L. Lackey filed as
Exhibit 10.4 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 2000 is incorporated
herein by reference
5. Bank of Granite Corporation's 2001 Incentive Stock Option
Plan, filed as Exhibit 4.1 to the Registrant's Registration
Statement on Form S-8 (Registration Statement No. 333-61640)
on May 25, 2001 is incorporated herein by reference
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 20 of 23
21
11. Schedule of Computation of Net Income Per Share
The information required by this item is set forth under Item
1, Note 2
(b) Reports on Form 8-K
On July 9, 2001, the Company filed a report on Form 8-K
regarding its July 9, 2001 news release in which it announced
its earnings for the quarter ended June 30, 2001. The full text
news release dated July 9, 2001 was attached as exhibit 99(a)
to this Form 8-K filing.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 21 of 23
22
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Bank of Granite Corporation
(Registrant)
Date: August 8, 2001 /s/ Kirby A. Tyndall
-------------------------------
Kirby A. Tyndall
Senior Vice President and
Chief Financial Officer and
Principal Accounting Officer
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 22 of 23
23
EXHIBIT INDEX
Begins
on Page
-------
Certificate of Incorporation, as amended *
Bylaws of the Registrant *
Bank of Granite Employees' Profit Sharing Plan and Trust, as amended *
Bank of Granite Supplemental Executive Retirement Plan *
Bank of Granite Corporation's 1997 Incentive Stock Option Plan *
Employment and Noncompetition Agreement, dated June 1, 1999, between GLL &
Associates, Inc. and Gary L. Lackey *
Bank of Granite Corporation's 2001 Incentive Stock Option Plan *
- -------------------------------------------------
* Incorporated herein by reference.
Bank of Granite Corporation, Form 10-Q, June 30, 2001, page 23 of 23