<PAGE>
                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549

                                    FORM 10-Q

              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934

      For the quarterly period ended September 30, 2001

              [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934

      For the transition period from _____ to _____

                         Commission file number 0-13153


                                  HABERSHAM BANCORP
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                     Georgia                                  58-1563165
--------------------------------------------------------------------------------
          (State or other jurisdiction of                  (I.R.S. Employer
          incorporation or organization)                   Identification No.)


Highway 441 N.   P.O. Box 1980,   Cornelia, Georgia             30531
--------------------------------------------------------------------------------
  (Address of principal executive offices)                    (Zip code)


                                 (706) 778-1000
--------------------------------------------------------------------------------
                (Issuer's telephone number, including area code)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

        Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

                                                  Yes [X]  No [ ]

State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date:

2,698,746 shares, common stock, $1.00 par value, as of November 9, 2001
<PAGE>

Item. 1 Financial Statements

HABERSHAM BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(dollars in thousands)

<TABLE>
<CAPTION>

ASSETS                                                           SEPTEMBER 30, 2001     DECEMBER 31, 2000
<S>                                                              <C>                    <C>
Cash and due from banks                                              $  16,915              $  13,566
Investment securities available for sale
 (cost of $43,572 at September 30, 2001 and
  $43,033 at December 31, 2000)                                         44,794                 42,986
Investment securities held to maturity
 (estimated fair values of $10,018 at
  September 30, 2001 and $13,045 at
  December 31, 2000)                                                     9,765                 13,124
Other investments                                                        8,477                 10,134

Loans held for sale                                                     94,497                 59,714

Loans                                                                  314,587                382,135
  Less allowance for loan losses                                        (3,717)                (3,454)
                                                                     ---------              ---------
    Loans, net                                                         310,870                378,681
                                                                     ---------              ---------

Intangible assets                                                        2,551                  2,680
Other assets                                                            21,638                 22,223
                                                                     ---------              ---------
    TOTAL ASSETS                                                     $ 509,507              $ 543,108
                                                                     =========              =========

LIABILITIES
Non-interest bearing deposits                                        $  31,488              $  27,787
Interest bearing deposits                                              304,650                313,245
Short-term borrowings                                                      768                    850
Federal funds purchased and securities
  sold under repurchase agreements                                       9,418                 35,995
Other borrowings                                                         5,861                  1,950
Federal Home Loan Bank Advances                                         72,766                108,095
Other liabilities                                                       41,570                 16,435
                                                                     ---------              ---------
    TOTAL LIABILITIES                                                  466,521                504,357
                                                                     ---------              ---------

SHAREHOLDERS' EQUITY
Common Stock, $1.00 par value,
 10,000,000 shares authorized;
 2,698,746 shares issued at September 30, 2001
 and December 31, 2000                                                   2,699                  2,699
Additional paid-in capital                                              12,417                 12,417
Retained earnings                                                       27,063                 23,666
Accumulated other comprehensive gain(loss)                                 807                    (31)
                                                                     ---------              ---------
    TOTAL SHAREHOLDERS' EQUITY                                          42,986                 38,751
                                                                     ---------              ---------
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                       $ 509,507              $ 543,108
                                                                     =========              =========
</TABLE>

See notes to condensed consolidated financial statements.
<PAGE>

HABERSHAM BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) For the Three-Month Periods Ended September 30, 2001 and 2000
(dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
INTEREST INCOME                                                          2001                     2000
<S>                                                                  <C>                      <C>
Loans                                                                $     9,244              $    10,011
Investment securities                                                        716                      783
Federal funds sold                                                            18                        4
Other                                                                        154                      170
                                                                     -----------              -----------
  TOTAL INTEREST INCOME                                                   10,132                   10,968

INTEREST EXPENSE
Time deposits, $100,000 and over                                           1,221                    1,374
Other deposits                                                             2,824                    3,106
Short-term and other borrowings, primarily
  FHLB advances                                                            1,395                    2,262
                                                                     -----------              -----------
  TOTAL INTEREST EXPENSE                                                   5,440                    6,742

NET INTEREST INCOME                                                        4,692                    4,226
Provision for loan losses                                                    404                      375
                                                                     -----------              -----------
NET INTEREST INCOME AFTER
 PROVISION FOR LOAN LOSSES                                                 4,288                    3,851

NONINTEREST INCOME
  Gain on sale of loans                                                    6,696                    3,287
  Loan fee income                                                            840                      668
  Brokerage fee income                                                        99                      202
  Service charges on deposits                                                165                      173
  Other service charges and commissions                                       76                      103
  Securities gains, net                                                      106                       37
  Unrealized gain on trading securities                                       --                      321
  Net change in fair value of forward commitment
   derivative instruments                                                   (686)                      --
  Other income                                                               480                      479
                                                                     -----------              -----------
    Total other income                                                     7,776                    5,270

NONINTEREST EXPENSE
  Salary and employee benefits                                             7,664                    5,018
  Occupancy                                                                  777                      854
  Computer services                                                          168                      149
  General and administrative expense                                       1,883                    1,555
                                                                     -----------              -----------
    Total other expense                                                   10,492                    7,576

INCOME BEFORE INCOME TAXES                                                 1,572                    1,545
Income tax expense                                                           502                      465
                                                                     -----------              -----------

NET INCOME                                                           $     1,070              $     1,080
                                                                     ===========              ===========

NET INCOME PER COMMON SHARE - BASIC                                  $       .40              $       .40
                                                                     ===========              ===========

NET INCOME PER COMMON SHARE - DILUTED                                $       .39              $       .40
                                                                     ===========              ===========

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING                                                     2,698,746                2,698,746
                                                                     ===========              ===========

WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES OUTSTANDING                               2,738,387                2,698,746
                                                                     ===========              ===========

Dividends per share                                                  $       .06              $       .06
                                                                     ===========              ===========
</TABLE>

See notes to condensed consolidated financial statements.
<PAGE>

HABERSHAM BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) For the Nine-Month Periods Ended September 30, 2001 and 2000
(dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
INTEREST INCOME                                                                   2001                     2000
<S>                                                                           <C>                      <C>
Loans                                                                         $    29,377              $    27,764
Investment securities                                                               2,200                    2,331
Federal funds sold                                                                     32                       10
Other                                                                                 547                      498
                                                                              -----------              -----------
  TOTAL INTEREST INCOME                                                            32,156                   30,603

INTEREST EXPENSE
Time deposits, $100,000 and over                                                    4,148                    3,705
Other deposits                                                                      9,633                    8,573
Short-term and other borrowings, primarily
  FHLB advances                                                                     4,804                    5,473
                                                                              -----------              -----------
  TOTAL INTEREST EXPENSE                                                           18,585                   17,751

NET INTEREST INCOME                                                                13,571                   12,852
Provision for loan losses                                                           1,120                      715
                                                                              -----------              -----------
NET INTEREST INCOME AFTER
 PROVISION FOR LOAN LOSSES                                                         12,451                   12,137

NONINTEREST INCOME
  Gain on sale of loans                                                            16,421                    8,923
  Loan fee income                                                                   2,682                    1,783
  Brokerage fee income                                                                408                      701
  Service charges on deposits                                                         502                      533
  Other service charges and commissions                                               217                      270
  Securities gains, net                                                               156                       37
  Unrealized loss on trading securities                                                --                     (306)
  Net change in fair value of forward commitment
   derivative instruments                                                             (17)                      --
  Other income                                                                      1,491                    1,336
                                                                              -----------              -----------
    Total other income                                                             21,860                   13,277

NONINTEREST EXPENSE
  Salary and employee benefits                                                     20,034                   14,509
  Occupancy                                                                         2,413                    2,574
  Computer services                                                                   534                      434
  General and administrative expense                                                5,283                    4,568
                                                                              -----------              -----------
    Total other expense                                                            28,264                   22,085
INCOME BEFORE INCOME TAXES                                                          6,047                    3,329

Income tax expense                                                                  2,002                      981
                                                                              -----------              -----------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
  IN ACCOUNTING PRINCIPLE, NET OF TAX                                               4,045                    2,348
Cumulative effect of change in accounting
   principle, net of tax                                                             (162)                      --
                                                                              -----------              -----------
NET INCOME                                                                    $     3,883              $     2,348
                                                                              ===========              ===========

Income before cumulative effect of change
  in accounting principle per common share- basic                             $      1.50              $       .87
Cumulative effect of change in accounting
  principle per common share - basic                                                 (.06)                      --
                                                                              -----------              -----------
NET INCOME PER COMMON SHARE - BASIC                                           $      1.44              $       .87
                                                                              ===========              ===========

Income before cumulative effect of change
  in accounting principle per common share - diluted                          $      1.49              $       .87
Cumulative effect of change in accounting
  principle per common share - diluted                                               (.06)                      --
                                                                              -----------              -----------
NET INCOME PER COMMON SHARE - DILUTED                                         $      1.43              $       .87
                                                                              ===========              ===========

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING                                                              2,698,746                2,698,746
                                                                              ===========              ===========

WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES OUTSTANDING                                        2,723,717                2,699,384
                                                                              ===========              ===========
Dividends per share                                                           $       .18              $       .18
                                                                              ===========              ===========
</TABLE>

See notes to condensed consolidated financial statements
<PAGE>


HABERSHAM BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) For the Nine-Month Periods Ended September 30, 2001 and 2000
(dollars in thousands)

<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES:                                                    2001                   2000
<S>                                                                                   <C>                    <C>
  Net income                                                                          $   3,883              $   2,348
  Cumulative effect of change in accounting principle                                       162                     --
  Adjustments to reconcile net income to net cash
  used in operating activities:
      Provision for loan losses                                                           1,120                    715
      Depreciation                                                                        1,010                  1,022
      Gain on sale of investment securities                                                (156)                   (37)
      Decrease in fair value of derivative instruments                                       17                     --
      Unrealized holding loss on trading securities                                          --                    306
      Gain on sale of premises & equipment                                                  (25)                    --
      Loss on sale of other real estate                                                      30                     11
      Net gain on sale of loans                                                         (16,421)                (8,923)
      Amortization of intangible assets                                                     193                    233
      Equity in earnings of investee                                                        (85)                  (128)
      Deferred income tax expense (benefit)                                                  47                    (31)
      Proceeds from sale of loans held for sale                                         812,327                422,613
      Net increase in loans held for sale                                              (831,172)              (436,057)

  Changes in assets and liabilities:
      Decrease (increase) in interest receivable                                            934                   (725)
      Increase in other assets                                                             (113)                  (934)
      (Decrease) increase in interest payable                                            (1,085)                   644
      Increase in other liabilities                                                      26,220                 15,075
                                                                                      ---------              ---------
  Net cash used in operating activities                                                  (3,114)                (3,868)
                                                                                      ---------              ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Investment securities available for sale:
      Proceeds from maturity                                                              6,277                  4,230
      Proceeds from sale and call                                                         7,484                  2,403
      Purchases                                                                         (13,145)                (5,845)
  Investment securities held to maturity:
      Proceeds from maturity                                                              2,360                  1,059
      Purchases                                                                              --                   (499)
  Other investments:
      Proceeds from sale                                                                  9,719                    712
      Purchases                                                                          (8,103)                (3,192)
  Loans:
      Proceeds from sale                                                                 96,057                 12,858
      Net increase in loans                                                             (30,415)               (64,037)
  Purchases of premises and equipment                                                      (741)                (1,185)
  Proceeds from sale of premises & equipment                                                 43                     --
  Additions to other real estate                                                           (548)                    --
  Proceeds from sale of other real estate                                                   870                    249
  Dividends received from other investment                                                   62                     28
                                                                                      ---------              ---------
    Net cash provided by (used in) investing activities                                  69,920                (53,219)
                                                                                      ---------              ---------
</TABLE>

<PAGE>

HABERSHAM BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Unaudited) For the Nine-Month Periods Ended September 30, 2001 and 2000
(dollars in thousands)

<TABLE>
<CAPTION>
CASH FLOWS FROM FINANCING ACTIVITIES:                                            2001                   2000
<S>                                                                          <C>                    <C>
  Net (decrease)increase in deposits                                            (4,894)                19,486
  Net (decrease)increase in short-term borrowings                                  (82)                    55
  Net (decrease)increase in federal funds purchased and
    securities sold under repurchase agreements                                (26,577)                 5,310
  (Repayment of) proceeds of Federal Home Loan
    Bank advances, net                                                         (35,329)                29,496
  Proceeds from long-term borrowings                                             4,000                     --
  Repayments of long-term borrowings                                               (89)                    --
  Cash dividends paid                                                             (486)                  (486)
                                                                             ---------              ---------
    Net cash (used in) provided by financing activities                        (63,457)                53,861
                                                                             ---------              ---------

Increase (decrease) in cash and cash equivalents                                 3,349                 (3,226)

CASH AND CASH EQUIVALENTS:  BEGINNING OF PERIOD                                 13,566                 14,517
                                                                             ---------              ---------
CASH AND CASH EQUIVALENTS:  END OF PERIOD                                    $  16,915              $  11,291
                                                                             =========              =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
  Interest                                                                   $  19,670              $  17,107
  Income taxes                                                                     827                    726

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:

Other real estate acquired through loan foreclosures                         $   1,727              $     374
Loans granted to facilitate the sale
  of other real estate                                                             195                    294
Unrealized gain on investment securities
  available for sale, net of tax effect                                            838                    334
Transfer of held to maturity securities to
  available for sale securities upon adoption of
  SFAS No. 133                                                                     999                     --
</TABLE>

See notes to condensed consolidated financial statements.
<PAGE>

HABERSHAM BANCORP AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements

1.       Basis of Presentation

         The condensed consolidated financial statements contained in this
report are unaudited but reflect all adjustments, consisting only of normal
recurring accruals, which are, in the opinion of management, necessary for a
fair presentation of the results of the interim periods reflected. Certain
information and note disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to applicable
rules and regulations of the Securities and Exchange Commission. The results of
operations for the interim periods reported herein are not necessarily
indicative of results to be expected for the full year.

         The condensed consolidated financial statements included herein should
be read in conjunction with the Company's 2000 consolidated financial statements
and notes thereto, included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2000.

         Certain reclassifications have been made to the prior periods in order
to conform to classifications adopted in the current period.

2.       Accounting Policies

         Reference is made to the accounting policies of the Company described
in the notes to the consolidated financial statements contained in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2000. The
Company has consistently followed those policies in preparing this report.

3.       Other Comprehensive Income

         "Other comprehensive income" refers to revenues, expenses, gains, and
losses that are included in comprehensive income but excluded from earnings
under current accounting standards. Currently, other comprehensive income for
the Company consists of items previously recorded directly in equity under
Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." Comprehensive income for the
nine months ended September 30, 2001 and 2000 was $4,721,000 and $2,682,000,
respectively, and for the three months ended September 30, 2001 and 2000 was
$1,506,000 and $1,326,000, respectively.

4.       Derivative Instruments

         With the exception of commitments to originate fixed-rate mortgage
loans for resale and forward commitments to sell mortgage-backed securities, the
Company does not hold any derivative instruments.
<PAGE>

         The Company's objective in entering into forward commitments to sell
mortgage-backed securities is to mitigate the interest rate risk associated with
commitments to originate fixed-rate mortgage loans and mortgage loans held for
sale. The Company records its forward commitments to sell mortgage-backed
securities at fair value and does not account for these as hedges. During the
three and nine months ended September 30, 2001, a loss in the amount of
$1,276,000 and $607,000, respectively, relating to the change in fair value of
forward commitments to sell mortgage-backed securities has been recorded in
other income on the income statement and in other assets on the balance sheet.

         In the normal course of business, the Company extends interest rate
lock commitments to borrowers who apply for loan funding and meet certain credit
and underwriting criteria. The Company records its interest rate lock
commitments at fair value and does not account for these as hedges. During the
three and nine months ended September 30, 2001, a gain in the amount of $590,000
relating to the change in fair value of the interest rate lock commitments has
been recorded in other income on the income statement and in other assets on the
balance sheet.

5.       Accounting Pronouncements

         The Company adopted SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", as amended, on January 1, 2001. In
accordance with the transition provisions of SFAS No. 133, the Company recorded
a net-of-tax cumulative effect loss of $162,000 on January 1, 2001 to reflect
the fair value of its forward commitments to sell mortgage loans. The provisions
of SFAS No. 133 allow for a one-time transfer of investment securities
previously classified as held to maturity to available for sale upon adoption.
As a result, the Company transferred approximately $999,000 of investment
securities previously classified as held to maturity to its available for sale
portfolio.

         The Company adopted SFAS No. 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities," effective
January 1, 2001. Due to the nature of the activities of the Company, the
adoption of SFAS No. 140 did not have a material impact on the consolidated
financial statements of the Company.

         In July 2001, the Financial Accounting Standards Board (FASB) issued
SFAS No.141, "Business Combinations", and SFAS No. 142, "Goodwill and Other
Intangible Assets". SFAS No. 141 requires that the purchase method of accounting
be used for all business combinations initiated after June 30, 2001 as well as
all purchase method business combinations completed after June 30, 2001. SFAS
No. 141 also specifies criteria intangible assets acquired in a purchase method
business combination must meet to be recognized and reported apart from
goodwill, noting that any purchase price allocable to an assembled workforce may
not be accounted for separately. SFAS No. 142 will require that goodwill and
intangible assets with indefinite useful lives no longer be amortized, but
instead tested for impairment at least annually in accordance with the
provisions of SFAS No. 142. SFAS No. 142 will also require that intangible
assets with definite useful lives be amortized over their respective estimated
useful lives to their estimated residual values, and reviewed for impairment in
accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of".

         The Company is required to adopt the provisions of SFAS No. 141
immediately and SFAS No. 142 effective January 1, 2002. Furthermore, any
goodwill and any intangible asset determined to have an indefinite useful life
that are acquired in a purchase business combination completed after June 30,
2001 will not be
<PAGE>

amortized, but will continue to be evaluated for impairment in accordance with
the appropriate pre-SFAS No. 142 accounting literature. Goodwill and intangible
assets acquired in business combinations completed before July 1, 2001 will
continue to be amortized prior to the adoption of SFAS No. 142.

         SFAS No. 141 will require upon adoption of SFAS No. 142, that the
Company evaluate its existing intangible assets and goodwill that were acquired
in a prior purchase business combination, and to make any necessary
reclassifications in order to conform with the new criteria in SFAS No. 141 for
recognition apart from goodwill. Upon adoption of SFAS No. 142, the Company will
be required to reassess the useful lives and residual values of all intangible
assets acquired in purchase business combinations, and make any necessary
amortization period adjustments by the end of the first interim period after
adoption. In addition, to the extent an intangible asset is identified as having
an indefinite useful life, the Company will be required to test the intangible
asset for impairment in accordance with the provisions of SFAS No. 142 within
the first interim period. Any impairment loss will be measured as of the date of
adoption and recognized as the cumulative effect of a change in accounting
principle in the first interim period.

         In connection with the transitional goodwill impairment evaluation,
SFAS No. 142 will require the Company to perform an assessment of whether there
is an indication that goodwill and equity-method goodwill is impaired as of the
date of adoption. To accomplish this the Company must identify its reporting
units and determine the carrying value of each reporting unit by assigning the
assets and liabilities, including the existing goodwill and intangible assets,
to those reporting units as of the date of adoption. The Company will then have
up to six months from the date of adoption to determine the fair value of each
reporting unit and compare it to the reporting unit's carrying amount. To the
extent a reporting unit's carrying amount exceeds its fair value, an indication
exists that the reporting unit's goodwill may be impaired and the Company must
perform the second step of the transitional impairment test. In the second step,
the Company must compare the implied fair value of the reporting unit's
goodwill, determined by allocating the reporting unit's fair value to all of it
assets (recognized and unrecognized) and liabilities in a manner similar to a
purchase price allocation in accordance with SFAS No. 141, to its carrying
amount, both of which would be measured as of the date of adoption. This second
step is required to be completed as soon as possible, but no later than the end
of the year of adoption. Any transitional impairment loss will be recognized as
the cumulative effect of a change in accounting principle in the Company's
statement of earnings.

         And finally, any unamortized negative goodwill and negative
equity-method goodwill existing at the date SFAS No. 142 is adopted must be
written off as the cumulative effect of a change in accounting principle.

         The Company had net intangible assets of $2,550,735 and $2,679,801 and
equity-method goodwill of $1,079,436 and $1,143,345 at September 30, 2001 and
December 31, 2000, respectively. The Company recorded a total amortization
expense of approximately $193,000 and $297,000 for the nine months ended
September 30, 2001 and the year ended December 31, 2000, respectively.

         Because of the extensive effort needed to comply with adopting SFAS No.
141 and SFAS No. 142, it is not practicable to reasonably estimate the impact of
adopting these statements on the Company's consolidated financial statements at
the date of this report, including whether any transitional impairment losses
will be required to be recognized as the cumulative effect of a change in
accounting principle.
<PAGE>

         In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations". SFAS No. 143 requires that entities record the fair
value of a liability for an asset retirement obligation in the period in which
it is incurred. When the liability is initially recorded, the entity capitalizes
a cost by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its present value each period, and the
capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the obligations for its
recorded amount or incurs a gain or loss upon settlement. SFAS No. 143 is
effective for fiscal years beginning after June 15, 2002, with earlier
application encouraged. The adoption of SFAS No. 143 is not expected to have a
material impact on the consolidated financial statements of the Company.

         In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". SFAS No. 144 addresses financial
accounting and reporting for the impairment of long-lived assets and for
long-lived assets to be disposed of. SFAS No. 144 supercedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of. SFAS No. 144 retains the fundamental provisions of SFAS No. 121
for (a) recognition and measurement of the impairment of long-lived assets to
held and used and (b) measurement of long-lived assets to disposed of by sale.
However, SFAS No. 144 establishes a single accounting model for long-lived
assets to be disposed of by sale and addresses significant implementation issues
related to SFAS No. 121.

         The Company is required to adopt SFAS No. 144 no later than the year
beginning after December 15, 2001, and plans to adopt its provisions for the
quarter ending March 31, 2002. Management does not expect the adoption of SFAS
No. 144 for long-lived assets held for use to have a material impact on the
Company's financial statements because the impairment assessment under SFAS No.
144 is largely unchanged from SFAS No. 121. The provisions of the Statement for
assets held for sale or other disposal generally are required to be applied
prospectively after the adoption date to newly initiated disposal activities.
Therefore, management cannot determine the potential effects that adoption of
SFAS No. 144 will have on the Company's financial statements.

6.       Segment Information

         The Company has two significant reportable segments: banking and
mortgage banking. The Company offers traditional banking services through
Habersham Bank. The Company originates and sells loans in the secondary market
through its mortgage banking segment, BancMortgage Financial Corp.

         The accounting policies of the segments are the same as those described
in the summary of significant accounting policies. The Company evaluates
performance based on net income of the respective segments.
<PAGE>

At and for the three months ended September 30, 2001


<TABLE>
<CAPTION>
                                                  Mortgage
                                   Banking        Banking         Eliminations       Other      Eliminations    Consolidated
                                  --------        --------        ------------      -------     ------------    ------------

<S>                               <C>             <C>             <C>               <C>         <C>             <C>
Interest income                   $  8,282        $  2,013         $   (178)        $    15         $  --         $ 10,132
Interest expense                     4,578             950             (178)             90            --            5,440
Provision for loan losses              214             190               --              --            --              404
Gain on sale of loans                  137           6,559               --              --            --            6,696
Other noninterest income               725             378             (157)            471          (337)           1,080
Depreciation on premises &
  equipment                            146             169               --              17            --              332
Other noninterest expense            3,235           7,069             (381)            574          (337)          10,160
Income tax expense (benefit)           227             181              149             (55)           --              502
Net income (loss)                      559             482              148            (119)           --            1,070

Total assets                      $420,938        $ 99,783         $(16,540)        $ 5,725         $(399)        $509,507
</TABLE>


At and for the three months ended September 30, 2000


<TABLE>
<CAPTION>
                                                  Mortgage
                                   Banking        Banking         Eliminations       Other      Eliminations    Consolidated
                                  --------        --------        ------------      -------     ------------    ------------

<S>                               <C>             <C>             <C>               <C>         <C>             <C>
Interest income                     $  9,906        $ 1,330        $   (283)        $   15        $  --         $ 10,968
Interest expense                       6,018            969            (283)            38           --            6,742
Provision for loan losses                220            155              --             --           --              375
Gain on sale of loans                     24          3,263              --             --           --            3,287
Other noninterest income                 748          1,078            (339)           839         (343)           1,983
Depreciation on premises &
  equipment                              196            121              --             21           --              338
Other noninterest expense              3,362          3,962            (347)           604         (343)           7,238
Income tax expense (benefit)             362             30               3             70           --              465
Net income (loss)                        810            145               5            120           --            1,080

Total assets                        $475,587        $73,713        $(20,079)        $5,221        $(204)        $534,238
</TABLE>


At and for the nine months ended September 30, 2001


<TABLE>
<CAPTION>
                                                  Mortgage
                                   Banking        Banking         Eliminations       Other        Eliminations    Consolidated
                                  --------        --------        ------------      -------       ------------    ------------

<S>                               <C>             <C>             <C>               <C>           <C>             <C>
Interest income                    $ 27,671        $  5,145         $   (704)        $    44       $      --         $ 32,156
Interest expense                     16,190           2,937             (704)            162              --           18,585
Provision for loan losses               643             477               --              --              --            1,120
Gain on sale of loans                   483          15,938               --              --              --           16,421
Other noninterest income              2,108           3,646             (691)          1,391          (1,015)           5,439
Depreciation on premises &
   equipment                            445             505               --              60              --            1,010
Other noninterest expense             9,598          18,326           (1,509)          1,854          (1,015)          27,254
Income tax expense (benefit)            842             962              351            (153)             --            2,002
Net income (loss)                     1,957           1,755              540            (369)             --            3,883

Total assets                       $420,938        $ 99,783         $(16,540)        $ 5,725       $    (399)        $509,507
</TABLE>


<PAGE>

At and for the nine months ended September 30, 2000


<TABLE>
<CAPTION>
                                                  Mortgage
                                   Banking        Banking         Eliminations       Other        Eliminations    Consolidated
                                  --------        --------        ------------      -------       ------------    ------------

<S>                               <C>             <C>             <C>               <C>           <C>             <C>
Interest income                     $ 28,032        $  3,254         $   (727)        $    44       $    --         $ 30,603
Interest expense                      16,192           2,170             (727)            116            --           17,751
Provision for loan losses                560             155               --              --            --              715
Gain on sale of loans                     76           8,847               --              --            --            8,923
Other noninterest income               2,014           3,289           (1,129)          1,206        (1,026)           4,354
Depreciation on premises &
  equipment                              587             374               --              61            --            1,022
Other noninterest expense              8,923          12,462           (1,097)          1,801        (1,026)          21,063
Income tax expense (benefit)           1,232             (24)             (11)           (216)           --              981
Net income (loss)                      2,657             225              (21)           (513)           --            2,348

Total assets                        $475,587        $ 73,713         $(20,079)        $ 5,221       $  (204)        $534,238
</TABLE>


Item 2.  Management's Discussion and Analysis of Financial Condition and
Results of Operations


HABERSHAM BANCORP AND SUBSIDIARIES

Organization

         Habersham Bancorp (the "Company") owns all of the outstanding stock of
Habersham Bank ("Habersham Bank") and The Advantage Group, Inc. Habersham Bank
owns all of the outstanding stock of BancMortgage Financial Corp
("BancMortgage"), and Advantage Insurers, Inc. ("Advantage Insurers").
Effective June 30, 1999, the Company consolidated the charters of Habersham
Bank and Security State Bank, which had until that date been a wholly owned
subsidiary of the Company. As a result of this consolidation, Security State
Bank now functions as a division of Habersham Bank. The Advantage Group, Inc.
is a non-bank subsidiary which engages in the business of providing marketing
and advertising services. Advantage Insurers, which began operations on March
31, 1997, offers a full line of property, casualty, and life insurance
products.

         The Advantage Group, Inc. and Advantage Insurers do not comprise a
significant portion of the financial position, results of operations, or cash
flows of the Company. Management's discussion and analysis, which follows,
relates primarily to Habersham Bank and BancMortgage.

         BancMortgage was organized in 1996 as a full service mortgage and
construction lending company located in the northern Atlanta metropolitan area.
During 1997, BancMortgage acquired for approximately $60,000 the assets and
certain liabilities of The Prestwick Mortgage Group, a national investment
banking and advisory firm specializing in the brokerage and evaluation of
mortgage-related assets. Concurrent with the acquisition of The Prestwick
Mortgage Group, BancMortgage also formed BancFinancial Services Corporation, a
full-service wholesale mortgage lender specializing in sub-prime mortgage
loans. The Prestwick Mortgage Group and BancFinancial Services Corporation are
based in Virginia.

         During 1999, BancMortgage formed a wholly owned subsidiary,
BancMortgage Reinsurance LTD., a reinsurance company incorporated in Turks and
Caicos. The

<PAGE>

subsidiary provides insurance to companies offering private mortgage insurance.
Also during the fourth quarter of 1999, BancMortgage acquired the assets of
Fidelity Group. This acquisition was accounted for as a purchase with a
purchase price of $390,031.

Forward Looking Statements

         Certain statements contained in this Quarterly Report on Form 10-Q and
the exhibits hereto which are not statements of historical fact constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act (the "Act"). In addition, certain statements in future
filings by the Company with the Securities and Exchange Commission, in press
releases, and in oral and written statements made by or with the approval of
the Company which are not statements of historical fact constitute
forward-looking statements within the meaning of the Act. Examples of
forward-looking statements include, but are not limited to: (1) projections of
revenues, income or loss, earnings or loss per share, the payment or
non-payment of dividends, capital structure and other financial items; (2)
statements of plans and objectives of the Company or its management or Board of
Directors, including those relating to products or services; (3) statements of
future economic performance; and (4) statements of assumptions underlying such
statements. Words such as "believes," "anticipates," "expects," "intends,"
"targeted," and similar expressions are intended to identify forward-looking
statements but are not the exclusive means of identifying such statements.

         Forward-looking statements involve risks and uncertainties which may
cause actual results to differ materially from those in such statements. Facts
that could cause actual results to differ from those discussed in the
forward-looking statements include, but are not limited to: (1) the strength of
the U.S. economy in general and the strength of the local economies in which
operations are conducted; (2) the effects of and changes in trade, monetary and
fiscal policies and laws, including interest rate policies of the Board of
Governors of the Federal Reserve System; (3) inflation, interest rate, market
and monetary fluctuations; (4) the timely development of and acceptance of new
products and services and perceived overall value of these products and services
by users; (5) changes in consumer spending, borrowing and saving habits; (6)
acquisitions; (7) the ability to increase market share and control expenses; (8)
the effect of changes in laws and regulations (including laws and regulations
concerning taxes, banking, securities and insurance) with which the Company and
its subsidiaries must comply; (9) the effect of changes in accounting policies
and practices, as may be adopted by the regulatory agencies as well as the
Financial Accounting Standards Board; (10) changes in the Company's
organization, compensation and benefit plans; (11) the costs and effects of
litigation and of unexpected or adverse outcomes in such litigation; and (12)
the success of the Company at managing the risks involved in the foregoing.

         Such forward-looking statements speak only as of the date on which
such statements are made, and the Company undertakes no obligation to update
any forward-looking statement to reflect events or circumstances after the date
on which such statement is made or to reflect the occurrence of unanticipated
events.

<PAGE>

Material Changes in Financial Condition

         The Company's total assets decreased approximately $33.6 million during
the first nine months of 2001 primarily due to decreases in the loan portfolio
of Habersham Bank resulting from the sale of real estate secured loans of
approximately $96 million and decreases in the investment securities portfolio
of approximately $5 million, offset by increases in held for sale loans in the
loan portfolio of BancMortgage, increases in the loan portfolio of Habersham
Bank, and increases in cash and cash equivalents of approximately $35 million,
$30 million, and $3 million, respectively. The increased production activity at
BancMortgage was due to the lower interest rate environment during 2001.

         Decreases in Federal Home Loan Bank advances and federal funds
purchased and securities sold under repurchase agreements during the first nine
months resulted from the repayment of approximately $35.3 million and $26.6
million, respectively. Deposits decreased approximately $5 million during the
first nine months primarily due to a declining interest rate environment. An
increase in long-term borrowings of approximately $3.9 million was the result of
Habersham Bancorp borrowing funds of $4 million to inject into Habersham Bank to
increase its capital, offset by repayments of $89,000.

         Nonperforming assets consist of nonaccrual loans, accruing loans 90
days past due, restructured loans and other real estate owned. Nonperforming
assets increased approximately $3,520,000 or 51.85% from December 31, 2000 to
September 30, 2001. The increase for the first nine months of 2001 was
primarily due to increases in nonaccrual loans and other real estate of
$2,610,000 and $1,215,000, respectively offset by decreases in accruing loans
90 days past due and restructured loans of approximately $228,000 and $73,000,
respectively. The increase in nonaccrual loans for the first nine months of
2001 was primarily due to the addition of loans secured by residential real
estate, a single commercial real estate loan, commercial loans, and consumer
loans totaling approximately $1,593,000, $2,140,000, $370,000, and $32,000
respectively. These increases were offset by decreases in loans secured by
residential real estate, commercial loans, and consumer loans of approximately
$1,417,000, $65,000 and $44,000, respectively. The increase in other real
estate for the first nine months of 2001 was primarily due to the foreclosures
of residential mortgages and cash expenditures of approximately $2,141,000
offset by sales of other real estate totaling approximately $926,000.

         Additions to the allowance for loan losses are made periodically to
maintain the allowance at a level based upon management's analysis of risk in
the loan portfolio. The balance of the allowance for loan losses is in
accordance with the internal calculation of the allowance for loan losses which
considers factors such as classified and past due loans as well as portfolio
growth, diversification, and loss experience. A provision for loan losses in
the amount of $1,120,000 was charged to expense for the nine months ended
September 30, 2001. Net charge-offs for the first nine months of 2001 totaled
approximately $857,000. At September 30, 2001 and December 31, 2000, the ratio
of allowance for loan losses to total loans was 1.18% and .90%, respectively.
Management considers the current allowance for loan losses adequate based upon
its analysis of the potential risk in the portfolio, although there can be no
assurance that the assumptions underlying such analysis will continue to be
correct.

         The Company had impaired loans of $4,461,000 and $1,851,000 at
September 30, 2001 and December 31, 2000, respectively. Impaired loans consist
of loans on nonaccrual status. The interest income recognized on such loans for
the three-month and nine-month periods ended September 30, 2001 and 2000 was
not material.


<PAGE>


    The Company's other real estate totaled $3,583,000 and $2,369,000 at
September 30, 2001 and December 31, 2000, respectively. The increase was due
primarily to foreclosures of real estate secured mortgages of approximately
$2,141,000 offset by sales of property of approximately $926,000.

Material Changes in Results of Operations

         Total interest income for the third quarter of 2001 decreased $836,000
or 7.62%, when compared to the third quarter of 2000. Total interest income for
the first nine months of 2001 increased $1,553,000 or 5.07% when compared to
the first nine months of 2000. Interest income from loans for the third quarter
of 2001 and for the first nine months of 2001 decreased $767,000 or 7.66% and
increased $1,613,000 or 5.81%, respectively, when compared to the third quarter
of 2000 and the first nine months of 2000. The quarterly decrease was primarily
due to the sale of adjustable rate mortgages in the loan portfolio of Habersham
Bank. The increase for the first nine months of 2001 was due primarily to
increases in the total loan portfolios of Habersham Bank and BancMortgage
offset by declining interest rates. Total average loans increased approximately
$51,993,000 or 13.30% during the first nine months of 2001 compared to the
first nine months of 2000. Average yields on loans decreased by .62% to 8.85%
for the first nine months of 2001 compared to average yields of loans of 9.47%
for the first nine months of 2000.

         Interest income from investment securities decreased $67,000 or 8.56%
for the third quarter of 2001 when compared to the third quarter of 2000.
Interest income from investment securities decreased $131,000 or 5.62% for the
first nine months of 2001 when compared to the first nine months of 2000. The
decrease in interest income from investments was primarily due to declining
average yields in the investment portfolio. Average yields on investment
securities decreased by .44% to 5.38% for the first nine months of 2001
compared to 5.82% for the first nine months of 2000.

         Total interest expense for the third quarter of 2001 decreased
$1,302,000 or 19.31%, when compared to the third quarter of 2000. Total
interest expense for the first nine months of 2001 increased $834,000 or 4.70%,
when compared to the first nine months of 2000.

         Interest expense on deposits for the third quarter of 2001 decreased
$435,000 or 9.71%, when compared to the third quarter of 2000. Interest expense
on deposits for the first nine months of 2001 increased $1,503,000 or 12.24%,
when compared to the first nine months of 2000. This increase was due to
increases in the deposit portfolio and increases in interest rates paid for
deposits during 2001. Total average interest bearing certificates of deposit
increased approximately $28,623,000 offset by decreases in Money Market and
savings accounts of approximately $1,600,000 and $222,000, respectively, during
the first nine months of 2001.

         Average rates on total interest bearing deposits increased by .16% to
5.65% during the first nine months of 2001 compared to 5.49% during the first
nine months of 2000. Average rates for certificates of deposit increased to
6.49% during the first nine months of 2001 compared to 5.99% during the first
nine months of 2000. Average rates for other interest bearing deposit accounts
decreased to 2.55% for the first nine months of 2001 compared to 2.71% during
the first nine months of 2000.

         Interest expense on short-term and other borrowings for the third
quarter of 2001 decreased $867,000 or 38.33% when compared to the third quarter
of 2000. Interest expense on short-term and other borrowings for the first nine
months of 2001 decreased $669,000 or 12.22% when compared to the first nine
months of 2000. The


<PAGE>


decrease is primarily due to decreases in interest rates, offset by an increase
in average borrowings of approximately $8 million or 7.37% when compared to the
first nine months of 2000. Average rates on borrowings decreased by 1.20% to
5.39% for the first nine months of 2001 compared to 6.59% for the first nine
months of 2000.

         Net interest income increased approximately $466,000 or 11.03%, for
the third quarter of 2001 when compared to the third quarter of 2000 and
increased $719,000 or 5.59% for the first nine months of 2001 when compared to
the first nine months of 2000, as a result of the items discussed above.

         The net interest margin of the Company, net interest income divided by
average interest-earning assets, was 3.48% for the first nine months of 2001
compared to 3.70% for the first nine months of 2000. The decrease in the net
interest margin resulted primarily from increases in interest rates paid on
deposits, an increase in the average balances in borrowings, and decreases in
the yields on loans and securities.

         Noninterest income increased $2,506,000 or 47.55% for the third
quarter of 2001 over the same period in 2000. Noninterest income increased
$8,583,000 or 64.65% for the first nine months of 2001 over the same period in
2000.

         The increase in noninterest income for the third quarter and the first
nine months of 2001 was primarily due to increased lending activity at
Habersham Bank and BancMortgage resulting in increases in gain on sale of loans
and loan fee income.

         Other income increased $1,000 or .20% for the third quarter of 2001
over the same period in 2000. Other income increased $155,000 or 11.60% for the
first nine months of 2001 over the same period in 2000.

         Other income was impacted by increases in activity at BancMortage
Reinsurance and Advantage Insurers resulting in increases of approximately
$51,000 and $28,000, respectively. Increased activity at Habersham Bank
resulted in increases in income relating to investments in insurance policies,
in trust fees, and Master Money Card Income, of approximately $31,000, $25,000,
and $14,000, respectively. Increased activity at BancMortgage resulted in an
increase of approximately $34,000 in conversion fees. These increases were
offset by decreases in data processing income and mutual fund fees of
approximately $28,000 and $5,000, respectively. In 2000, the Company also
recorded an unrealized loss on trading securities. In September 2000, the
Company transferred its trading securities to its available for sale portfolio.

         Noninterest expenses increased $2,916,000 or 38.49% for the third
quarter of 2001 over the same period in 2000. Noninterest expenses increased
$6,179,000 or 27.98% for the first nine months of 2001 over the same period in
2000. The increase in noninterest expense for the third quarter and for the
first nine months of 2001 was primarily due to increased salary and employee
benefits, and computer services of approximately $5,526,000, and $100,000,
respectively, offset by decreases in overhead expenses of approximately
$160,000.

         Salary and employee benefits increased primarily due to the production
volume generated by BancMortgage, which compensates staff by commissions that
are directly related to production volume, as well as annual salary
adjustments. Advantage Insurers and The Advantage Group, Inc. also expanded
into other locations during the first quarter of 2001 resulting in increases to
salary and employee benefits.


<PAGE>


         General and administrative expenses for the third quarter of 2001
increased $328,000 or 21.09%, when compared to the third quarter of 2000.
General and administrative expenses for the first nine months of 2001 increased
approximately $715,000 or 15.65% when compared to the first nine months of
2000. The increases for the third quarter of 2001 are primarily due to
increases in outside services, consisting of FDIC insurance expense, Department
of Banking Exam fees, and legal and accounting fees of approximately $121,000,
increases in advertising and marketing expense of approximately $10,000,
increases in office supply expense of approximately $27,000, and increases in
other expenses of approximately $170,000. The increases for the first nine
months or 2001 are primarily due to increases in outside services, consisting
of FDIC insurance expense, Department of Banking Exam fees, and legal and
accounting fees of approximately $272,000, increases in advertising and
marketing expense of approximately $101,000, increases is office supply expense
of approximately $54,000, increases in other real estate expenses of
approximately $81,000, and increases in other expenses of approximately
$207,000.

         Income tax expense for the three months ended September 30, 2001 and
2000 was $502,000 and $465,000, respectively. Income tax expense for the first
nine months ended September 30, 2001 and 2000 was $2,002,000 and $981,000,
respectively. The effective tax rate for the nine months ended September 30,
2001 and 2000 was 34.02% and 29.47%, respectively.

Liquidity and Capital Resources

         Liquidity management involves the matching of the cash flow
requirements of customers, either depositors withdrawing funds or borrowers
needing loans, and the ability of the Company to meet those requirements.

         The Company's liquidity program is designed and intended to provide
guidance in funding the credit and investment activities of the Company while
at the same time ensuring that the deposit obligations of the Company are met
on a timely basis. In order to permit active and timely management of assets
and liabilities, these accounts are monitored regularly in regard to volume,
mix, and maturity.

         The Company's liquidity position depends primarily upon the liquidity
of its assets relative to its need to respond to short-term demand for funds
caused by withdrawals from deposit accounts and loan funding commitments.
Primary sources of liquidity are scheduled repayments on the Company's loans
and interest on and maturities of its investment securities. Sales of
investment securities available for sale represent another source of liquidity
to the Company. The Company may also utilize its cash and due from banks and
federal funds sold to meet liquidity requirements as needed.

         The Company also has the ability, on a short-term basis, to purchase
federal funds from other financial institutions up to $25,000,000. Presently,
the Company has made arrangements with commercial banks for short-term advances
up to $9,500,000 under a repurchase agreement line of credit of which none was
advanced at September 30, 2001.

         Habersham Bank's liquidity policy requires that the ratio of cash and
certain short-term investments to net withdrawable deposit accounts be at least
20%. The Bank's liquidity ratios at September 30, 2001 and 2000 were 20.10% and
20.05%, respectively.

         At September 30, 2001, Habersham Bancorp and Habersham Bank were
required to have minimum Tier 1 and total capital ratios of 4% and 8%,
respectively. Additionally,


<PAGE>


the Company and the Bank are required to maintain a leverage ratio (Tier 1
capital to average assets) of at least 4%. The Company and the Bank's ratios at
September 30, 2001 follow:


<TABLE>
<CAPTION>
                           Habersham         Habersham
                             Bank             Bancorp

<S>                        <C>               <C>
Tier 1                      10.27%            10.29%
Total Capital               11.25%            11.25%
Leverage                     7.35%             7.40%
</TABLE>


Interest Rate Sensitivity

         The objective of asset and liability management is to manage and
measure the level and volatility of earnings and capital by controlling
interest rate risk. To accomplish this objective, management makes use of
interest rate and income simulation models to perform current and dynamic
projections of interest income and equity, as well as more traditional asset
and liability management methods.

         The Company's historical performance in various economic climates is
considered by management in making long-term asset and liability decisions for
the Company.

         The relative interest rate sensitivity of the Company's assets and
liabilities indicates the extent to which the Company's net interest income may
be affected by interest rate movements. The Company's ability to reprice assets
and liabilities in the same dollar amounts and at the same time minimizes
interest rate risks. One method of measuring the impact of interest rate
changes on net interest income is to measure, in a number of time frames, the
interest sensitivity gap, by subtracting interest sensitive liabilities from
interest sensitive assets, as reflected in the following table. Such interest
sensitivity gap represents the risk, or opportunity, in repricing. If more
assets than liabilities are repriced at a given time in a rising rate
environment, net interest income improves; in a declining rate environment, net
interest income deteriorates. Conversely, if more liabilities than assets are
repriced while interest rates are rising, net interest income deteriorates; if
interest rates are falling, net interest income improves.


<PAGE>


         The interest rate sensitivity analysis, calculated as of September 30,
2001, below has a three month negative gap of approximately $5 million
(interest-bearing liabilities exceeding interest-earning assets repricing
within three months).


<TABLE>
<CAPTION>
                                                  DUE IN      DUE AFTER       DUE AFTER      DUE AFTER      DUE AFTER
                                                  THREE      THREE THROUGH    SIX THROUGH   ONE THROUGH       FIVE
                                                  MONTHS      SIX MONTHS     TWELVE MONTHS   FIVE YEARS       YEARS         TOTAL
                                                ---------    -------------   -------------  -----------     ---------     --------
<S>                                             <C>          <C>             <C>            <C>             <C>           <C>
INTEREST EARNING ASSETS:

 Federal funds sold                                 1,038             --             --             --             --      $  1,038
 Investment securities                                105            356          1,486          6,475         46,137        54,559
 Loans                                            183,168         24,017         38,155         90,790         72,954       409,084
                                                ---------       --------       --------       --------       --------      --------
  Total interest-earning assets                   184,311         24,373         39,641         97,265        119,091       464,681

INTEREST BEARING LIABILITIES:
 Deposits
  Money Market and NOW                             54,576             --             --             --             --        54,576
  Savings                                           7,286             --             --             --             --         7,286
  Certificates of deposit                          74,751         63,259         56,095         48,683             --       242,788
 Borrowings                                        53,041             89            183         13,677         21,823        88,813
                                                ---------       --------       --------       --------       --------      --------
  Total interest-bearing
   liabilities                                    189,654         63,348         56,278         62,360         21,823       393,463

Excess (deficiency) of interest-earning
 assets over (to) interest-bearing
 liabilities                                    $  (5,343)      $(38,975)      $(16,637)      $ 34,905       $ 97,268      $ 71,218
                                                =========       ========       ========       ========       ========      ========

Cumulative gap                                  $  (5,343)      $(44,318)      $(60,955)      $(26,050)      $ 71,218

Ratio of cumulative gap to total
 cumulative earning assets                          (2.90)%       (21.24)%       (24.55)%        (7.54)%        15.33%
Ratio of cumulative interest-earning assets
  to cumulative interest-bearing
  liabilities                                       97.18%         82.48%         80.29%         92.99%        118.10%
</TABLE>

         Management strives to maintain the ratio of cumulative interest
earning assets to cumulative interest bearing liabilities within a range of 60%
to 140%.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

         As of September 30, 2001, there were no substantial changes from the
interest rate sensitivity analysis or the sensitivity of market value of
portfolio equity for various changes in interest rates calculated as of
December 31, 2000. The foregoing disclosures related to the market risk of the
Company should be read in conjunction with the Company's audited consolidated
financial statements, related notes and management's discussion and analysis of
financial condition and results of operations for the year ended December 31,
2000 included in the Company's 2000 Annual Report on Form 10K.


<PAGE>


PART II
OTHER INFORMATION

Item 1.  Legal proceedings.

                  None

Item 2.  Changes in securities.

                  None

Item 3.  Defaults upon senior securities.
                  None

Item 4.  Submission of matters to a vote of security holders.
                  None

Item 5.  Other information.
                  None

Item 6.  Exhibits, list and reports on Form 8-K

         (a)      The registrant submits herewith as exhibits to this report on
Form 10-Q the exhibits required by Item 601 of Regulation S-K, subject to Rule
12b-32 under the Securities Exchange Act of 1934.


<TABLE>
<CAPTION>
Exhibit No.                          Document
-----------                          --------

<S>              <C>
 3.1             Amended and restated Articles of Incorporation of Habersham Bancorp, as amended by amendments executed
                 as of April 16, 1988 and April 17, 1995 (1) and as further amended by amendment executed as of April
                 15, 2000.(2)

 3.2             By-laws of Habersham Bancorp, as amended as of November 20, 1989 (3) and as of March 16, 1991.(4)

10.1*            Habersham Bancorp Savings Investment Plan, as amended and restated  March 17, 1990, and the related
                 Trust Agreements, as amended March 17, 1990.(3)

10.2*            Habersham Bancorp Incentive Stock Option Plan, as amended February 26, 1994. (5)

10.3*            Habersham Bancorp Outside Directors Stock Option Plan.(6)

10.4*            Habersham Bancorp 1996 Incentive Stock Option Plan (7), as amended by the First Amendment thereto dated
                 January 29, 2000.(8)

10.5*            Mortgage Banking Agreement Dated as of January 2, 1996 among Habersham Bancorp, Habersham Bank, BancMortgage
                 Financial Corp. and Robert S. Cannon and Anthony L. Watts.(9)

10.6             Option Agreement dated as of March 11, 1998 by and among Habersham Bancorp and certain shareholders of
                 Empire Bank Corp.(10)

11.1             Computation of Earnings Per Share.
</TABLE>


<PAGE>


(1)      Incorporated herein by reference to exhibit 3(a) in Amendment No. 1 to
Registrant's Registration Statement on Form S-4 (Regis. No. 33-57915).

(2)      Incorporated herein by reference to exhibit of same number in the
Registrant's Annual Report on Form 10-K for the year ended December 31, 2000
(File No. 0-13153).

(3)      Incorporated herein by reference to exhibit of same number in the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1989
(File No. 0-13153).

(4)      Incorporated herein by reference to exhibit of same number in the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1991
(File No. 0-13153).

(5)      Incorporated herein by reference to exhibit of same number in the
Registrant's Annual Report on Form 10-KSB for the year ended December 31, 1993
(File No. 0-13153).

(6)      Incorporated herein by reference to exhibit of same number in the
Registrant's Annual Report on Form 10-KSB for the year ended December 31, 1994
(File No. 0-13153).

(7)      Incorporated herein by reference to exhibit of same number in the
Registrant's Annual Report on Form 10-KSB for the year ended December 31, 1995
(File No. 0-13153).

(8)      Incorporated herein by reference to exhibit of same number in the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1999
(File No. 0-13153).

(9)      Incorporated herein by reference to exhibit of same number in the
Registrant's Annual Report on Form 10-KSB for the year ended December 31, 1997
(File No. 0-13153).

(10)     Incorporated herein be reference to exhibit of same number in the
Registrant's Annual Report on Form 10-Q for the quarter ended June 30, 1998
(File No. 0-13153).


*        Indicates the Registrant's plans, management contracts and
compensatory arrangements.


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                                   SIGNATURES


         In accordance with the requirements of the Exchange Act, the
registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                    HABERSHAM BANCORP
                                      (Registrant)


Date November 13, 2001              /s/ Annette Banks
                                    -------------------------------------------
                                    Chief Financial Officer
                                    (for the Registrant and as the
                                    Registrant's principal financial and
                                    accounting officer)