VALUE

BANK OF GRANITE NDQ--GRAN 21.44 37.60 25.90

RECENT
PRICE 19.13 TRAILING
19.60
RELATIVE

19.12
DIV’D
P/E RATIO 18.8 P/E RATIO 0.94 YLD 2.7%
20.48 26.96 22.93
LINE
21.81 High
RANKS 17.36 19.20 14.80 12.90 15.09 13.44 16.17 17.67 16.60 Low
PERFORMANCE 3 Average LEGENDS 45
12 Mos Mov Avg
Technical 3 Average . . . . Rel Price Strength
3-for-2 split 6/96
30
Above
SAFETY 2 Average
5-for-4 split 6/98
5-for-4 split 6/02
22.5
Shaded area indicates recession
BETA .80 (1.00 = Market) 13
9
Financial Strength A 6

Price Stability 85 4
3
Price Growth Persistence 50
375
Earnings Predictability 90 VOL.
(thous.)

© VALUE LINE PUBLISHING, INC. 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006/2007
EARNINGS PER SH 1.00 .94 1.02 1.10 .99 1.11 1.13 .94 1.13 A,B 1.22 C/NA
DIV’DS DECL’D PER SH .24 .27 .30 .34 .37 .41 .46 .49 --
BOOK VALUE PER SH 6.66 7.36 7.90 8.56 9.09 9.56 10.43 10.59 --
COMMON SHS OUTST’G (MILL) 14.29 14.33 14.37 13.94 13.73 13.33 13.60 13.32 --
AVG ANN’L P/E RATIO 19.3 24.7 18.8 15.0 16.9 16.3 16.8 21.5 16.9 15.7/NA
RELATIVE P/E RATIO 1.11 1.28 1.07 .98 .87 .89 .96 1.14 --
AVG ANN’L DIV’D YIELD 1.2% 1.2% 1.6% 2.0% 2.2% 2.3% 2.4% 2.4% --
TOTAL ASSETS ($MILL) 529.0 606.2 610.7 661.6 715.4 742.0 971.4 1032.2 -- Bold figures
LOANS ($MILL) 352.6 381.0 385.4 444.0 504.0 556.5 728.1 786.0 -- are consensus
NET INTEREST INC ($MILL) 28.6 31.5 32.3 36.1 32.8 34.9 39.3 42.2 -- earnings
LOAN LOSS PROV’N ($MILL) 1.2 4.3 1.9 3.9 4.2 3.5 4.8 5.4 -- estimates
NONINTEREST INC ($MILL) 8.1 8.7 8.2 8.0 10.1 11.4 14.4 11.3 -- and, using the
NONINTEREST EXP ($MILL) 14.1 15.8 16.5 16.8 18.3 20.3 25.9 29.1 -- recent prices,
NET PROFIT ($MILL) 14.4 13.5 14.7 15.6 13.8 15.1 15.3 12.7 -- P/E ratios.
INCOME TAX RATE 32.5% 32.8% 33.2% 33.6% 32.4% 32.9% 33.8% 32.6% --
RETURN ON TOTAL ASSETS 2.73% 2.22% 2.41% 2.35% 1.93% 2.04% 1.58% 1.23% --
LONG-TERM DEBT ($MILL) -- -- -- -- -- -- -- -- --
SHR. EQUITY ($MILL) 95.2 105.4 113.5 119.3 124.8 127.4 141.8 141.0 --
SHR. EQ. TO TOTAL ASSETS 18.0% 17.4% 18.6% 18.0% 17.4% 17.2% 14.6% 13.7% --
LOANS TO TOT ASSETS 66.7% 62.8% 63.1% 67.1% 70.4% 75.0% 75.0% 76.1% --
RETURN ON SHR. EQUITY 15.2% 12.8% 13.0% 13.1% 11.1% 11.9% 10.8% 9.0% --
RETAINED TO COM EQ 11.6% 9.1% 9.1% 9.1% 7.0% 7.4% 6.4% 4.3% --
ALL DIV’DS TO NET PROF 23% 29% 30% 31% 37% 37% 41% 52% --
ANo. of analysts changing earn. est. in last 13 days: 0 up, 0 down, consensus 5-year earnings growth 9.0% per year. BBased upon 2 analysts’ estimates. CBased upon 2 analysts’ estimates.

ANNUAL RATES
ASSETS ($mill.) 2002 2003 12/31/04
INDUSTRY: Bank
of change (per share) 5 Yrs. 1 Yr.
Loans 556.5 728.1 786.0
Loans 14.5% 10.5% BUSINESS: Bank of Granite Corp. operates as a multi-
Earnings 1.5% -17.0% Funds Sold 5.9 .0 .0
Dividends 11.0% 6.5% bank holding company. It owns Bank of Granite, a state
Securities 124.9 159.4 158.6
Book Value 7.0% 1.5% bank, and GLL Associates, Inc., a mortgage bank. The
Total Assets 11.0% 8.5% Other Earning 2.7 4.1 3.6
company provides its community banking business opera-
Other 52.0 79.8 84.0 tions from 20 full-service offices and one loan-production
Fiscal LOANS ($mill.)
Year 1Q 2Q 3Q 4Q LIABILITIES ($mill.) office in North Carolina. The company conducts its mort-
12/31/03 568.2 609.2 721.1 728.1
Deposits 547.3 735.1 749.9 gage banking business operations from 13 offices in the
12/31/04 714.8 729.1 740.5 786.0 Funds Borrowed 62.4 90.5 135.3 central and southern Piedmont and Catawba Valley regions
12/31/05 778.5 820.9 Long-Term Debt .0 .0 .0 of North Carolina and on Hilton Head Island, South
12/31/06 Net Worth 127.4 141.8 141.0 Carolina. The Community Banking segment offers a variety
Fiscal EARNINGS PER SHARE Full Other 4.9 4.0 6.0 of loan and deposit products and other financial services.
Year 1Q 2Q 3Q 4Q Year Granite Mortgage’s principal mortgage banking activities
Total 742.0 971.4 1032.2
12/31/02 .28 .25 .27 .31 1.11 Loan Loss Resrv. include the origination and underwriting of mortgage loans
8.8 10.8 13.7
12/31/03 .28 .30 .31 .24 1.13 to individuals. Has 315 employees. Chairman: John A.
12/31/04 .22 .24 .23 .25 .94 Forlines, Jr. Address: P.O. Box 128, Granite Falls, NC
12/31/05 .24 .30 .30 .30 28630. Tel.: (828) 496-2000. Internet:
12/31/06 .29 LONG-TERM DEBT AND EQUITY http://www.bankofgranite.com.
QUARTERLY DIVIDENDS PAID as of 12/31/04
Cal- Full
endar 1Q 2Q 3Q 4Q Year
LT Debt None Due in 5 Yrs. None
2002 .096 .11 .11 .11 .43 Including Cap. Leases None
2003 .11 .11 .12 .12 .46
Leases, Uncapitalized Annual rentals $.9 mill.
C.B.
2004 .12 .12 .12 .13 .49
2005 .13 .13 .13 Pension Liability None in ’04 vs. None in ’03
August 26, 2005
INSTITUTIONAL DECISIONS Pfd Stock None Pfd Div’d Paid None TOTAL SHAREHOLDER RETURN
3Q’04 4Q’04 1Q’05 Dividends plus appreciation as of 7/31/2005
to Buy 13 21 13 Common Stock 13,316,102 shares
3 Mos. 6 Mos. 1 Yr. 3 Yrs. 5 Yrs.
to Sell 10 12 13
Hld’s(000) 1914 2006 1937 20.66% 6.43% 13.25% 17.11% 29.70%
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