<PAGE>   1
                    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, 2000


             [ ] 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
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(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
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                (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 October 31, 2000


<PAGE>   2

Item. 1 Financial Statements

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

<TABLE>
<CAPTION>
ASSETS                                           SEPTEMBER 30, 2000    DECEMBER 31, 1999
<S>                                              <C>                   <C>
Cash and due from banks                                $  11,291         $  14,517
Investment securities available for sale
 (cost of $39,546 at September 30, 2000 and
 $40,295 at December 31, 1999)                            38,575            38,820
Investment securities held to maturity
 (estimated fair values of $13,202 at
 September 30, 2000 and $13,664 at
 December 31, 1999)                                       13,642            14,202
Trading securities                                         1,409             1,715
Other investments                                         10,070             7,554

Loans held for sale                                       70,478            48,187

Loans                                                    367,778           317,312
  Less allowance for loan losses                          (3,188)           (3,182)
                                                       ---------         ---------
    Loans, net                                           364,590           314,130
                                                       ---------         ---------

Intangible assets                                          2,723             2,892
Other assets                                              21,460            19,959
                                                       ---------         ---------
    TOTAL ASSETS                                       $ 534,238         $ 461,976
                                                       =========         =========

LIABILITIES
Non-interest bearing deposits                          $  28,989         $  25,139
Interest bearing deposits                                307,917           292,281
Short-term borrowings                                        747               692
Federal funds purchased and securities
  sold under repurchase agreements                        24,600            19,290
Other borrowings                                           1,950             1,950
Federal Home Loan Bank Advances                          106,747            77,251
Other liabilities                                         25,663             9,944
                                                       ---------         ---------
    TOTAL LIABILITIES                                    496,613           426,547
                                                       ---------         ---------

SHAREHOLDERS' EQUITY
Common Stock, $1.00 par value,
 10,000,000 shares authorized;
 2,698,746 shares issued and
 outstanding in 2000 and 1999                              2,699             2,699
Additional paid-in capital                                12,417            12,417
Retained earnings                                         23,149            21,287
Accumulated other comprehensive loss                        (640)             (974)
                                                       ---------         ---------
    TOTAL SHAREHOLDERS' EQUITY                            37,625            35,429
                                                       ---------         ---------
    TOTAL LIABILITIES AND SHAREHOLDERS'
      EQUITY                                           $ 534,238         $ 461,976
                                                       =========         =========
</TABLE>


See notes to condensed consolidated financial statements.


<PAGE>   3

HABERSHAM BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) For the Three-Month Periods Ended September 30, 2000 and 1999
(dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
INTEREST INCOME                                                 2000               1999
<S>                                                         <C>                <C>
Loans                                                       $    10,011        $     7,458
Investment securities                                               783                719
Federal funds sold                                                    4                 19
Other                                                               170                107
                                                            -----------        -----------
  TOTAL INTEREST INCOME                                          10,968              8,303

INTEREST EXPENSE
Time deposits, $100,000 and over                                  1,374                854
Other deposits                                                    3,106              2,323
Short-term and other borrowings, primarily
  FHLB advances                                                   2,262                988
                                                            -----------        -----------
  TOTAL INTEREST EXPENSE                                          6,742              4,165

NET INTEREST INCOME                                               4,226              4,138
Provision for loan losses                                           375                224
                                                            -----------        -----------

NET INTEREST INCOME AFTER
 PROVISION FOR LOAN LOSSES                                        3,851              3,914

NONINTEREST INCOME
  Gain on sale of loans                                           3,489              2,488
  Loan fee income                                                   668                900
  Service charges on deposits                                       173                159
  Other service charges and commissions                             103                 83
  Travel service income                                              --                185
  Securities gains, net                                              37                 --
  Unrealized gain (loss) on trading securities                      321               (276)
  Other income                                                      479                453
                                                            -----------        -----------
    Total other income                                            5,270              3,992

NONINTEREST EXPENSE
  Salary and employee benefits                                    5,018              4,719
  Occupancy                                                         854                798
  Travel service expense                                             --                164
  Computer services                                                 149                 90
  General and administrative expense                              1,555              1,484
                                                            -----------        -----------
    Total other expense                                           7,576              7,255

INCOME BEFORE INCOME TAXES                                        1,545                651
Income tax expense                                                  465                156
                                                            -----------        -----------
NET INCOME                                                  $     1,080        $       495
                                                            ===========        ===========
NET INCOME PER COMMON SHARE - BASIC                         $       .40        $       .18
                                                            ===========        ===========
NET INCOME PER COMMON SHARE - DILUTED                       $       .40        $       .18
                                                            ===========        ===========

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING                                            2,698,746          2,684,666
                                                            ===========        ===========

WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES OUTSTANDING                      2,698,746          2,704,427
                                                            ===========        ===========

Dividends per share                                         $       .06        $       .05
                                                            ===========        ===========
</TABLE>



See notes to condensed consolidated financial statements.

<PAGE>   4

HABERSHAM BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) For the Nine-Month Periods Ended September 30, 2000 and 1999
(dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
INTEREST INCOME                                                 2000              1999
<S>                                                         <C>                <C>
Loans                                                       $    27,764        $    20,313
Investment securities                                             2,331              2,270
Federal funds sold                                                   10                101
Other                                                               498                385
                                                            -----------        -----------
  TOTAL INTEREST INCOME                                          30,603             23,069

INTEREST EXPENSE
Time deposits, $100,000 and over                                  3,705              2,383
Other deposits                                                    8,573              6,675
Short-term and other borrowings, primarily
  FHLB advances                                                   5,473              2,555
                                                            -----------        -----------
  TOTAL INTEREST EXPENSE                                         17,751             11,613

NET INTEREST INCOME                                              12,852             11,456
Provision for loan losses                                           715                677
                                                            -----------        -----------

NET INTEREST INCOME AFTER
 PROVISION FOR LOAN LOSSES                                       12,137             10,779

NONINTEREST INCOME
  Gain on sale of loans                                           9,624              7,576
  Loan fee income                                                 1,783              2,306
  Service charges on deposits                                       533                485
  Other service charges and commissions                             270                234
  Travel service income                                              --                763
  Securities gains, net                                              37                 16
  Unrealized loss on trading securities                            (306)              (725)
  Other income                                                    1,336                992
                                                            -----------        -----------
    Total other income                                           13,277             11,647

NONINTEREST EXPENSE
  Salary and employee benefits                                   14,509             13,477
  Occupancy                                                       2,574              2,267
  Travel service expense                                             --                684
  Computer services                                                 434                397
  General and administrative expense                              4,568              4,004
                                                            -----------        -----------
    Total other expense                                          22,085             20,829

INCOME BEFORE INCOME TAXES                                        3,329              1,597
Income tax expense                                                  981                350
                                                            -----------        -----------
NET INCOME                                                  $     2,348        $     1,247
                                                            ===========        ===========
NET INCOME PER COMMON SHARE - BASIC                         $       .87        $       .48
                                                            ===========        ===========
NET INCOME PER COMMON SHARE - DILUTED                       $       .87        $       .48
                                                            ===========        ===========

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING                                            2,698,746          2,582,567
                                                            ===========        ===========

WEIGHTED AVERAGE NUMBER OF COMMON
AND COMMON EQUIVALENT SHARES OUTSTANDING                      2,699,384          2,609,484
                                                            ===========        ===========

Dividends per share                                         $       .18        $       .15
                                                            ===========        ===========
</TABLE>


See notes to condensed consolidated financial statements.


<PAGE>   5

HABERSHAM BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) For the Nine Month Periods Ended September 30, 2000 and 1999
(dollars in thousands)

<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES:                            2000               1999
<S>                                                         <C>                <C>
  Net income                                                $     2,348        $     1,247
  Adjustments to reconcile net income to net cash
   (used by) provided by operating activities:
      Provision for loan losses                                     715                677
      Depreciation                                                1,022              1,041
      Gain on sale of investment securities                         (37)               (16)
      Proceeds from sale of trading securities                       --                596
      Unrealized holding loss on trading securities                 306                725
      Loss (gain) on sale of other real estate                       11                (16)
      Net gain on sale of loans                                  (9,624)            (7,576)
      Amortization of intangible assets                             233                243
      Equity in earnings of investee                               (128)              (143)
      Deferred income tax benefit                                   (31)               (24)
      Proceeds from sale of loans held for sale                 423,314            456,110
      Net increase in loans held for sale                      (436,057)          (416,018)

  Changes in assets and liabilities:
      Increase in interest receivable                              (725)              (357)
      (Increase) decrease in other assets                          (974)                38
      Increase (decrease) in interest payable                       644               (486)
      Increase (decrease) in other liabilities                   15,075             (1,449)
                                                            -----------        -----------
  Net cash (used by) provided by operating activities            (3,868)            34,591
                                                            -----------        -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Investment securities available for sale:
      Proceeds from maturity                                      4,230              9,278
      Proceeds from sale                                          2,403              5,016
      Purchases                                                  (5,845)            (8,393)
  Investment securities held to maturity:
      Proceeds from maturity                                      1,059              1,360
      Purchases                                                    (499)              (199)
  Other investments:
      Proceeds from sale                                            712              7,218
      Purchases                                                  (3,192)            (5,486)

  Net cash paid for purchase of CB Financial Corp.
   common stock                                                      --               (116)
  Loans:
      Proceeds from sale                                         12,858             32,970
      Net increase in loans                                     (64,037)          (113,864)
  Purchases of premises and equipment                            (1,185)            (1,260)
  Proceeds from sale of other real estate                           249                270
  Dividends received from other investment                           28                 --
                                                            -----------        -----------
  Net cash used in investing activities                         (53,219)           (73,206)
                                                            -----------        -----------
</TABLE>


<PAGE>   6

HABERSHAM BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Unaudited) For the Nine-Month Periods Ended September 30, 2000 and 1999
(dollars in thousands)


<TABLE>
<CAPTION>
CASH FLOWS FROM FINANCING ACTIVITIES:                              2000               1999

<S>                                                              <C>                <C>
  Net increase in deposits                                       19,486             12,611
  Net increase in short-term borrowings                              55                625
  Decrease in other borrowings                                       --               (750)
  Net increase in federal funds purchased and
    securities sold under repurchase agreements                   5,310             22,510
  Proceeds from Federal Home
    Loan Bank advances, net                                      29,496              4,301
  Cash dividends paid                                              (486)              (391)
  Issuance of common stock                                           --                396
  Purchase and retirement of common stock                            --               (165)
                                                            -----------        -----------
   Net cash provided by financing activities                     53,861             39,137
                                                            -----------        -----------

(Decrease) increase in cash and cash equivalents                 (3,226)               522

CASH AND CASH EQUIVALENTS:  BEGINNING OF PERIOD                  14,517             14,099
                                                            -----------        -----------
CASH AND CASH EQUIVALENTS:  END OF PERIOD                   $    11,291        $    14,621
                                                            ===========        ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
  Interest                                                  $    17,107        $    12,100
  Income taxes                                                      726                175

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
Stock issued for purchase of CB Financial Corp.
  common stock                                              $        --        $     2,848
Other real estate acquired through loan foreclosures                374                871
Loans granted to facilitate the sale
  of other real estate                                              294                210
Unrealized gain (loss) on investment securities
  available for sale, net of tax effect                             334               (688)
</TABLE>

See notes to condensed consolidated financial statements.


<PAGE>   7

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 generally accepted accounting principles 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 1999 consolidated financial
statements and notes thereto, included in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1999.

         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,
1999. 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". The Company adopted SFAS
No. 130 effective January 1, 1998. Comprehensive income for the nine months
ended September 30, 2000 and 1999 was $2,682,000 and $1,357,000, respectively
and for the three months ended September 30, 2000 and 1999 was $1,326,000 and
$465,000, respectively.


<PAGE>   8

4.       Recent Accounting Pronouncements

         In June 1998, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities".
SFAS No. 133 is effective for financial statements for all fiscal quarters of
all fiscal years beginning after June 15, 1999. In June 1999, the FASB issued
SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133", an amendment of FASB
Statement No. 133. SFAS No. 133, as amended, is now effective for all fiscal
quarters of all fiscal years beginning after June 15, 2000. Management has not
yet completed its evaluation of the expected impact on the Company's
operations.

         In September 2000, the FASB issued SFAS 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities - A
Replacement of FASB Statement No 125". The standard revises the standards for
accounting for securitizations and other transfers of financial assets and
collateral and requires certain disclosures, but it carried over most of SFAS
125's provisions without reconsideration. SFAS 140 is effective for transfers
and servicing of financial assets and extinguishments of liabilities occurring
after March 31, 2001. The Company does not believe the provisions of SFAS 140
will have a significant impact on the financial statements upon adoption.

5.       Segment Information

         The Company has two significant reportable segments: banking and
mortgage banking. The Company offers traditional banking services through
Habersham Bank and Security State Bank, which has operated as a division of
Habersham Bank since the consolidation of its charter with that of Habersham
Bank effective June 30, 1999. 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.

As of 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          3,465             --              --             --            3,489
Other noninterest income                 748            876           (339)            839           (343)           1,781
Depreciation on premises &
  equipment                              196            121             --              21             --              338
Other noninterest expense              3,362          3,962           (347)            604           (343)           7,238
Income tax expense                       362             30              3              70             --              465
Net income                               810            145              5             120             --            1,080

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


<PAGE>   9

As of and for the three months ended September 30, 1999


<TABLE>
<CAPTION>
                                                   Mortgage
                                    Banking         Banking      Eliminations       Other      Eliminations     Consolidated
<S>                                 <C>             <C>          <C>                <C>        <C>              <C>
Interest income                     $  7,493        $   996       $   (201)         $   15          $  --         $  8,303
Interest expense                       3,761            567           (201)             38             --            4,165
Provision for loan losses                 40            184             --              --             --              224
Gain on sale of loans                    127          2,361             --              --             --            2,488
Other noninterest income                 586          1,654           (855)            439           (320)           1,504
Depreciation on premises &
  equipment                              221            113             --              16             --              350
Other noninterest expense              2,849          4,144           (500)            732           (320)           6,905
Income tax expense (benefit)             333             58           (116)           (119)            --              156
Net income (loss)                        833            102           (224)           (216)            --              495

Total assets                        $397,743        $42,471       $(17,710)        $ 2,493          $(319)        $424,678
</TABLE>


As of 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          9,548             --              --             --            9,624
Other noninterest income               2,014          2,588         (1,129)          1,206         (1,026)           3,653
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>


As of and for the nine months ended September 30, 1999

<TABLE>
<CAPTION>
                                                   Mortgage
                                    Banking         Banking       Eliminations       Other       Eliminations   Consolidated
<S>                                 <C>            <C>            <C>               <C>          <C>            <C>
Interest income                     $ 20,582        $ 3,035       $   (617)         $   69          $  --         $ 23,069
Interest expense                      10,257          1,841           (617)            132             --           11,613
Provision for loan losses                195            482             --              --             --              677
Gain on sale of loans                    363          7,213             --              --             --            7,576
Other noninterest income               1,753          3,866         (1,883)          1,294           (959)           4,071
Depreciation on premises &
  equipment                              662            328             --              51             --            1,041
Other noninterest expense              8,307         11,488         (1,439)          2,391           (959)          19,788
Income tax expense (benefit)             752            111           (148)           (365)            --              350
Net income (loss)                      2,178            197           (287)           (841)            --            1,247

Total assets                        $397,743        $42,471       $(17,710)         $2,493          $(319)        $424,678
</TABLE>


<PAGE>   10

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. Effective September 30,
1999, the Bank ceased operations of its travel agency subsidiary, Appalachian
Travel Service, Inc. ("Appalachian"). Net income of such business for all
periods presented is not significant. 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., Appalachian, 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 this 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 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:


<PAGE>   11

(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.


Material Changes in Financial Condition

         The Company's total assets increased approximately $72 million during
the first nine months of 2000 as a result of an increase in real estate secured
loans and commercial lending activity in the loan portfolio of Habersham Bank
of approximately $50 million and increases in mortgage loans held for sale of
approximately $22 million. The increase was funded primarily by increases in
borrowings primarily from Federal Home Loan Bank of approximately $29 million,
increases in Federal funds purchased and securities sold under repurchase
agreements of approximately $5 million and increases in the deposit portfolio
at Habersham Bank of approximately $19 million.

         Nonperforming assets consist of nonaccrual loans, accruing loans 90
days past due, restructured loans and other real estate owned. Nonperforming
assets increased $901,753 or 22.57% from December 31, 1999 to September 30,
2000. The increase for 2000 was primarily due to increases in loans 90 days
past due of approximately $1,340,000 offset by reductions in nonaccrual loans,
other real estate and restructured loans of approximately $177,000, $190,000
and $71,000, respectively. The increase in loans 90 days past due consisted
primarily of construction loans of approximately $1,305,000 which are secured
by residential properties. The reduction in nonaccrual loans was primarily the
result of the charge off of a single commercial loan totaling approximately
$169,000. The decrease in other real estate resulted


<PAGE>   12

from the sale of properties totaling approximately $554,000 offset by the
addition of approximately $374,000 in residential properties.

         Additions to the allowance for loan losses are made periodically to
maintain the allowance at an appropriate 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 and diversification. A provision for loan losses in the amount
of $375,472 was charged to expense for the quarter ended September 30, 2000.
Net charge-offs for the third quarter ended September 30, 2000 totaled
$353,748. At September 30, 2000 and December 31, 1999, the ratio of allowance
for loan losses to total loans was .86% and 1.00%, respectively. Management
considers the current allowance for loan losses appropriate 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 $1,026,939 and $1,203,471 as of
September 30, 2000 and December 31, 1999, 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, 2000 and 1999 was
not material.

         The Company's other real estate totaled $1,480,786 and $1,671,084 as
of September 30, 2000 and December 31, 1999, respectively. The decrease was due
to the sale of three residential properties for approximately $554,000 and the
write down of $10,000 on a single residential property, offset by the
foreclosures of two single residential properties totaling $374,000.


Material Changes in Results of Operations

         Total interest income for the third quarter of 2000 increased
$2,665,000 or 32.10%, when compared to the third quarter of 1999. Total
interest income for the first nine months of 2000 increased $7,534,000 or
32.66%, when compared to the first nine months of 1999.

         Interest income from loans for the third quarter of 2000 and for the
first nine months of 2000 increased $2,553,000 or 34.23% and $7,451,000 or
36.68%, respectively, when compared to the third quarter of 1999 and the first
nine months of 1999. These increases were primarily due to increases in the
loan portfolio of Habersham Bank and increasing yields on loans. Total average
loans increased approximately $94,053,000 or 31.69% during the first nine
months of 2000 when compared to the first nine months of 1999. Average yields
on loans increased by .34% to 9.47% for the first nine months of 2000 compared
to average yields on loans of 9.13% for the first nine months of 1999.

         Interest income from investment securities increased $64,000 or 8.90%
for the third quarter of 2000 when compared to the third quarter of 1999.
Interest income from investment securities increased $61,000 or 2.69% for the
first nine months of 2000 when compared to the first nine months of 1999. The
increase in interest income from investments was primarily due to increases in
the average yields on the investment portfolio for the first nine months of
2000 offset by decreases in the average investment portfolio for the first nine
months of 2000 when compared to the first nine months of 1999. Average yields
on investment securities increased by .57% to 5.82% for the first nine months
of 2000 compared to 5.25% for the first nine months of 1999. The average
investment portfolio decreased $4,139,000 or 7.19% for the first nine months of
2000 when compared to the first nine months of 1999.


<PAGE>   13

         Total interest expense for the third quarter of 2000 increased
$2,577,000 or 61.87%, when compared to the third quarter of 1999. Total
interest expense for the first nine months of 2000 increased $6,138,000 or
52.85%, when compared to the first nine months of 1999.

         Interest expense on deposits for the third quarter increased
$1,303,000 or 41.01%, when compared to the third quarter of 1999. Interest
expense on deposits for the first nine months of 2000 increased $3,220,000 or
35.55%, when compared to the first nine months of 1999. This increase was due
to increases in the deposit portfolio and an increasing interest rate
environment for the third quarter and the first nine months of 2000.

         Total average interest bearing certificate of deposits increased
approximately $49,245,000 offset by decreases in Money Market and savings
accounts of approximately $7,841,000 and $756,000, respectively, during the
first nine months of 2000, when compared to the first nine months of 1999.
Average rates on total interest bearing deposits increased by .80% to 5.49%
during the first nine months of 2000 compared to 4.69% for the first nine
months of 1999. Average rates for NOW and other deposit accounts and
certificates of deposit increased to 2.77% and 6.18%, respectively, during the
first nine months of 2000 compared to 2.64% and 5.44%, respectively, during the
first nine months of 1999.

         Interest expense on short-term and other borrowings for the third
quarter of 2000 increased $1,274,000 or 128.95%, when compared to the third
quarter of 1999. Interest expense on short-term and other borrowings for the
first nine months of 2000 increased $2,918,000 or 114.21%, when compared to the
first nine months of 1999. The increase is primarily due to an increase in
average borrowings of approximately $48,137,000 or 76.85%, compared to the first
nine months of 1999. Average rates on borrowings increased by 1.15% to 6.59% for
the first nine months of 2000 compared to 5.44% for the first nine months of
1999.

         Net interest income increased approximately $88,000 or 2.13%, for the
third quarter of 2000 when compared to the third quarter of 1999 and increased
$1,396,000 or 12.19% for the first nine months of 2000 when compared to the
first nine months of 1999, as a result of the items discussed above.

         The net interest margin of the Company, net interest income divided by
average earning assets, was 3.70% for the first nine months of 2000 compared to
4.19% for the first nine months of 1999. The decrease in the net interest
margin resulted primarily from increases in interest rates paid on deposits and
borrowings and an increase in the average balances in borrowings offset by
increases in the yield on loans and securities.

         Noninterest income increased $1,278,000 or 32.01% for the third
quarter of 2000 over the same period in 1999. Noninterest income increased
$1,630,000 or 13.99% for the first nine months of 2000 over the same period in
1999. The increase in noninterest income for the third quarter and the first
nine months of 2000 was primarily due to increases in the gain on sale of
loans, as well as, a decrease in the unrealized loss on trading securities
recognized by the Company during the third quarter offset by decreases in loan
fee income, and a decrease in travel service income resulting from the closing
of Appalachian during 1999.

         Other income increased $26,000 or 5.74% for the third quarter of 2000
over the same period in 1999. This increase resulted primarily from increases
in the activity of BancMortgage Reinsurance LTD, The Advantage Group, Inc., and
Advantage Insurers,


<PAGE>   14

of approximately $67,000, $70,000, and $11,000, respectively, offset by a
reduction of equity in earnings of CB Financial Corp. of approximately
$108,000.

         Other income increased $344,000 or 34.68% for the first nine months of
2000 over the same period in 1999. This increase resulted primarily from
increases in the activity of BancMortgage Reinsurance LTD, The Advantage Group,
Inc., and Advantage Insurers, resulting in income of approximately $187,000,
$74,000, and $18,000.

         Noninterest expenses increased $321,000 or 4.42% for the third quarter
of 2000 over the same period in 1999. Noninterest expenses increased $1,256,000
or 6.03% for the first nine months of 2000 over the same period in 1999. The
increase in noninterest expense for the third quarter and for the first nine
months of 2000 was primarily due to increased salary and employee benefits,
occupancy expenses, and computer service expenses offset by decreases in travel
service expenses resulting from the closing of Appalachian. 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. Salary and employee
benefits and occupancy expenses also increased due to the acquisition of The
Fidelity Group during the fourth quarter of 1999.

         General and administrative expenses for the third quarter of 2000
increased $71,000 or 4.78%, when compared to the third quarter of 1999. For the
third quarter of 2000, increases in other operating expenses, advertising and
public relations, and other real estate expense of approximately $154,000,
$28,000, and $12,000, respectively, were offset by reductions in outside
service expense and office supplies of $86,000 and $24,000, respectively.
General and administrative expenses for the first nine months of 2000 increased
approximately $564,000 or 14.09%, when compared to the first nine months of
1999. For the first nine months of 2000, increases in other operating expenses
and office supplies of approximately $642,000 and $9,000 were offset by
reductions in advertising and public relations, outside services, and other
real estate expenses of approximately $36,000, $26,000, and $25,000,
respectively. These increases were primarily due to additional expenses
relating to the expanded operations of BancFinancial Services, the Fidelity
Group, and The Advantage Group, Inc.

         Income tax expense for the three months ended September 30, 2000 and
1999 was $465,000 and $156,000, respectively. Income tax expense for the first
nine months ended September 30, 2000 and 1999 was $981,000 and $350,000,
respectively. The effective tax rate for the nine months ended September 30,
2000 and 1999 was 29.47% and 21.92%, respectively. The increase in the
effective tax rate for the nine months ended September 30, 2000 is due to a
decrease in tax-exempt income.

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

<PAGE>   15

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 $20,000,000. Presently,
the Company has made arrangements with commercial banks for short-term advances
up to $15,000,000 under a repurchase agreement line of credit, in addition to a
total available line of $143,000,000 which is available to the Company, subject
to available collateral, from the Federal Home Loan Bank.

         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 ratio at September 30, 2000 and 1999 was 20.05% and
25.25%, respectively. Efforts were successful in bringing the liquidity ratio
at June 30, 2000 of 18.57% up to the minimum by concentrating upon local
deposit growth.

         At September 30, 2000, Habersham Bancorp and Habersham Bank were
required to have minimum Tier 1 and total capital ratios of 4% and 8%,
respectively. Additionally, 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, 2000 follow:

<TABLE>
<CAPTION>
                              Habersham                    Habersham
                                Bank                        Bancorp
         <S>                  <C>                          <C>
         Tier 1                 7.93%                          8.97%
         Total Capital          8.75%                          9.78%
         Leverage               6.05%                          6.85%
</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>   16

         The interest rate sensitivity analysis, calculated as of September 30,
2000, below has a three month negative gap of approximately $69 million
(interest bearing liabilities exceeding interest earning assets repricing
within three months).

<TABLE>
<CAPTION>
                                                 DUE IN        DUE AFTER        DUE AFTER     DUE AFTER      DUE AFTER      TOTAL
                                                  THREE      THREE THROUGH    SIX THROUGH    ONE THROUGH       FIVE
                                                 MONTHS        SIX MONTHS    TWELVE MONTHS    FIVE YEARS       YEARS
INTEREST EARNING ASSETS:
<S>                                             <C>          <C>             <C>             <C>             <C>          <C>
 Investment securities                          $     473       $    991       $   1,229       $  12,554      $ 36,970     $ 52,217
 Loans                                            161,752         28,473          36,394         135,784        75,853      438,256
                                                ---------       --------       ---------       ---------      --------     --------
  Total interest earning assets                   162,225         29,464          37,623         148,338       112,823      490,473
INTEREST BEARING LIABILITIES:
 Deposits
  Money Market and NOW                             47,036             --              --              --            --       47,036
  Savings                                           7,373             --              --              --            --        7,373
  Certificates of deposit                          64,812         38,417          83,510          66,769            --      253,508
 Borrowings                                       112,094             --              --          11,950        10,000      134,044
                                                ---------       --------       ---------       ---------      --------     --------
  Total interest bearing
   liabilities                                    231,315         38,417          83,510          78,719        10,000      441,961


Excess(deficiency) of interest earning
 assets over(to) interest bearing
 liabilities                                    $ (69,090)      $ (8,953)      $ (45,887)      $  69,619      $102,823     $ 48,512
                                                =========       ========       =========       =========      ========     ========

Cumulative gap                                  $ (69,090)      $(78,043)      $(123,930)      $ (54,311)     $ 48,512

Ratio of cumulative gap to total
 cumulative interest earning assets                (42.59%)       (40.71%)        (54.04%)        (14.38%)        9.89%
Ratio of cumulative interest earning assets
  to cumulative interest bearing
  liabilities                                       70.13%         71.07%          64.92%          87.43%       110.98%
</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, 2000, 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, 1999. 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,
1999 included in the Company's 1999 Annual Report on Form 10K.


<PAGE>   17

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)
</TABLE>

<PAGE>   18

<TABLE>
<S>      <C>
11.1     Computation of Earnings Per Share.

27.0     Financial Data Schedule (for SEC use only).
</TABLE>



(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 3.1(a) in the Registrant's
         Quarterly Report on Form 10-Q for the quarter ended March 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.


<PAGE>   19


                                   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, 2000                  /s/ David D. Stovall
                                     ------------------------------------
                                     President and
                                     Chief Financial Officer
                                     (for the Registrant and as the
                                     Registrant's principal financial and
                                     accounting officer)