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,  2007.
                                         ----------------

                                       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 [ ]  Accelerated  filer [X]  Non-accelerated  filer [ ]

     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:

     5,432,514 shares of common stock, $3.00 par value per share, outstanding as
of  April  30,  2007.


<PAGE>
<TABLE>
<CAPTION>
                           SOUTHEASTERN BANK FINANCIAL CORPORATION
                                          FORM 10-Q
                                            INDEX
                                                                                 Page
<S>     <C>       <C>                                                           <C>
Part I

        Item 1.   Financial Statements (Unaudited)

                  Consolidated Balance Sheets as of March 31, 2007 and
                    December 31, 2006                                              3

                  Consolidated Statements of Income for the Three Months
                    ended March 31, 2007 and 2006                                  4

                  Consolidated Statements of Cash Flows for the Three
                    Months ended March 31, 2007 and 2006                           5

                  Notes to Consolidated Financial Statements                       6

        Item 2.   Management's Discussion and Analysis of
                    Financial Condition and Results of Operations                 13

        Item 3.   Quantitative and Qualitative Disclosures about Market Risk      27

        Item 4.   Controls and Procedures                                         27

Part II   Other Information

        Item 1.   Legal Proceedings                                                *
        Item 1A.  Risk Factors                                                    28
        Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds     28
        Item 3.   Defaults Upon Senior Securities                                  *
        Item 4.   Submission of Matters to a Vote of Security Holders              *
        Item 5.   Other Information                                                *
        Item 6.   Exhibits                                                        29

Signature                                                                         30
</TABLE>

* No information submitted under this caption


                                        1
<PAGE>
                                     PART I
                              FINANCIAL INFORMATION


                                        2
<PAGE>
<TABLE>
<CAPTION>
                  SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
                                Consolidated Balance Sheets
                                        (Unaudited)


                                                              March 31,      December 31,
                        ASSETS                                  2007             2006
                                                           ---------------  ---------------
<S>                                                        <C>              <C>
Cash and due from banks                                    $   27,550,298   $   25,709,915
Federal funds sold                                             52,027,000       14,688,000
Interest-bearing deposits in other banks                          512,690          512,690
                                                           ---------------  ---------------
        Cash and cash equivalents                              80,089,988       40,910,605

Investment securities
  Available-for-sale                                          203,052,083      199,135,716
  Held-to-maturity, at cost (fair values of
    $1,988,286 and $3,048,196, respectively)                    1,935,488        2,970,619

Loans held for sale                                             9,870,968       14,857,315

Loans                                                         764,287,169      735,111,615
  Less allowance for loan losses                              (10,273,905)      (9,776,779)
                                                           ---------------  ---------------
        Loans, net                                            754,013,264      725,334,836

Premises and equipment, net                                    23,955,291       23,402,588
Accrued interest receivable                                     5,900,961        5,982,654
Bank-owned life insurance                                      16,146,854       15,982,052
Restricted equity securities                                    5,011,981        4,936,281
Other assets                                                    7,606,427        7,689,596
                                                           ---------------  ---------------

                                                           $1,107,583,305   $1,041,202,262
                                                           ===============  ===============

          LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
    Noninterest-bearing                                    $  111,366,348   $  106,846,160
    Interest-bearing:
      NOW accounts                                            131,914,257      119,334,300
      Savings                                                 282,749,595      255,065,766
      Money management accounts                                50,245,625       45,897,176
      Time deposits over $100,000                             210,766,546      193,860,714
      Other time deposits                                      87,589,731       80,758,973
                                                           ---------------  ---------------
                                                              874,632,102      801,763,089

Federal funds purchased and securities sold
  under repurchase agreements                                  61,328,650       70,019,551
Advances from Federal Home Loan Bank                           60,000,000       60,000,000
Other borrowed funds                                              900,000        1,000,000
Accrued interest payable and other liabilities                  8,925,585        9,495,498
Subordinated debentures                                        20,000,000       20,000,000
                                                           ---------------  ---------------

        Total liabilities                                   1,025,786,337      962,278,138
                                                           ---------------  ---------------

Stockholders' equity:
  Common stock, $3.00 par value; 10,000,000 shares
    authorized; 5,434,045 and 5,433,285 shares issued in
    2007 and 2006, respectively; 5,432,945 and 5,432,854
    shares outstanding in 2007 and 2006, respectively          16,302,135       16,299,855
  Additional paid-in capital                                   39,103,814       38,989,058
  Retained earnings                                            27,339,916       25,287,006
  Treasury stock, at cost; 1100 and 431 shares in
    2007 and 2006, respectively                                   (42,350)         (16,809)
  Accumulated other comprehensive loss, net                      (906,547)      (1,634,986)
                                                           ---------------  ---------------

        Total stockholders' equity                             81,796,968       78,924,124
                                                           ---------------  ---------------

                                                           $1,107,583,305   $1,041,202,262
                                                           ===============  ===============
</TABLE>

See accompanying notes to consolidated financial statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>
       SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
                 Consolidated Statements of Income
                           (Unaudited)

                                                  Three Months Ended
                                                       March 31,
                                               ------------------------
                                                  2007         2006
                                               -----------  -----------
<S>                                            <C>          <C>
Interest income:
  Loans, including fees                        $15,503,670  $11,812,088
  Investment securities                          2,611,334    2,456,072
  Federal funds sold                               366,082      150,593
  Interest-bearing deposits in other banks           6,490        7,975
                                               -----------  -----------
        Total interest income                   18,487,576   14,426,728
                                               -----------  -----------

Interest expense:
  Deposits                                       7,492,193    4,918,651
  Federal funds purchased and securities sold
    under repurchase agreements                    867,145      683,908
  Other borrowings                               1,074,739      846,988
                                               -----------  -----------
        Total interest expense                   9,434,077    6,449,547
                                               -----------  -----------

        Net interest income                      9,053,499    7,977,181

Provision for loan losses                          575,798      503,792
                                               -----------  -----------

        Net interest income after provision
          for loan losses                        8,477,701    7,473,389
                                               -----------  -----------

Noninterest income:
  Service charges and fees on deposits           1,397,016    1,352,144
  Gain on sales of loans                         1,284,278    1,254,345
  Investment securities gains, net                  33,191            -
  Retail investment income                         323,239      167,411
  Trust service fees                               273,536      192,465
  Increase in cash surrender value of
    bank-owned life insurance                      164,802      139,270
  Miscellaneous income                             167,679      149,625
                                               -----------  -----------
        Total noninterest income                 3,643,741    3,255,260
                                               -----------  -----------

Noninterest expense:
  Salaries and other personnel expense           4,795,507    4,439,980
  Occupancy expenses                               760,344      748,736
  Other operating expenses                       2,266,935    1,977,171
                                               -----------  -----------
        Total noninterest expense                7,822,786    7,165,887
                                               -----------  -----------

        Income before income taxes               4,298,656    3,562,762

Income tax expense                               1,539,376    1,102,787
                                               -----------  -----------

        Net income                             $ 2,759,280  $ 2,459,975
                                               ===========  ===========

Basic net income per share                     $      0.51  $      0.47
                                               ===========  ===========

Diluted net income per share                   $      0.50  $      0.46
                                               ===========  ===========

Weighted average common shares outstanding       5,433,639    5,273,688
                                               ===========  ===========

Weighted average number of common and
  common equivalent shares outstanding           5,503,845    5,327,383
                                               ===========  ===========
</TABLE>

See accompanying notes to consolidated financial statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>
                            SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES
                                     Consolidated Statements of Cash Flows
                                                  (Unaudited)

                                                                                 Three Months Ended March 31,
                                                                                    2007             2006
                                                                               ---------------  ---------------
<S>                                                                            <C>              <C>
Cash flows from operating activities:
Net income                                                                     $    2,759,280   $    2,459,975
  Adjustments to reconcile net income to net cash
    provided by operating activities
      Depreciation                                                                    367,394          376,947
      Provision for loan losses                                                       575,798          503,792
      Net accretion of discount on investment securities                              (64,551)         (50,439)
      Increase in CSV of bank owned life insurance                                   (164,802)        (139,270)
      Stock options compensation cost                                                 133,809           69,706
      Loss (Gain) on disposal of premises and equipment                                43,016           (2,941)
      Gain on sales of loans                                                       (1,284,278)      (1,254,345)
      Real estate loans originated for sale                                       (63,281,103)     (60,698,915)
      Proceeds from sales of real estate loans                                     69,551,728       67,629,556
      Decrease in accrued interest receivable                                          81,693           14,230
      Decrease (Increase) in other assets                                              63,720         (707,038)
      (Decrease) Increase in accrued interest payable and other liabilities          (569,913)          36,823
                                                                               ---------------  ---------------
        Net cash provided by operating activities                                   8,211,791        8,238,081
                                                                               ---------------  ---------------

Cash flows from investing activities:
      Proceeds from maturities of available for sale securities                    15,697,534        6,420,409
      Proceeds from maturities of held-to-maturity securities                       1,035,000                -
      Purchase of available for sale securities                                   (18,563,981)     (12,611,248)
      Purchase of Federal Home Loan Bank stock                                        (75,700)               -
      Net increase in loans                                                       (29,491,577)     (31,576,989)
      Purchase of Bank-owned life insurance                                                 -       (3,500,000)
      Additions to premises and equipment                                            (971,313)        (295,887)
      Proceeds from sale of premises and equipment                                      8,200            6,638
                                                                               ---------------  ---------------
        Net cash used in investing activities                                     (32,361,837)     (41,557,077)
                                                                               ---------------  ---------------

Cash flows from financing activities:
      Net increase in deposits                                                     72,869,013       61,448,017
      Net decrease in federal funds purchased and
        securities sold under repurchase agreements                                (8,690,901)     (10,527,362)
      Payments of Federal Home Loan Bank advances                                           -       (5,000,000)
      Proceeds from subordinated debentures                                                 -       10,000,000
      Principal payments on other borrowed funds                                     (100,000)        (650,000)
      Purchase of treasury stock                                                      (42,350)               -
      Payment of cash dividends                                                      (706,370)        (685,853)
      Proceeds from stock options exercised                                                37          164,088
                                                                               ---------------  ---------------
        Net cash provided by financing activities                                  63,329,429       54,748,890
                                                                               ---------------  ---------------

        Net increase in cash and cash equivalents                              $   39,179,383   $   21,429,894

Cash and cash equivalents at beginning of period                                   40,910,605       22,563,056

                                                                               ---------------  ---------------
Cash and cash equivalents at end of period                                     $   80,089,988   $   43,992,950
                                                                               ===============  ===============

Supplemental disclosures of cash paid during the period for:
      Interest                                                                 $    9,763,822   $    6,605,609
                                                                               ===============  ===============

      Income taxes                                                             $      816,891   $      445,000
                                                                               ===============  ===============
</TABLE>

See accompanying notes to consolidated financial statements.


                                        5
<PAGE>
             SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARY

                   Notes to Consolidated Financial Statements

                                 March 31, 2007

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.

The  financial statements for the three months ended March 31, 2007 and 2006 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,  2006.

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, 2007 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  -  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, 2007 was $2,268,000
compared  to  $2,845,000  for  the  three  months  ended  March  31,  2006.

Note  3  -  Stock-based  Compensation

During  2000,  the  Company  adopted the 2000 Long-Term Incentive Plan (the 2000
Plan)  which  allows  for  stock  option  awards for up to 253,000 shares of the
Company's  common  stock  to  employees, officers, and directors of the Company.
The  Company  believes  that  such  awards  better  align  the  interests of its
employees  with  those  of  its


                                        6
<PAGE>
shareholders.  Under  the  provisions  of  the  2000  Plan,  the option price is
determined by a committee of the board of directors at the time of grant and may
not  be  less than 100% of the fair value of the common stock on the date of the
grant  of  such  option.  Generally,  when  granted,  these  options vest over a
five-year period.  However, there were 10,000 options granted in 2005, that vest
based  on  specific  loan  growth  performance  targets.  All  options  must  be
exercised  within  a  ten-year  period.  As of March 31, 2007, all options under
this  plan  had  been  issued.

During  2006,  the  Company  adopted the 2006 Long-Term Incentive Plan (the 2006
Plan),  approved  by  shareholders at the annual meeting, which allows for stock
options  awards  for  up  to 250,000 shares of the Company's common stock to key
employees,  officers,  directors  and independent contractors providing material
services  to  the  Company.  The  purpose  of the Plan is to enhance stockholder
investment  by  attracting,  retaining  and  motivating key employees, officers,
directors  and  independent  contractors  of the Company, and to encourage stock
ownership  by  such  persons  by  providing  them  with  a  means  to  acquire a
proprietary  interest  in  the  Company's success, and to align the interests of
management  with  those of stockholders.  Under the provisions of the 2006 Plan,
the  option  price is determined by a committee of the board of directors at the
time  of  grant  and  may  not be less than 100% of the fair value of the common
stock  on  the date of the grant of such option.  Notwithstanding the foregoing,
in  the  case of an Incentive Stock Option granted to a Participant who is a Ten
Percent Stockholder, the Option Price shall not be less than one hundred and ten
percent  (110%)  of  the  Fair  Market  Value of the Common Stock on the Date of
Grant.  Generally,  when  granted,  these  options vest over a five-year period.
All  options  must  be  exercised  within a ten year period from the date of the
grant;  however,  options  issued to a ten percent stockholder must be exercised
within  a five year period from its date of grant.  As of March 31, 2007, 62,334
options  had  been  granted  under  this  Plan.

The  Company  periodically purchases treasury stock and uses it for stock option
exercises, when available.  If treasury stock is not available, additional stock
is  issued.  The  Company  estimates  it  will  repurchase 25,000 shares or less
during  the  2007  year.

The  Company  will  accept  as  payment for options exercised, at the optionee's
discretion,  cash  or  shares  of  the  Company's  stock  at  market value, or a
combination  of  cash  and  Company stock.  For the three months ended March 31,
2007,  the  Company  received  $37 in cash and stock with a fair market value of
$18,000.  For  the  three  months  ended  March  31,  2006, the Company received
$164,088  in cash and additional stock with a fair market value of $22,000.  All
options  issued  are  incentive  stock  options and therefore, no tax benefit is
realized.

Effective  January  1,  2006,  the  Company adopted SFAS No. 123 (Revised 2004),
Accounting  for  Stock-Based Compensation, which requires the Company to compute
the  fair  value  of options at the date of grant and to recognize such costs as
compensation  expense  ratably  over the vesting period of the options.  For the
three  months  ended  March  31, 2007 and March 31, 2006, the Company recognized
$134,000  and  $70,000, respectively, as compensation expense resulting from all
stock  options.


                                        7
<PAGE>
The  fair  value  of  each  option  is  estimated on the date of grant using the
Black-Scholes  valuation  model that uses the assumptions noted in the following
table.  Expected  volatility  is  the  measure  of the amount by which the share
price  is  expected to fluctuate during a period.   The method used to calculate
historical  average  annualized  volatility is based on the closing price of the
first  trade  of  each  month.  Expected  dividends  are  based on the Company's
historical  pattern  of  dividend payments.  The Company uses historical data to
estimate  option  exercise  and employee termination within the valuation model.
The  risk-free  rate  is  the  U.S.  Treasury  note at the time of grant for the
expected  term  of  the  option.

The  fair  value  of  all  options  granted  was  determined using the following
weighted  average  assumptions  as  of  grant  date.

<TABLE>
<CAPTION>
                                   Three Months Ended
                                         March
                                ------------------------
                                    2007        2006
                                -----------  -----------
<S>                             <C>          <C>
Options granted                     17,500        5,000
Risk-free interest rate               4.88%        4.36%
Dividend yield                        2.00%        2.00%
Expected life at date of grant        7.86         7.92
Volatility                           38.83%       33.47%
</TABLE>


                                        8
<PAGE>
<TABLE>
<CAPTION>
A summary of activity for stock options with a specified vesting period follows:

                                          For The Three Months Ended March 31, 2007 and 2006
                                         -----------------------------------------------------
                                                                      Weighted
                                                     Weighted         average
                                                      average        remaining      Aggregate
                                                     exercise     contractual life  Intrinsic
                                          Shares    price/share       in years        Value
                                         --------  -------------  ----------------  ----------
<S>                                      <C>       <C>            <C>               <C>
Options outstanding - December 31, 2006  237,785   $      26.64

Granted in 2007                           17,500          39.39

Options exercised in 2007                 (1,200)        (15.05)
                                         --------  -------------

Options outstanding - March 31, 2007     254,085   $      27.58               7.04  $2,393,481
                                         ========  =============  ================  ==========

Exercisable at March 31, 2007            139,205   $      19.47               5.61  $2,440,264
                                         ========  =============  ================  ==========


Options outstanding - December 31, 2005  205,434   $      21.35

Granted in 2006                            5,000          39.25

Options exercised in 2006                (16,874)        (11.00)
                                         --------  -------------

Options outstanding - March 31, 2006     193,560   $      22.72               7.11  $2,847,268
                                         ========  =============  ================  ==========

Exercisable at March 31, 2006             96,743   $      17.12               6.25  $2,019,994
                                         ========  =============  ================  ==========
</TABLE>

Information related to the stock options that vest over a specified period
follows:

<TABLE>
<CAPTION>
                                                               March 31
                                                           -----------------
                                                            2007      2006
                                                           -------  --------
<S>                                                        <C>      <C>
Intrinsic value of options exercised                       $31,085  $455,606
Cash received from option exercises                             37   164,088
Fair market value of stock received from option exercises   18,018    21,567
Weighted average grant-date fair value                       15.97     14.13
</TABLE>

All  stock  options  issued  are  incentive  stock options and therefore, no tax
benefit  is  realized.

As  of  March 31, 2007 and 2006, there was $1,702,000 and $707,000, respectively
of  total  unrecognized compensation cost related to nonvested options that vest
over a five year period.  That cost is expected to be recognized over a weighted
average  period  of  3.8  years  and  3.02  years,  respectively.


                                        9
<PAGE>
The  following  table  provides information for stock options that vest based on
specific  loan  growth  performance  targets.

<TABLE>
<CAPTION>
                                        For the Three Months Ended March 31, 2007 and 2006
                                        --------------------------------------------------
                                                                  Weighted
                                                                  average
                                                                 remaining      Aggregate
                                                 Exercise     contractual life  Intrinsic
                                        Shares  price/share       in years        Value
                                        ------  ------------  ----------------  ----------
<S>                                     <C>     <C>           <C>               <C>
Options outstanding- December 31, 2006  10,000  $      34.30

Granted in 2007                              -             -

Options exercised in 2007                    -             -
                                        ------  ------------

Options outstanding - March 31, 2007    10,000  $      34.30               8.3  $   27,000
                                        ======  ============  ================  ==========

Exercisable at March 31, 2007            2,000  $      34.30               8.3  $   54,000
                                        ======  ============  ================  ==========


Options outstanding- December 31, 2005  10,000  $      34.30

Granted in 2006                              -             -

Options exercised in 2006                    -             -
                                        ------  ------------

Options outstanding - March 31, 2006    10,000  $      34.30               9.3  $   87,000
                                        ======  ============  ================  ==========

Exercisable at March 31, 2006                -  $          -                 -  $        -
                                        ======  ============  ================  ==========
</TABLE>

As  of  March  31,  2007  and  2006,  there  was  $83,000  and  $66,000 of total
unrecognized  compensation  cost  related  to nonvested options granted based on
performance.  That  cost  is  expected  to be recognized over a weighted average
period  of  3.3  years  and  4.3years,  respectively.

Note 4 - Cash Dividend Declared

On January 17, 2007, the Company declared a quarterly cash dividend of $0.13 per
share  on  outstanding  shares.  The  dividend  was paid on February 21, 2007 to
shareholders  of  record  as  of  February  9,  2007.

On  April  14, 2007, the Company declared a quarterly cash dividend of $0.13 per
share  on  outstanding  shares.  The  dividend  is  payable  on  May 21, 2007 to
shareholders  of  record  as  of  May  9,  2007.


                                       10
<PAGE>
Note 5 - Recently Issued Accounting Standards on the Financial Statements

In  September  2006, the FASB issued Statement No. 157, Fair Value Measurements.
This  Statement  defines  fair value, establishes a framework for measuring fair
value  and  expands  disclosures  about fair value measurements.  This Statement
establishes  a  fair  value hierarchy about the assumptions used to measure fair
value  and  clarifies  assumptions about risk and the effect of a restriction on
the  sale  or  use  of  an  asset.  The  standard  is effective for fiscal years
beginning after November 15, 2007.  The Company has not completed its evaluation
of  the  impact  of  the  adoption  of  this  standard.

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  Company  does  not  have  any  of the above mentioned
consideration  in  the  Company's  life  insurance  policies.

The Company does not expect that the following newly issued accounting standards
will  have  a material effect on the financial statements when adopted in future
years.  In  general,  these  standards  revise  the  accounting  for derivatives
embedded  in  other  financial  instruments for 2007, revise the recognition and
accounting for servicing of financial assets for 2007, and revise the accrual of
post-retirement  benefits  associated with providing split-dollar life insurance
for  2008.  The  Company  did  not have any of these assets or liabilities as of
March  31,  2007.

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for
Uncertainty  in Income Taxes ("FIN 48"), on January 1, 2007. The adoption of FIN
48  had  no  affect  on  the  Company's financial statements. The Company has no
unrecognized  tax  benefits and does not anticipate any increase in unrecognized
benefits  during  2007  relative  to any tax positions taken prior to January 1,
2007.  Should  the accrual of any interest or penalties relative to unrecognized
tax benefits be necessary, it is the Company's policy to record such accruals in
its  income  taxes  accounts;  no such accruals exist as of January 1, 2007. The
Company  and its subsidiaries file a consolidated U.S. federal income tax return
and  files  in the state of Georgia. These returns are subject to examination by
taxing  authorities  for  all  years  after  2002.

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


                                       11
<PAGE>
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 provisions of SFAS No. 159 are effective as of the beginning of
an entity's first fiscal year that begins after November 15, 2007. Management is
currently evaluating the impact, if any, that adoption of SFAS No. 159 will have
on  the  Company's  financial  position,  results  of  operations and liquidity.


                                       12
<PAGE>
Item  2.  Management's  Discussion  and  Analysis  of  Financial  Condition  and
          Results of Operations

Overview
--------

Southeastern  Bank  Financial  Corporation  (the  "Company")  operates  two
wholly-owned  subsidiaries  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
eight  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. Southern Bank & Trust (the "Thrift"), a federally
chartered  thrift,  opened its main office in Aiken, South Carolina on September
12,  2006.  The  Company's  operations campus is located in Augusta, 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 2005 population of the
Augusta-Richmond  County,  GA-SC  MSA was 520,332, 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 2005 population for the Athens-Clarke County, GA
MSA  was  175,085,  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.

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
12.34% of all deposits and was the second largest depository institution at June
30,  2006,  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.


                                       13
<PAGE>
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  and  investment  securities  increased during the first three
months  of  2007  as  compared  to  the first three months of 2006 due to rising
interest  rates  and  increased  volumes.  Service  charges and fees on deposits
increased  for  the  three months of 2007 as compared to the same period in 2006
due  to  increases  in NSF income on retail checking accounts and debit/ATM card
income,  both  the  result  of  new  account growth.  However, this increase was
somewhat  offset by the decision to discontinue daily overdraft balance fees and
debit  card  fees in 2007, and a decrease in service charge income primarily due
to the increase in the earnings credit applied to average balances maintained in
those  accounts.  Gain  on  sales of mortgage loans did not change significantly
during  the  first  three  months  of  2007 compared to the same period in 2006.
Other  significant  contributors  to  income  are trust services fees and retail
investment  income.

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

                                 March 31,    December 31,    December 31,
                                   2007           2006            2002
                                -----------  --------------  --------------
<S>                             <C>          <C>             <C>
                                          (Dollars in thousands)
Assets                          $1,107,583   $   1,041,202   $     569,832
Loans                              774,158         749,969         396,699
Deposits                           874,632         801,763         439,557

Return on average total assets        1.06%           1.10%           1.14%
Return on average equity             13.97%          14.69%          13.95%
</TABLE>

The Company continues to experience steady 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  2002  was $6.0 million compared to net income of $11.2
million for 2006.  Net income for the three months ended March 31, 2007 was $2.8
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  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


                                       14
<PAGE>
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
collectibility  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 that become uncollectible, based on
evaluations  of  the  collectibility  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.


                                       15
<PAGE>
The  Company  segments  its  allowance  for loan losses into the following three
major categories: 1) identified losses for impaired loans; 2) general allocation
for  Classified/Watch  loans;  and  3)  general  allocation  for  loans  with
satisfactory ratings. Risk ratings are initially assigned in accordance with the
Company's loan and collection policy. An organizationally independent department
reviews  grade  assignments  on  an  ongoing  basis.  Management reviews current
information and events regarding a borrowers' financial condition and strengths,
cash  flows  available for debt repayment, the related collateral supporting the
loan  and  the  effects  of  known  and  expected  economic conditions. When the
evaluation  reflects  a  greater than normal risk associated with the individual
loan,  management  classifies the loan accordingly. If the loan is determined to
be impaired, management allocates a portion of the allowance for loan losses for
that  loan  based  upon the present value of future cash flows discounted at the
loan's  effective  interest  rate,  or  the  fair  value  of  the  collateral if
collection of the loan is deemed to be dependent upon the collateral. Regulatory
guidance  is  also  considered.  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.  Impaired  and  Classified/Watch  loans are aggressively monitored. The
allocation for loans rated satisfactory is further subdivided into various types
of loans as defined by regulatory reporting codes. The Company's management also
gives  consideration  to subjective factors such as, national and local economic
conditions,  bankruptcy  trends,  unemployment  trends, loan concentrations, and
competitive  factors  in the local market. These factors represent uncertainties
in the Company's business environment and are included in the various individual
components  of  the  allowance  for  loan  losses.

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

The  Company's  net income for the first quarter of 2007 was $2.8 million, which
was  an  increase of $299,000 (12.2%) compared to net income of $2.5 million for
the  first  quarter  of  2006. Diluted net income per share for the three months
ended  March  31,  2007  was  $0.50 compared to $0.46 for the three months ended
March  31, 2006. The increase in net income for the three months ended March 31,
2007  as  compared  with  the three months ended March 31, 2006, was primarily a
result  of  increases  in  net  interest income and noninterest income, somewhat
offset  by  increases  in noninterest expense. Interest income on both loans and
investment  securities  increased  due  to increased volumes and higher interest
rates. Interest expense on deposits, securities sold under repurchase agreements
and  other  borrowings increased as a result of rising interest rates and higher
volumes.  Factors  contributing  to  the  increase in noninterest income for the
three months ended March 31, 2007 were increases in retail investment income and
trust  income,  primarily  due  to increased volume. Service charges and fees on
deposits  increased  for the three months of 2007 as compared to the same period
in 2006 due to increases in NSF income on retail checking accounts and debit/ATM
card  income,  both the result of new account growth. However, this increase was
somewhat  offset by the decision to discontinue daily overdraft balance fees and
debit  card  fees in 2007, and a decrease in service charge income primarily due
to  the  increase  in  the  earnings  credit  applied  to


                                       16
<PAGE>
average  balances  maintained  in  those  accounts.  Increases in cash surrender
value  of  bank  owed life insurance increased due to the purchase of additional
policies  in  February  2006.  Noninterest  expense  increased  during the three
months  ended  March  31, 2007 compared to the same period ended March 31, 2006,
primarily  due to increases in salaries and employee benefits related to company
growth  and  increases  in  other  operating  expenses.  The  increase  in other
noninterest expenses for the three months ended March 31, 2007 include increases
in  processing expenses for ATM processing and retail investment services.  Data
processing  expense increased primarily due to software maintenance for Southern
Bank  & Trust, an increase in the Bank's core software maintenance, the addition
of  a  merchant capture service agreement and additional AS400 disk space.  Loss
on sale of fixed assets increased for the three-month period for the replacement
of  ATMs  and  automobiles.

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

                                                                                     Variance
                                                March 31,    December 31,  -----------------------------
                                                 2007           2006           Amount            %
                                             -------------  -------------  --------------  -------------
                                                               (Dollars in thousands)
<S>                                          <C>            <C>            <C>             <C>
Cash and due from banks                      $      27,550  $      25,710  $       1,840            7.2%
Federal funds sold                                  52,027         14,688         37,339          254.2%
Investment securities                              204,988        202,106          2,882            1.4%
Loans                                              774,158        749,969         24,189            3.2%
Assets                                           1,107,583      1,041,202         66,381            6.4%
Deposits                                           874,632        801,763         72,869            9.1%
Securities sold under repurchase agreements         61,329         70,020         (8,691)        (12.4%)
Liabilities                                      1,025,786        962,278         63,508            6.6%
Stockholders' equity                                81,797         78,924          2,873            3.6%
</TABLE>

Table 2 highlights significant changes in the balance sheet at March 31, 2007 as
compared  to  December  31, 2006.  Assets increased $66.4 million, primarily the
result  of  higher  balances  for loans and federal funds sold.  These increases
were  funded by increases in total deposits of $72.9 million, somewhat offset by
decreases  in  securities  sold under repurchase agreements.  Net income of $2.8
million  less  dividends  paid  of  $706,000  also  contributed  to the funding.

The  annualized return on average assets for the Company was 1.06% for the three
months  ended  March  31, 2007, compared to 1.13% for the same period last year.
While  total  assets have increased $185.6 million since first quarter 2006, net
income  has  only  increased  $299,000  resulting  in  a  decrease  in ROA.  The
annualized  return  on  average  stockholders'  equity  was 13.97% for the three
months  ended  March 31, 2007, compared to 15.42% for the same period last year.
The  decrease  is primarily attributable to the issuance of common stock and the
related  increase  in  additional  paid  in  capital,  the


                                       17
<PAGE>
increase  in  retained  earnings  due to net income and decreases 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, 2007        Three Months Ended March 31, 2006
                                            --------------------------------------  -------------------------------------
                                                         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                                     $   761,022        8.18%  $     15,504  $   607,873        7.88%  $    11,812
  Investment securities                         199,740        5.23%         2,611      201,813        4.94%        2,456
  Federal funds sold                             29,133        5.10%           366       13,893        4.41%          151
  Interest-bearing deposits in other banks          513        5.07%             6          918        3.49%            8
                                            -----------------------------------------------------------------------------
    Total interest-earning assets           $   990,408        7.49%  $     18,487  $   824,497        7.10%  $    14,427
                                            -----------               ------------  -----------               -----------

Interest-bearing liabilities:
  Deposits                                  $   823,269        3.69%  $      7,492  $   688,661        2.90%  $     4,919
  Federal funds purchased / securities
    sold under repurchase agreements             66,690        5.27%           867       62,895        4.41%          684
  Other borrowings                               80,593        5.41%         1,075       61,975        5.54%          847
                                            -----------               ------------  -----------               -----------
    Total interest-bearing liabilities      $   970,552        3.94%  $      9,434  $   813,531        3.22%  $     6,450
                                            -----------               ------------  -----------               -----------

Net interest margin/income:                                    3.76%  $      9,053                     3.97%  $     7,977
                                                                      ============                            ===========
</TABLE>

Net interest income increased $1.1 million (13.5%) 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 2006.  Loan interest income
increased $3.7 million in the three month period, while deposit interest expense
increased  $2.6  million  in  the  three  month period, all the result of rising
interest rates and the continued growth of account balances.  The annual average
balance  for  loans  was  $761.0  million  at  March 31, 2007 with an annualized
average  yield  of  8.18%  compared  to $607.9 million at March 31, 2006 with an
annualized  average  yield  of  7.88%.  Interest-bearing  deposits had an annual


                                       18
<PAGE>
average  balance  of  $823.3 million with an annualized average rate of 3.69% at
March  31, 2007 compared to $688.7 million and 2.90% at March 31, 2006.  Some of
the  other contributing factors during the three month period included increases
in  interest  income  on investment securities, increases in interest expense on
federal funds purchased and securities sold under repurchase agreements, all the
result  of  increased  volumes  and  higher  interest  rates.

The  Company's net interest margin for the three months ended March 31, 2007 was
3.76%  as compared to 3.97% for the three months ended March 31, 2006.  The rate
for  earning  assets  increased  39 basis points for the three month period with
higher  average yields on loans and investment securities accounting for most of
the increase.  The cost to fund earning assets increased 72 basis points for the
three month period primarily due to higher rates on deposits and securities sold
under  repurchase  agreements.

<TABLE>
<CAPTION>
Noninterest  Income
-------------------

                          Table 5 - Noninterest Income

                              Three Months Ended
                                   March 31,             Variance
                            -----------  -----------  ---------------
                               2007         2006       Amount     %
                            -----------  -----------  --------  -----
                                       (Dollars in thousands)
<S>                         <C>          <C>          <C>       <C>
Service charges and fees
  on deposits               $     1,397  $     1,352  $     45   3.3%
Gain on sales of loans            1,284        1,254        30   2.4%
Investment securities
  (losses) gains, net                33            -        33   N/A
Retail investment income            323          167       156  93.4%
Trust services fees                 274          193        81  42.0%
Increase in cash surrender
  value of bank-owned
  life insurance                    165          139        26  18.7%
Miscellaneous income                168          150        18  12.0%
                            -----------  -----------  --------  -----
Total noninterest income    $     3,644  $     3,255  $    389  12.0%
                            ===========  ===========  ========  =====
</TABLE>

Noninterest  income  increased $389,000 (12.0%) during the three-month period as
compared to the same period in 2006.  The most significant changes for the three
month  period  were an increase in retail investment income due to production by
new  personnel  and increases in trust services fees due to increased sales from
the  continued  development  of that area.  Service charges and fees on deposits
increased  for  the  three months of 2007 as compared to the same period in 2006
due  to  increases  in NSF income on retail checking accounts and debit/ATM card
income,  both  the  result  of  new  account growth.  However, this increase was
somewhat  offset by the decision to discontinue daily overdraft balance fees and
debit  card  fees  in  2007,  and  a  decrease  in  service  charge


                                       19
<PAGE>
income  primarily  due to the increase in the earnings credit applied to average
balances  maintained  in  those  accounts.

<TABLE>
<CAPTION>
Noninterest  Expense
--------------------

                          Table 6 - Noninterest Expense

                              Three Months Ended
                                    March 31,           Variance
                           ------------------------  ---------------
                              2007         2006       Amount     %
                           -----------  -----------  --------  -----
                                      (Dollars in thousands)
<S>                        <C>          <C>          <C>       <C>
Salaries and other
  personnel expense        $     4,796  $     4,440  $    356   8.0%
Occupancy expenses                 760          749        11   1.5%
Other operating expenses         2,267        1,977       290  14.7%
                           -----------  -----------  --------  -----
Total noninterest expense  $     7,823  $     7,166  $    657   9.2%
                           ===========  ===========  ========  =====
</TABLE>

Noninterest  expense  increased  $657,000  (9.2%) during the three-month period.
Salaries  and  other personnel expense increased for first quarter 2007 compared
to  first  quarter  2006  due  to the opening of Southern Bank & Trust in Aiken,
South  Carolina, new personnel due to continued company growth, expansion of the
wealth  management  area, medical expenses and additional stock options expense,
somewhat  offset  by an increase in the contra salary expense in compliance with
SFAS  No.  91.  Other  operating  expenses  increased  $290,000  (14.7%) for the
three-month  period  as  compared  to  the  same  period  in  2006. Increases in
processing  expenses  during  the  three  month period were primarily due to ATM
processing  and  retail  investment  services. Data processing expense increased
primarily  due to software maintenance for Southern Bank & Trust, an increase in
the Bank's core software maintenance, the addition of a merchant capture service
agreement  and  additional  AS400  disk  space.  Loss  on  sale  of fixed assets
increased  for  the  three-month  period  for  the  replacement  of  ATMs  and
automobiles.

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

Income tax expense totaled $1.5 million in the first quarter of 2007 as compared
to  $1.1  million  in the first quarter of 2006.  The effective tax rate for the
three  months  ended  March 31, 2007 and 2006 was 35.8% and 31.0%, respectively.
For  the three months ended March 31, 2007 as compared to the three months ended
March  31,  2006,  a  decrease  in  nontaxable  interest  income, an increase in
nondeductible  stock  option expense and an increase in the federal tax rate due
to anticipated higher income for the year, resulted in an increase in income tax
expense  and  the  effective  income  tax  rate.


                                       20
<PAGE>
Asset  Quality
--------------

Table  5  which  follows  shows  the  current  and  prior  period  amounts  of
non-performing  assets.  Non-performing  assets  were  $2.5 million at March 31,
2007,  compared  to  $2.4 million at December 31, 2006. Significant changes from
December  2006  to  March  2007 include a $237,000 increase in other real estate
owned,  a  $41,000  decrease  in  non-performing  assets with balances less than
$100,000  and  a  $23,000  decrease  for  customers  with  balances greater than
$100,000.  The  ratio  of  non-performing  assets  to total loans and other real
estate  was 0.30% at March 31, 2007, compared to 0.31% at December 31, 2006. 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,  2007  and  December  31,  2006.

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

                                 March 31,   December 31,
                                    2007         2006
                                 ----------  -------------
<S>                              <C>         <C>
Nonaccrual loans                 $    2,287  $       2,351
Other real estate owned                 237              -
                                 ----------  -------------
    Total non-performing assets  $    2,524  $       2,351
                                 ==========  =============

Loans past due 90 days or more
  and still accruing interest    $        -  $           -
                                 ==========  =============
</TABLE>

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, 2007 and December 31, 2006.


                                       21
<PAGE>
<TABLE>
<CAPTION>
                      Table 8 - Loan Portfolio Composition

                                      March 31, 2007        December 31, 2006
                                -------------------------  ------------------
                                   Amount          %        Amount       %
                                ------------  -----------  ---------  -------
                                            (Dollars in thousands)
<S>                             <C>           <C>          <C>        <C>
Commercial financial and
agricultural . . . . . . . . .  $    83,589        10.80%  $ 80,823    10.78%
                                ------------  -----------  ---------  -------
Real estate
  Commercial . . . . . . . . .      213,707        27.61%   198,453    26.46%
  Residential. . . . . . . . .      160,335        20.71%   158,543    21.14%
  Residential held for sale. .        9,871         1.28%    14,857     1.98%
  Construction and
    development. . . . . . . .      277,137        35.80%   266,875    35.58%
                                ------------  -----------  ---------  -------
      Total real estate. . . .      661,050        85.39%   638,728    85.17%
                                ------------  -----------  ---------  -------
Lease financing. . . . . . . .           72         0.01%       116     0.02%
Consumer
  Direct . . . . . . . . . . .       23,884         3.09%    24,146     3.22%
  Indirect.. . . . . . . . . .        5,750         0.74%     6,232     0.83%
  Revolving. . . . . . . . . .          752         0.10%       843     0.11%
                                ------------  -----------  ---------  -------
    Total consumer . . . . . .       30,386         3.93%    31,221     4.16%
                                ------------  -----------  ---------  -------
Deferred loan origination fees         (939)       -0.12%      (919)   -0.12%
                                ------------  -----------  ---------  -------
    Total. . . . . . . . . . .      774,158       100.00%  $749,969   100.00%
                                ============  ===========  =========  =======
</TABLE>

At  March 31, 2007, the loan portfolio is comprised of 85.39% real estate loans.
Commercial, financial and agricultural loans comprise 10.80%, and consumer loans
comprise  3.93%  of  the  portfolio.

Commercial  real  estate comprises 27.61% 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 (35.80%) 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 conditions.  The
residential  category,  20.71% 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,
1.28%  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,  2007 were $11.3 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


                                       22
<PAGE>
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 potential
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 $576,000 was charged to
expense  for  the  quarter  ended  March  31,  2007 compared to $504,000 for the
quarter ended March 31, 2006.  The increase in the provision for loan losses for
the three month period is primarily due to the $187,000 provision related to the
new  Thrift's loan portfolio, offset by a decrease in classified/ watch loans, a
decrease  in  the  unallocated  reserve,  and  slower  loan  growth at the Bank.
Additionally,  the  Bank  determined  that  the  reserve  for unfunded lines and
commitments and standby letters of credit was not needed at March 31, 2007.  The
Bank had higher recoveries in the first quarter of 2006 as compared to the first
quarter  of  2007.

<TABLE>
<CAPTION>
      Table 9 - Allowance for Loan Losses

                                2007     2006
                              --------  -------
<S>                           <C>       <C>
Beginning balance, January 1  $ 9,777   $9,125
Provision charged to expense      576      504
Recoveries                        231      259
Loans charged off                (310)    (418)
                              --------  -------
Ending balance, March 31      $10,274   $9,470
                              ========  =======
</TABLE>

At  March  31,  2007  the  ratio of allowance for loan losses to total loans was
1.33%  compared  to  1.30%  at  December  31,  2006 and 1.51% at March 31, 2006.
Management  considers  the  current  allowance for loan losses appropriate based
upon  its analysis of the potential risk in the portfolio, although there can be
no  assurance  that the assumptions underlying such analysis will continue to be
correct.

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, 2007 was 88.5% compared to
93.5%  at  December  31,  2006 and 86.5% at March 31, 2006.  The decrease in the
loan  to deposit ratio from December 31, 2006 to March 31, 2007 reflects deposit
growth at a higher rate than loan growth during the period.  The increase in the
loan  to  deposit  ratio  from March 31, 2006 to December 31, 2006 reflects loan
growth  at  a higher rate than deposit growth during that time period.  Deposits
at  March 31, 2007 and December 31, 2006 include $76.3 million and $67.4 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


                                       23
<PAGE>
first  mortgage  loans,  commercial real estate loans and investment securities.
These  borrowings  totaled  $60.0  million  at  March  31, 2007.  GB&T maintains
repurchase  lines  of  credit with SunTrust Robinson Humphrey, Atlanta, Georgia,
for  advances  up  to $20.0 million and with The Bankers Bank, Atlanta, Georgia,
for  advances up to $10.0 million of which no amounts were outstanding in either
case  at  March 31, 2007.  GB&T has a federal funds purchased accommodation with
The  Bankers  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 The Bankers 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 $61.3 million at March 31,
2007.

Stockholders'  equity  to  total  assets was 7.39% at March 31, 2007 compared to
7.58% at December 31, 2006 and 7.16% at March 31, 2006.  Stockholders' equity as
of  March  31,  2007  includes proceeds of $5.0 million from a private placement
stock  offering  held during the third and fourth quarters of 2006.  The capital
of  the  Company  exceeded all required regulatory guidelines at March 31, 2007.
The  Company's  Tier  1 risk-based, total risk-based and leverage capital ratios
were  11.86%, 13.07%, and 9.67%, respectively, at March 31, 2007.  The following
table  reflects  the current regulatory capital levels in more detail, including
comparisons  to  the  regulatory  minimums.


                                       24
<PAGE>
<TABLE>
<CAPTION>
                               Table 10 - Regulatory Capital Requirements
                                             March 31, 2007
                                         (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              $   102,564       11.86%      34,589        4.00%      67,975        7.86%
  Total capital                   113,054       13.07%      69,179        8.00%      43,875        5.07%
Tier 1 leverage ratio             102,564        9.67%      42,404        4.00%      60,160        5.67%

Georgia Bank & Trust Company

Risk-based capital:
  Tier 1 capital              $    77,908        9.57%      32,549        4.00%      45,359        5.57%
  Total capital                    87,653       10.77%      65,098        8.00%      22,555        2.77%
Tier 1 leverage ratio              77,908        7.77%      40,125        4.00%      37,783        3.77%

Southern Bank & Trust

Risk-based capital:
  Tier 1 capital              $     9,262       18.81%       1,970        4.00%       7,292       14.81%
  Total capital                     9,791       19.88%       3,940        8.00%       5,851       11.88%
Tier 1 leverage ratio               9,262       19.39%       1,911        4.00%       7,351       15.39%
</TABLE>

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  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.


                                       25
<PAGE>
Unfunded commitments to extend credit where contract amounts represent potential
credit  risk  totaled  $197.6  million at March 31, 2007.  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                                   More
Contractual Obligations       Less than    1 - 3    3 - 5   than 5
($in thousands)                 1 Year     Years    Years    Years
----------------------------  ----------  -------  -------  -------
<S>                           <C>         <C>      <C>      <C>
Lines of credit               $  197,627        -        -        -
Mortgage loan commitments     $   16,950
Lease agreements                     141      202       73      157
Deposits                         804,371   62,719    3,310    4,232
Securities sold under
  repurchase agreements           61,329        -        -        -
FHLB advances                      5,000        -   30,000   25,000
Other borrowings                     900        -        -        -
                              ----------  -------  -------  -------
  Total commitments and
    contractual obligations   $1,086,318  $62,921  $33,383  $29,389
                              ----------  -------  -------  -------
</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.  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


                                       26
<PAGE>
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,  2007, 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, 2006.  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, 2006 included in the
Company's  2006  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.


                                       27
<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, 2006, 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  2007.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
                                                                     Maximum Number
                                                                     (or Appropriate
                                               Total Number of      Dollar Value) of
                      Total                   Shares (or Units)     Shares (or Units)
                    Number of    Average    Purchased as Part of    Yet Be Purchased
                     Shares    Price Paid    Publicly Announced    Under the Plans or
Period              Purchased   Per Share     Plans or Programs         Programs
------------------  ---------  -----------  ---------------------  -------------------
<S>                 <C>        <C>          <C>                    <C>
January 1 through
January 31, 2007            -            -                  3,799               96,201
------------------  ---------  -----------  ---------------------  -------------------
February 1 through
February 28, 2007           -            -                  3,799               96,201
------------------  ---------  -----------  ---------------------  -------------------
March 1 through
March 31, 2007          1,100        38.50                  4,899               95,101
------------------  ---------  -----------  ---------------------  -------------------
Total                   1,100  $     38.50                  4,899               95,101
--------------------------------------------------------------------------------------
</TABLE>


                                       28
<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
               2007.

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.


                                       29
<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 10, 2007                    By:   /s/ Darrell R. Rains
       ------------                        ------------------------------------
                                       Darrell R. Rains
                                       Group Vice President, Chief
                                       Financial Officer (Duly Authorized
                                       Officer of Registrant and Principal
                                       Financial Officer)


                                       30