----

----

**U.S.        SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,        D. C. 20549**

| x                                                                                        | QUARTERLY                    REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES                    EXCHANGE ACT OF 1934 |
|------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|
|  For                    the quarterly period ended June 30,                    2005 |

| o                                                                                         | TRANSITION                    REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT                    OF                    1934 |
|-------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|
|  For                    the transition period from _____ to                    _____ |

| 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) |

|   |  Yes |  x |  No |  o |
|--------|-----------|---------|----------|---------|

|   |  Yes |  o |  No |  x |
|--------|-----------|---------|----------|---------|

----

| ASSETS                                                                                                                                                                                                                     |   | June                  30, 2005 |    | DECEMBER                  31, 2004 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|------------------------------------|--------|
|                                                                                                                                                                                                                       |   |                           |    |                               |   |   |   |
| Cash                  and due from banks                                                                                                                                                                                   |   | $                              | 10,594  |                               | $      | 9,559 |   |
| Federal                  funds sold                                                                                                                                                                                        |   |                           | 6,783   |                               |   | - |   |
| Total                  cash and cash equivalents                                                                                                                                                                           |   |                           | 17,377  |                               |   | 9,559 |   |
|                                                                                                                                                                                                                       |   |                           |    |                               |   |   |   |
| Investment                  securities available for sale (amortized cost of $75,377 at June                  30, 2005                  And $70,366 at December 31, 2004)                                                  |   |                           | 75,100  |                               |   | 70,313 |   |
| Investment                  securities held to maturity (estimated fair value of $3,923 at                  June 30,                  2005 and $4,371 at December 31, 2004)                                                |   |                           | 3,722   |                               |   | 4,111 |   |
| Other                  investments                                                                                                                                                                                         |   |                           | 2,957   |                               |   | 2,469 |   |
|                                                                                                                                                                                                                       |   |                           |    |                               |   |   |   |
| Loans                  held for sale                                                                                                                                                                                       |   |                           | 1,815   |                               |   | 1,062 |   |
|                                                                                                                                                                                                                       |   |                           |    |                               |   |   |   |
| Loans                                                                                                                                                                                                                      |   |                           | 285,161 |                               |   | 280,772 |   |
| Less                  allowance for loan losses                                                                                                                                                                            |   |                           | (3,836  | )                                  |   | (3,635 | ) |
| Loans,                  net                                                                                                                                                                                                |   |                           | 281,325 |                               |   | 277,137 |   |
|                                                                                                                                                                                                                       |   |                           |    |                               |   |   |   |
| Goodwill                                                                                                                                                                                                                   |   |                           | 2,489   |                               |   | 2,489 |   |
| Other                  assets                                                                                                                                                                                              |   |                           | 21,255  |                               |   | 18,793 |   |
| TOTAL                  ASSETS                                                                                                                                                                                              |   | $                              | 406,040 |                               | $      | 385,933 |   |
|                                                                                                                                                                                                                       |   |                           |    |                               |   |   |   |
| LIABILITIES                                                                                                                                                                                                                |   |                           |    |                               |   |   |   |
| Noninterest-bearing                  deposits                                                                                                                                                                              |   | $                              | 59,141  |                               | $      | 44,316 |   |
| Interest-bearing                  deposits                                                                                                                                                                                 |   |                           | 252,835 |                               |   | 248,641 |   |
| Total                  deposits                                                                                                                                                                                            |   |                           | 311,976 |                               |   | 292,957 |   |
|                                                                                                                                                                                                                       |   |                           |    |                               |   |   |   |
| Short-term                  borrowings                                                                                                                                                                                     |   |                           | 597     |                               |   | 786 |   |
| Federal                  funds purchased and securities sold under repurchase                  agreements                                                                                                                  |   |                           | 8,114   |                               |   | 4,835 |   |
| Federal                  Home Loan Bank Advances                                                                                                                                                                           |   |                           | 33,000  |                               |   | 36,000 |   |
| Other                  liabilities                                                                                                                                                                                         |   |                           | 3,345   |                               |   | 3,349 |   |
| TOTAL                  LIABILITIES                                                                                                                                                                                         |   |                           | 357,032 |                               |   | 337,927 |   |
|                                                                                                                                                                                                                       |   |                           |    |                               |   |   |   |
| STOCKOLDERS’                  EQUITY                                                                                                                                                                                 |   |                           |    |                               |   |   |   |
| Common                  Stock, $1.00 par value, 10,000,000 shares authorized; 2,901,692                  shares                  issued at June 30, 2005 and 2,900,192 shares issued at December                  31, 2004 |   |                           | 2,902   |                               |   | 2,900 |   |
| Additional                  paid-in capital                                                                                                                                                                                |   |                           | 14,577  |                               |   | 14,561 |   |
| Retained                  earnings                                                                                                                                                                                         |   |                           | 31,754  |                               |   | 30,661 |   |
| Accumulated                  other comprehensive(loss)income                                                                                                                                                               |   |                           | (225    | )                                  |   | (116 | ) |
| TOTAL                  STOCKHOLDERS’ EQUITY                                                                                                                                                                          |   |                           | 49,008  |                               |   | 48,006 |   |
| TOTAL                  LIABILITIES AND STOCKHOLDERS’                                                                                                                                                                 |   |                           |    |                               |   |   |   |
| EQUITY                                                                                                                                                                                                                     |   | $                              | 406,040 |                               | $      | 385,933 |   |

----

|                                                                                                         |   | Three                    Months ended June                      30, |      | Six                    Months endedJune                    30, |   |
|--------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|-----------|----------------------------------------------------------------|--------|
|                                                                                                         |   | 2005                                                                |      | 2004                                                           |   | 2005 |   | 2004 |   |
|                                                                                                         |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
| INTEREST                  INCOME                                                                             |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
| Interest                  and fees on loans                                                                  |   | $                                                                   | 5,104     |                                                           | $      | 4,311 |   | $ | 9,796 |   | $ | 8,573 |   |
| Taxable                  investment securities                                                               |   |                                                                | 581       |                                                           |   | 559 |   |   | 1,172 |   |   | 1,159 |   |
| Tax                  exempt investment securities                                                            |   |                                                                | 199       |                                                           |   | 182 |   |   | 392 |   |   | 370 |   |
| Federal                  funds sold                                                                          |   |                                                                | 68        |                                                           |   | 3 |   |   | 117 |   |   | 7 |   |
| Other                                                                                                        |   |                                                                | 41        |                                                           |   | 25 |   |   | 79 |   |   | 57 |   |
| TOTAL                  INTEREST INCOME                                                                       |   |                                                                | 5,993     |                                                           |   | 5,080 |   |   | 11,556 |   |   | 10,166 |   |
|                                                                                                         |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
| INTEREST                  EXPENSE                                                                            |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
| Time                  deposits, $100,000 and over                                                            |   |                                                                | 473       |                                                           |   | 378 |   |   | 858 |   |   | 795 |   |
| Other                  deposits                                                                              |   |                                                                | 966       |                                                           |   | 738 |   |   | 1,897 |   |   | 1,517 |   |
| Short-term                  and other borrowings, primarily                                                  |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
| FHLB                  advances                                                                               |   |                                                                | 509       |                                                           |   | 508 |   |   | 1,046 |   |   | 979 |   |
| TOTAL                  INTEREST EXPENSE                                                                      |   |                                                                | 1,948     |                                                           |   | 1,624 |   |   | 3,801 |   |   | 3,291 |   |
|                                                                                                         |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
| NET                  INTEREST EARNINGS                                                                       |   |                                                                | 4,045     |                                                           |   | 3,456 |   |   | 7,755 |   |   | 6,875 |   |
| Provision                  for loan losses                                                                   |   |                                                                | 120       |                                                           |   | 120 |   |   | 240 |   |   | 283 |   |
|                                                                                                         |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
| NET                  INTEREST INCOME AFTER                                                                   |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
| PROVISION                  FOR LOAN LOSSES                                                                   |   |                                                                | 3,925     |                                                           |   | 3,336 |   |   | 7,515 |   |   | 6,592 |   |
|                                                                                                         |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
| NONINTEREST                  INCOME                                                                          |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
| Mortgage                  origination income                                                                 |   |                                                                | 152       |                                                           |   | 279 |   |   | 384 |   |   | 464 |   |
| Service                  charges on deposits                                                                 |   |                                                                | 161       |                                                           |   | 175 |   |   | 313 |   |   | 346 |   |
| Other                  service charges and commissions                                                       |   |                                                                | 37        |                                                           |   | 45 |   |   | 76 |   |   | 88 |   |
| Investment                  securities (losses) gains, net                                                   |   |                                                                | (13       | )                                                              |   | 7 |   |   | (30 | ) |   | 38 |   |
| Gain                  on sale of other investments                                                           |   |                                                                | -         |                                                           |   | - |   |   | - |   |   | 18 |   |
| Gain                  on sale of land                                                                        |   |                                                                | -         |                                                           |   | 879 |   |   | - |   |   | 879 |   |
| Other                  income                                                                                |   |                                                                | 397       |                                                           |   | 361 |   |   | 798 |   |   | 712 |   |
| Total                  noninterest income                                                                    |   |                                                                | 734       |                                                           |   | 1,746 |   |   | 1,541 |   |   | 2,545 |   |
|                                                                                                         |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
| NONINTEREST                  EXPENSE                                                                         |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
| Salary                  and employee benefits                                                                |   |                                                                | 2,017     |                                                           |   | 2,132 |   |   | 3,961 |   |   | 4,187 |   |
| Occupancy                                                                                                    |   |                                                                | 475       |                                                           |   | 489 |   |   | 939 |   |   | 923 |   |
| Computer                  services                                                                           |   |                                                                | 118       |                                                           |   | 110 |   |   | 211 |   |   | 210 |   |
| General                  and administrative expense                                                          |   |                                                                | 878       |                                                           |   | 1,222 |   |   | 1,801 |   |   | 2,265 |   |
| Total                  noninterest expense                                                                   |   |                                                                | 3,488     |                                                           |   | 3,953 |   |   | 6,912 |   |   | 7,585 |   |
|                                                                                                         |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
| EARNINGS                  BEFORE INCOME TAXES                                                                |   |                                                                | 1,171     |                                                           |   | 1,129 |   |   | 2,144 |   |   | 1,552 |   |
| Income                  tax expense                                                                          |   |                                                                | 320       |                                                           |   | 327 |   |   | 587 |   |   | 391 |   |
| NET                  EARNINGS                                                                                |   | $                                                                   | 851       |                                                           | $      | 802 |   | $ | 1,557 |   | $ | 1,161 |   |
|                                                                                                         |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
|                                                                                                         |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
| NET                  EARNINGS PER COMMON SHARE - BASIC                                                       |   | $                                                                   | .29       |                                                           | $      | .28 |   | $ | .54 |   | $ | .40 |   |
| NET                  EARNINGS PER COMMON SHARE - DILUTED                                                     |   | $                                                                   | .29       |                                                           | $      | .27 |   | $ | .53 |   | $ | .39 |   |
|                                                                                                         |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
| WEIGHTED                  AVERAGE NUMBER OF COMMON SHARES OUTSTANDING                                        |   |                                                                | 2,901,692 |                                                           |   | 2,890,417 |   |   | 2,901,319 |   |   | 2,881,326 |   |
| WEIGHTED                  AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES                  OUTSTANDING |   |                                                                | 2,939,111 |                                                           |   | 2,954,934 |   |   | 2,935,675 |   |   | 2,947,410 |   |
|                                                                                                         |   |                                                                |      |                                                           |   |   |   |   |   |   |   |   |   |
| DIVIDENDS                  PER COMMON SHARE                                                                  |   | $                                                                   | .08       |                                                           | $      | 1.07 |   | $ | .16 |   | $ | 1.14 |   |

----

|                                                                                                                                                                                                                                      |   | Three                          Months endedJune                          30, |   | Six                        Months endedJune                          30, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                      |   | 2005                                                                         |   | 2004                                                                     |   | 2005 |   | 2004 |   |
|                                                                                                                                                                                                                                      |   |                                                                         |        |                                                                     |   |   |   |   |   |   |   |   |   |
| NET                      EARNINGS                                                                                                                                                                                                         |   | $                                                                            | 851    |                                                                     | $      | 802 |   | $ | 1,557 |   | $ | 1,161 |   |
|                                                                                                                                                                                                                                      |   |                                                                         |   |                                                                     |   |   |   |   |   |   |   |   |   |
| OTHER                      COMPREHENSIVE INCOME (LOSS), NET OF TAX:Unrealized                      holding (losses) gains on investment securities available for                      sale arising                      during the period |   |                                                                         | 647    |                                                                     |   | (2,738 | ) |   | (254 | ) |   | (1,926 | ) |
|                                                                                                                                                                                                                                      |   |                                                                         |   |                                                                     |   |   |   |   |   |   |   |   |   |
| Unrealized                      holding gains (losses) on derivative financial instruments                      classified as                      cash flow hedges, arising during period                                                |   |                                                                         | (90    | )                                                                        |   | (40 | ) |   | 59 |   |   | (40 | ) |
|                                                                                                                                                                                                                                      |   |                                                                         |   |                                                                     |   |   |   |   |   |   |   |   |   |
| Reclassification                      adjustment for (gains) losses on investment securities available                      for                      sale                                                                                 |   |                                                                         | 13     |                                                                     |   | (7 | ) |   | 30 |   |   | (38 | ) |
|                                                                                                                                                                                                                                      |   |                                                                         |   |                                                                     |   |   |   |   |   |   |   |   |   |
| Total                      other comprehensive income (loss), before tax                                                                                                                                                                  |   |                                                                         | 570    |                                                                     |   | (2,785 | ) |   | (165 | ) |   | (2,004 | ) |
|                                                                                                                                                                                                                                      |   |                                                                         |   |                                                                     |   |   |   |   |   |   |   |   |   |
| INCOME                    TAXES RELATED                    TO OTHER COMPREHENSIVE INCOME:                                                                                                                                                 |   |                                                                         |   |                                                                     |   |   |   |   |   |   |   |   |   |
| Unrealized                      holding (losses) gains on investment securities available for                      sale arising                      during the period                                                                    |   |                                                                         | (220   | )                                                                        |   | 931 |   |   | 86 |   |   | 654 |   |
|                                                                                                                                                                                                                                      |   |                                                                         |   |                                                                     |   |   |   |   |   |   |   |   |   |
| Unrealized                      holding gains (losses) on derivative financial instruments                      classified as                      cash flowhedges, arising during period                                                 |   |                                                                         | 30     |                                                                     |   | 14 |   |   | (20 | ) |   | 14 |   |
|                                                                                                                                                                                                                                      |   |                                                                         |   |                                                                     |   |   |   |   |   |   |   |   |   |
| Reclassification                      adjustment for (gains) losses on investment securities available                      for                      sale                                                                                 |   |                                                                         | (4     | )                                                                        |   | 2 |   |   | (10 | ) |   | 13 |   |
|                                                                                                                                                                                                                                      |   |                                                                         |   |                                                                     |   |   |   |   |   |   |   |   |   |
| Total                      income taxes related to other comprehensive income (loss)                                                                                                                                                      |   |                                                                         | (194   | )                                                                        |   | 947 |   |   | 56 |   |   | 681 |   |
|                                                                                                                                                                                                                                      |   |                                                                         |   |                                                                     |   |   |   |   |   |   |   |   |   |
| Total                      other comprehensive (loss) income, net of tax                                                                                                                                                                  |   |                                                                         | 376    |                                                                     |   | (1,838 | ) |   | (109 | ) |   | (1,323 | ) |
|                                                                                                                                                                                                                                      |   |                                                                         |   |                                                                     |   |   |   |   |   |   |   |   |   |
| Total                      comprehensive (loss) income                                                                                                                                                                                    |   | $                                                                            | 1,227  |                                                                     | $      | (1,036 | ) | $ | 1,448 |   | $ | (162 | ) |

----

|                                                                                                                      |   | 2005   |    | 2004   |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|
|                                                                                                                      |   |   |    |   |   |   |   |
| CASH                  FLOWS PROVIDED BY OPERATING ACTIVITIES:                                                             |   | $      | 852     |   | $      | 3,272 |   |
|                                                                                                                      |   |   |    |   |   |   |   |
| CASH                  FLOWS FROM INVESTING ACTIVITIES:                                                                    |   |   |    |   |   |   |   |
| Investment                  securities available for sale:                                                                |   |   |    |   |   |   |   |
| Proceeds                  from maturity                                                                                   |   |   | 5,230   |   |   | 7,144 |   |
| Proceeds                  from sales and calls                                                                            |   |   | 1,471   |   |   | 9,048 |   |
| Purchases                                                                                                                 |   |   | (11,948 | )      |   | (12,532 | ) |
| Investment                  securities held to maturity:                                                                  |   |   |    |   |   |   |   |
| Proceeds                  from maturity                                                                                   |   |   | 118     |   |   | 424 |   |
| Proceeds                  from calls                                                                                      |   |   | 275     |   |   | - |   |
| Other                  investments:                                                                                       |   |   |    |   |   |   |   |
| Proceeds                  from sales                                                                                      |   |   | 450     |   |   | 45 |   |
| Purchases                  of other investments                                                                           |   |   | (938    | )      |   | (400 | ) |
| Net                  increase in loans                                                                                    |   |   | (6,452  | )      |   | (9,861 | ) |
| Proceeds                  from sale of land                                                                               |   |   | -       |   |   | 945 |   |
| Purchases                  of premises and equipment                                                                      |   |   | (289    | )      |   | (655 | ) |
| Proceeds                  from sale of other real estate                                                                  |   |   | 386     |   |   | 1,067 |   |
| Net                  additions to other real estate                                                                       |   |   | -       |   |   | (84 | ) |
| Net                  cash used by investing activities                                                                    |   |   | (11,697 | )      |   | (4,859 | ) |
|                                                                                                                      |   |   |    |   |   |   |   |
| CASH                  FLOWS FROM FINANCING ACTIVITIES:                                                                    |   |   |    |   |   |   |   |
| Net                  increase (decrease) in deposits                                                                      |   |   | 19,019  |   |   | (4,409 | ) |
| Net                  increase (decrease) in short-term borrowings                                                         |   |   | (189    | )      |   | 183 |   |
| Net                  increase in federal funds purchased and securities sold under repurchase                  agreements |   |   | 3,279   |   |   | 2,522 |   |
| Proceeds                  from FHLB advances                                                                              |   |   | 7,000   |   |   | 8,000 |   |
| Repayment                  of FHLB advances                                                                               |   |   | (10,000 | )      |   | - |   |
| Issuance                  of common stock                                                                                 |   |   | 18      |   |   | 242 |   |
| Cash                  dividends paid                                                                                      |   |   | (464    | )      |   | (3,296 | ) |
| Net                  cash provided by financing activities                                                                |   |   | 18,663  |   |   | 3,242 |   |
|                                                                                                                      |   |   |    |   |   |   |   |
| Net                  increase in cash and cash equivalents                                                                |   |   | 7,818   |   |   | 1,655 |   |
|                                                                                                                      |   |   |    |   |   |   |   |
| CASH                  AND CASH EQUIVALENTS: BEGINNING OF PERIOD                                                           |   |   | 9,559   |   |   | 8,381 |   |
| CASH                  AND CASH EQUIVALENTS: END OF PERIOD                                                                 |   | $      | 17,377  |   | $      | 10,036 |   |
|                                                                                                                      |   |   |    |   |   |   |   |
| SUPPLEMENTAL                  DISCLOSURES OF CASH FLOW INFORMATION:                                                       |   |   |    |   |   |   |   |
|                                                                                                                      |   |   |    |   |   |   |   |
| Other                  real estate acquired through loan foreclosures                                                     |   | $      | 2,525   |   | $      | 676  |   |
| Loans                  granted to facilitate the sale of other real estate                                                |   |   | 500     |   |   | 191 |   |
| Change                  in components of other comprehensive income                                                       |   |   | 109     |   |   | (1,323 | ) |

----

| 1. | Basis                    of Presentation |
|----|------------------------------------------|

| 2. | Accounting                    Policies |
|----|----------------------------------------|

| 3. | Other                    Comprehensive Income |
|----|-----------------------------------------------|

| 4. | Net                    Earnings Per Share |
|----|-------------------------------------------|

----

|                                                                                                                     |   | Three                      Months ended |      | Six                      Months ended |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|-----------|---------------------------------------|--------|
|                                                                                                                     |   | June                      30,           |      | June                      30,         |   |
|                                                                                                                     |   | 2005                                    |      | 2004                                  |   | 2005 |   | 2004 |   |
|                                                                                                                     |   |                                    |      |                                  |   |   |   |   |   |   |   |   |   |
| Net                      earnings                                                                                        |   | $                                       | 851,374   |                                  | $      | 802,330 |   | $ | 1,557,450 |   | $ | 1,161,382 |   |
|                                                                                                                     |   |                                    |      |                                  |   |   |   |   |   |   |   |   |   |
| Weighted                      average common shares outstanding                                                          |   |                                    | 2,901,692 |                                  |   | 2,890,417 |   |   | 2,901,319 |   |   | 2,881,326 |   |
|                                                                                                                     |   |                                    |      |                                  |   |   |   |   |   |   |   |   |   |
| Shares                        issued from assumed exercise of common stock                        equivalents            |   |                                    | 37,419    |                                  |   | 64,517 |   |   | 34,356 |   |   | 66,084 |   |
|                                                                                                                     |   |                                    |      |                                  |   |   |   |   |   |   |   |   |   |
| Weighted                        average number of common and common equivalent shares                        outstanding |   |                                    | 2,939,111 |                                  |   | 2,954,934 |   |   | 2,935,675 |   |   | 2,947,410 |   |
|                                                                                                                     |   |                                    |      |                                  |   |   |   |   |   |   |   |   |   |
| Earnings                      per share:                                                                                 |   |                                    |      |                                  |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                    |   | $                                       | .29       |                                  | $      | .28 |   | $ | .54 |   | $ | .40 |   |
|                                                                                                                     |   |                                    |      |                                  |   |   |   |   |   |   |   |   |   |
| Diluted                                                                                                                  |   | $                                       | .29       |                                  | $      | .27 |   | $ | .53 |   | $ | .39 |   |

| 5. | Stock                    Option Plans |
|----|---------------------------------------|

----

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

----

----

----

----

|                                               |   | June                    30, 2005 |      | December                    31, 2004 |   |
|----------------------------------------------------|--------|----------------------------------|-----------|--------------------------------------|--------|
| Accruing                    loans 90 days past due |   | $                                | 682,878   |                                 | $      | 381,670 |   |
| Non-accrual                    loans               |   |                             | 823,734   |                                 |   | 3,252,464 |   |
| Other                    real estate               |   |                             | 2,737,721 |                                 |   | 1,289,880 |   |
| Restructured                    loans              |   |                             | 134,462   |                                 |   | 119,031 |   |
| Total                    non-performing assets     |   | $                                | 4,378,795 |                                 | $      | 5,043,045 |   |

| Balance                    at December 31, 2004                    |   | $      | 381,670  |   |
|--------------------------------------------------------------------|--------|--------|----------|--------|
| New                    loans classified to 90 days past due status |   |   | 966,766  |   |
| 90                    days past due loans charged-off              |   |   | (46,373  | )      |
| Payments                    received                               |   |   | (619,185 | )      |
| Balance                    at June 30, 2005                        |   | $      | 682,878  |   |

| Real                    estate secured loans             |   |   | #                    7 |   | $      | 643,375 |   |
|----------------------------------------------------------|--------|--------|------------------------|--------|--------|---------|--------|
| Commercial                    loans                      |   |   | #                    2 |   |   | 13,970  |   |
| Consumer                    loans                        |   |   | #                    5 |   |   | 25,533  |   |
| Total                    accruing loans 90 days past due |   |   | #14                    |   | $      | 682,878 |   |

----

| Balance                      at December 31, 2004                             |   | $      | 3,252,464  |   |
|-------------------------------------------------------------------------------|--------|--------|------------|--------|
| Loans                      reclassified to non-accrual status in 2005         |   |   | 445,156    |   |
| Payments                      received on non-accrual loans during 2005       |   |   | (76,959    | )      |
| Non-accrual                      loans charged-off during 2005                |   |   | (46,503    | )      |
| Non-accrual                      loans reclassified to other real estate      |   |   | (2,526,476 | )      |
| Non-accrual                      loans reclassified to accrual status in 2005 |   |   | (223,948   | )      |
| Balance                      at June 30, 2005                                 |   | $      | 823,734    |   |

----

|                             | Habersham | Habersham |
|----------------------------------|-----------|-----------|
|                             | Bank      | Bancorp   |
| Tier                    1        | 13.94%    | 14.73%    |
| Total                    Capital | 15.16%    | 15.94%    |
| Leverage                         | 11.01%    | 11.14%    |

----

| Period                                                                  |   | Total                      Number of Shares Purchased |   | Average                      Price Paid Per Share |   | Total                      Number of Shares (or Units) Purchased as Part of Publicly Announced                      Plans                      or Programs 1 |   | Maximum                      Number (or Appropriate Dollar Value) of Shares (or Units) that                      May Yet Be                      Purchased Under the Plans or Programs |
|-------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|---------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| April                      1 throughApril                      30, 2005 |   |  0                                               |   | 0                                                 |   | 0                                                                                                                                                            |   | 0                                                                                                                                                                                      |
| May                      1 throughMay                      31, 2005     |   |  0                                               |   | 0                                                 |   | 0                                                                                                                                                            |   | 0                                                                                                                                                                                      |
| June                      1 throughJune                      30, 2005   |   |  0                                               |   | 0                                                 |   | 0                                                                                                                                                            |   | 0                                                                                                                                                                                      |
| Total                                                                   |   |  0                                               |   | 0                                                 |   | 0                                                                                                                                                            |   | 0                                                                                                                                                                                      |

| Item 3 | Defaults                      upon senior securities. |   |
|--------|-------------------------------------------------------|--------|

|   | None |
|--------|------|

| Item 4. | Submission                      of matters to a vote of security holders. |   |
|---------|---------------------------------------------------------------------------|--------|

|   | (a)    | The                      regular annual meeting of the shareholders of the Company was                      held on                      April 16, 2005.                                                                                                                                                                                                                                                                                |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | (b)    | The                      business conducted at the meeting included the election of                      the Board of                      Directors. The Directors elected at the meeting were: Edward                      D. Ariail,                      Thomas A. Arrendale, III, Michael C. Martin, Michael L. Owen,                      James A.                      Stapleton, Jr., David D. Stovall, and Calvin R. Wilbanks. |

|   | Name                                        | Votes                    For | Votes                    Withheld |
|--------|---------------------------------------------|------------------------------|-----------------------------------|
|   | Edward                    D. Ariail         | 2,457,644                    | 63,423                            |
|   | Thomas                    A. Arrendale, III | 2,492,043                    | 29,024                            |
|   | Michael                    C. Martin        | 2,493,622                    | 27,445                            |
|   | Michael                    L. Owen          | 2,480,339                    | 40,728                            |
|   | James                    A. Stapleton, Jr.  | 2,493,622                    | 27,445                            |
|   | David                    D. Stovall         | 2,457,644                    | 63,423                            |
|   | Calvin                    R. Wilbanks       | 2,493,622                    | 27,445                            |

----

|  | (c) | The                    business conducted at the meeting included the approval of the                    Habersham                    Bancorp 2005 Stock Option Plan. The following table sets forth                    the number                    of votes cast for, against, and abstained. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| For       | Against | Abstain |
|-----------|---------|---------|
| 2,060,642 | 42,697  | 10,871  |

|  | (d) | The                    business conducted at the meeting included the approval of the                    Habersham                    Bancorp Outside Director Stock Option Plan. The following table                    sets forth                    the number of votes cast for, against, and abstained. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| For       | Against | Abstain |
|-----------|---------|---------|
| 2,010,947 | 92,392  | 10,871  |

| 10.1* | Form                      of Non-Qualified Stock Option Award under the 2005 Stock Option                      Plan. |
|-------|----------------------------------------------------------------------------------------------------------------------|

| 10.2* | Form                        of Incentive Stock Option Award under the 2005 Stock Option                        Plan |
|-------|---------------------------------------------------------------------------------------------------------------------|

| 10-3* | Form                          of Non-Qualified Stock Option Award under the Outside Directors                          Stock                          Option Plan. |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.1 | Certification                            of Chief Executive Officer Pursuant to Section 302 of                            the Sarbanes-Oxley                            Act of 2002. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.2 | Certification                              of Chief Financial Officer Pursuant to Section 302                              of the Sarbanes-Oxley                              Act of 2002. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32 | Certification                                of Chief Executive Officer and Chief Financial Officer                                Pursuant to Section                                906 of the Sarbanes-Oxley Act of 2002. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                       |                                                                                                                                                                                                    |                                          |
|--------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------|
|                                       |                                                                                                                                                                                                    |                                          |
| Date: August                  9, 2005 |                                                                                                                                                                                               | /s/ Annette                  Banks  |
|                                       | Chief                    Financial Officer (for                      the Registrant and as the Registrant’s                      principal financial and accounting                      officer) |
|                                       |                                                                                                                                                                                                    |

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