Southeastern Bank Financial (SBFC) 8-K Southeastern Bank Financial Corp. Reports Third Quarter

Exhibit 99.1

FOR IMMEDIATE RELEASE

For More Information:

Ronald L. Thigpen

President and Chief Operating Officer

Southeastern Bank Financial Corp.

706-481-1014

Southeastern Bank Financial Corp. Reports Third Quarter

2015 Earnings and Declares Dividend

AUGUSTA, Ga., October 23, 2015– Southeastern Bank Financial Corp. (OTCQB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta (GB&T), today reported quarterly net income of $4.87 million for the three months ended September 30, 2015, or $0.72 in diluted earnings per share, compared to $4.38 million, or $0.65 in diluted earnings per share, in the third quarter of 2014, an increase of 11.0 percent.

"We are pleased to report a quarterly increase in earnings over the year-ago period," said Ronald L. Thigpen, President and Chief Operating Officer. "Net interest income for the third quarter reflects both an improvement in total interest income and a reduction in total interest expense from the prior year quarter. Continuing improvement in credit quality allowed a lower provision for loan loss expense. Non-interest income reflected a 16.8 percent increase in gain on sale of loans from mortgage origination and increases in retail investment income and trust service fees. We had excellent growth in our balance sheet as we experienced solid deposit growth. Loan growth continues to remains lower than expected year to date and continues to be a major challenge. Overall, we continue to perform well reflecting an annualized 1.06 percent return on average assets and an annualized 11.69 percent return on average equity for the third quarter of 2015.”

Total assets at September 30, 2015, were $1.8 billion, an increase of $84.2 million or 4.9 percent from December 31, 2014. Total loans outstanding at the end of the third quarter were $962.4 million, a decrease of $3.9 million from December 31, 2014, and an increase of $19.9 million from June 30, 2015. Total deposits were $1.5 billion at September 30, 2015, an increase of $77.1 million from December 31, 2014, and an increase of $6.6 million from June 30, 2015. Cash and cash equivalents totaled $50.6 million at the end of the third quarter of 2015.

Net interest income for the third quarter of 2015 totaled $13.5 million, a 3.7 percent increase from $13.1 million for the same period in 2014. Noninterest income for the third quarter totaled $5.3 million, an increase from $5.2 million for the same period a year ago. Key increases were reflected from higher mortgage origination volume and increased retail investment income and trust service, partly offset by losses recognized in sales of investment securities. Noninterest expense was $11.6 million in the third quarter of 2015, an increase of 4.7 percent from a year ago primarily resulting from increased commission expense.

The net interest margin was 3.18 percent for the quarter-ended September 30, 2015, compared to 3.20 percent at December 31, 2014, and 3.16 percent for the same period a year ago. Annualized return on average assets (ROA) was 1.06 percent for the third quarter of 2015, an increase from 0.99 percent for the same period a year ago, and annualized return on average shareholder's equity (ROE) was 11.69 percent, a slight decrease from 11.74 percent from the third quarter of 2014.

Nonperforming assets at September 30, 2015, were 0.77 percent of total assets, compared to 1.26 percent at December 31, 2014, and 1.09 percent at September 30, 2014. Net charge-offs for the third quarter of 2015 totaled 0.56 percent of average loans on an annualized basis, compared to 0.43 percent annualized in the third quarter of 2014. The company held $360 thousand in OREO at September 30, 2015, compared to $1.1 million at December 31, 2014, and $1.4 million at September 30, 2014.

The company's loan loss provision expense was $132 thousand in the third quarter of 2015, compared to a credit of $2.7 million in the previous quarter, and $876 thousand in the third quarter a year ago. As noted in the second quarter earnings release, the $2.7 million credit in the previous quarter reflected the impact from a significant payoff and recovery. The allowance for loan losses at September 30, 2015, was $22.2 million, or 2.30 percent of loans outstanding, compared to $25.5 million, or 2.64 percent of loans outstanding, at December 31, 2014, and $26.7 million, or 2.79 percent of loans outstanding, at September 30, 2014.

"We are encouraged by the loan growth we experienced during the third quarter and the increasing pipeline for loans. We are also pleased with the increases in mortgage origination volume along with core deposit growth” said Thigpen. "Our balance sheet remains strong and we look forward to supporting the needs of our customers. We remain excited about the growth prospects for the community related to the relocation of U. S. Army Cyber Command to Fort Gordon.”

On October 21, 2015, the company's Board of Directors declared a regular quarterly cash dividend of $0.15 per share of common stock payable on November 20, 2015, to shareholders of record as of November 6, 2015.

About Southeastern Bank Financial Corp.

Southeastern Bank Financial Corp. is the $1.8 billion-asset bank holding company of Georgia Bank & Trust Company of Augusta (GB&T). GB&T is the largest locally owned and operated community bank in the Augusta metro market, with nine full-service Augusta-area offices, three full-service offices in Aiken County, S.C., operating as Southern Bank & Trust and one limited service Loan Production Office in Athens, Ga. 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 under the symbol SBFC on OTCQB. Investors can find Real-Time quotes and market information for the Company on www.otcmarkets.com or by visiting 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 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 Company’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.

SOUTHEASTERN BANK FINANCIAL CORPORATION

Consolidated Balance Sheets

(Dollars in thousands, except share data)

	September 30,
	2015		December 31,
Assets	(Unaudited)		2014
Cash and due from banks	$	42,870	$	33,286
Interest-bearing deposits in other banks		7,691		2,709
Cash and cash equivalents		50,561		35,995
Available-for-sale securities		696,994		644,465
Loans held for sale, at fair value		32,339		18,365
Loans		962,414		966,356
Less allowance for loan losses		22,180		25,506
Loans, net		940,234		940,850
Premises and equipment, net		27,660		27,842
Accrued interest receivable		6,283		5,898
Bank-owned life insurance		42,832		36,908
Restricted equity securities		4,361		4,398
Other real estate owned		360		1,107
Deferred tax asset		12,316		15,263
Other assets		3,028		1,690
	$	1,816,968	$	1,732,781
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing	$	235,777	$	196,624
Interest-bearing:
NOW accounts		385,455		354,038
Savings		551,703		521,570
Money management accounts		15,662		15,824
Time deposits		352,383		375,808
		1,540,980		1,463,864
Securities sold under repurchase agreements		633		10,678
Advances from Federal Home Loan Bank		66,000		64,000
Accrued interest payable and other liabilities		20,232		18,953
Subordinated debentures		20,000		20,000
Total liabilities		1,647,845		1,577,495
Stockholders' equity:
Preferred stock, no par value; 10,000,000 shares authorized; 0 shares outstanding in 2015 and 2014, respectively		-		-
Common stock, $3.00 par value; 10,000,000 shares authorized; 6,745,371 and 6,744,891 shares issued in 2015 and 2014, respectively; 6,745,371 and 6,744,160 shares outstanding in 2015 and 2014, respectively		20,236		20,235
Additional paid-in capital		63,507		63,096
Retained earnings		83,628		71,902
Treasury stock, at cost; 0 and 731 shares in 2015 and 2014, respectively		-		(18	)
Accumulated other comprehensive income, net		1,752		71
Total stockholders' equity		169,123		155,286
	$	1,816,968	$	1,732,781

SOUTHEASTERN BANK FINANCIAL CORPORATION

Consolidated Statements of Comprehensive Income

(Dollars in thousands, except share and per share data)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
Interest income:
Loans, including fees	$	11,584		$	11,711		$	35,296		$	34,632
Investment securities		3,945			3,518			11,390			10,670
Interest-bearing deposits in other banks		20			14			54			47
Total interest income		15,549			15,243			46,740			45,349
Interest expense:
Deposits		1,443			1,535			4,354			4,709
Securities sold under repurchase agreements		6			1			11			4
Other borrowings		562			651			1,826			1,978
Total interest expense		2,011			2,187			6,191			6,691
Net interest income		13,538			13,056			40,549			38,658
Provision (Credit) for loan losses		132			876			(2,011	)		2,944
Net interest income after provision for loan losses		13,406			12,180			42,560			35,714
Noninterest income:
Service charges and fees on deposits		1,831			1,903			5,418			5,324
Gain on sales of loans		2,007			1,718			5,319			3,910
Gain (loss) on sale of fixed assets, net		58			15			(3	)		27
Investment securities (losses) gains, net (includes ($165) and $215 for the threemonths ended and ($1,005) and $492 for the nine months ended September 30, 2015and 2014 accumulated other comprehensive income reclassifications forunrealized gains (losses) on available-for-sale securities)		(165	)		215			(1,005	)		492
Retail investment income		589			520			1,635			1,608
Trust service fees		357			328			1,048			970
Earnings from cash surrender value ofbank-owned life insurance		365			317			924			876
Miscellaneous income		265			200			709			623
Total noninterest income		5,307			5,216			14,045			13,830
Noninterest expense:
Salaries and other personnel expense		6,719			6,291			19,968			18,205
Occupancy expenses		1,040			1,027			3,088			2,958
Other real estate losses (gains), net		10			239			(102	)		226
Prepayment fees		-			-			955			-
Other operating expenses		3,802			3,498			10,938			10,420
Total noninterest expense		11,571			11,055			34,847			31,809
Income before income taxes		7,142			6,341			21,758			17,735
Income tax expense		2,277			1,959			6,997			5,503
Net income	$	4,865		$	4,382		$	14,761		$	12,232
Other comprehensive income (loss):
Unrealized loss on derivatives	$	(502	)	$	(27	)		(260	)		(670	)
Unrealized gain (loss) on securities available-for-sale		5,472			(849	)		2,006			14,449
Reclassification adjustment for realized loss (gain)
on securities, net of OTTI		165			(215	)		1,005			(492	)
Tax effect		(1,997	)		424			(1,070	)		(5,169	)
Total other comprehensive income (loss)		3,138			(667	)		1,681			8,118
Comprehensive income	$	8,003		$	3,715		$	16,442		$	20,350
Basic net income per share	$	0.73		$	0.66		$	2.20		$	1.83
Diluted net income per share		0.72			0.65			2.20			1.83
Weighted average common shares outstanding		6,703,371			6,681,743			6,700,439			6,681,214
Weighted average number of common andcommon equivalent shares outstanding		6,719,396			6,694,528			6,713,344			6,687,056