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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): SEPTEMBER 25, 1998
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BANK OF GRANITE CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Delaware 0-15956 56-1550545
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
P.O. Box 128, 23 North Main Street, Granite Falls, N.C. 28630
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(Address of Principal Executive Offices) (Zip Code)
(Registrant's telephone number, including area code) (828)496-2000
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Not Applicable
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(Former Name or Former Address, if changed since last report)
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Bank of Granite Corporation, Form 8-K, September 29, 1998, page 1 of 5
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INDEX
BANK OF GRANITE CORPORATION
Page
Item 5 - Other Events 3
Item 7 - Exhibits 3
Signatures 4
Exhibit 99 (a) News Release dated September 25, 1998 5
Bank of Granite Corporation, Form 8-K, September 29, 1998, page 2 of 5
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Item 5 - Other Events
(a) On September 25, 1998, the Registrant announced that third quarter
earnings will decline due to a before tax charge of approximately $3,140,000,
amounting to $1,884,000, or 16.5 cents per share, after tax.
The charge will result from increasing the loan loss reserves of the
Registrant's banking subsidiary because of the inability of one of the banking
subsidiarys borrowers to repay loans which the banking subsidiary had made
for a period extending over several years. The Registrant had hoped that this
borrower's business would improve and the borrower, a textile related plant,
was even showing positive cash flows in mid-summer, but the cash flows proved
to be short-lived.
Depending on the realizable value of the plants assets and orders
in process, the subsidiary bank may ultimately recover an undetermined amount
of the loss which will be booked as a recovery in the period in which it is
received.
The Registrant expects to report its third quarter earnings on or about
October 13.
This filing, including exhibits, may contain forward looking statements
within the meaning of the Private Securities Litigation Reform Act. The
accuracy of such forward looking statements could be affected by such factors
as, including but not limited to, the financial success or changing strategies
of the Company's customers, actions of government regulators, or general
economic conditions.
The news of this event was released on September 25, 1998, as evidenced
by Exhibit 99(a) to this Form 8-K.
Item 7 - Exhibits
99 Additional Exhibits
(a) News Release dated September 25, 1998
Bank of Granite Corporation, Form 8-K, September 29, 1998, page 3 of 5
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Signatures
Pursuant to the requirements of the Securities 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
September 29, 1998 BY: /s/ Kirby A. Tyndall
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Kirby A. Tyndall
Senior Vice President
and Chief Financial Officer
Bank of Granite Corporation, Form 8-K, September 29, 1998, page 4 of 5
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Exhibit 99 (a)
BANK OF GRANITE CORPORATION
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For Release:
IMMEDIATE RELEASE
September 25, 1998
BANK OF GRANITE'S EARNINGS WILL DECLINE IN THIRD QUARTER
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BECAUSE OF LOAN LOSS
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(Granite Falls, N.C.) Bank of Granite Corporation (Nasdaq--GRAN)
announced today that third quarter earnings will decline due to a before tax
charge of approximately $3,140,000, amounting to $1,884,000, or 16.5 cents per
share, after tax.
According to John A. Forlines, Jr., Chairman and CEO, the charge will
result from increasing the banks loan loss reserves because of the inability
of one of the banks borrowers to repay loans which the bank had made for a
period extending over several years. The bank had hoped that this company's
business would improve and the company, a textile related plant, was even
showing positive cash flows in mid-summer, but the cash flows proved to be
short-lived.
"We tried to give them every opportunity to generate positive cash flow,"
said Forlines. He added that the bank decided it was prudent to recognize
all of this charge in the third quarter. "It did not seem right to deplete
our bad debt reserves in view of the size of this exposure," said Forlines.
He said, depending on the realizable value of the plants assets and orders
in process, the bank may ultimately recover an undetermined amount of the
loss which will be booked as a recovery in the period in which it is
received. He said any recovery may be influenced by economic or other
factors.
Mr. Forlines said that as a result of this loss, he expects third quarter
earnings to decline, meaning that the banks record of consecutive quarterly
earnings increases will be broken. Bank of Granite, one of the soundest and
most profitable banks in the United States, has had sixty-two consecutive
quarters in which earnings exceeded those in the comparable quarter of the
preceding year, covering a period of fifteen and one half years, as of June
30, 1998. He said the bank expects to report its third quarter earnings on
or about October 13.
Bank of Granite will pay its 177th consecutive quarterly dividend on
October 30. 1998 marks 45 years of consecutive dividend increases, believed
to be a record for any United States bank.
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Bank of Granite Corporation
P.O. Box 128, Granite Falls, NC 28630 www.bankofgranite.com
For further information, contact Kirby A. Tyndall, Senior Vice President and
Chief Financial Officer at (828) 496-2026, FAX (828) 496-2116 or
Internet: [email protected]
Bank of Granite Corporation, Form 8-K, September 29, 1998, page 5 of 5
