SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

BANK OF GRANITE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.

/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:
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BANK OF GRANITE CORPORATION
23 NORTH MAIN STREET
GRANITE FALLS, NC 28630
(704) 496-2000

Notice of Annual Meeting of Shareholders - April 24, 1995

TO OUR SHAREHOLDERS:

The Annual Meeting of Shareholders of Bank of Granite Corporation will
be held on Monday April 24, 1995 at 10:30 a.m. The meeting will be held at the
Holiday Inn, 130 South Lenoir Ryhne Boulevard, S.E. (at Interstate 40, Exit
#125), Hickory, North Carolina for the following purposes:

1. To consider the election of seven persons named as director
nominees in the Proxy Statement dated March 16, 1995, which
accompanies this Notice;

2. To consider the ratification of the selection of Deloitte &
Touche, LLP as Bank of Granite Corporation's independent
Certified Public Accountants for the fiscal year ending
December 31, 1995; and

3 To transact such other business as may properly be brought
before the meeting or any adjournment thereof.

Shareholders of record at the close of business on March 16, 1995 are
entitled to receive notice of and vote at this meeting.

Bank of Granite Corporation's 1995 Annual Shareholders Meeting Proxy
Ballot, Proxy Statement and its 1995 Annual Report are enclosed with this
Notice.

YOUR VOTE IS IMPORTANT. TO ASSURE YOUR REPRESENTATION AT THE MEETING,
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN YOUR PROXY IN THE ENVELOPE PROVIDED
FOR THAT PURPOSE. IF YOU ATTEND THE MEETING, YOU MAY, OF COURSE, WITHDRAW YOUR
PROXY AND VOTE IN PERSON.

By Order of the Board of Directors

JOHN A. FORLINES, JR.
------------------------------------
Granite Falls, NC JOHN A. FORLINES, JR.
March 16, 1995 Chairman and Chief Executive Officer

================================================================================
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================================================================================
BANK OF GRANITE CORPORATION
PROXY STATEMENT
================================================================================

SOLICITATION, VOTING AND REVOCABILITY OF PROXY

General

The accompanying Proxy is solicited by the Board of Directors of Bank of
Granite Corporation (the "Corporation") for use at the Annual Meeting of
Shareholders to be held on April 24, 1995, and any adjournment thereof. The
time and place of the meeting is set forth in the accompanying Notice of
Meeting. The approximate date on which this Proxy Statement and the
accompanying Proxy are first being sent or given to Shareholders of the
Corporation is March 16, 1995.

A copy of the Corporation's 1994 Annual Report including financial statements
is included with this Proxy Statement and has been sent to each person who was
a shareholder of record as of the close of business on March 16, 1995. The
Corporation will also provide to any shareholder without charge a copy of the
Annual Report for 1994 filed on Form 10-K with the Securities and Exchange
Commission upon written request to Randall C. Hall, Secretary, Bank of Granite
Corporation, P. O. Box 128, Granite Falls, North Carolina 28630.

Solicitation

All expenses of preparing, printing and mailing the Proxy and all material used
in the solicitation thereof will be borne by the Corporation. In addition to
the use of the mails, proxies may be solicited through personal interview and
telephone by directors, officers and other employees of the Corporation, none
of whom will receive additional compensation for their services.

Revocability of Proxy

This Proxy shall be revocable at any time prior to its exercise by filing a
written request with Randall C. Hall, Secretary of the Corporation, by voting
in person at the Shareholders Meeting, or by presenting a duly executed proxy
bearing a later date.

Voting Securities and Vote Required for Approval

At the close of business on March 16, 1995, the record date, the
Corporation had issued and outstanding 5,961,675 shares of Common Stock, par
value $1.00 per share, which is the only class of stock outstanding. Only the
holders of record of Common Stock of the Corporation at the close of business
on March 16, 1995 are entitled to receive notice of the Annual Meeting of
Shareholders and to vote on such matters to come before the Annual Meeting or
any adjournment thereof.

Presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock of the Corporation entitled to vote at the
Annual Meeting is necessary to constitute a quorum at the Annual Meeting or any
adjournment thereof.

The approval of Proposal 1 (the Election of Directors), Proposal 2
(the Ratification of the Selection of the Corporation's Independent
Accountants), and approval of all other items which may be submitted to the
shareholders for their consideration at the Annual Meeting requires the
affirmative vote of a majority of

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shares present and voting. Each shareholder is entitled to one (1) vote for
each share of Common Stock held by him or her at the close of business on the
record date, March 16, 1995. Cumulative voting is not permitted.

The Board of Directors unanimously recommends a vote in favor of
Proposals 1 and 2. Each Proxy, unless the shareholder otherwise specifies,
will be voted in favor of Proposals 1 and 2. In each case where the
shareholder has appropriately specified how the Proxy is to be voted, it will
be voted in accordance with his or her specification. Executed but unmarked
Proxies that are returned to the Corporation will be voted in favor of the
proposed slate of directors and in favor of the ratification of Deloitte and
Touche as the Corporation's independent accountants. Shareholders may
designate a person or persons other than those named in the enclosed Proxy to
vote their shares at the Annual Meeting or any adjournment thereof. As to any
other matter or business which may be brought before the Annual Meeting or any
adjournment thereof, a vote may be cast pursuant to the accompanying Proxy in
accordance with the judgment of the person or persons voting the same, but the
management and Board of the Corporation do not know of any other matter or
business to come before the Annual Meeting.

PRINCIPAL HOLDERS OF VOTING SECURITIES

To the knowledge of the Corporation, no individual shareholder owned
beneficially more than five percent (5%) of the Bank of Granite Corporation's
outstanding Common Stock on the record date. Corporation Common Stock is held
by Cede & Co. as nominee of securities depositories for various segments of the
financial industry. As of the record date, Cede & Co. held shares registered
in street name for approximately 1,300 individuals and organizations as
follows:

Amont and Nature of Percent
Name and Address Beneficial Ownership of Class
---------------- ---------------------- --------
Cede & Co. 1,828,776 shares 30.68%
New York, NY

On the record date, the Corporation's Common Stock was owned by
approximately 3,000 individuals and entities, holding Stock either as record
holder or as beneficial owner.

No change in control of the Corporation has occurred since the
beginning of the Corporation's last fiscal year, and as far as the Corporation's
management is aware, there are no plans for change in control of the
Corporation.

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INFORMATION ABOUT THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD

Boards of Bank of Granite Corporation and its sole subsidiary, Bank of
Granite (the "Bank") are composed of the same persons.

During the fiscal year ended December 31, 1994, the Bank's Board of
Directors held 13 meetings, and the Corporation's Board of Directors held 6
meetings. All members of both Boards of Directors attended more than 75% of
the total number of meetings of the Boards of Directors and the total number of
meetings held by committees of the Boards of which they are members. Overall
attendance at both Boards' meetings was approximately 94%.

Corporation and Bank directors were paid an annual retainer of $3,000 and
fees of $250 for attendance at each meeting of the Board. Directors received
no additional compensation for attending committee meetings. The Corporation's
Board has standing audit and nominating committees. The Bank's Board of
Directors supervises all compensation matters, and performs certain executive
committee functions for the Corporation's Board of Directors. The functions,
composition and frequency of meetings for the audit and nominating committees
in fiscal year 1994 were as follows:

AUDIT COMMITTEE - The Audit Committee was composed of directors Robert E.
Cline, Barbara F. Freiman and Myron L. Moore, Jr. The Committee, whose
members are neither officers nor employees of the Corporation or Bank,
provides general oversight of the internal audit function, reviews the
findings of external audits and examinations, evaluates the adequacy of
the Bank's insurance coverage, and reviews the activities of the Bank's
regulatory compliance efforts. During 1994, twelve (12) meetings were
held. All Committee members attended more than 75% of the total number
of Audit Committee meetings held during fiscal year 1994.

NOMINATING COMMITTEE - The Nominating Committee was composed of directors
John A. Forlines, Jr., Barbara F. Freiman, Myron L. Moore, Jr. and
Charles M. Snipes. The Committee makes recommendations to the Board of
Directors with respect to nominees for election as directors. The
Committee would consider shareholder nominees for Corporation and Bank
Board membership. Any shareholder wishing to nominate a candidate for
director must follow the procedures set forth in the section of this
Proxy Statement entitled "Proposals for 1996 Annual Shareholders
Meeting." During 1994, one meeting was held. All Committee members
attended at least 75% of the total number of Nominating Committee
meetings held during fiscal year 1994.

ELECTION OF DIRECTORS
(PROPOSAL 1)

Seven (7) directors are being considered for election at the Annual
Meeting, each to hold office for one year or until a successor is elected and
qualified. The Corporation Board's nominees are shown below along with
biographical summaries and beneficial ownership of Common Stock. The
information is presented, unless otherwise indicated, as of March 16, 1995.

All of the director nominees shown below have previously been elected a
director by the Corporation shareholders and are currently serving on the
Board.

No director nominee listed holds any other directorships in a company
with a class of securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934. There are no family relationships between any director
or person nominated by the Corporation Board to become a director.

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To the knowledge of management, no director nominee beneficially owns
more than 5% of the outstanding shares of Corporation Common Stock.

In the event a director nominee declines or is unable to serve as
director, which is not anticipated, the shares represented by proxy will be
voted for the Board's substitute nominee

______________________________________________________

THE BOARD OF DIRECTORS RECOMMENDS THAT THE DIRECTOR NOMINEES, SHOWN IN
THE FOLLOWING TABLE, BE ELECTED AS DIRECTORS.

DIRECTORS AND EXECUTIVE OFFICERS OF BANK OF GRANITE CORPORATION

The number of shares of Bank of Granite Corporation stock beneficially
owned by the nominees are those owned as of March 16, 1995. Unless otherwise
indicated, each director has sole voting power (or shares such power with his
spouse) with respect to the shares set forth in the table on the following
page. The source of information provided in the table is the Corporation's
shareholder records.

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DIRECTORS AND EXECUTIVE OFFICERS OF BANK OF GRANITE CORPORATION
===============================================================================================================================
AMOUNT AND
AGE ON NATURE OF OWNERSHIP AS A
DEC. 31, DIRECTOR BENEFICIAL PERCENT OF COMMON
NAME PRINCIPAL OCCUPATION 1994 SINCE(1) OWNERSHIP STOCK OUTSTANDING
- -------------------------------------------------------------------------------------------------------------------------------

JOHN N. BRAY President, Vanguard 52 Bank (1992) 2,029 direct .04%
Hickory, NC Furniture, Inc. Corp. (1992) 627 indirect

ROBERT E. CLINE President, Cline Realty 69 Bank (1984) 7,141 direct .30%
Hickory, NC Company, Inc.; Chairman of Corp. (1987) 10,544
the Board, First Security indirect(2)
Company, Inc. (through 1993)

JOHN A. FORLINES, JR. Chairman and Chief Executive 76 Bank (1954) 275,168 direct 4.88%
Granite Falls, NC Officer, Bank of Granite Corp. (1987) 15,685
Corporation, since June 1987; indirect(3)
Chairman, Bank of Granite,
since 1972 (and Chief
Executive Officer from 1954
through April, 1994)

BARBARA F. FREIMAN Director of Institutional 60 Bank (1989) 3,267 direct .07%
Lenoir, NC Development, Caldwell Corp. (1989) 1,135
Community College indirect(2)

WILLIAM F. HOWARD, Executive Vice President, 33 Bank (1992) 1,250 direct .03%
III Belk Howard Group Corp. (1992) 250 indirect
Lenoir, NC

MYRON L. MOORE, JR. Treasurer, Lenoir Mirror 70 Bank (1959) 5,077 direct .16%
Lenoir, NC Company; Corp. (1987) 4,687 indirect
Director, Bank of Granite,
1947
through 1954.

CHARLES M. SNIPES President, Bank of Granite 61 Bank (1982) 69,017 direct 1.42%
Hickory, NC Corporation; President and Corp. (1987) 15,685
Chief Executive Officer indirect(3)
(beginning May, 1994), Bank
of Granite; Director,
Vanguard Furniture, Inc.
Directors and 363,045 direct 6.94%
Executive Officers as 50,580
a Group(4) indirect(4)
- -------------------------------------------------------------------------------------------------------------------------------

Notes:

(1) Bank of Granite Corporation, the holding company for Bank of Granite,
was organized in June, 1987.

(2) Shares of stock indirectly owned include those held in their spouse's
name or by corporations controlled by such individuals.

(3) The indirect stock ownership shown for John A. Forlines, Jr. and
Charles M. Snipes consists of those shares of Corporation Common Stock
currently obtainable by such individuals on the record date, March 16,
1995, through the Corporation's Incentive Stock Option Plan, as
described later in this proxy under the Section "Information Pertaining
to Stock Option Plan."

(4) Includes those director nominees listed in the table along with one
executive officer not required to be individually listed.

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SUMMARY COMPENSATION TABLE

The following table summarizes current and long-term compensation and
provides separate columns for stock related compensation for each executive
officer of the Corporation and its subsidiary, Bank of Granite ("Bank"), whose
total salary and bonus exceeded $100,000 during 1994.

SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION

LONG-TERM
COMPENSATION
_______

EXECUTIVE OFFICER AND AWARD OF STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS(2) COMPENSATION(3)
- -----------------------------------------------------------------------------------------------------------

JOHN A. FORLINES, JR. 1994 $178,380 $38,768 2,500 $34,024
Corporation Chairman and
Chief Executive Officer; 1993 $168,288 $38,696 3,750 $30,797
Bank Chairman
1992 $161,288 $33,831 4,687 $29,444

CHARLES M. SNIPES 1994 $125,100 $27,184 2,500 $26,234
Corporation President;
Bank President and Chief 1993 $118,008 $27,128 3,750 $22,916
Executive Officer
1992 $114,197 $23,716 4,687 $21,384
- -----------------------------------------------------------------------------------------------------------

Notes:

(1) Figures shown represent actual incentive cash bonuses paid during the
year indicated.

(2) Figures shown represent number of shares of Corporation Common Stock
subject to options which were awarded to the named executive officers
shown during the years indicated.

(3) Figures shown indicate amounts contributed by the Bank to its Profit
Sharing Plan ("Plan") and allocated to the indicated executive
officer's accounts. The Plan is a "tax qualified" plan under Section
401(a) of the Internal Revenue Code and covers all Bank employees. The
following amounts were contributed to John A. Forlines, Jr.'s Plan
accounts: $22,500 (1994), $30,000 (1993), and $29,114 (1992). The
following amounts were contributed to Charles M. Snipes' Plan accounts:
$22,500 (1994), $21,962 (1993), and $20,409 (1992).

Figures shown also indicate amounts contributed by the Bank to the
indicated executive officer's Supplemental Executive Retirement Plan
("SERP") accounts. Because of Internal Revenue Code limitations on
amounts which can be contributed to the named executive's Profit
Sharing Plan accounts, the SERP was implemented by the Bank during 1994
to help replace those contributions "lost" by the named executives due
to these limitations. The following amounts were contributed by the
Bank to John A. Forline's SERP account during 1994: $10,587. The
following amounts were contributed by the Bank to Charles M. Snipe's
SERP account during 1994: $343.

The remaining amounts shown represent the value of certain split dollar
insurance plan premiums paid for the indicated executives, based on the
term insurance value of such payments as calculated under the Internal
Revenue Code P.S. 58 rates or those of the insurer, if lower.

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INFORMATION PERTAINING TO STOCK OPTION PLAN

The following charts provide information pertaining to the Corporation's
Incentive Stock Option Plan ("Plan") under which certain key employees may be
granted rights to purchase Corporation Common Stock. The Plan provides for the
grant of qualified incentive stock options which must meet the requirements of
Code Section 422A. The Plan was originally adopted by the Corporation's Board
of Directors on December 8, 1987, and was duly approved by the Corporation's
shareholders on March 28, 1988.

STOCK OPTION GRANTS DURING 1994
- ----------------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION FOR OPTION TERM

EXERCISE
NUMBER OF % OF TOTAL OR BASE
SECURITIES OPTIONS GRANTED PRICE
UNDERLYING TO EMPLOYEE IN PER EXPIRATION 5% 10%
EXECUTIVE OFFICER OPTIONS(1) FISCAL YEAR(2) SHARE(3) DATE(4) APPRECIATION(5) APPRECIATION(6)
- ----------------------------------------------------------------------------------------------------------------------------

JOHN A. FORLINES, JR. 3,125 12.9 $23.60 2/14/99 $20,377 $45,024
Corporation
Chairman and Chief
Executive Officer;
Bank Chairman
- ----------------------------------------------------------------------------------------------------------------------------
CHARLES M. SNIPES 3,125 12.9 $23.60 2/14/99 $20,377 $45,024
Corporation
President; Bank
President and Chief
Executive Officer
- ----------------------------------------------------------------------------------------------------------------------------

Notes:

(1) Figures indicate number of shares of stock granted under the Plan in
the form of options to the indicated executive officer during 1994.
The price at which shares of Corporation Common Stock may be purchased
upon the exercise of options under the Plan is equal to 100% of the
fair market value of the Corporation's Common Stock on the date the
options are granted. All options granted pursuant to the Plan must be
exercised within 5 years from the date of grant. Outstanding options
must also be exercised during employment or within 3 months after a
participating executive's termination of service. If termination of
service is by reason of death, an option may be exercised by the
executive's legal representative or beneficiary within one year after
the date of death. Options granted under the plan are subject to
applicable income tax withholding requirements and are not
transferrable by the holder except by will or by the laws of dissent
and distribution, and shall be exercisable, during the participating
key executive's lifetime, only by the key employee.

(2) Percent shown indicates options awarded to indicated executive officer
as a percentage of total options granted to all Plan participants
during 1994.

(3) The exercise or base price is the dollar amount at which each share of
stock subject to option may be acquired by the indicated executive
officer. The exercise or base price is the closing market price per
share of the Common Stock on the date of the award of the option.

(4) The date shown indicates the date upon which the options granted will
expire.

(5) The dollar values shown represent the potential realizable value of the
grant of options at an assumed 5% annualized appreciation rate in the
price of Corporation Common Stock. The potential realizable value is
calculated under the following formula: [(A x B) - C] x D, where A =
$23.60, the per share market price at the time of the grant; B =
1.2763, the assumed rate of stock price appreciation (5%) compounded
annually over the 5-year term of the option; C = $23.60, the per share
exercise price of the option; and D = 3,125, the number of securities
underlying the grant at year end 1994.

(6) The dollar values shown represent the potential realizable value of the
grant of options at an assumed 10% annualized appreciation rate in the
price of Corporation Common Stock. The potential realizable value is
calculated under the following formula: [(A x B) - C] x D, where A =
$23.60, the per share market price at the time of the grant; B =
1.6105, the assumed rate of stock price appreciation (10%) compounded
annually over the 5-year term of the option; C = $23.60, the per share
exercise price of the option; and D = 3,125, the number of securities
underlying the grant at year end 1994.

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AGGREGATED OPTION EXERCISES DURING 1994 AND YEAR END OPTION VALUES
- ----------------------------------------------------------------------------------------------------------------------------
NUMBER AND VALUE OF SHARES SUBJECT TO UNEXERCISED
OPTIONS EXERCISED DURING 1994 OPTIONS AT YEAR END
-------------------------------------------------------------------------------------------------
VALUE OF SHARES
NUMBER OF SHARES UNEXERCISED,
UNEXERCISED, EXERCISABLE EXERCISABLE AND
EXECUTIVE OFFICER SHARES ACQUIRED(1) VALUE REALIZED(2) AND UNEXERCISABLE(3) UNEXERCISABLE(4)
- ----------------------------------------------------------------------------------------------------------------------------

JOHN A. FORLINES, JR. 473 $ 7,393 Unexercised - 20,936 Unexercised - $162,400
Corporation Chairman Exercisable - 13,373 Exercisable - 125,196
and Chief Executive Unexercisable - 7,563 Unexercisable - 37,204
Officer; Bank
Chairman
- ----------------------------------------------------------------------------------------------------------------------------
CHARLES M. SNIPES 4,452 $68,634 Unexercised - 20,936 Unexercised - $162,400
Corporation Exercisable - 13,373 Exercisable - 125,196
President; Bank Unexercisable - 7,563 Unexercisable - 37,204
President and Chief
Executive Officer
- ----------------------------------------------------------------------------------------------------------------------------

Notes:

(1) Indicates number of shares acquired by indicated executive officer
through the exercise of options during 1994.

(2) Dollar amounts represent the aggregate dollar value realized by the
indicated executive officer upon the exercise of options during 1994.
The aggregate dollar value realized is calculated based on the
difference between the fair market value of Corporation Common Stock on
the date of exercise, less the underlying option's exercise or base
price.

(4) Dollar amounts shown represent the value of stock options held by the
indicated executive officers at year end 1994. Only those options
which are "in the money" are reported. An option is considered to be
"in the money" if the fair market value of Corporation Common Stock
exceeds the exercise or base price of the shares subject to the options
at year end 1994. For those options "in the money," value is computed
based on the difference between the fair market value of Corporation
Common Stock at year end 1994 and the exercise or base price of the
shares subject to the options. The value of options exercisable and
unexercisable at year end 1994 is also shown.

BOARD REPORT ON EXECUTIVE OFFICER COMPENSATION

The Corporation's compensation committee must provide Corporation
shareholders a report discussing the basis for the compensation committee's
action in establishing compensation for Corporation and Bank executive
officers. The report is also required to discuss the relationship, if any,
between the Corporation's performance and executive officer compensation.
Finally, the report must specifically discuss the factors and criteria upon
which the compensation paid the Corporation's CEO was based.

The fundamental philosophy of Bank of Granite Corporation's compensation
program is to offer competitive compensation opportunities for all executive
officers which are based both on the individual's contribution and on the
Corporation's performance. The compensation paid is designed to retain and
reward executive officers who are capable of leading the Corporation in
achieving its business objectives in an industry characterized by complexity,
competitiveness, and change. The compensation of Corporation executives is
reviewed and approved annually by the full Corporation Board of Directors,
which acts as the Corporation's board compensation committee. Annual
compensation for the Corporation's CEO (and other executive officers) consists
of three elements:

- base salary;

- An annual cash incentive that is directly and indirectly linked to
Corporation and individual performance (with Corporation performance
measured on the basis of Return on Assets); and

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- Long-term equity participation, consisting of the issuance of stock
options, designed to better align the interests of executive
officers with those of the Corporation's shareholders.

For the Corporation's executives (and CEO), base salary is targeted to
approximate average salaries for individuals in similar positions with similar
levels of responsibilities who are employed by other banking organizations of
similar size. The Corporation frequently participates in local, state and
other salary/compensation surveys and has access to other published
salary/compensation data. The results of such surveys are used by the
Corporation Board of Directors in helping to set appropriate levels of
Corporation CEO and other executive officer base salaries.

For the Corporation's executives (and CEO), the annual cash incentive
during the years 1992, 1993 and 1994 ranged from 20.8% to 23.0% of base salary.
This means that up to approximately 23.0% of the executive's annual
compensation was variable, could fluctuate significantly from year to year, and
was directly and indirectly tied to business and individual performance. The
annual cash incentive is based on the banking organization's return on assets
(ROA). The Corporation's Board of Directors, in its sole discretion, sets a
threshold ROA target, based in part on the Corporation's financial performance
in prior years and the performance of banking organizations of similar size in
the Bank's general geographic region. If the threshold ROA target is achieved,
a stated dollar amount will be paid into an incentive compensation pool. The
incentive compensation pool amounts are then distributed among incentive plan
participants based on such participants' base salaries as a percentage of all
participants' base salaries. If the Corporation earns an ROA above the
threshold level, an increasing dollar incentive pool is created up to a maximum
dollar amount at a predetermined ROA level.

For the Corporation's CEO, executives (and other key employees), stock
options may be granted each year in the sole discretion of the Board of
Directors. While no formal system is employed in determining the number of
stock options granted, both in the aggregate and to any one individual, the
Board does take into account the Corporation's current financial performance
and the number of stock options previously granted.

During 1994, the Corporation increased the CEO's base salary by 6.0%.
The Corporation Board of Directors determined that the 6.0% increase in the CEO
base salary was appropriate in light of two primary factors. The first factor
was a desire by the Corporation to provide the CEO with a base salary
comparable to that paid by other banking organizations of similar size and
financial performance. The Corporation Board of Directors annually reviews
national, regional, statewide and local peer group salary data (to the extent
available) in its determination of a comparable base salary. A second factor
considered by the Corporation Board of Directors was the following 1994
Corporation performance accomplishment: a 2.47% Return on Assets, which placed
the Corporation among the banking industry's top performers during 1994.

This report is provided as a summary of current Board practice with
regard to annual compensation review and authorization of executive officer
compensation and with respect to specific action taken for the CEO.

Board of Directors
Bank of Granite Corporation

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Certain information must be disclosed regarding the relationships of
members of the Corporation's compensation committee with either the Corporation
or the Bank, or in certain circumstances, with other corporations. This will
provide shareholders with information regarding the independence of
decision-making by the Corporation's compensation committee.

The full Corporation Board of Directors serves as the Corporation's
compensation committee. Disclosure is required of any member of the
compensation committee who was, at any time during the last completed fiscal
year, an officer or employee of the Corporation or the Bank. John A. Forlines,
Jr. and Charles M. Snipes both served as members of the Corporation Board of
Directors during 1994 and also served as Corporation and Bank executive
officers. Mr. Forlines is the Chairman and CEO of Bank of Granite Corporation,
and Chairman of the Bank of Granite. Mr. Snipes is the President of Bank of
Granite Corporation and President and CEO of the Bank of Granite. While Mr.
Forlines and Mr. Snipes specifically excluded themselves from any Corporation
Board of Directors' discussions concerning their own compensation, they did
participate with other Corporation Board members in discussions concerning
other executive officers' compensation.

SHAREHOLDER PERFORMANCE GRAPH

The Corporation is required to provide its shareholders with a line graph
comparing the Corporation's cumulative total shareholder return with a
performance indicator of the overall stock market and either a published
industry index or a Corporation-determined peer comparison. The purpose of
the chart is to help shareholders determine the reasonableness of the
compensation committee's decisions with respect to the setting of various
levels of executive officer compensation. Shareholder return (measured through
increases in stock price and payment of dividends) is often a benchmark used in
assessing corporate performance and the reasonableness of compensation paid
executive officers.

However, the shareholders should recognize that corporations often use a
number of other performance benchmarks (in addition to shareholder return) to
set various levels of executive officer compensation. Shareholders should thus
consider other relevant performance indicators in assessing shareholder return,
such as growth in earnings per share, book value per share, and cash dividends
per share, along with other performance measures such as return on equity and
return on assets.

The performance graph shown on the following page compares the
Corporation's cumulative total return over the most recent 5-year period with
both the NASDAQ Index, the Standard & Poor's 500 Index, and an Independent Bank
Index (reflecting changes in certain peer group bank stocks). Returns are
shown on a total return basis, assuming the reinvestment of dividends.

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BANK OF GRANITE CORPORATION
Five Year Performance Graph

[GRAPH]

1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----

Bank of Granite Corporation 100 91 123 183 198 204
Independent Bank Index - Weighted 100 89 99 136 160 193
NASDAQ Index 100 85 136 159 181 177

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TRANSACTIONS WITH OFFICERS AND DIRECTORS

The Corporation has had, and expects to have in the future, banking
transactions in the ordinary course of its business with directors, officers
and their associates, on the same terms, including interest rates and
collateral on loans, as those prevailing at the same time for comparable
transactions with others; and, in the opinion of Corporation management, these
transactions do not and will not involve more than the normal risk of
collectibility or present other unfavorable features.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers, and persons who own more than
10% of the Corporation's Common Stock, to file with the Securities and Exchange
Commission initial reports of ownership of Corporation Common Stock and reports
of changes in ownership. Executive officers, directors and greater than 10%
shareholders are required by SEC regulations to furnish the Corporation with
copies of all Section 16(a) forms they file.

To the Corporation's knowledge, all Section 16(a) filing requirements
applicable to its executive officers, directors and greater than 10% beneficial
owners were made in a timely manner.

RATIFICATION OF SELECTION OF ACCOUNTANTS
(PROPOSAL 2)

The Board of Directors of the Corporation has selected the firm of
Deloitte & Touche, LLP as independent Certified Public Accountants to examine
the financial statements of the Corporation for the year ending December 31,
1995. The firm is to report on the Corporation's consolidated balance sheets,
and related consolidated statements of income, consolidated statements of cash
flow, and consolidated changes in shareholders' equity, and to perform such
other appropriate accounting services as may be required by the Board of
Directors. It is expected that representatives of Deloitte & Touche, LLP, who
also served as the Corporation's accounting firm for the past fiscal year, will
be present at the shareholders' meeting. They will be provided with an
opportunity to make a statement if they desire to do so and to answer
appropriate questions which may be raised at the meeting.

The fee arrangement between Deloitte & Touche, LLP and the Bank of
Granite Corporation is based on rates and terms customary in their practice.

______________________________________________________

THE BOARD OF DIRECTORS RECOMMENDS THAT THE FIRM OF DELOITTE & TOUCHE,
LLP BE RATIFIED AS THE CORPORATION'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
FOR THE YEAR ENDED DECEMBER 31, 1995.

PROPOSALS FOR 1996 ANNUAL SHAREHOLDER MEETING

From time to time, individual shareholders may wish to submit proposals
which they believe should be voted upon by the Corporation's shareholders. The
Securities and Exchange Commission has adopted regulations which govern the
inclusion of such proposals in the Corporation's annual proxy materials. No
such proposals were submitted for the 1995 Annual Meeting. Shareholder
proposals intended to be presented at the 1996 Annual Meeting of Shareholders
must be received by the Secretary of the Corporation at its executive office,
23 North Main Street, P. O. Box 128, Granite Falls, North Carolina 28630

no later than November 15, 1995 (which is 120 days prior to the expected date
of the 1996 Proxy Statement) in order to be eligible for inclusion in the
Corporation's Proxy Ballot and Proxy Statement for the 1996 Annual Meeting.

While the Corporation's Nominating Committee normally recommends and
nominates individuals to serve as directors of the Corporation, shareholders
may also nominate candidates for director, provided that such nominations are
made in writing and are received by the Corporation at its executive offices
not later than December 15, 1995 (which is 90 days prior to the expected date
of the 1995 Proxy Statement). The nomination should be sent to the attention
of the Corporation Secretary and must include, concerning the director nominee,
the following information: full name, age, date of birth, educational
background and business experience, including positions held for at least the
preceding five years. The nomination must also include home and business
addresses and telephone numbers and include a signed representation by the
nominee to timely provide all information requested by the Corporation as part
of its disclosure in regard to the solicitation of proxies for the election of
directors. The name of each such candidate for director must be placed in
nomination at the Annual Meeting by a shareholder present in person. The
nominee must also be present in person at the meeting. A vote for a person who
has not been duly nominated pursuant to these requirements is void.

OTHER BUSINESS

Management of the Corporation knows of no other business to be presented
to the meeting. If other matters should properly come before the Annual
Meeting or any adjournment thereof, a vote may be cast pursuant to the
accompanying Proxy in accordance with the judgment of the person or persons
voting the same.

All shareholders are urged to attend the Annual Meeting of Shareholders
of April 24, 1995 at 10:30 a.m., at Holiday Inn, 138 South Lenoir Ryhne
Boulevard, S.E. (at Interstate 40, Exit #125), Hickory, North Carolina, and to
vote your shares in person. If you do not plan to attend, please sign and
return your Proxy promptly. A Proxy may be revoked at any time before it is
voted, and the giving of a Proxy will not affect the right of a shareholder to
attend the meeting and vote in person.

By Order of the Board of Directors
Bank of Granite Corporation
Granite Falls, North Carolina

RANDALL C. HALL
--------------------------------------
Randall C. Hall
Secretary

Granite Falls, North Carolina
March 16, 1995

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APPENDIX A

PROXY BANK OF GRANITE CORPORATION THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE
23 N. Main Street UNDERSIGNED HEREBY APPOINTS JOHN A. FORLINES, JR., MYRON L. MOORE, JR.
P.O. Box 128 AND ROBERT E. CLINE, OR EACH OF THEM, AS PROXIES, EACH WITH THE POWER
Granite Falls, North Carolina 28630 TO APPOINT HIS OR HER SUBSTITUTE AND HEREBY AUTHORIZES EACH OF THEM TO
REPRESENT AND TO VOTE AS DESIGNATED BELOW ALL THE SHARES OF COMMON
STOCK HELD ON RECORD BY THE UNDERSIGNED ON MARCH 16, 1995, AT THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 24, 1995, OR ANY
ADJOURNMENT THEREOF.

1. ELECTION OF DIRECTORS:
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(except as marked to contrary below) to vote for all the nominees listed

INSTRUCTIONS: To withhold authority to vote for any individual nominee, strike a line through the nominee's
name in the list below.
John N. Bray, Robert E. Cline, Myron L. Moore, Jr., Barbara F. Freiman, William F. Howard, III, Charles M. Snipes, John A.
Forlines, Jr.

2. THE RATIFICATION OF THE ACCOUNTING FIRM OF DELOITTE & TOUCHE LLP
as the Corporation's independent Certified Public Accountants for the year ending December 31, 1995:
/ / FOR / / AGAINST / / ABSTAIN

3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE DATED:_________________________________________________________
MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR SIGNATURE______________________________________________________
THE ELECTION OF ALL DIRECTOR NOMINEES.
SIGNATURE IF HELD JOINTLY______________________________________

PLEASE SIGN EXACTLY AS NAME APPEARS. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE
FULL TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL
CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER.
IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
AUTHORIZED PERSON.

PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE.