THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Bank of Granite Corporation (GRAN)

3/20/2006 Proxy Information

Mr. Forlines served as Chairman of Bank of Granite Corporation from 1987 to January 2006. He was also Chairman of Bank of Granite (the Bank) from 1972 to January 2006. Mr. Forlines served as Chief Executive Officer of Bank of Granite Corporation from 1987 until 2004 and of the Bank from 1954 until 1994.

The Company 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 Company management, these transactions do not and will not involve more than the normal risk of collectibility or present other unfavorable features. Loans made to officers and directors are in compliance with federal banking regulations and therefore are exempt from insider loan prohibitions included in the Sarbanes-Oxley Act of 2002. In September 2003, the Company entered into commercial leases with Salem Investors, LLC, a company jointly owned by the chief executive officer and a senior vice president of Granite Mortgage, for the purpose of providing a community banking facility to the Bank and a mortgage banking facility to Granite Mortgage in Winston-Salem, North Carolina. The lease terms commenced on September 1, 2004, and each lease has an initial term of seven years. In 2005, the monthly lease payment was $5,625 for the banking facility and $16,875 for the mortgage banking facility. Based on a fairness opinion obtained from an independent third party expert, the Company believes that the leases are on terms comparable to lease terms for similar properties in the Winston-Salem area.

3/18/2005 Proxy Information

The Company 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 Company management, these transactions do not and will not involve more than the normal risk of collectibility or present other unfavorable features. Loans made to directors and officers are in compliance with federal banking regulations and therefore are exempt from insider loan prohibitions included in the Sarbanes-Oxley Act of 2002. In September 2003, the Company entered into commercial leases with Salem Investors, LLC, a company jointly owned by the chief executive officer and a senior vice president of Granite Mortgage, for the purpose of providing a community banking facility to the Bank and a mortgage banking facility to Granite Mortgage in Winston-Salem, North Carolina. The lease terms commenced on September 1, 2004, and each lease has an initial term of seven years. In 2004, the monthly lease payment was $6,696 for the banking facility and $20,088 for the mortgage banking facility. Based on a fairness opinion obtained from an independent third party expert, the Company believes that the leases are on terms comparable to lease terms for similar properties in the Winston-Salem area.