<PAGE>   1

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
                                     1996            1995           % INCREASE
<S>                              <C>             <C>                   <C>
Earnings
  Interest income                $ 38,749,861    $ 36,566,970           6.0%
  Interest expense                 14,356,050      13,201,538           8.7%
  Net income                       12,700,834      11,516,944          10.3%
  Cash dividends paid               3,058,856       2,628,388          16.4%

Per Share*
  Net income                           $ 1.41          $ 1.28          10.2%
  Cash dividends                          .35             .29          20.7%
  Book value at December 31              9.25            8.20          12.8%

At Year-end
  Assets                         $487,549,856    $456,452,332           6.8%
  Deposits                        397,697,991     377,043,144           5.5%
  Loans (gross)                   320,280,400     301,685,399           6.2%
  Allowance for loan losses         4,793,889       4,644,725           3.2%
  Shareholders' equity             83,306,114      73,620,251          13.2%

Ratios
  Return on average assets               2.69 %          2.66 %
  Return on average equity              16.29 %         16.90 %
  Capital-to-assets                     16.52 %         15.74 %
</TABLE>

*Per Share amount adjusted to reflect a 3-for-2 Stock Split paid in May 1996





MARKET AND DIVIDEND SUMMARY

<TABLE>
<CAPTION>            
                                            1996                                                   1995
                      Quarter 1    Quarter 2    Quarter 3    Quarter 4       Quarter 1    Quarter 2    Quarter 3    Quarter 4
<S>                  <C>           <C>          <C>          <C>             <C>          <C>          <C>          <C>
Price Range               
  High               $ 20 43/64    $ 26 3/4     $ 29 1/2     $ 33            $ 16 21/16   $ 18 5/32    $ 18         $ 19 5/16
  Low                  18 21/64      20           23 1/2       27 1/4          16           16           17           17 5/16   
  Closing              20 11/64      25 1/2       27 1/2       29              16 21/32     18           18           19 5/16
  Dividends          $.08          $.08         $.09         $.09            $.067        $.067        $.08         $.08
</TABLE>






                                      2
<PAGE>   2

SELECTED
FINANCIAL DATA
Bank of Granite Corporation and
Subsidiary For the Years Ended
December 31

<TABLE>
<CAPTION>
                                                 1996            1995            1994             1993            1992
<S>                                          <C>             <C>             <C>             <C>             <C>                   
Total interest income                        $ 38,749 861    $ 36,566,970    $ 29,573,402    $ 26,114,097    $ 25,977,371
Total interest expense                         14,356,050      13,201,538       9,514,296       9,249,054      10,641,167
                                             ----------------------------------------------------------------------------
Net interest income                            24,393,811      23,365,432      20,059,106      16,865,043      15,336,204
Provision for loan losses                         820,000       1,117,000         704,000         575,000         880,000
                                             ----------------------------------------------------------------------------
Net interest income after
  provision for loan losses                    23,573,811      22,248,432      19,355,106      16,290,043      14,456,204
Other income                                    4,965,456       4,120,865       4,245,497       4,211,175       4,058,640
Other expenses                                  9,618,076       9,253,821       9,146,805       7,641,494       7,310,170
                                             ----------------------------------------------------------------------------
Income before income taxes and
  cumulative effect of a change in
  accounting for income taxes                  18,921,191      17,115,476      14,464,798      12,859,724      11,204,674
Income taxes                                    6,220,357       5,598,532       4,622,525       3,984,532       3,397,389
                                             ----------------------------------------------------------------------------
Income before cumulative effect of a
  change in accounting for income taxes        12,700,834      11,516,944       9,842,273       8,875,192       7,807,285
Cumulative effect on prior years of a 
  change in accounting for income taxes                                                          [125,926]
                                             ----------------------------------------------------------------------------
Net Income                                   $ 12,700,834    $ 11,516,944    $  9,842,273    $  8,749,266    $  7,807,285
                                             ----------------------------------------------------------------------------
Per share:*
  Net income                                 $       1.41    $       1.28    $       1.09    $        .97    $        .88
                                             ----------------------------------------------------------------------------
  Cash dividends                             $        .35    $        .29    $        .25    $        .23    $        .20
                                             ----------------------------------------------------------------------------
  Book value                                 $       9.25    $       8.20    $       7.07    $       6.29    $       5.51
                                             ----------------------------------------------------------------------------
Weighted average shares outstanding*            9,039,921       8,994,557       8,978,415       8,940,677       8,888,466
                                             ----------------------------------------------------------------------------
Performance ratios:
  Return on average assets                           2.69 %          2.66 %          2.47 %          2.36 %          2.29 %
  Return on average equity                          16.29 %         16.90 %         16.50 %         16.76 %         17.21 %
  Equity to assets                                  16.52 %         15.74 %         14.94 %         14.05 %         13.48 %
  Dividend payout                                   24.08 %         22.82 %         22.73 %         22.73 %         22.69 %
                                             ----------------------------------------------------------------------------
Balance at year end
  Assets                                     $487,549,856    $456,452,332    $412,167,170    $387,667,497    $361,503,786
  Liabilities                                 404,243,742     382,832,081     348,999,296     331,648,486     312,779,928
  Deposits                                    397,697,991     377,043,144     343,330,048     327,514,920     307,783,958
  Loans (gross)                               320,280,400     301,685,399     269,851,459     243,825,155     229,777,621
  Allowance for loan losses                     4,793,889       4,644,725       3,996,491       3,603,430       3,391,390
  Securities                                  128,644,338     124,271,061     112,925,680     113,297,662      98,047,826
  Shareholders' equity                         83,306,114      73,620,251      63,167,874      56,019,011      48,723,858
</TABLE>

                                      14
<PAGE>   3

QUARTERLY FINANCIAL DATA
Summarized unaudited quarterly financial data
For the Years Ended December 31, 1996 & 1995

<TABLE>
<CAPTION>
                                                             1996
                                                             Quarter 1       Quarter 2       Quarter 3       Quarter 4
<S>                                                        <C>             <C>             <C>            <C>                  
Interest income                                            $ 9,362,120     $ 9,565,448     $ 9,800,337    $ 10,021,956   
Interest expense                                             3,527,958       3,560,942       3,642,223       3,624,927   
Provision for loan losses                                      185,000         100,000         260,000         275,000
                                                           -----------------------------------------------------------
Net interest income after provision for loan losses          5,649,162       5,904,506       5,898,114       6,122,029
Other Income                                                 1,247,913       1,158,091       1,194,475       1,364,977       
Other expenses                                               2,435,634       2,453,686       2,325,765       2,402,991       
                                                           -----------------------------------------------------------
Income before income taxes                                   4,461,441       4,608,911       4,766,824       5,084,015    
Income taxes                                                 1,515,000       1,495,000       1,545,000       1,665,357      
                                                           -----------------------------------------------------------
Net Income                                                 $ 2,946,441     $ 3,113,911     $ 3,221,824     $ 3,418,658    
                                                           -----------------------------------------------------------

Earnings per share                                         $       .33     $       .34     $       .36     $       .38
</TABLE>

<TABLE>
<CAPTION>
                                                             1995
                                                             Quarter 1       Quarter 2       Quarter 3       Quarter 4
<S>                                                        <C>             <C>             <C>            <C>                  
Interest income                                            $ 8,600,271     $ 9,161,235     $ 9,294,264    $  9,511,200 
Interest expense                                             2,893,625       3,304,989       3,461,676       3,541,248   
Provision for loan losses                                      440,000         310,000         282,000          85,000
                                                           -----------------------------------------------------------
Net interest income after provision for loan losses          5,266,646       5,546,246       5,550,588       5,884,952
Other Income                                                 1,064,443       1,069,885         954,252       1,032,285       
Other expenses                                               2,321,276       2,415,268       2,202,222       2,315,055       
                                                           -----------------------------------------------------------
Income before income taxes                                   4,009,813       4,200,863       4,302,618       4,602,182    
Income taxes                                                 1,404,000       1,369,000       1,379,000       1,446,532      
                                                           -----------------------------------------------------------
Net Income                                                 $ 2,605,813     $ 2,831,863     $ 2,923,618     $ 3,155,650    
                                                           -----------------------------------------------------------

Earnings per share                                         $       .29     $       .31     $       .33     $       .35
</TABLE>





INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of Bank of Granite Corporation:

     We have audited the consolidated balance sheets of Bank of Granite 
Corporation and its subsidiary as of December 31, 1996 and 1995, and the related
consolidated statements of income, shareholders' equity, and cash flows for
each of the three years in the period ended December 31, 1996. Such consolidated
financial statements and our report thereon dated January 26, 1997, expressing
an unqualified opinion (which are not included herein) are included in the proxy
statement for the 1997 annual meeting of shareholders. The accompanying
consolidated balance sheets and consolidated statements of income are the
responsibility of the Company's management. Our responsibility is to express an
opinion on such consolidated balance sheets and consolidated statements of 
income in relation to the complete consolidated financial statements.

     In our opinion, the information set forth in the accompanying consolidated
balance sheets as of December 31, 1996 and 1995 and the related consolidated
statements of income for each of the three years in the period ended December
31, 1996 is fairly stated in all material respects in relation to the basic
consolidated financial statements from which it has been derived.


Deloitte & Touche LLP, Hickory, North Carolina, January 26, 1997


                                      17
<PAGE>   4

SHAREHOLDER INFORMATION

COMMON STOCK

     Bank of Granite Corporation's common stock is traded on the
over-the-counter (OTC) market and quoted in the NASDAQ (National Association of
Securities Dealers Automated Quotations) National Market System, where our
symbol is GRAN. Price and volume information is contained in the Wall Street
Journal and most major daily newspapers in the "Over-the-Counter Markets"
section under the National Market System listing.

ANNUAL MEETING

     The Annual Meeting of the shareholders of the Bank of Granite Corporation
will be held at 10:30 am, Monday, April 28, 1997, at the Holiday Inn, 1385
Lenoir Rhyne Boulevard Southeast, Hickory, North Carolina (located off
Interstate 40 at Exit 125).

EQUAL OPPORTUNITY EMPLOYER
 
     It is the policy of Bank of Granite Corporation to treat all employees and
applicants for employment without regard to race, creed, color, national
origin, sex or age.

COPIES OF FORM 10-K

     Copies of the Bank of Granite Corporation's Annual Report to the
Securities and Exchange Commission on Form 10-K may be obtained by shareholders
at no charge by writing: Randall C. Hall, Vice President and
Secretary/Treasurer, Bank of Granite Corporation, Post Office Box 128, Granite
Falls, North Carolina 28630.

STOCK TRANSFER AGENT AND REGISTRAR

Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
908/272-8511 or 800/368-5948

DIVIDEND REINVESTMENT

     Registered holders of Bank of Granite Corporation stock are eligible to
participate in the Corporation's Dividend Reinvestment Plan, a convenient and
economical way to purchase additional shares of Bank of Granite Corporation
common stock. For an informational folder and authorization form or to receive
additional information on this plan, contact: Registrar and Transfer Company,
10 Commerce Drive, Cranford, New Jersey 07016, 908/272-8511 or 800/368-5948.

SHAREHOLDER INFORMATION

     For additional information, contact Melodie R. Mathes, Shareholder
Relations, Bank of Granite Corporation, Post Office Box 128, Granite Falls,
North Carolina 28630, 704/496-2022.

INDEPENDENT AUDITORS

Deloitte & Touche LLP
200 1st Avenue NW
Post Office Box 9197
Hickory, North Carolina 28603

MARKET INFORMATION

   Bank of Granite serves the people and businesses of the Blue Ridge Foothills
and Catawba Valley of North Carolina, which is located approximately 70 miles
northwest of Charlotte. This region offers a remarkable quality of life, with
both scenic and cultural treasures, to over 200,000 citizens. The area is also
known as a manufacturing capital for furniture, hosiery and fiber optic
telecommunications.

                                      18