CORNELIA, Ga., May 1 /PRNewswire-FirstCall/ -- Habersham Bancorp (Nasdaq: HABC) reports first quarter earnings of $59,000 or $.02 per diluted share, a decrease of 94% when compared to first quarter earnings of $984,000 or $.33 per diluted share in the first quarter of 2007.

The decrease in total earnings resulted principally from a decrease in net interest income of approximately $1.5 million and additional expense from a provision for loan loss of approximately $423,000. The decrease was partially offset by an increase in noninterest income of approximately $237,000 and a decrease in noninterest expense of approximately $112,000 when comparing the first quarter of 2008 as compared to the first quarter of 2007. The decrease 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. Nonperforming assets increased approximately $8.9 million from December 31, 2007 to March 31, 2008 as a result of increases in nonaccrual loans and other real estate totaling $5.0 million and $3.9 million, respectively.

The net interest margin for the first quarter of 2008 was 3.31% when compared to 4.65% for the first quarter of 2007. Average interest-bearing assets and average interest-bearing liabilities increased approximately $.6 million and $30.6 million, respectively, when comparing first quarter of 2008 to first quarter of 2007.

Total assets of $521.6 million at March 31, 2008 reflect an increase of $7.4 million or 1.44% from $514.2 million at December 31, 2007. Increases in the investment securities portfolios, cash and cash equivalents balances and in other assets of approximately $6.8 million, $6.6 million and $4.7 million, respectively, were offset by deceases in the loan and loans held for sale portfolios of approximately $10.7 million.





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

                                                         Three Months Ended
    Earnings Summary                                            March 31,
                                                             2008       2007

    Interest income                                       $ 7,603    $ 9,038
    Interest expense                                        4,000      3,980
    Net interest income                                     3,603      5,058
    Provision for loan losses                                 423          -
    Net interest income after provision
     for loan losses                                        3,180      5,058

    Other income                                            1,030        915
    Investment securities gains                               127          5
    Other expense
                                                            4,474      4,586
    Earnings before income tax expense                       (137)     1,392
    Income tax (benefit) expense                                         408
                                                             (196)
    Net earnings                                          $    59    $   984
    Net earnings per share - basic                        $   .02    $   .33
    Net earnings per share - diluted                      $   .02    $   .33
    Weighted average number of common
     shares outstanding                                 2,818,593  2,968,593

    Weighted average number of common and common
     equivalent shares outstanding                      2,818,593  2,995,405

    Cash dividends declared per common share              $   .10 $      .10


                                                        March 31, December 31,
    Balance Sheet Summary                                    2008       2007
    Total Assets                                        $ 521,640  $ 514,219
    Loans, net                                            338,563    348,251
    Deposits                                              402,695    390,267
    Stockholders' Equity                                   54,062     54,182

SOURCE Habersham Bancorp