Southeastern Bank Financial (SBFC) 8-K Southeastern Bank Financial Corp. Reports $2.8 Million Profit In The Second Quarter 2011

Exhibit 99.1

For More Information:
Ronald L. Thigpen	John Marsh
Executive Vice President and COO	President
Southeastern Bank Financial Corp.	Marsh Communications LLC
706-481-1014	770-458-7553

Southeastern Bank Financial Corp. Reports
$2.8 Million Profit In The Second Quarter 2011

AUGUSTA, Ga., July 29, 2011— Southeastern Bank Financial Corp. (OTCBB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta (GB&T) and Southern Bank & Trust of Aiken, S.C.(SB&T), today reported quarterly net income of $2.8 million for the three months ended June 30, 2011, or $0.42 in diluted earnings per share, compared to $1.6 million, or $0.24 in diluted earnings per share, in the second quarter of 2010.

“The significant increase in net income over the prior year quarter reflects growing income and earnings for the sixth consecutive quarter as we continue to move in the right direction in the midst of an uncertain economy,” said President and Chief Executive Officer R. Daniel Blanton. “While lower deposit costs played a large role in our positive earnings, we also benefitted from earlier efforts to increase the efficiency of our operations. Our credit quality remains strong relative to the industry but we continue to maintain a conservative position in our allowance for loan losses until we see definitive positive movement in the economic environment.”

Total assets at June 30, 2011, were $1.6 billion, a decrease of $7.2 million from Dec. 31, 2010. Loans outstanding at the end of the second quarter were $889.7 million, compared to $886.9 million at Dec. 31, 2010, and $933.3 million at June 30, 2010. Total deposits were $1.4 billion at June 30, 2011, a decrease of $8.7 million at Dec. 31, 2010, and an increase of $30.6 million from the same period a year ago. Cash and cash equivalents totaled $69.7 million at the end of the second quarter, compared to $65.1 million at Dec. 31, 2010.

Net interest income for the second quarter of 2011 totaled $12.9 million, a 13.3 percent increase from $11.4 million for the same period in 2010. The increase was driven by a $1.5 million decrease in deposit costs. Noninterest income for the second quarter totaled $4.7 million, a 10.1 percent decline from $5.2 million a year ago, resulting from decreases in gains on sales of investment securities and mortgage loans. Despite the year-over-year decline in noninterest income, retail investment income increased 21.8 percent. Noninterest expense was $10.1 million in the second quarter of 2011, a decrease of 4.7 percent from $10.6 million a year ago, resulting primarily from lower salary and occupancy expenses, as well as lower other real estate owned (OREO) related losses.

The net interest margin was 3.44 percent for the quarter-ended June 30, 2011, compared to 3.19 percent a year ago. Annualized return on average assets (ROA) was 0.70 percent for the second quarter of 2011, an increase of 28 basis points from the same period a year ago, and annualized return on average shareholder’s equity (ROE) was 10.76 percent, an increase of 421 basis points from the second quarter of 2010.

Nonperforming assets at June 30, 2011, were 2.29 percent of total assets, compared to 2.20 percent at March 31, 2011, and 2.53 percent at June 30, 2010. Net charge-offs for the second quarter of 2011 totaled 0.85 percent of average loans on an annualized basis, compared to 1.43 percent annualized in the first quarter of 2011 and 1.37 percent annualized in the second quarter of 2010. The company held $8.6 million in OREO at June 30, 2011, compared to $7.8 million at December 31, 2010, and $7.2 million at June 30, 2010.

The company’s loan-loss provision expense was $3.4 million in the second quarter of 2011, compared to $3.2 million in the first quarter of 2011 and $3.8 million in the second quarter a year ago. The allowance for loan losses at June 30, 2011, was $28.4 million, or 3.25 percent of loans outstanding, compared to $26.7 million, or 3.05 percent of loans outstanding, at Dec. 31, 2010, and $23.8 million, or 2.65 percent of loans outstanding, at June 30, 2010.

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Net income for the six months ended June 30, 2011, totaled $5.1 million, an increase of $2.2 million from the same period of 2010. Diluted earnings per share for the first six months of 2011 were $0.76, an increase of $0.33 per share earned from the same period a year ago.

Net interest income for the first six months of 2011 was $25.1 million, a 14.6 percent increase from $21.9 million in the first six months of 2010. Noninterest income was $8.7 million for the first six months of 2011, compared to $9.2 million in the same period of 2010. Noninterest expense was $19.8 million for the six-month period ended June 30, 2011, compared to $20.0 million in the same period in 2010.

“Our goal is to continue on our track of increasing profitability,” said Blanton. “There remains a degree of uncertainty in the economic recovery in our markets and the broader economy, however, which could pose new challenges in the future. As such, we will remain cautious in our approach.”

About Southeastern Bank Financial Corp.

Southeastern Bank Financial Corp. is the $1.6 billion-asset bank holding company of Georgia Bank & Trust Company of Augusta (GB&T) and Southern Bank & Trust (SB&T). GB&T is the largest locally owned and operated community bank in the Augusta metro market, with nine full-service Augusta-area offices and one limited service Loan Production Office in Athens, GA. SB&T is a state charted bank serving the Aiken County, S.C., market, with three full-service offices. The company also has mortgage operations in Augusta and Savannah. The banks focus primarily on real estate, commercial and consumer loans to individuals, small to medium-sized businesses and professionals, and also provide wealth management and trust services. The company’s common stock is publicly traded on the OTC Bulletin Board under the symbol SBFC. For more information, please visit the company’s Web site, www.georgiabankandtrust.com.

Safe Harbor Statement — Forward-Looking Statements

Statements made in this release by Southeastern Bank Financial Corporation (The Company) other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are made based upon management’s belief as well as

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assumptions made by, and information currently available to, management pursuant to “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The Company’s actual results may differ materially from the results anticipated in forward-looking statements due to a variety of factors, including: unanticipated changes in the Bank’s local economy and in the national economy; governmental monetary and fiscal policies; deposit levels, loan demand, loan collateral values and securities portfolio values; difficulties in interest rate risk management; difficulties in operating in a variety of geographic areas; the effects of competition in the banking business; changes in governmental regulation relating to the banking industry, including regulations relating to branching and acquisitions; failure of assumptions underlying the establishment of reserves for loan losses, including the value of collateral underlying delinquent loans; and other factors. The Company cautions that such factors are not exclusive. The Company does not undertake to update any forward-looking statement that may be made from time to time by, or on behalf of, the Company.

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SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

	June 30,
	2011		December 31,
	(Unaudited)		2010
Assets
Cash and due from banks	$	61,140,586	$	42,304,774
Federal funds sold		—		—
Interest-bearing deposits in other banks		8,542,898		22,810,141
Cash and cash equivalents		69,683,484		65,114,915
Investment securities
Available-for-sale		569,499,501		586,301,633
Held-to-maturity, at cost (fair values of $0 and $310,753, respectively)		—		310,000
Loans held for sale		15,912,509		12,774,806
Loans		873,801,444		874,095,184
Less allowance for loan losses		28,409,746		26,656,672
Loans, net		845,391,698		847,438,512
Premises and equipment, net		28,546,388		29,415,853
Accrued interest receivable		6,289,666		6,382,121
Bank-owned life insurance		30,144,614		24,178,634
Restricted equity securities		5,454,200		5,706,900
Other real estate owned		8,557,815		7,750,552
Prepaid FDIC assessment		3,885,990		4,784,587
Deferred tax asset		12,916,797		14,594,554
Other assets		3,638,286		2,352,138
	$	1,599,920,948	$	1,607,105,205
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing	$	131,327,922	$	120,138,486
Interest-bearing:
NOW accounts		343,399,575		356,266,740
Savings		466,264,505		409,583,995
Money management accounts		39,265,752		36,937,485
Time deposits over $100,000		304,424,036		346,721,403
Other time deposits		117,317,925		141,088,967
		1,401,999,715		1,410,737,076
Securities sold under repurchase agreements		611,045		817,574
Advances from Federal Home Loan Bank		52,000,000		60,000,000
Other borrowed funds		—		—
Accrued interest payable and other liabilities		12,642,029		12,646,021
Subordinated debentures		22,946,646		22,946,646
Total liabilities		1,490,199,435		1,507,147,317
Stockholders’ equity:
Preferred stock, no par value; 10,000,000 shares authorized; 0 shares outstanding in 2011 and 2010, respectively		—		—
Common stock, $3.00 par value; 10,000,000 shares authorized; 6,676,467 and 6,675,147 shares issued and outstanding in 2011 and 2010, respectively		20,029,401		20,025,441
Additional paid-in capital		62,690,859		62,617,358
Retained earnings		24,655,665		19,548,606
Treasury stock, at cost; 0 shares in 2011 and 2010, respectively		—		—
Accumulated other comprehensive income (loss), net		2,345,588		(2,233,517	)
Total stockholders’ equity		109,721,513		99,957,888
	$	1,599,920,948	$	1,607,105,205

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SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2011			2010		2011			2010
Interest income:
Loans, including fees	$	12,826,525		$	13,516,261	$	25,454,773		$	26,859,707
Investment securities		4,509,850			3,955,152		8,829,754			7,374,533
Federal funds sold		—			3,460		—			6,882
Interest-bearing deposits in other banks		37,707			93,496		85,210			182,167
Total interest income		17,374,082			17,568,369		34,369,737			34,423,289
Interest expense:
Deposits		3,842,342			5,319,108		7,922,174			10,686,166
Securities sold under repurchase agreements		1,616			5,019		3,274			15,857
Other borrowings		662,819			890,582		1,377,397			1,845,122
Total interest expense		4,506,777			6,214,709		9,302,845			12,547,145
Net interest income		12,867,305			11,353,660		25,066,892			21,876,144
Provision for loan losses		3,423,114			3,793,636		6,663,518			7,082,135
Net interest income after provision for loan losses		9,444,191			7,560,024		18,403,374			14,794,009
Noninterest income:
Service charges and fees on deposits		1,750,095			1,748,757		3,327,837			3,343,206
Gain on sales of loans		1,720,503			2,222,022		2,927,137			3,575,301
Gain on sale of fixed assets		—			—		16,659			27,024
Investment securities gains (losses), net		(29,533	)		149,269		118,223			161,944
Other-than-temporary loss
Total impairment loss		—			—		(126,907	)		—
Loss recognized in other comprehensive income		—			—		65,422			—
Net impairment loss recognized in earnings		—			—		(61,485	)		—
Retail investment income		506,761			416,077		964,267			751,089
Trust service fees		292,174			289,410		565,238			576,564
Increase in cash surrender value of bank-owned life insurance		248,103			223,044		465,980			452,120
Miscellaneous income		190,684			156,145		404,066			317,264
Total noninterest income		4,678,787			5,204,724		8,727,922			9,204,512
Noninterest expense:
Salaries and other personnel expense		5,653,375			5,914,348		11,217,731			11,408,877
Occupancy expenses		1,111,444			1,166,058		2,226,617			2,337,103
Other real estate losses (gains), net		365,566			413,680		460,969			328,487
Other operating expenses		2,931,629			3,067,433		5,932,345			5,919,244
Total noninterest expense		10,062,014			10,561,519		19,837,662			19,993,711
Income before income taxes		4,060,964			2,203,229		7,293,634			4,004,810
Income tax expense		1,255,781			582,600		2,186,575			1,129,515
Net income	$	2,805,183		$	1,620,629	$	5,107,059		$	2,875,295
Basic net income per share	$	0.42		$	0.24	$	0.76		$	0.43
Diluted net income per share	$	0.42		$	0.24	$	0.76		$	0.43
Weighted average common shares outstanding		6,676,467			6,673,925		6,676,161			6,673,631
Weighted average number of common and common equivalent shares outstanding		6,676,467			6,673,968		6,676,161			6,673,631

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