CORNELIA, Ga., Aug. 6 /PRNewswire-FirstCall/ -- Habersham Bancorp (Nasdaq: HABC) reports a second quarter loss of $375,000 or $.13 per diluted share when compared to second quarter earnings of $1,034,000 or $.35 per diluted share for the same period in 2007. The decrease resulted principally from a decrease in net interest income of approximately $1,955,000 and additional expense from provisions for loan losses of approximately $654,000.

For the six-month period ended June 30, 2008, the Company reports a loss of $316,000 or $.11 per diluted share when compared to year-to-date earnings of $2,019,000 or $.68 per diluted share for the six-month period ended June 30, 2007. The decrease resulted principally from a decrease in net interest income of approximately $3,412,000 and additional expense from provisions for loan losses of approximately $1,077,000.

The decreases in net interest income resulted from: 1) an increase in the total dollar balances of loans on nonaccrual status and, 2) the total dollar balances of variable rate loans tied to a decreasing prime interest rate. Non-performing assets increased approximately $19,889,000 from December 31, 2007 to June 30, 2008 primarily as a result of increases in nonaccrual loans and other real estate totaling $13,378,000 and $5,761,000, respectively.

The Company's net interest margin for the second quarter and first six months of 2008 was 3.15% and 3.24%, respectively, compared to 4.75% and 4.70% for the second quarter and first six months of 2007.

Total assets of $503.3 million at June 30, 2008 reflect a decrease of $10.9 million or 2.12% from $514.2 million at December 31, 2007. Decreases in the total loan portfolios and cash and cash equivalent balances of approximately $12.6 million and $7.8 million, respectively, were offset by increases in other real estate, premises and equipment, net and investment securities of approximately $5.8 million, $1.7 million, and $1.9 million, respectively.

The Company's stock is listed on the Nasdaq Global Market under the symbol HABC. Any requests for information regarding the purchase or sale of the common stock can be addressed to: Sterne, Agee and Leach, Inc.; Paine Webber, Inc.; SunTrust Robinson-Humphrey Co., Inc.; AGS Securities, Inc; Wachovia Securities, Inc.; or First Tennessee, market makers for HABC.





    HABERSHAM BANCORP FINANCIAL HIGHLIGHTS
    (Unaudited)(dollar amounts in thousands, except per share amounts)

                             Three Months Ended        Six Months Ended
    Summary of Operations          June 30,                  June 30,
                              2008         2007         2008         2007

    Interest income         $6,835       $9,351      $14,438      $18,389
    Interest expense         3,558        4,119        7,559        8,098
      Net interest income    3,277        5,232        6,879       10,291

    Provision for loan
     losses                    654            -        1,077            -
      Net interest income
       after provision for
       loan losses           2,623        5,232        5,802       10,291

    Other income               973          933        2,002        1,848
    Investment securities
     gains                     161            -          289            5
    Other expense            4,653        4,695        9,126        9,281
       (Loss) earnings
        before income
        taxes                 (896)       1,470       (1,033)       2,863

    Income tax benefit
    (expense)                  521         (436)         717         (844)

    Net (loss) earnings      $(375)      $1,034        $(316)      $2,019

    Net (loss) earnings
     per share - basic       $(.13)        $.35        $(.11)        $.68

    Net (loss) earnings
     per share - diluted     $(.13)        $.35        $(.11)        $.68

    Weighted average
     number of common
     shares
        Outstanding      2,818,593    2,968,593    2,818,593    2,968,593

    Weighted average
     number of common
     and common
     equivalent shares
      outstanding        2,818,593    2,982,724    2,818,593    2,989,065
    Cash dividends
     declared per
     common share             $.10         $.10         $.20         $.20


                                          June 30,           December 31,
                                            2008                 2007
    Balance Sheet Summary
    Total Assets                         $503,308             $514,219
    Loans, net                            336,699              348,251
    Deposits                              371,944              390,267
    Stockholders' Equity                   51,733               54,182

SOURCE Habersham Bancorp