SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

                                    FORM 10-Q

(Mark  One)

 X     Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act
---    of 1934
       For  the  quarterly  period  ended  March  31,  2008.
                                           ----------------

                                       or

       Transition  Report  under Section 13 or 15(d) of the Securities Exchange
---    Act of 1934
       For  the  transition  period  from  _____________  to  ______________.

                          Commission File No.  0-23980
                                               -------

                     Southeastern Bank Financial Corporation
                     ---------------------------------------
             (Exact name of registrant as specified in its charter)

               Georgia                               58-2005097
               -------                               ----------
      (State of Incorporation)            (I.R.S. Employer Identification No.)

                    3530 Wheeler Road, Augusta, Georgia 30909
                    -----------------------------------------
                    (Address of principal executive offices)

                                 (706) 738-6990
                                 --------------
                (Issuer's telephone number, including area code)

                                 Not Applicable
                                 --------------
    (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
                                                                        ---   --

     Check  whether  the  issuer  is  a  large accelerated filer, an accelerated
filer,  or  a  non-accelerated  filer.  See definition of "accelerated filer and
large  accelerated  filer"  in  Rule  12b-2  of  the  Exchange  Act.

     Large  accelerated  filer  [ ]        Non-accelerated  filer  [ ]
                                           (do not check if a smaller
                                               reporting company)

     Accelerated filer [X]                 Smaller reporting company [ ]

     Indicate  by  check  mark  whether  the  registrant  is a shell company (as
defined  in  Rule  12b-2  of  the  Exchange  Act):  Yes    No X
                                                       ---   ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State  the  number of shares outstanding of each of the issuer's classes of
common  equity,  as  of  the  latest  practicable  date:

     5,421,771 shares of common stock, $3.00 par value per share, outstanding as
of  April  30,  2008.


<PAGE>
<TABLE>
<CAPTION>
                         SOUTHEASTERN BANK FINANCIAL CORPORATION
                                      FORM 10-Q
                                        INDEX

<S>                                                                                <C>
                                                                                    Page
Part I

      Item 1.   Financial Statements (Unaudited)

                Consolidated Balance Sheets as of March 31, 2008 and
                  December 31, 2007                                                   3

                Consolidated Statements of Income for the Three
                  Months ended March 31, 2008 and 2007                                4

                Consolidated Statements of Cash Flows for the
                  Three Months ended March 31, 2008 and 2007                          5

                Notes to Consolidated Financial Statements                            6

      Item 2.   Management's Discussion and Analysis of
                Financial Condition and Results of Operations                        11

      Item 3.   Quantitative and Qualitative Disclosures about Market Risk           25

      Item 4.   Controls and Procedures                                              25

Part II  Other Information

      Item 1.   Legal Proceedings                                                     *

      Item 1A.  Risk Factors                                                         26

      Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds          26

      Item 3.   Defaults Upon Senior Securities                                       *

      Item 4.   Submission of Matters to a Vote of Security Holders                   *

      Item 5.   Other Information                                                     *

      Item 6.   Exhibits                                                             27

Signature                                                                            28

* No information submitted under this caption
</TABLE>


                                        1
<PAGE>
                                     PART I
                              FINANCIAL INFORMATION


                                        2
<PAGE>
<TABLE>
<CAPTION>
                SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES

                              Consolidated Balance Sheets
                                 (Dollars in thousands)

                                                             March 31,
                                                               2008        December 31,
             Assets                                         (Unaudited)       2007
                                                           ------------  --------------
<S>                                                        <C>           <C>
Cash and due from banks                                    $    21,261   $      24,558
Federal funds sold                                               8,027               -
Interest-bearing deposits in other banks                           500             500
                                                           ------------  --------------
      Cash and cash equivalents                                 29,788          25,058

Investment securities
  Available-for-sale                                           254,659         245,429
  Held-to-maturity, at cost (fair values of
    $1,470 and $1,467, respectively)                             1,435           1,435

Loans held for sale                                             19,638          11,303

Loans                                                          907,387         871,440
  Less allowance for loan losses                               (12,808)        (11,800)
                                                           ------------  --------------
      Loans, net                                               894,579         859,640

Premises and equipment, net                                     33,181          32,612
Accrued interest receivable                                      6,783           7,416
Bank-owned life insurance                                       16,825          16,660
Restricted equity securities                                     5,815           5,060
Other assets                                                     8,837           8,367
                                                           ------------  --------------

                                                           $ 1,271,540   $   1,212,980
                                                           ============  ==============

    Liabilities and Stockholders' Equity

Deposits
  Noninterest-bearing                                      $   112,716   $     101,272
  Interest-bearing:
    NOW accounts                                               155,828         132,186
    Savings                                                    292,172         289,731
    Money management accounts                                   80,326          73,609
    Time deposits over $100,000                                260,080         243,501
    Other time deposits                                        114,839         111,867
                                                           ------------  --------------
                                                             1,015,961         952,166

Federal funds purchased and securities sold
  under repurchase agreements                                   62,270          81,166
Advances from Federal Home Loan Bank                            69,000          59,000
Other borrowed funds                                               700             500
Accrued interest payable and other liabilities                  11,261          10,390
Subordinated debentures                                         20,000          20,000
                                                           ------------  --------------

      Total liabilities                                      1,179,192       1,123,222
                                                           ------------  --------------

Stockholders' equity:
  Common stock, $3.00 par value; 10,000,000 shares
    authorized; 5,433,614 and 5,433,614 shares issued in
    2008 and 2007, respectively; 5,421,319 and 5,425,182
    shares outstanding in 2008 and 2007, respectively           16,301          16,301
  Additional paid-in capital                                    39,359          39,518
  Retained earnings                                             36,159          34,228
  Treasury stock, at cost; 12,295 and 8,432 shares in
    2008 and 2007, respectively                                   (403)           (317)
  Accumulated other comprehensive gain, net                        932              28
                                                           ------------  --------------

      Total stockholders' equity                                92,348          89,758
                                                           ------------  --------------

                                                           $ 1,271,540   $   1,212,980
                                                           ============  ==============
</TABLE>

See accompanying notes to consolidated financial statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>
            SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES

                        Consolidated Statements of Income
                  (Dollars in thousands, except per share data)

                                   (Unaudited)

                                                  Three Months Ended
                                                      March, 31,
                                               -----------------------
                                                  2008        2007
                                               ----------  -----------
<S>                                            <C>         <C>
Interest income:
  Loans, including fees                        $   16,393  $   15,504
  Investment securities                             3,261       2,611
  Federal funds sold                                   91         366
  Interest-bearing deposits in other banks              6           6
                                               ----------  -----------
      Total interest income                        19,751      18,487
                                               ----------  -----------

Interest expense:
  Deposits                                          7,877       7,492
  Federal funds purchased and securities sold
    under repurchase agreements                       540         867
  Other borrowings                                  1,069       1,075
                                               ----------  -----------
      Total interest expense                        9,486       9,434
                                               ----------  -----------

      Net interest income                          10,265       9,053

Provision for loan losses                           1,271         576
                                               ----------  -----------

      Net interest income after provision
        for loan losses                             8,994       8,477
                                               ----------  -----------

Noninterest income:
  Service charges and fees on deposits              1,670       1,397
  Gain on sales of loans                            1,260       1,284
  Gain / (loss) on sale of fixed assets                 3         (52)
  Investment securities gains, net                     38          33
  Retail investment income                            289         323
  Trust service fees                                  286         274
  Increase in cash surrender value of
    bank-owned life insurance                         164         165
  Miscellaneous income                                221         168
                                               ----------  -----------
      Total noninterest income                      3,931       3,592
                                               ----------  -----------

Noninterest expense:
  Salaries and other personnel expense              5,171       4,796
  Occupancy expenses                                1,026         760
  Other operating expenses                          2,724       2,215
                                               ----------  -----------
      Total noninterest expense                     8,921       7,771
                                               ----------  -----------

      Income before income taxes                    4,004       4,298

Income tax expense                                  1,369       1,539
                                               ----------  -----------

      Net income                               $    2,635  $    2,759
                                               ==========  ===========

Basic net income per share                     $     0.49  $     0.51
                                               ==========  ===========

Diluted net income per share                   $     0.48  $     0.50
                                               ==========  ===========

Weighted average common shares outstanding      5,417,388   5,433,639
                                               ==========  ===========

Weighted average number of common and
  common equivalent shares outstanding          5,468,606   5,503,845
                                               ==========  ===========
</TABLE>

See accompanying notes to consolidated financial statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>
                            SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES

                                     Consolidated Statements of Cash Flows
                                             (Dollars in thousands)

                                                  (Unaudited)

                                                                                Three Months Ended March 31,
                                                                                   2008              2007
                                                                             -----------------  ---------------
<S>                                                                          <C>                <C>
Cash flows from operating activities:
Net income                                                                   $          2,635   $        2,759
  Adjustments to reconcile net income to net cash
    provided by operating activities
      Depreciation                                                                        537              367
      Deferred income tax benefit                                                        (393)               -
      Provision for loan losses                                                         1,271              576
      Net investment securities gain                                                      (38)             (33)
      Net accretion of discount on investment securities                                  (20)             (65)
      Increase in CSV of bank owned life insurance                                       (165)            (165)
      Stock options compensation cost                                                      51              134
      (Gain) Loss on disposal of premises and equipment                                    (3)              52
      Gain on sales of loans                                                           (1,260)          (1,284)
      Real estate loans originated for sale                                           (64,977)         (63,281)
      Proceeds from sales of real estate loans                                         57,902           69,552
      Decrease in accrued interest receivable                                             633               82
      (Increase) Decrease in other assets                                                (225)              64
      Increase (Decrease) in accrued interest payable and other liabilities               871             (570)
                                                                             -----------------  ---------------
        Net cash (used) provided by operating activities                               (3,181)           8,188
                                                                             -----------------  ---------------

Cash flows from investing activities:
      Proceeds from sales of available for sale securities                              3,950                -
      Proceeds from maturities of available for sale securities                        26,583           15,698
      Proceeds from maturities of held-to-maturity securities                               -            1,035
      Purchase of available for sale securities                                       (38,241)         (18,564)
      Purchase of Federal Home Loan Bank stock                                           (755)             (76)
      Net increase in loans                                                           (36,623)         (29,492)
      Additions to premises and equipment                                              (1,157)            (971)
      Proceeds from sale of premises and equipment                                         54                8
                                                                             -----------------  ---------------
        Net cash used in investing activities                                         (46,189)         (32,362)
                                                                             -----------------  ---------------


Cash flows from financing activities:
      Net increase in deposits                                                         63,795           72,869
      Net decrease in federal funds purchased and
        securities sold under repurchase agreements                                   (18,896)          (8,691)
      Advances from Federal Home Loan Bank                                             10,000                -
      Proceeds from other borrowed funds                                                  200                -
      Principal payments on other borrowed funds                                            -             (100)
      Purchase of treasury stock                                                         (437)             (42)
      Payment of cash dividends                                                          (704)            (707)
      Proceeds from stock options exercised                                               129                -
      Proceeds from Directors' stock purchase plan                                         13                -
                                                                             -----------------  ---------------
        Net cash provided by financing activities                                      54,100           63,329
                                                                             -----------------  ---------------

        Net increase in cash and cash equivalents                            $          4,730   $       39,155

Cash and cash equivalents at beginning of period                                       25,058           40,911

                                                                             -----------------  ---------------
Cash and cash equivalents at end of period                                   $         29,788   $       80,066
                                                                             =================  ===============

Supplemental disclosures of cash paid during the period for:
    Interest                                                                 $         10,117   $        9,764
                                                                             =================  ===============

    Income taxes                                                             $              -   $          817
                                                                             =================  ===============

Supplemental information on noncash investing activities:
    Loans transferred to other real estate                                   $            412   $            -
                                                                             =================  ===============
</TABLE>

See accompanying notes to consolidated financial statements.


                                        5
<PAGE>
             SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                                 March 31, 2008

Note  1  -  Basis  of  Presentation

The  accompanying  consolidated  financial  statements  include  the accounts of
Southeastern  Bank  Financial  Corporation (the "Company"), and its wholly-owned
subsidiaries,  Georgia  Bank  &  Trust  Company (the "Bank") and Southern Bank &
Trust  (the  "Thrift").  Significant  intercompany transactions and accounts are
eliminated  in  consolidation.  Dollar  amounts  are rounded to thousands except
share  and  per  share  data.

The  financial statements for the three months ended March 31, 2008 and 2007 are
unaudited  and  have  been prepared pursuant to the rules and regulations of the
Securities  and  Exchange  Commission.  Certain  information  and  footnote
disclosures  normally  included  in  financial statements prepared in accordance
with  accounting  principles  generally accepted in the United States of America
have  been  condensed  or omitted pursuant to such rules and regulations.  These
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and footnotes included in the Company's annual
report  on  Form  10-K  for  the  year  ended  December  31,  2007.

In  the  opinion  of management, all adjustments necessary to present fairly the
financial  position and the results of operations and cash flows for the interim
periods  have been made.  All such adjustments are of a normal recurring nature.
The  results  of  operations  for  the three months ended March 31, 2008 are not
necessarily  indicative  of  the  results  of  operations  which the Company may
achieve  for  the  entire  year.

Some items in the prior period financial statements were reclassified to conform
to  the  current  presentation.

Note  2  -  Fair  Value  Measurements

The  Company  adopted  Statement  of Financial Accounting Standards ("SFAS") No.
157,  "Fair  Value Measurements." at the beginning of our 2008 fiscal year. SFAS
No.  157  defines  fair  value, establishes a framework for measuring fair value
under  GAAP,  and expands disclosures about fair value measurement. According to
SFAS  No. 157, fair value is defined as the price that would be received to sell
an  asset  or  paid  to  transfer  a liability in an orderly transaction between
market  participants at the measurement date. SFAS No. 157 applies to all assets
and liabilities that are being measured and reported on a fair value basis. This
statement  enables  the  reader of the financial statements to assess the inputs
used  to  develop those measurements by establishing a hierarchy for ranking the
quality  and  reliability of the information used to determine fair values. This
statement


                                        6
<PAGE>
requires  that  assets  and liabilities carried at fair value will be classified
and  disclosed  in  one  of  the  following  three  categories:

Level  1:        Quoted  prices  in  active  markets  for  identical  assets  or
liabilities.

Level  2:        Significant  other observable inputs other than level 1 prices,
such as quoted market prices for similar assets or liabilities, quoted prices in
markets  that  are  not  active,  and other inputs that are observable or can be
corroborated  by  observable  market  data.  Observable  market  based inputs or
unobservable  inputs  that  are  corroborated  by  market  data.

Level  3:        Unobservable  inputs  that are not corroborated by market data.

In  determining  the  appropriate levels, the Company used the following methods
and  significant  assumptions  to  estimate  the  fair  value  of  items:

Securities:  The  fair values of trading securities, held-to-maturity securities
-----------
and  securities  available for sale are determined by obtaining quoted prices on
nationally  recognized  securities exchanges (Level 1 inputs) or matrix pricing,
which  is  a  mathematical  technique  widely used in the industry to value debt
securities  without  relying  exclusively  on  quoted  prices  for  the specific
securities,  but  rather  by  relying  on  the securities' relationship to other
benchmark  quoted  securities  (Level  2  inputs).

Impaired  Loans: The fair value of impaired loans is determined by reviewing the
---------------
estimated  amount realizable from collateral liquidation based upon an appraisal
as well as the estimated amounts realizable from borrowers and guarantors (Level
3  inputs).

Investments  in  tax  credits: The fair values for tax credits are measured on a
------------------------------
recurring  basis and are based upon total credits and deductions remaining to be
allocated  and  total  estimated credits and deductions to be allocated.(Level 3
inputs)

The  table  below  presents  the balances of assets and liabilities  measured at
fair  value  on  a  recurring  basis  by  level  within  the  hierarchy:


                                        7
<PAGE>
<TABLE>
<CAPTION>
                                             Quoted
                                            Prices in
                                             Active
                                             Markets     Significant
                                               for          Other       Significant
                                            Identical    Observable     Unobservable
                                             Assets        Inputs          Inputs
                                            (Level 1)     (Level 2)      (Level 3)
                               March 31,
                                 2008               (Dollars in thousands)
                               ------------------------------------------------------
<S>                            <C>         <C>          <C>            <C>
Available-for-sale securities  $  254,659  $      420   $    254,239   $           -

Tax credits                           574           0              0             574

Held-to-maturity securities         1,470           0          1,470               0

                               ----------  -----------  -------------  --------------
Total                          $  256,703  $      420   $    255,709   $         574
                               ==========  ===========  =============  ==============
</TABLE>

The table below presents a reconciliation and income statement classification of
gains  and  losses  for  all assets  measured at fair value on a recurring basis
using  significant unobservable inputs (Level 3) for the quarter ended March 31,
2008:

<TABLE>
<CAPTION>
                                             Fair Value Measurements
                                                Using Significant
                                               Unobservable Inputs

                                                    (Level 3)

                                                   Tax Credits
                                            -------------------------
<S>                                         <C>
Beginning balance, Jan. 1, 2008             $                    594

Total realized losses included in earnings                       (20)

                                            -------------------------
Ending balance, March 31, 2008              $                    574
                                            =========================
</TABLE>

Assets  and  liabilities  measured  at  fair  value on a non-recurring basis are
summarized  below:

<TABLE>
<CAPTION>
                                   Quoted
                                  Prices in
                                   Active
                                   Markets     Significant
                                     for          Other       Significant
                                  Identical    Observable    Unobservable
                      March 31,    Assets        Inputs         Inputs
                        2008     (Level 1)      (Level 2)      (Level 3)
                     -----------------------------------------------------
<S>                  <C>         <C>          <C>            <C>
Assets:
Impaired loans          1,244                                    1,244
</TABLE>

The  following  represents  impairment  charges  recognized  during  the period.


                                        8
<PAGE>
Impaired  loans,  which  are  measured  for  impairment  using the fair value of
collateral for collateral-dependent loans, had a carrying amount of $1,244, with
a  valuation allowance of $225. There was no additional provision for such loans
during  the  period.

In  February 2008, the FASB issued Staff Position (FSP) 157-2, Effective Date of
FASB  Statement  No. 157.  This FSP delays the effective date of FAS 157 for all
nonfinancial  assets  and  nonfinancial  liabilities,  except  those  that  are
recognized  or  disclosed at fair value on a recurring basis (at least annually)
to  fiscal  years  beginning after November 15, 2008, and interim periods within
those  fiscal  years.  The  Company  has  not  fully  implemented  SFAS  157 for
nonfinancial  assets  and  liabilities.  Nonfinancial  assets  at March 31, 2008
consist  of other real estate owned, the amount of which was not material to the
financial  statements.

Note  3  -  Comprehensive  Income

Other comprehensive income for the Company consists of changes in net unrealized
gains  and  losses  on  investment  securities  available  for  sale.  Total
comprehensive  income  for  the  three  months  ended  March 31, 2008 was $3,538
compared  to  $2,268  for  the  three  months  ended  March  31,  2007.

Note  4  -  Cash  and  Stock  Dividends  Declared

On January 23, 2008, the Company declared a quarterly cash dividend of $0.13 per
share  on  outstanding  shares.  The  dividend  was paid on February 22, 2008 to
shareholders  of  record  as  of  February  8,  2008.

On  April  16, 2008, the Company declared a quarterly cash dividend of $0.13 per
share  on  outstanding  shares.  The  dividend  is  payable  on  May 14, 2008 to
shareholders  of  record  as  of  May  2,  2008.

On  April  23,  2008,  the  Company  declared  a 10% stock dividend that will be
payable  on  June  2,  2008  to  shareholders  of record as of May 22, 2008.  No
fractional  share  will  be issued.  Shareholders entitled to a fractional share
will  receive  cash  for  the fractional share at the price equal to the closing
price  of  the  stock  as  of  the record date, adjusted for the stock dividend.

Note  5  -  Recently  Issued  Accounting  Standards  on the Financial Statements

In  July  2006,  the  FASB  issued  FASB  Interpretation  No. 48, Accounting for
Uncertainty  in  Income Taxes - an interpretation of FASB Statement No. 109 (FIN
48),  which  prescribes  a recognition threshold and measurement attribute for a
tax  position  taken  or  expected  to  be  taken  in a tax return.  FIN 48 also
provides  guidance  on  derecognition,  classification,  interest and penalties,
accounting  in  interim periods, disclosure and transition.  FIN 48 is effective
for  fiscal years beginning after December 15, 2006.  The adoption of FIN 48 did
not  have  a  material  effect  on  the  Company's  consolidated


                                        9
<PAGE>
financial statements.  The Company and its subsidiaries file a consolidated U.S.
federal  income tax return and files in the state of Georgia and South Carolina.
These  returns  are  subject  to examination by taxing authorities for all years
after  2003.

In September 2006, the FASB Emerging Issues Task Force finalized Issue No. 06-5,
Accounting  for  Purchases of Life Insurance - Determining the Amount That Could
Be  Realized in Accordance with FASB Technical Bulletin No. 85-4 (Accounting for
Purchases  of  Life Insurance). This issue requires that a policyholder consider
contractual  terms  of  a  life  insurance policy in determining the amount that
could  be  realized  under the insurance contract.  It also requires that if the
contract  provides for a greater surrender value if all individual policies in a
group  are  surrendered at the same time, that the surrender value be determined
based  on  the  assumption  that  policies  will be surrendered on an individual
basis.  Lastly,  the  issue discusses whether the cash surrender value should be
discounted  when  the  policyholder  is  contractually limited in its ability to
surrender  a  policy.  This  issue is effective for fiscal years beginning after
December 15, 2006.  The adoption of this issue did not have a material impact on
the  Company's  consolidated  financial  statements.

In  February  2007  the  FASB  issued Statement of Financial Accounting Standard
("SFAS")  No.  159,  "The  Fair  Value Option for Financial Assets and Financial
Liabilities."  SFAS No. 159 permits entities to choose to measure many financial
instruments and certain other items at fair value with an objective of improving
financial  reporting  by  providing  entities  with  the opportunity to mitigate
volatility  in  reported  earnings  caused  by  measuring  related  assets  and
liabilities  differently  without  having  to  apply  complex  hedge  accounting
provisions.  The  new  standard is effective for the Company on January 1, 2008.
The  Company  did  not  elect  the fair value option for any financial assets or
financial  liabilities  as  of  January  1,  2008.

On  January  1,  2008, the Company adopted FASB Emerging Issues Task Force Issue
No.  06-4,  Accounting  for  Deferred  Compensation  and Postretirement Benefits
Aspects  of  Endorsement  Split-Dollar  Life Insurance Arrangements.  This issue
requires  that  a  liability  be  recorded  during  the  service  period  when a
split-dollar  life  insurance agreement continues after participants' employment
or  retirement.  The  required  accrued  liability  will  be based on either the
post-employment  benefit  depending  on  the contractual terms of the underlying
agreement.  This  issue  is  effective for fiscal years beginning after December
15, 2007.  The impact of adoption was not material to the Company's consolidated
financial  statements.


                                       10
<PAGE>
Item  2.  Management's  Discussion  and  Analysis  of  Financial  Condition  and
          Results  of  Operations
(Dollar  amounts  are  expressed  in  thousands  unless  otherwise  noted)

Overview
--------

Southeastern  Bank  Financial  Corporation  (the  "Company")  operates  two
wholly-owned  subsidiaries  primarily  in  the  Augusta-Richmond  County,  GA-SC
metropolitan area.  Georgia Bank & Trust Company (the "Bank") was organized by a
group  of  local  citizens  and  commenced business on August 28, 1989, with one
branch  location.  Today,  it  is  Augusta's  largest  community banking company
operating  nine  full service branches in Augusta, Martinez, and Evans, Georgia,
and  one branch in Athens, Georgia.  Mortgage origination offices are located in
Augusta,  Savannah  and Athens, Georgia.  SB&T Capital Corporation ("the LPO") a
wholly owned subsidiary of the Bank, was organized on August 16, 2007 and opened
an  office  in Greenville, South Carolina.  On November 1, 2007 the Bank entered
into  an  Operating  Agreement with NMF Asset Management LLC ("NMF") whereby the
Bank  became  a 30% partner.  NMF is an investment management firm that provides
services  to  individuals,  trusts, pensions, nonprofit organizations as well as
other institutions.  Southern Bank & Trust (the "Thrift"), a federally chartered
thrift,  operates  three full service branches in North Augusta and Aiken, South
Carolina.  Effective  first  quarter  2008 the Thrift began originating mortgage
loans  to  be  sold in the secondary market.  The Company's operations campus is
located  in  Martinez,  Georgia  and  services  both  subsidiaries.

The  Company's  primary  market  area includes Richmond and Columbia Counties in
Georgia  and  Aiken  County  in South Carolina, all part of the Augusta-Richmond
County,  GA-SC  metropolitan statistical area (MSA).  The 2006 population of the
Augusta-Richmond  County,  GA-SC  MSA was 523,249, the second largest in Georgia
and fourth largest in South Carolina.  The Augusta market area has a diversified
economy  based  principally  on  government,  public  utilities,  health  care,
manufacturing,  construction, and wholesale and retail trade.  Augusta is one of
the  leading medical centers in the Southeast.   The Company entered the Athens,
GA  market  in December 2005.  The 2006 population for the Athens-Clarke County,
GA  MSA  was  185,479,  ranked sixth in the state of Georgia.  The Athens market
area  has  a diversified economy based primarily on government, retail services,
tourism,  manufacturing, other services, and health care, with the largest share
of  government  jobs  in  the  state.  In  August  2007  the Company entered the
Greenville,  SC  market.  The 2006 population for the Greenville-Mauldin-Easley,
SC MSA was 601,986, ranked third in the state of South Carolina.  The Greenville
market  area  has  a  diversified  economy  based  primarily  on  government,
manufacturing,  construction,  retail  services,  and  health  care.

The  Company's  services  include  the origination of residential and commercial
real  estate  loans,  construction  and  development  loans,  and commercial and
consumer  loans.  The  Company  also  offers  a  variety  of  deposit  programs,
including  noninterest-bearing  demand,  interest  checking,  money  management,
savings,  and time deposits.  In the Augusta-Richmond County, GA-SC metropolitan
area,  GB&T  had  12.87%  of  all  deposits


                                       11
<PAGE>
and  was  the  second  largest depository institution at June 30, 2007, as cited
from the Federal Deposit Insurance Corporation's website.  Securities sold under
repurchase  agreements  are  also  offered.  Additional  services include wealth
management,  trust,  retail  investment, and mortgage.  As a matter of practice,
most  mortgage  loans  are  sold in the secondary market; however, some mortgage
loans  are  placed  in  the  portfolio  based  on  asset/liability  management
strategies.  The Company continues to concentrate on increasing its market share
through  various  new deposit and loan products and other financial services, by
adding  locations,  and  by  focusing  on  the  customer relationship management
philosophy.  The  Company  is committed to building life-long relationships with
its  customers,  employees,  shareholders,  and  the  communities  it  serves.

The  Company's  primary source of income is from its lending activities followed
by  interest  income from its investment activities, service charges and fees on
deposits, and gain on sales of mortgage loans in the secondary market.  Interest
income  on  loans increased during the first three months of 2008 as compared to
the  first  three  months  of  2007  due to increased volumes somewhat offset by
decrease  in  rates.  Interest  income on investment securities increased due to
increase  in  volume and rates.  Interest income on federal funds sold decreased
due  to  both  volume  and rate decreases.  Service charges and fees on deposits
increased  for  the  three months of 2008 as compared to the same period in 2007
due to increases in NSF income on both retail and business checking accounts and
debit/ATM  card  income,  both  the  result  of  new  account  growth.

<TABLE>
<CAPTION>
                        Table 1 - Selected Financial Data

                                 March 31,    December 31,    December 31,
                                   2008           2007            2003
                                -----------  --------------  --------------
                                          (Dollars in thousands)
<S>                             <C>          <C>             <C>
Assets                          $1,271,540   $   1,212,980   $     630,633
Loans                              927,025         882,743         432,679
Deposits                         1,015,961         952,166         483,952

Return on average total assets        0.86%           1.04%           1.31%
Return on average equity             11.57%          14.03%          15.62%
</TABLE>

The  Company continues to experience steady asset growth as evidenced in Table 1
above. The Company has also achieved significant increases in loans and deposits
and  continues  to  provide  strong returns on assets and equity as noted in the
table  above.  Net  income  for  2003 was $7.9 million compared to net income of
$11.8  million  for  2007.  Net income for the three months ended March 31, 2008
was  $2.6  million.  The Company has paid cash dividends of $0.13 per share each
quarter  since  2004.

The  Company  meets  its  liquidity  needs  by managing cash and due from banks,
federal  funds  purchased and sold, maturity of investment securities, principal
repayments  from  mortgage-backed  securities,  and  draws  on  lines of credit.
Additionally,  liquidity  can  be


                                       12
<PAGE>
managed through structuring deposit and loan maturities.  The Company funds loan
and  investment  growth  with  core  deposits,  securities sold under repurchase
agreements  and  Federal  Home Loan Bank advances.  During inflationary periods,
interest  rates  generally increase and operating expenses generally rise.  When
interest  rates  rise,  variable  rate  loans  and  investments  produce  higher
earnings; however, deposit and other borrowings interest expense also rise.  The
Company monitors its interest rate risk as it applies to net income in a ramp up
and  down  annually 200 basis points (2%) scenario and as it applies to economic
value  of  equity  in  a  shock up and down 200 (2%) basis points scenario.  The
Company  monitors  operating  expenses  through responsibility center budgeting.

Forward-Looking  Statements
---------------------------

Southeastern  Bank Financial Corporation may, from time to time, make written or
oral forward-looking statements, including statements contained in the Company's
filings  with  the Securities and Exchange Commission (the "Commission") and its
reports  to  shareholders.  Statements  made in such documents, 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 economies, 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;  the effects of competition in the banking business; difficulties in
expanding  the  Company's  business  into  new  markets; 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.

Critical  Accounting  Estimates
-------------------------------

The  accounting  and  financial  reporting  policies  of  the  Company  and  its
subsidiaries  conform  to accounting principles generally accepted in the United
States  of  America  and  to  general practices within the banking industry.  Of
these  policies,  management  has  identified the allowance for loan losses as a
critical accounting estimate that requires difficult, subjective judgment and is
important  to  the  presentation  of  the  financial  condition  and  results of
operations  of  the  Company.

The allowance for loan losses is established through a provision for loan losses
charged  to  expense,  which affects the Company's earnings directly.  Loans are
charged  against the allowance for loan losses when management believes that the
collectability  of the principal is unlikely. Subsequent recoveries are added to
the  allowance.  The  allowance  is  an  amount that management believes will be
adequate  to  absorb  losses  on  existing  loans


                                       13
<PAGE>
that  become uncollectible, based on evaluations of the collectability of loans.
The  evaluations  take  into consideration such factors as changes in the nature
and  volume  of  the  loan  portfolio,  historical loss rates, overall portfolio
quality,  review  of specific problem loans, and current economic conditions and
trends  that  may  affect  a  borrower's  ability  to  repay.

The  provision  for loan losses is the charge to operating earnings necessary to
maintain  an  adequate  allowance  for  loan  losses.  The Company has developed
policies and procedures for evaluating the overall quality of its loan portfolio
and  the  timely  identification  of  problem  credits.  Management continues to
review  these  policies and procedures and makes further improvements as needed.
The adequacy of the Company's allowance for loan losses and the effectiveness of
the Company's internal policies and procedures are also reviewed periodically by
the  Company's regulators and the Company's internal loan review personnel.  The
Company's  regulators  may  advise  the  Company  to  recognize additions to the
allowance  based upon their judgments about information available to them at the
time  of  their  examination.  Such  regulatory  guidance is considered, and the
Company  may  recognize  additions  to  the  allowance  as  a  result.

The  Company's  Board  of  Directors,  with  the  recommendation  of management,
approves  the  appropriate  level  for  the allowance for loan losses based upon
internal policies and procedures, historical loan loss ratios, loan volume, size
and  character  of  the  loan  portfolio,  concentrations  of  loans to specific
borrowers  or industries, value of the collateral underlying the loans, specific
problem loans and current economic conditions and trends.  The Company continues
to refine the methodology on which the level of the allowance for loan losses is
based,  by comparing historical loss ratios utilized to actual experience and by
classifying  loans  for  analysis  based  on  similar risk characteristics. Cash
receipts  for  accruing  loans  are  applied to principal and interest under the
contractual  terms of the loan agreement; however, cash receipts on impaired and
nonaccrual  loans  for  which  the accrual of interest has been discontinued are
generally  applied first to principal and then to interest income depending upon
the  overall  risk  of  principal  loss  to  the  Company.

Performance  Overview  --  Net  Income
--------------------------------------

The  Company's  net income for the first quarter of 2008 was $2,635, which was a
decrease  of  $125 (4.5%) compared to net income of $2,759 for the first quarter
of 2007.  Diluted net income per share for the three months ended March 31, 2008
was  $0.48  compared  to  $0.50  for the three months ended March 31, 2007.  The
decrease  in  net  income  for the three months ended March 31, 2008 as compared
with  the  three  months  ended  March  31,  2007, was primarily a result of the
continued  decline  in net interest margin due to the Federal Reserve's actions,
the  substantially  higher  provision for loan losses due to increased levels of
nonperforming  assets,  and increases in noninterest expense, somewhat offset by
increases  in  loan  and  investment  interest  income  and  noninterest income.
Interest  income on loans increased due to increased volumes, somewhat offset by
decrease  in  rates.  Investment interest income increased primarily due to both
volume  and  rate increases.  Interest expense on deposits increased as a result
of higher volumes somewhat offset by a lower rates.  Interest expense on federal
funds


                                       14
<PAGE>
purchased  and  securities  sold under repurchase agreements decreased primarily
due  to  lower  rates.

Factors  contributing to the increase in noninterest income for the three months
ended  March 31, 2008 were increases in service charges and fees on deposits due
to  NSF  income  on  retail  and  business  checking accounts and debit/ATM card
income,  both  the  result of new account growth.  Noninterest expense increased
during  the  three months ended March 31, 2008 compared to the same period ended
March  31,  2007,  primarily due to increases in salaries and premises and fixed
assets  expense  related  to  company  growth  and  increases in other operating
expenses.  The increase in other noninterest expenses for the three months ended
March  31,  2008  includes  increases  in  processing, marketing, communication,
professional  fees,  and  insurance  and  taxes  expense.  Loss on sale of fixed
assets  decreased  for the three-month period due to the replacement of ATMs and
automobiles  in  first  quarter  2007.

<TABLE>
<CAPTION>
                          Table 2 - Selected Balance Sheet Data

                                                                            Variance
                                              March 31,  December 31,   -----------------
                                                2008         2007        Amount      %
                                             ----------  -------------  --------  -------
                                                         (Dollars in thousands)
<S>                                          <C>         <C>            <C>       <C>
Cash and due from banks                      $   21,261  $      24,558  ($3,297)  (13.4%)
Federal funds sold                                8,027              -    8,027     N/A
Investment securities                           256,094        246,864    9,230      3.7%
Loans                                           927,025        882,743   44,282      5.0%
Assets                                        1,271,540      1,212,980   58,560      4.8%
Deposits                                      1,015,961        952,166   63,795      6.7%
Securities sold under repurchase agreements      62,271         81,165  (18,894)  (23.3%)
Liabilities                                   1,179,192      1,123,222   55,970      5.0%
Stockholders' equity                             92,348         89,758    2,590      2.9%
</TABLE>

Table 2 highlights significant changes in the balance sheet at March 31, 2008 as
compared  to  December 31, 2007.  Assets increased $58,560, primarily the result
of  higher  balances  for  loans,  investments  and  federal  funds sold.  These
increases were funded by increases in total deposits of $63,795, somewhat offset
by  decreases  in  securities  sold  under repurchase agreements.  Net income of
$2,635  less  dividends  paid  of  $704  also  contributed  to  the  funding.

The  annualized return on average assets for the Company was 0.86% for the three
months  ended  March  31, 2008, compared to 1.06% for the same period last year.
While  total assets have increased $163,957 since first quarter 2007, net income
has  decreased  $124  resulting  in  a  decrease  in  ROA.

The  annualized  return on average stockholders' equity was 11.57% for the three
months  ended  March 31, 2008, compared to 13.97% for the same period last year.
The  decrease


                                       15
<PAGE>
is primarily attributable to the decrease in net income coupled with an increase
in  retained  earnings  due  to  net  income  and increases in accumulated other
comprehensive  income.

Net  Interest  Income
---------------------

The  primary source of earnings for the Company is net interest income, which is
the  difference  between  income  on  interest-earning assets, such as loans and
investment securities, and interest expense incurred on interest-bearing sources
of  funds,  such  as  deposits  and  borrowings.  The  following tables show the
average  balances  of  interest-earning assets and interest-bearing liabilities,
annualized  average  yields  earned and rates paid on those respective balances,
and  the  actual interest income and interest expense for the periods indicated.
Average  balances  are calculated based on daily balances, yields on non-taxable
investments  are not reported on a tax equivalent basis and average balances for
loans  include  nonaccrual  loans  even  though  interest  was  not  earned.

<TABLE>
<CAPTION>
                               Table 3 - Average Balances, Income and Expenses, Yields and Rates


                                                Three Months Ended March 31, 2008         Three Months Ended March 31, 2007
                                            -----------------------------------------  ----------------------------------------
                                                           Annualized                               Annualized
                                                             Average        Amount                   Average         Amount
                                              Average       Yield or       Paid or      Average      Yield or        Paid or
                                               Amount         Rate          Earned      Amount         Rate          Earned
                                            -----------------------------------------  ----------------------------------------
                                                                            (Dollars in thousands)
<S>                                         <C>           <C>            <C>           <C>        <C>             <C>
Interest-earning assets:
  Loans                                     $    896,500       7.26%     $     16,393  $ 761,022        8.18%     $      15,504
  Investment securities                          248,618       5.25%            3,261    199,740        5.23%             2,611
  Federal funds sold                              14,977       2.43%               91     29,133        5.10%               366
  Interest-bearing deposits in other banks           500       4.60%                6        513        5.07%                 6
                                            ------------                 ------------  ---------                  -------------
      Total interest-earning assets         $  1,160,595       6.77%     $     19,751  $ 990,408        7.49%     $      18,487
                                            ------------                 ------------  ---------                  -------------

Interest-bearing liabilities:
  Deposits                                  $    874,421       3.61%     $      7,877  $ 718,678        4.23%     $       7,492
  Federal funds purchased / securities
    sold under repurchase agreements              64,306       3.37%              540     66,690        5.27%               867
  Other borrowings                                86,511       4.96%            1,069     80,593        5.41%             1,075
                                            ------------                 ------------  ---------                  -------------
      Total interest-bearing liabilities    $  1,025,238       3.71%     $      9,486  $ 865,961        4.42%     $       9,434
                                            ------------                 ------------  ---------                  -------------

Net interest margin/income:                                    3.49%     $     10,265                   3.61%     $       9,053
                                                                         ============                             =============
</TABLE>

Net  interest  income  increased $1,211 (13.4%) during the three-month period as
the  result  of increases in interest income that exceeded increases in interest
expense  as compared to the same period in 2007.  Loan interest income increased
$889 in the three month period, while deposit interest expense increased $384 in
the  three  month period, all the result of continued growth of account balances
somewhat offset by a decrease in interest rates.  The annual average balance for
loans  was  $896,500 at March 31, 2008 with an annualized average yield of 7.26%
compared  to  $761,022  at  March  31,  2007 with an annualized average yield of
8.18%.  Interest-bearing  deposits  had  an  average balance of $874,421 with an
annualized  average  rate  of  3.61%  at March 31, 2008 compared to $718,678 and
4.23%  at  March  31,  2007.  Some  of the other contributing factors during the
three  month  period  included  increases  in  interest  income  on  investment
securities  and


                                       16
<PAGE>
a decrease in interest expense on securities sold under agreement to repurchase,
somewhat  offset  by  decreases  in  federal funds sold interest income, all the
result  of  increased  volumes  and  lower  interest  rates.

The  Company's  net  interest  margin  for the three months ended March 31, 2008
decreased  12  basis  points  to 3.49% as compared to 3.61% for the three months
ended March 31, 2007.  The net interest margin deteriorated in the first quarter
as  the  average  rate  earned on assets decreased more quickly than the average
rate  on  interest-bearing  deposits.  The  rate for earning assets decreased 73
basis  points  for the three month period with lower average yields on loans and
federal  funds  sold  accounting  for  most  of  the decrease.  The cost to fund
earning  assets  decreased  23 basis points for the three month period primarily
due  to lower rates on deposits and securities sold under repurchase agreements.
During  the  first quarter the Federal Reserve decreased its targeted funds rate
three  times  for  a  total of 2.00%.  Among other things, their action caused a
significant  decrease  in  the  Company's  prime  based  loan  yields.

Noninterest  Income
-------------------

<TABLE>
<CAPTION>
                          Table 5 - Noninterest Income

                                Three Months Ended
                                     March 31,             Variance
                              -----------------------  ------------------
                                 2008        2007       Amount      %
                              ----------  -----------  --------  --------
                                          (Dollars in thousands)
<S>                           <C>         <C>          <C>       <C>
Service charges and fees
  on deposits                 $    1,670  $    1,397   $   273      19.5%
Gain on sales of loans             1,260       1,284       (24)    (1.9%)
Gain on sale of fixed assets           3         (52)       55   (105.8%)
Investment securities
  (losses) gains, net                 38          33         5      15.2%
Retail investment income             289         323       (34)   (10.5%)
Trust services fees                  286         274        12       4.4%
Increase in cash surrender
  value of bank-owned
  life insurance                     164         165        (1)    (0.6%)
Miscellaneous income                 221         168        53      31.5%
                              ----------  -----------  --------  --------
Total noninterest income      $    3,931  $    3,592   $   339       9.4%
                              ==========  ===========  ========  ========
</TABLE>

Noninterest  income  increased  $339  (9.4%)  during  the  three-month period as
compared  to the same period in 2007.  The most significant change for the three
month  period  was  an  increase  in service charges and fees on deposits due to
increases  in  NSF income on retail and business checking accounts and debit/ATM
card  income,  both  the  result  of  new  account  growth.


                                       17
<PAGE>
Noninterest  Expense
--------------------

<TABLE>
<CAPTION>
                          Table 6 - Noninterest Expense


                             Three Months Ended
                                  March 31,            Variance
                           -----------------------  --------------
                              2008        2007      Amount     %
                           ----------  -----------  -------  -----
                                      (Dollars in thousands)
<S>                        <C>         <C>          <C>      <C>
Salaries and other
  personnel expense        $    5,171  $     4,796  $   375   7.8%
Occupancy expenses              1,026          760      266  35.0%
Other operating expenses        2,724        2,215      509  23.0%
                           ----------  -----------  -------  -----
Total noninterest expense  $    8,921  $     7,771  $ 1,150  14.8%
                           ==========  ===========  =======  ====-
</TABLE>

Noninterest  expense  increased  $1.2  million  (23.0%)  during  the three-month
period.

Salaries  and  other  personnel  expenses:

Salaries  and  other personnel expense increased for first quarter 2008 compared
to  first  quarter 2007 due to the opening of new full service branches in North
Augusta and Aiken, South Carolina for the Thrift as well as the opening of a new
branch  in  Evans, Georgia and adding of a loan production office in Greenville,
South Carolina for the Bank. This continued growth and expansion has resulted in
the  addition  of  new  personnel,  resulting  in increased salaries, which were
partially offset by decreases in commissions and  increases in the contra salary
expense  in  compliance  with  SFAS  No.  91.

Occupancy  expenses:

The most significant changes in occupancy expense were increases in rent / lease
expense  for  both  the  North  Augusta  and Greenville, South Carolina offices.
Miscellaneous  equipment  purchases and depreciation expense increased primarily
due  to  opening  of  new  branches as well as the opening of the new Operations
Campus  in  the  last  quarter  of  2007.

Other  operating  expenses:

Other  operating  expenses  increased $509 (14.8%) for the three-month period as
compared  to  the same period in 2007.  Processing expenses increased $66 during
the three month period and were primarily due to ATM processing, retail checking
account  expense  and payroll processing fees.  Marketing expenses increased $85
primarily  due  to  increases in agency fees, and additional expenses for TV and
other  print  media  advertising.  Communications  expense  increased $82 due to
additional  telephone  trunk  lines installed.  Professional fees increased $109
due  to  the  outsourcing of the Sarbanes Oxley testing as well as IT consulting
expenses.  Insurance  and  tax  expense  increased


                                       18
<PAGE>
from 2007 due to the FDIC credit of $96 that was used in 2007 and an increase in
business  and  intangible taxes.  Loss on sale of fixed assets decreased $55 for
the  three-month  period due to the replacement of ATMs and automobiles in 2007.

Income  Taxes
-------------

Income tax expense totaled $1.4 million in the first quarter of 2008 as compared
to  $1.5  million  in the first quarter of 2007.  The effective tax rate for the
three  months  ended  March 31, 2008 and 2007 was 34.2% and 35.8%, respectively.
For  the three months ended March 31, 2008 as compared to the three months ended
March 31, 2007, a decrease in nondeductible stock option expense and an increase
in  general business tax credits from a new Georgia low income housing state tax
credit,  resulted  in  a decrease in income tax expense and the effective income
tax  rate.

Asset  Quality
--------------

Table  5  which  follows  shows  the  current  and  prior  period  amounts  of
non-performing  assets.  Non-performing  assets  were  $8,017 at March 31, 2008,
compared to $5,495 at December 31, 2007.  Significant changes from December 2007
to  March  2008  include  a  $412  increase  in  other real estate owned, a $426
increase  in  non-performing  assets  with  balances less than $100 and a $1,684
increase  for  customers  with  balances  greater than $100 due to $1,697 from a
single  new  nonaccrual  loan,  somewhat offset by a $536 foreclosure as well as
payments  on  existing  nonaccrual  loan  balances.  The ratio of non-performing
assets  to  total  loans  and  other  real  estate  was 0.86% at March 31, 2008,
compared  to  0.62%  at  December  31,  2007.  The  control  and  monitoring  of
non-performing  assets  continues  to  be  a  priority  of  management.

There  were  no  loans  past  due 90 days or more and still accruing interest at
March  31,  2008  and  December  31,  2007.

<TABLE>
<CAPTION>
                              Table 7 - Non-Performing Assets
                                   (Dollars in thousands)

                                                         March 31,2008    December 31,2007
                                                        ---------------  ------------------
<S>                                                     <C>              <C>
Nonaccrual loans                                        $        7,605   $           5,495
Other real estate owned                                            412                   -
                                                        ---------------  ------------------
    Total non-performing assets                         $        8,017   $           5,495
                                                        ===============  ==================

Loans past due 90 days or more
  and still accruing interest                           $            -   $               -
                                                        ===============  ==================

Non-performing assets to total assets                             0.63%               0.45%

Non-performing assets to total loans and ORE                      0.86%               0.62%

Allowance for loan loss to total non-performing assets          159.76%             214.74%
</TABLE>


                                       19
<PAGE>
Allowance  for  Loan  Losses
----------------------------

The  allowance  for  loan  losses represents an allocation for probable incurred
loan  losses  in  the  loan  portfolio.  The  adequacy of the allowance for loan
losses  is  evaluated  periodically  based on a review of all significant loans,
with  particular  emphasis  on impaired, non-accruing, past due, and other loans
that  management  believes  require special attention.  The determination of the
allowance  for  loan  losses is considered a critical accounting estimate of the
Company.  See  "Critical  Accounting  Estimates."

When  reviewing  the allowance for loan losses, it is important to understand to
whom  the  Company lends.  The following table sets forth the composition of the
Company's  loan  portfolio  as  of  March  31,  2008  and  December  31,  2007.

<TABLE>
<CAPTION>
                      Table 8 - Loan Portfolio Composition

                                   March 31, 2008      December 31, 2007
                                -------------------  ----------------------
                                 Amount       %       Amount         %
                                ---------  --------  ---------  -----------
                                          (Dollars in thousands)
<S>                             <C>        <C>       <C>        <C>
Commercial financial and
  agricultural                  $100,716     10.86%  $ 93,318        10.57%
                                ---------  --------  ---------  -----------
Real estate
  Commercial.                    243,173     26.23%   236,358        26.78%
  Residential.                   196,028     21.15%   190,613        21.59%
  Residential held for sale       19,638      2.12%    11,303         1.28%
  Construction and
    development                  337,765     36.44%   318,438        36.07%
                                ---------  --------  ---------  -----------
      Total real estate          796,604     85.93%   756,712        85.72%
                                ---------  --------  ---------  -----------
Lease financing.                      36      0.00%        37         0.00%
Consumer
  Direct                          25,085      2.71%    25,569         2.90%
  Indirect                         3,831      0.41%     4,237         0.48%
  Revolving                        1,565      0.17%     3,819         0.43%
                                ---------  --------  ---------  -----------
    Total consumer                30,481      3.29%    33,625         3.81%
                                ---------  --------  ---------  -----------
Deferred loan origination fees      (812)    -0.09%      (949)       -0.11%
                                ---------  --------  ---------  -----------
    Total                        927,025    100.00%  $882,743       100.00%
                                =========  ========  =========  ===========
</TABLE>

At  March 31, 2008, the loan portfolio is comprised of 85.93% real estate loans.
Commercial, financial and agricultural loans comprise 10.86%, and consumer loans
comprise  3.29%  of  the  portfolio.

Commercial  real  estate comprises 26.23% of the loan portfolio and is primarily
owner  occupied properties where the operations of the commercial entity provide
the  necessary  cash  flow to service the debt.  For this portion of real estate
loan portfolio, repayment is not dependent upon the sale of the real estate held
as  collateral.  Construction  and development (36.44%) has been an increasingly
important  portion  of  the  real  estate loan portfolio.  The Company carefully
monitors  the  loans  in  this  category  since  the repayment of these loans is
generally  dependent  upon  the  sale of the real estate in the normal course of
business  and  can  be  impacted  by  national  and  local  economic


                                       20
<PAGE>
conditions.  The residential category, 21.15% of the portfolio, represents those
loans  that the Company chooses to maintain in its portfolio rather than selling
into  the  secondary market for marketing and competitive reasons and commercial
loans  secured  by  residential  real  estate.  The  residential  held  for sale
category,  2.12%  of  the  portfolio, comprises loans that are in the process of
being  sold  into  the  secondary  market.  In  these loans, the credit has been
approved  by  the  investor  and  the  interest  rate locked so that the Company
minimizes  credit  and  interest  rate  risk  with  respect  to  these  loans.

The Company has no large loan concentrations to individual borrowers.  Unsecured
loans  at  March  31,  2008 were $15.8 million.  While management uses available
information  to recognize losses on loans, future additions to the allowance may
be  necessary  based  on  changes  in economic conditions.  In addition, various
regulatory  agencies,  as  an  integral  part  of  their  examination  process,
periodically  review the Company's allowance for loan losses.  Such agencies may
advise  additions  to  the  allowance based on their judgments about information
available to them at the time of their examination.  Such regulatory guidance is
considered,  and  the  Company  may  recognize  additions  to the allowance as a
result.

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.  Loans  determined  to be uncollectible are charged to the
allowance  for loan losses and subsequent recoveries are added to the allowance.
A  provision  for  losses in the amount of $1,271 was charged to expense for the
quarter  ended  March  31, 2008 compared to $576 for the quarter ended March 31,
2007.  This increase is primarily due to an increased level of classified assets
and  criticized debt as well as economic and environmental factors affecting the
portfolio.

<TABLE>
<CAPTION>
                       Table 9 - Allowance for Loan Losses
                             (Dollars In Thousands)

                                2008      2007
                              --------  --------
<S>                           <C>       <C>
Beginning balance, January 1  $11,800   $ 9,777
Provision charged to expense    1,271       576
Recoveries                        204       231
Loans charged off                (467)     (310)
                              --------  --------
Ending balance, March 31      $12,808   $10,274
                              ========  ========
</TABLE>

At  March  31,  2008  the  ratio of allowance for loan losses to total loans was
1.41%  compared  to  1.35%  at  December  31,  2007 and 1.33% at March 31, 2007.
Management  considers  the  current  allowance for loan losses appropriate based
upon  its  analysis of risk in the portfolio, although there can be no assurance
that  the  assumptions  underlying  such  analysis  will continue to be correct.


                                       21
<PAGE>
Liquidity  and  Capital  Resources
----------------------------------

The  Company's  liquidity  remains  adequate  to meet operating and loan funding
requirements.  The loan to deposit ratio at March 31, 2008 was 91.3% compared to
92.7%  at  December 31, 2007 and 88.5% at March 31, 2007.  Deposits at March 31,
2008  and  December 31, 2007 include $91.8 million and $78.5 million of brokered
certificates  of  deposit, respectively.  GB&T has also utilized borrowings from
the  Federal  Home  Loan Bank.  GB&T maintains a line of credit with the Federal
Home Loan Bank approximating 10% of GB&T's total assets.  Federal Home Loan Bank
advances  are  collateralized  by eligible first mortgage loans, commercial real
estate  loans and investment securities.  These borrowings totaled $69.0 million
at  March  31,  2008.  GB&T  maintains  repurchase lines of credit with SunTrust
Robinson  Humphrey,  Atlanta,  Georgia,  for  advances  up  to $20.0 of which no
amounts  were outstanding at March 31, 2008.  GB&T has a federal funds purchased
accommodation  with  Silverton  Bank, Atlanta, Georgia, for advances up to $16.7
million  and  with  SunTrust  Bank,  Atlanta,  Georgia  for advances up to $10.0
million,  while  SB&T has a federal funds purchased accommodation with Silverton
Bank,  Atlanta,  Georgia,  for  advances  up  to  $3.3  million.  Additionally,
liquidity  needs  can  be  satisfied  by  the  structuring  of the maturities of
investment  securities  and  the  pricing  and  maturities on loans and deposits
offered  to  customers.  The  Company  also  uses  retail  securities sold under
repurchase  agreements  to fund growth.  Retail securities sold under repurchase
agreements  were  $62.3  million  at  March  31,  2008.

Stockholders'  equity  to  total  assets was 7.26% at March 31, 2008 compared to
7.4%  at  December  31,  2007  and  7.39% at March 31, 2007.  The capital of the
Company  exceeded  all  required  regulatory  guidelines at March 31, 2008.  The
Company's  Tier  1 risk-based, total risk-based and leverage capital ratios were
11.04%, 12.30%, and 9.03%, respectively, at March 31, 2008.  The following table
reflects  the  current  regulatory  capital  levels  in  more  detail, including
comparisons  to  the  regulatory  minimums.


                                       22
<PAGE>
<TABLE>
<CAPTION>
                               Table 10 - Regulatory Capital Requirements
                                             March 31, 2008
                                         (Dollars in Thousands)

                                                         Required for capital
                                       Actual              adequacy purposes            Excess
                                Amount       Percent      Amount      Percent      Amount      Percent
                              ------------------------  -----------------------  -----------------------
<S>                           <C>          <C>          <C>         <C>          <C>         <C>
Southeastern Bank Financial
Corporation

Risk-based capital:
  Tier 1 capital              $   111,276       11.04%      40,325        4.00%      70,951        7.04%
  Total capital                   123,957       12.30%      80,650        8.00%      43,307        4.30%
Tier 1 leverage ratio             111,276        9.03%      49,312        4.00%      61,964        5.03%

Georgia Bank & Trust Company

Risk-based capital:
  Tier 1 capital              $    90,343        9.90%      36,494        4.00%      53,849        5.90%
  Total capital                   101,750       11.15%      72,989        8.00%      28,761        3.15%
Tier 1 leverage ratio              90,343        7.95%      51,106        4.50%      39,237        3.45%

Southern Bank & Trust

Risk-based capital:
  Tier 1 capital              $    14,027       15.21%       3,689        4.00%      10,338       11.21%
  Total capital                    15,181       16.46%       7,379        8.00%       7,802        8.46%
Tier 1 leverage ratio              14,027       15.14%       3,707        4.00%      10,320       11.14%
</TABLE>

Southeastern  Bank  Financial  Corporation  and Georgia Bank & Trust Company are
regulated  by  the  Department  of  Banking  and Finance of the State of Georgia
(DBF).  The  DBF  requires  that  state  banks  in  Georgia generally maintain a
minimum  ratio  of  Tier  1 capital to total assets of four and one-half percent
(4.5%)  for  banks  and  four  percent  (4%)  for  holding  companies.

Management  is  not  aware  of  any  events or uncertainties that are reasonably
likely  to  have a material effect on the Company's liquidity, capital resources
or  operations.

Commitments  and  Contractual  Obligations
------------------------------------------

The  Company  is  a  party to lines of credit with off-balance sheet risk in the
normal  course  of business to meet the financing needs of its customers.  Lines
of credit are unfunded commitments to extend credit.  These instruments involve,
in  varying  degrees, exposure to credit and interest rate risk in excess of the
amounts  recognized  in  the  financial  statements.  The  Company's exposure to
credit  loss  in the event of nonperformance by the other party to the financial
instrument  for  unfunded  commitments to extend credit and letters of credit is
represented  by  the  contractual  amount  of  those  instruments.  The


                                       23
<PAGE>
Company  evaluates  construction  and  acquisition and development loans for the
percentage  completed  before  extending additional credit.  The Company follows
the same credit policies in making commitments and contractual obligations as it
does  for  on-balance  sheet  instruments.

Unfunded commitments to extend credit where contract amounts represent potential
credit risk totaled $174,788 at March 31, 2008.  These commitments are primarily
at  variable  interest  rates.

The  Company's  commitments  are  funded  through  internal  funding  sources of
scheduled  repayments of loans and sales and maturities of investment securities
available  for  sale  or external funding sources through acceptance of deposits
from  customers  or  borrowings  from  other  financial  institutions.

The  following table is a summary of the Company's commitments to extend credit,
commitments  under  contractual  leases  as  well  as  the  Company' contractual
obligations,  consisting  of deposits, FHLB advances, which are subject to early
termination  options,  and  borrowed  funds  by  contractual  maturity  date.

<TABLE>
<CAPTION>
Table 11 - Commitments and
Contractual Obligations        Less Than 1                               More than
(Dollars in thousands)            Year      1 - 3 Years   3 - 5 Years     5 Years
----------------------------  ------------  ------------  ------------  ----------
<S>                           <C>           <C>           <C>           <C>

Lines of credit               $    174,788             -             -           -
Lease agreements                       337           640           355         141
Deposits                           823,924       186,266         5,771           -
Securities sold under
  repurchase agreements             62,270             -             -           -
FHLB advances                       19,000        24,000         6,000      20,000
Other borrowings                       700             -             -           -
                              ------------  ------------  ------------  ----------
  Total commitments and
    contractual obligations   $  1,081,019  $    210,906  $     12,126  $   20,141
                              ============  ============  ============  ==========
</TABLE>

Although management regularly monitors the balance of outstanding commitments to
fund  loans  to  ensure  funding  availability should the need arise, management
believes  that  the  risk  of  all customers fully drawing on all these lines of
credit  at  the  same  time  is  remote.

Effects  of  Inflation  and  Changing  Prices
---------------------------------------------

Inflation  generally  increases the cost of funds and operating overhead, and to
the  extent  loans  and  other  assets  bear  variable rates, the yields on such
assets.  Unlike  most  industrial  companies,  virtually  all  of the assets and
liabilities  of  a  financial  institution are monetary in nature.  As a result,
interest  rates generally have a more significant impact on the performance of a
financial  institution  than  the  effects  of  general  levels  of  inflation.


                                       24
<PAGE>
Although interest rates do not necessarily move in the same direction and to the
same  extent  as  the  prices  of  goods  and  services,  increases in inflation
generally have resulted in increased interest rates.  In addition, inflation can
increase  a  financial  institution's  cost of goods and services purchased, the
cost  of  salaries and benefits, occupancy expense and similar items.  Inflation
and  related  increases in interest rates generally decrease the market value of
investments  and  loans  held  and may adversely affect liquidity, earnings, and
stockholders'  equity.  Mortgage  originations  and refinancings tend to slow as
interest  rates  increase,  and  can  reduce  the  Company's  earnings from such
activities  and  the  income  from the sale of residential mortgage loans in the
secondary  market.

Item  3.  Quantitative  and  Qualitative  Disclosures  About  Market  Risk

As  of  March  31,  2008, there were no substantial changes in 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, 2007.  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, 2007 included in the
Company's  2007  Annual  Report  on  Form  10-K.

Item  4.  Controls  And  Procedures

As  of  the end of the period covered by this report, the Company carried out an
evaluation,  under  the  supervision and with the participation of the Company's
management,  including  the  Company's  President  and  Chief  Executive Officer
(principal  executive  officer) and its Group Vice President and Chief Financial
Officer  (principal  financial  officer), of the effectiveness of the design and
operation  of  the  Company's  disclosure  controls  and  procedures pursuant to
Exchange  Act  Rule 13a-15.  Based upon that evaluation, such officers concluded
that  the  Company's  disclosure controls and procedures are effective in timely
alerting  them  to  material  information relating to the Company (including its
consolidated  subsidiaries)  that  is  required  to be included in the Company's
periodic  filings  with the Securities and Exchange Commission.  There have been
no changes in the Company's internal controls or, to the Company's knowledge, in
other  factors  during  the  quarter covered by this report that have materially
affected,  or are reasonably likely to materially affect, the Company's internal
controls  over  financial  reporting.


                                       25
<PAGE>
                                     Part II
                                OTHER INFORMATION


Item 1.   Legal  Proceedings

          There  are  no material pending legal proceedings to which the Company
          or  any  of  its  subsidiaries  is  a  party  or of which any of their
          property  is  subject.

Item 1a.  Risk  Factors

          In  addition  to  the  other information set forth in this report, you
          should  carefully  consider the factors discussed in Part I, "Item 1A.
          Risk Factors" in the Company's Annual Report on Form 10-K for the year
          ended  December  31, 2007, which could materially affect its business,
          financial  condition  or  future  results.  The risks described in the
          Annual  Report on Form 10-K are not the only risks facing the Company.
          Additional  risks  and uncertainties not currently known to management
          or  that  management  currently  deems  to  be  immaterial  also  may
          materially  adversely  affect  the  Company's  business,  financial
          condition  and/or  operating  results.

Item 2.   Unregistered  Sales  of  Equity Securities and Use of Proceeds

          Issuer  Purchases  of  Equity  Securities

          The  following  table  sets  forth information regarding the Company's
          purchases  of  its  common  stock  on a monthly basis during the first
          quarter  of  2008.  Of  the 13,318 shares repurchased during the first
          quarter  of 2008, 10,894 were privately negotiated and 2,424 were made
          in  the  open  market.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
                                                                      Maximum Number (or
                                                  Total Number of     Appropriate Dollar
                                                 Shares (or Units)     Value) of Shares
                    Total Number    Average    Purchased as Part of    (or Units) Yet Be
                     of Shares    Price Paid    Publicly Announced    Purchased Under the
Period               Purchased     Per Share     Plans or Programs     Plans or Programs
-----------------------------------------------------------------------------------------
<S>                 <C>           <C>          <C>                    <C>
January 1 through
January 31, 2008          10,894        33.25                 23,125               76,875
-----------------------------------------------------------------------------------------
February 1 through
February 29, 2008            500        33.71                 23,625               76,375
-----------------------------------------------------------------------------------------
March 1 through
March 31, 2008             1,924        30.24                 25,549               74,451
-----------------------------------------------------------------------------------------
Total                     13,318  $     32.83                 25,549               74,451
-----------------------------------------------------------------------------------------
</TABLE>


                                       26
<PAGE>
          On  April  15, 2004, the Company announced the commencement of a stock
          repurchase  program,  pursuant  to  which  it will, from time to time,
          repurchase  up to 100,000 shares of its outstanding stock. The program
          does  not  have a stated expiration date. No stock repurchase programs
          were  terminated  during  the  first  quarter  of  2008.

Item 3.   Defaults  Upon  Senior  Securities

          Not  applicable

Item 4.   Submission  of  Matters  to  a  Vote  of  Security  Holders

          None

Item 5.   Other  Information

          None

Item 6.   Exhibits

          31.1 Certification  of Chief Executive Officer Pursuant to Section 302
               of  the  Sarbanes-Oxley  Act  of  2002.

          31.2 Certification  of Chief Financial Officer Pursuant to Section 302
               of  the  Sarbanes-Oxley  Act  of  2002.

          32.1 Certification  of  Chief  Executive  Officer  and Chief Financial
               Officer  Pursuant  to  Section  906  of the Sarbanes-Oxley Act of
               2002.


                                       27
<PAGE>
                     SOUTHEASTERN BANK FINANCIAL CORPORATION
                              Form 10-Q Signatures


     Pursuant  to  the  requirements of the Securities Exchange Act of 1934, the
registrant  caused  this  report  to be signed on its behalf by the undersigned,
thereunto  duly  authorized.

                    SOUTHEASTERN BANK FINANCIAL CORPORATION



Date:  May 12, 2008                     By:  /s/ Darrell R. Rains
     ----------------                      --------------------------------
                                             Darrell R. Rains
                                             Group Vice President, Chief
                                             Financial Officer (Duly Authorized
                                             Officer of Registrant and Principal
                                             Financial Officer)


                                       28