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  September  30,  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:

     5,425,482 shares of common stock, $3.00 par value per share, outstanding as
of  October  31,  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 September 30, 2007 and
                 December 31, 2006                                                3

                 Consolidated Statements of Income for the Three and Nine
                 Months ended September 30, 2007 and 2006                         4

                 Consolidated Statements of Cash Flows for the
                 Nine Months ended September 30, 2007 and 2006                    5

                 Notes to Consolidated Financial Statements                       7

       Item 2.   Management's Discussion and Analysis of
                 Financial Condition and Results of Operations                   10

       Item 3.   Quantitative and Qualitative Disclosures about Market Risk      24

       Item 4.   Controls and Procedures                                         24

Part II  Other Information
       Item 1.   Legal Proceedings                                                *
       Item 1A.  Risk Factors                                                    25
       Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds     26
       Item 3.   Defaults Upon Senior Securities                                  *
       Item 4.   Submission of Matters to a Vote of Security Holders              *
       Item 5.   Other Information                                                *
       Item 6.   Exhibits                                                        27

Signature                                                                        28

* No information submitted under this caption
</TABLE>


                                        1
<PAGE>
                                     PART I
                              FINANCIAL INFORMATION


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

                                 Consolidated Balance Sheets

                                                             September 30,
                                                                 2007         December 31,
             Assets                                           (Unaudited)         2006
                                                            ---------------  ---------------
<S>                                                         <C>              <C>
Cash and due from banks                                     $   26,487,084   $   25,709,915
Federal funds sold                                              23,847,000       14,688,000
Interest-bearing deposits in other banks                           500,031          512,690
                                                            ---------------  ---------------
      Cash and cash equivalents                                 50,834,115       40,910,605

Investment securities
  Available-for-sale                                           232,545,144      199,135,716
  Held-to-maturity, at cost (fair values of
    $1,980,734 and $3,048,196, respectively)                     1,935,227        2,970,619

Loans held for sale                                              9,562,760       14,857,315

Loans                                                          839,862,823      735,111,615
  Less allowance for loan losses                               (11,804,686)      (9,776,779)
                                                            ---------------  ---------------
      Loans, net                                               828,058,137      725,334,836

Premises and equipment, net                                     28,140,004       23,402,588
Accrued interest receivable                                      7,424,365        5,982,654
Bank-owned life insurance                                       16,476,922       15,982,052
Restricted equity securities                                     5,059,781        4,936,281
Other assets                                                     7,882,950        7,689,596
                                                            ---------------  ---------------

                                                            $1,187,919,405   $1,041,202,262
                                                            ===============  ===============

  Liabilities and Stockholders' Equity

Deposits
  Noninterest-bearing                                       $  109,053,029   $  106,846,160
  Interest-bearing:
    NOW accounts                                               136,381,664      119,334,300
    Savings                                                    301,562,674      255,065,766
    Money management accounts                                   59,520,051       45,897,176
    Time deposits over $100,000                                238,930,907      193,860,714
    Other time deposits                                        105,779,924       80,758,973
                                                            ---------------  ---------------
                                                               951,228,249      801,763,089

Federal funds purchased and securities sold
  under repurchase agreements                                   61,953,938       70,019,551
Advances from Federal Home Loan Bank                            59,000,000       60,000,000
Other borrowed funds                                               900,000        1,000,000
Accrued interest payable and other liabilities                   8,224,404        9,495,498
Subordinated debentures                                         20,000,000       20,000,000
                                                            ---------------  ---------------

      Total liabilities                                      1,101,306,591      962,278,138
                                                            ---------------  ---------------

Stockholders' equity:
  Common stock, $3.00 par value; 10,000,000 shares
     authorized; 5,433,614 and 5,433,285 shares issued in
     2007 and 2006, respectively; 5,425,982 and 5,432,854
    shares outstanding in 2007 and 2006, respectively           16,300,842       16,299,855
  Additional paid-in capital                                    39,376,328       38,989,058
  Retained earnings                                             32,255,461       25,287,006
  Treasury stock, at cost; 7,632 and 431 shares in
    2007 and 2006, respectively                                   (289,865)         (16,809)
  Accumulated other comprehensive loss, net                     (1,029,952)      (1,634,986)
                                                            ---------------  ---------------

      Total stockholders' equity                                86,612,814       78,924,124
                                                            ---------------  ---------------

                                                            $1,187,919,405   $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             Nine Months Ended
                                                       September, 30,                September, 30,
                                               ----------------------------  ---------------------------
                                                   2007           2006           2007           2006
                                               -------------  -------------  -------------  ------------
<S>                                            <C>            <C>            <C>            <C>
Interest income:
  Loans, including fees                        $ 17,138,785   $ 14,208,614   $ 49,041,654   $ 39,038,976
  Investment securities                           3,015,836      2,705,083      8,548,646      7,863,464
  Federal funds sold                                220,138        195,013        901,723        389,642
  Interest-bearing deposits in other banks            6,710          5,808         20,180         19,458
                                               -------------  -------------  -------------  ------------
      Total interest income                      20,381,469     17,114,518     58,512,203     47,311,540
                                               -------------  -------------  -------------  ------------

Interest expense:
  Deposits                                        8,688,555      6,479,749     24,345,638     16,945,683
  Federal funds purchased and securities sold
    under repurchase agreements                     829,797        754,106      2,499,627      2,162,860
  Other borrowings                                1,127,128      1,168,587      3,390,854      3,073,878
                                               -------------  -------------  -------------  ------------
      Total interest expense                     10,645,480      8,402,442     30,236,119     22,182,421
                                               -------------  -------------  -------------  ------------

      Net interest income                         9,735,989      8,712,076     28,276,084     25,129,119

Provision for loan losses                         1,001,232        666,913      2,607,419      1,627,041
                                               -------------  -------------  -------------  ------------

      Net interest income after provision
        for loan losses                           8,734,757      8,045,163     25,668,665     23,502,078
                                               -------------  -------------  -------------  ------------

Noninterest income:
  Service charges and fees on deposits            1,675,173      1,422,806      4,653,640      4,314,928
  Gain on sales of loans                          1,349,880      1,328,907      3,954,535      3,854,244
  Gain on sale of fixed assets                    1,094,902          3,210      1,031,764         95,049
  Investment securities (losses) gains, net        (278,206)       (10,000)      (245,015)       273,600
  Retail investment income                          296,025        192,363        894,482        576,336
  Trust service fees                                271,167        214,294        829,609        605,126
  Increase in cash surrender value of
    bank-owned life insurance                       169,133        156,010        494,870        445,253
  Miscellaneous income                              168,453        150,682        496,993        447,077
                                               -------------  -------------  -------------  ------------
      Total noninterest income                    4,746,527      3,458,272     12,110,878     10,611,613
                                               -------------  -------------  -------------  ------------

Noninterest expense:
  Salaries and other personnel expense            4,905,273      4,538,449     14,329,031     13,483,469
  Occupancy expenses                                845,373        637,723      2,348,159      2,071,624
  Other operating expenses                        2,557,612      2,057,702      6,984,774      6,168,196
                                               -------------  -------------  -------------  ------------
      Total noninterest expense                   8,308,258      7,233,874     23,661,964     21,723,289
                                               -------------  -------------  -------------  ------------

      Income before income taxes                  5,173,026      4,269,561     14,117,579     12,390,402

Income tax expense                                1,816,746      1,344,532      5,031,078      4,078,994
                                               -------------  -------------  -------------  ------------

      Net income                               $  3,356,280   $  2,925,029   $  9,086,501   $  8,311,408
                                               =============  =============  =============  ============

Basic net income per share                     $       0.62   $       0.55   $       1.67   $       1.57
                                               =============  =============  =============  ============

Diluted net income per share                   $       0.61   $       0.55   $       1.65   $       1.56
                                               =============  =============  =============  ============

Weighted average common shares outstanding        5,428,409      5,312,831      5,431,489      5,288,760
                                               =============  =============  =============  ============

Weighted average number of common and
  common equivalent shares outstanding            5,492,967      5,361,440      5,499,414      5,329,051
                                               =============  =============  =============  ============
</TABLE>

See accompanying notes to consolidated financial statements.


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

                                      Consolidated Statements of Cash Flows

                                                   (Unaudited)


                                                                               Nine Months Ended September 30,
                                                                                    2007              2006
                                                                              ----------------  ----------------
<S>                                                                           <C>               <C>
Cash flows from operating activities:
Net income                                                                    $     9,086,501   $     8,311,408
  Adjustments to reconcile net income to net cash
    provided by operating activities
      Depreciation                                                                  1,113,579         1,013,581
      Provision for loan losses                                                     2,607,419         1,627,041
      Net investment securities losses (gains)                                        245,015          (273,600)
      Net (accretion of discount) amortization of
        premium on investment securities                                             (112,505)         (266,989)
      Increase in CSV of bank owned life insurance                                   (494,870)         (445,253)
      Stock options compensation cost                                                 405,030           331,698
      Gain on disposal of premises and equipment                                   (1,031,764)          (95,050)
      Gain on the sale of other real estate                                            (2,614)                -
      Gain on sales of loans                                                       (3,954,535)       (3,854,244)
      Real estate loans originated for sale                                      (198,634,253)     (200,576,379)
      Proceeds from sales of real estate loans                                    207,883,343       211,288,167
      Increase in accrued interest receivable                                      (1,441,711)         (763,351)
      Increase in other assets                                                       (305,088)       (1,331,854)
      (Decrease) Increase in accrued interest payable and other liabilities        (1,271,094)          835,676
                                                                              ----------------  ----------------
        Net cash provided by operating activities                                  14,092,453        15,800,851
                                                                              ----------------  ----------------

Cash flows from investing activities:
      Proceeds from sales of available for sale securities                          8,309,763        15,729,239
      Proceeds from maturities of available for sale securities                    35,247,859        54,444,673
      Proceeds from maturities of held to maturity securities                       1,045,350           500,000
      Purchase of available for sale securities                                   (76,342,299)      (89,515,360)
      Purchase of Federal Home Loan Bank stock                                       (618,500)         (873,800)
      Proceeds from redemption of FHLB stock                                          495,000           225,000
      Net increase in loans                                                      (105,671,495)      (99,503,380)
      Purchase of Bank-owned life insurance                                                 -        (3,500,000)
      Additions to premises and equipment                                          (7,813,269)       (4,607,619)
      Proceeds from sale of other real estate                                         292,937                 -
      Proceeds from sale of premises and equipment                                  2,994,038         1,791,151
                                                                              ----------------  ----------------
        Net cash used in investing activities                                    (142,060,616)     (125,310,096)
                                                                              ----------------  ----------------


                                        5
<PAGE>
(continued)

Cash flows from financing activities:
      Net increase in deposits                                                    149,465,160       128,943,407
      Net decrease in federal funds purchased and
        securities sold under repurchase agreements                                (8,065,613)       (4,110,635)
      Advances from Federal Home Loan Bank                                         10,000,000        19,000,000
      Payments of Federal Home Loan Bank advances                                 (11,000,000)      (11,000,000)
      Proceeds from subordinated debentures                                                 -        10,000,000
      Proceeds from issuance of common stock                                                -         4,429,166
      Principal payments on other borrowed funds                                     (100,000)                -
      Purchase of treasury stock                                                     (289,865)          (45,174)
      Payment of cash dividends                                                    (2,118,046)       (2,060,300)
      Proceeds from stock options exercised                                                37           176,127
                                                                              ----------------  ----------------
        Net cash provided by financing activities                                 137,891,673       145,332,591
                                                                              ----------------  ----------------

        Net increase in cash and cash equivalents                             $     9,923,510   $    35,823,346

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

                                                                              ----------------  ----------------
Cash and cash equivalents at end of period                                    $    50,834,115   $    58,386,402
                                                                              ================  ================

Supplemental disclosures of cash paid during the period for:
    Interest                                                                  $    30,152,761   $    21,506,010
                                                                              ================  ================

    Income taxes                                                              $     6,444,181   $     4,912,075
                                                                              ================  ================

Supplemental information on noncash investing activities:
    Loans transferred to other real estate                                    $       340,775   $             -
                                                                              ================  ================
</TABLE>

See accompanying notes to consolidated financial statements.


                                        6
<PAGE>
            SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements

                               September 30, 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 and nine months ended September 30, 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 and nine months ended September 30, 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 net unrealized gains and
losses  on investment securities available for sale.  Total comprehensive income
for  the  three  months  ended  September  30,  2007  was $5,557,000 compared to
$5,358,000  for  the three months ended September 30, 2006.  Total comprehensive
income  for  the nine months ended September 30, 2007 was $9,692,000 compared to
$9,009,000  for  the  nine  months  ended  September  30,  2006.

Note  3  -  Cash  Dividend  Declared

On October 17, 2007, the Company declared a quarterly cash dividend of $0.13 per
share


                                        7
<PAGE>
on  outstanding  shares.  The  dividend  is  payable  on  November  16,  2007 to
shareholders  of  record  as  of  November  2,  2007.

Note  4  -  Unrealized  Losses  on  Investment  Securities

Available  for  Sale  securities  are  carried at fair market value with related
unrealized gains or losses included in stockholders' equity as accumulated other
comprehensive  income.  Unrealized  losses  have not been recognized into income
because the issuers are either obligations of the U.S. government or are of high
credit  quality.  Also,  the  decline in fair value is largely due to changes in
interest  rates  and  the  fair  value is expected to recover as the obligations
approach  maturity.

Note  5  -  Recently  Issued  Accounting  Standards  on the Financial Statements

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 effect 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 file in the states of Georgia and South Carolina.  These returns are subject
to examination by taxing authorities for all years after 2003.


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

The  Company  has  evaluated  the  impact  of  the  following  issued accounting
standards  and  has determined that the impact of adoptions is immaterial to the
financial  statements.  In  general,  these  standards revise the accounting for
derivatives  embedded  in  other  financial  instruments for 2007 and revise the
recognition  and  accounting  for  servicing  of  financial  assets  for  2007.

                                        8
<PAGE>
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  February  2007  the  FASB  issued Statement of Financial Accounting Standard
("SFAS")  No.  159,  "The  Fair  Value Option for Financial Assets and Financial
Liabilities."  SFAS No. 159 permits entities to choose to measure many financial
instruments and certain other items at fair value with an objective of improving
financial  reporting  by  providing  entities  with  the opportunity to mitigate
volatility  in  reported  earnings  caused  by  measuring  related  assets  and
liabilities  differently  without  having  to  apply  complex  hedge  accounting
provisions.  The 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.

The  Company  does  not  expect  that  the newly issued accounting standard that
revises  the  accrual  of  post-retirement  benefits  associated  with providing
split-dollar  life  insurance  will  have  a  material  effect  on the financial
statements  when adopted in future years.  The Company did not have any of these
assets  or  liabilities  as  of  September  30,  2007.


                                        9
<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 ten
full service branches in Augusta, Martinez, and Evans, Georgia and one branch in
Athens,  Georgia. A new full service branch was opened in Evans, Georgia on July
9,  2007.  Mortgage  origination  offices  are  located in Augusta, Savannah and
Athens,  Georgia. SB&T Capital Corporation (the "LPO") a wholly-owned subsidiary
of  the  Bank, was organized on August 16, 2007 and intends to open an office in
Greenville,  South  Carolina  in fourth quarter 2007. Southern Bank & Trust (the
"Thrift"),  a federally chartered thrift, opened its main office in Aiken, South
Carolina  on  September  12,  2006.  A new full service branch of the Thrift was
opened  on August 23, 2007 in North Augusta, South Carolina. A new branch of the
Thrift has been approved by the Office of the Thrift Supervision (the "OTS") and
expected  to  open  early  December  2007  in  Downtown  Aiken,  South Carolina.

The  Company's primary market 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  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  primary  market  area, Augusta-Richmond
County,  GA-SC metropolitan area, the Company had 13.63% of all deposits and was
the  second  largest  depository institution at June 30, 2007, as cited from the
Federal  Deposit  Insurance  Corporation's  website.  Securities  sold  under
repurchase  agreements  are  also  offered.  Additional  services include wealth
management,  trust,  retail  investment, and mortgage.  As a matter of practice,
most  mortgage  loans  are  sold in the secondary market; however, some mortgage
loans  are  placed  in  the  portfolio  based  on  asset/liability  management
strategies.  The Company continues to concentrate on increasing its market share
through  various  new deposit and loan products and other financial services and
by  focusing on the customer relationship management philosophy.  The Company is
committed  to  building  life-long  relationships with its customers, employees,
shareholders,  and  the  communities  it  serves.

The  Company's  primary source of income is from its lending activities followed
by  interest  income from its investment activities, service charges and fees on
deposits, and gain on sales of mortgage loans in the secondary market.  Interest
income on loans and investment securities increased during the first nine months
of  2007  as  compared  to  the


                                       10
<PAGE>
first nine months of 2006 due to higher interest rates and increased volumes.
Retail investment and Trust service fees income increased due to higher volume.

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

                                 Sept 30,         December 31,         December 31,
                                   2007               2006                 2002
                                -----------  -----------------------  --------------
                                             (Dollars in thousands)
<S>                             <C>          <C>                      <C>
Assets                          $1,187,919   $            1,041,202   $     569,832
Loans                              849,426                  749,969         396,699
Deposits                           951,228                  801,763         439,557

Return on average total assets        1.10%                    1.10%           1.14%
Return on average equity             14.77%                   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  the  year  ended 2002 was $6.0 million compared to net
income  of $11.2 million at year end 2006.  Net income for the nine months ended
September  30,  2007  was  $9.1 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 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


                                       11
<PAGE>
results  anticipated  in forward-looking statements due to a variety of factors,
including  unanticipated  changes  in  the Company's local economy, the national
economy, governmental monetary and fiscal policies, deposit levels, loan demand,
loan collateral values and securities portfolio values; difficulties in interest
rate  risk  management;  the  effects  of  competition  in the banking business;
difficulties  in  expanding  the Company's business into new markets; changes in
governmental  regulation relating to the banking industry, including regulations
relating  to  branching  and acquisitions; failure of assumptions underlying the
establishment  of  reserves  for  loan losses, including the value of collateral
underlying  delinquent loans; and other factors.  The Company cautions that such
factors  are  not  exclusive.  The  Company  does  not  undertake  to update any
forward-looking  statement  that  may be made from time to time by, or on behalf
of,  the  Company.

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

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

The allowance for loan losses is established through a provision for loan losses
charged  to  expense,  which affects the Company's earnings directly.  Loans are
charged  against the allowance for loan losses when management believes that the
collectability of the principal is unlikely.  Subsequent recoveries are added to
the  allowance.  The  allowance  is  an  amount that management believes will be
adequate  to absorb losses on existing loans that become uncollectible, based on
evaluations  of  the  collectability  of  loans.  The  evaluations  take  into
consideration  such  factors  as  changes  in  the nature and volume of the loan
portfolio,  historical loss rates, overall portfolio quality, review of specific
problem  loans,  and  current  economic  conditions and trends that may affect a
borrower's  ability  to  repay.

The  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 borrower's 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


                                       12
<PAGE>
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
--------------------

The  Company's  net income for the third quarter of 2007 was $3.4 million, which
was  an  increase of $431,000 (14.7%) compared to net income of $2.9 million for
the  third  quarter  of 2006.  Diluted net income per share for the three months
ended  September 30, 2007 was $0.61 compared to $0.55 for the three months ended
September  30,  2006.  Net  income  for  the  first nine months of 2007 was $9.1
million, an increase of $775,000 (9.3%) compared with net income of $8.3 million
for the first nine months of 2006.  The increase in net income for the three and
nine  months ended September 30, 2007 as compared with the three and nine months
ended  September  30,  2006, was primarily a result of increases in net interest
income  and  noninterest  income,  somewhat  offset  by increases in noninterest
expense  and  provision  for  loan  losses.  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 higher volumes and
increase  in interest rates.  The loan loss provision increased primarily due to
loan  volume  growth as well as increases in specifically-reserved loans, higher
levels of Classified and Watch-rated debt and management's assessment of current
economic  environment.  Factors  contributing  to  the  increase  in noninterest
income  for  the  nine  months  ended September 30, 2007, were primarily from an
increase  in  the  gain  on sale of fixed assets due to a $1,097,000 gain on the
sale  of  property  in  August 2007, retail investment income and trust services
fees  increased  resulting  from  increased  production in the Wealth Management
area,  service  charges and fees on deposits increased primarily due to increase
in  NSF  fees  and  ATM/debit  card  income  somewhat  offset  by  a decrease in
investment  securities  (losses) gains, net due to a $278,000 loss recognized in
third  quarter  2007  for  the  three  month  period  as well as a $526,000 gain
recognized  on  the sale of agency securities in second quarter 2006 as compared
to  the  $245,000 losses recognized on the sale of agency securities in 2007 for
the  nine month period.  Noninterest expense increased during the three and nine
months ended September 30, 2007 compared to the same periods ended September 30,
2006,  primarily  due  to  increases  in  salaries, employee benefits, occupancy
expense  and  other  operating expenses.  Significant changes in other operating
expenses during the three and nine month periods include increases in processing
expense,  IT  maintenance  expense,  and  contributions.


                                       13
<PAGE>
<TABLE>
<CAPTION>
                                  Table 2 - Selected Balance Sheet Data

                                               September 30,   December 31,            Variance
                                                                            -----------------------------
                                                  2007           2006           Amount            %
                                              -------------  -------------  --------------  -------------
                                                                (Dollars in thousands)
<S>                                           <C>            <C>            <C>             <C>
Cash and due from banks                       $      26,487  $      25,710  $         777            3.0%
Federal funds sold                                   23,847         14,688          9,159           62.4%
Investment securities                               234,480        202,106         32,374           16.0%
Loans                                               849,426        749,969         99,457           13.3%
Assets                                            1,187,919      1,041,202        146,717           14.1%
Deposits                                            951,228        801,763        149,465           18.6%
Securities sold under repurchase agreements          61,954         70,020         (8,066)        (11.5%)
Liabilities                                       1,101,306        962,278        139,028           14.4%
Stockholders' equity                                 86,613         78,924          7,689            9.7%
</TABLE>


Table  2  highlights  significant  changes in the balance sheet at September 30,
2007  as  compared  to  December  31,  2006.  Assets  increased  $146.7 million,
primarily the result of higher balances for fed funds sold, loans and investment
securities.  The  increase  in  assets was funded by the increase in deposits of
$149.5  million  somewhat  offset by an $8.1 million decrease in securities sold
under  repurchase agreements.  Net income of $9.1 million less dividends paid of
$2.1  million  also  contributed  to  the  funding.

The  annualized  return on average assets for the Company was 1.10% for the nine
months  ended September 30, 2007 equal to the return for December 31, 2006.  The
annualized return on average stockholders' equity was 14.77% for the nine months
ended  September  30,  2007,  compared  to  14.69%  for  December  31,  2006.

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 table shows 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.


                                       14
<PAGE>
<TABLE>
<CAPTION>
                               Table 3 - Average Balances, Income and Expenses, Yields and Rates

                                             Three Months Ended September 30, 2007       Three Months Ended September 30, 2006
                                             ----------------------------------------  ----------------------------------------
                                                           Annualized                               Annualized
                                                             Average                                  Average
                                                Average      Yield or     Amount Paid    Average       Yield or    Amount Paid
                                                Amount         Rate       or Earned      Amount         Rate       or Earned
                                             ----------------------------------------  ----------------------------------------
                                                                            (Dollars in thousands)
<S>                                          <C>           <C>           <C>           <C>           <C>           <C>
Interest-earning assets:
  Loans                                      $    826,787         8.14%  $     17,139  $    674,006         8.28%  $     14,208
  Investment securities                           230,689         5.23%         3,016       213,263         5.07%         2,705
  Federal funds sold                               17,325         5.04%           220        15,525         4.99%           195
  Interest-bearing deposits in other banks            500         5.40%             6           513         4.48%             6
                                             ----------------------------------------------------------------------------------
      Total interest-earning assets          $  1,075,301         7.46%  $     20,381  $    903,307         7.46%  $     17,114
                                             ------------                ------------  ------------                ------------

Interest-bearing liabilities:
  Deposits                                   $    803,509         4.29%  $      8,689  $    644,983         3.99%  $      6,480
  Federal funds purchased / securities
    sold under repurchase agreements               63,581         5.18%           830        58,013         5.16%           754
  Other borrowings                                 78,618         5.69%         1,127        80,823         5.73%         1,168
                                             ------------                ------------  ------------                ------------
      Total interest-bearing liabilities     $    945,708         4.47%  $     10,646  $    783,819         4.25%  $      8,402
                                             ------------                ------------  ------------                ------------

Net interest margin/income:                                       3.54%  $      9,735                       3.77%  $      8,712
                                                                         ============                              ============
</TABLE>


<TABLE>
<CAPTION>
                               Table 4 - Average Balances, Income and Expenses, Yields and Rates

                                                 Nine Months Ended Sept. 30, 2007          Nine Months Ended Sept. 30, 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                                      $    793,660         8.18%  $     49,042  $    642,156         8.05%  $     39,039
  Investment securities                           221,109         5.16%         8,549       212,909         4.93%         7,863
  Federal funds sold                               23,168         5.21%           902        11,034         4.72%           390
  Interest-bearing deposits in other banks            508         5.31%            20           646         4.02%            19
                                             ------------                ------------  ------------                ------------
      Total interest-earning assets          $  1,038,445         7.47%  $     58,513  $    866,745         7.24%  $     47,311
                                             ------------                ------------  ------------                ------------

Interest-bearing liabilities:
  Deposits                                   $    764,128         4.26%  $     24,346  $    615,138         3.68%  $     16,946
  Federal funds purchased / securities
    sold under repurchase agreements               63,889         5.23%         2,500        60,193         4.80%         2,163
  Other borrowings                                 79,223         5.72%         3,391        73,023         5.63%         3,074
                                             ------------                ------------  ------------                ------------
      Total interest-bearing liabilities     $    907,240         4.46%  $     30,237  $    748,354         3.96%  $     22,183
                                             ------------                ------------  ------------                ------------

Net interest margin/income:                                       3.57%  $     28,276                       3.81%  $     25,128
                                                                         ============                              ============
</TABLE>

Net interest income increased $1.0 million (11.8%) during the three-month period
and  $3.1  million  (12.5%) during the nine-month period as compared to the same
period  in  2006.  Loan interest income increased $2.9 million and $10.0 million
in  the  three  and  nine  month  periods,  respectively, while deposit interest
expense  increased  $2.2  million  and  $7.4 million in the three and nine month
periods,  respectively,  all  the  result of higher interest rates and continued
growth  of  account  balances.  The  annual average balance for loans was $793.7
million at September 30, 2007 with an annualized average yield of 8.18% compared
to  $642.2  million  at  September  30, 2006 with an annualized average yield of
8.05%.  Interest-bearing  deposits  had  an  annual  average  balance  of $764.1
million  with an annualized average rate of 4.26% at September 30, 2007 compared
to


                                       15
<PAGE>
$615.1  million  and  3.68%  at  September 30, 2006.  Other contributing factors
during  both  the  three  and  nine month periods included increases in interest
income  on  investment  securities,  increases in interest expense on securities
sold  under  repurchase  agreements  somewhat  offset  by  decreases in interest
expense  on  other  borrowings.

The  Company's net interest margin for the three and nine months ended September
30,  2007  was 3.54% and 3.57%, respectively, as compared to 3.77% and 3.81% for
the  three and nine months ended September 30, 2006, respectively.  The rate for
earning  assets increased 23 basis points for the nine month period, with higher
average  yields  on  loans  offset  by  lower  average yields on investments and
federal  funds  sold  accounting  for  most  of  the increase for the nine month
period.  The  cost to fund earning assets increased 22 basis points and 50 basis
points  for  the  three  and  nine month periods, respectively, primarily due to
higher  rates  on  deposits  somewhat offset by lower rates on other borrowings.

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

<TABLE>
<CAPTION>
                                              Table 5 - Noninterest Income

                               Three Months Ended                             Nine Months Ended
                                  September 30,             Variance             September 30,             Variance
                             ----------------------  ---------------------  ---------------------  ---------------------
                                2007        2006       Amount        %         2007       2006       Amount        %
                             ----------  ----------  ----------  ---------  ----------  ---------  ----------  ---------
                                            (Dollars in thousands)                     (Dollars in thousands)
<S>                          <C>         <C>         <C>         <C>        <C>         <C>        <C>         <C>
Service charges and fees
  on deposits                $   1,675   $   1,423   $     252       17.7%  $   4,654   $   4,315  $     339        7.9%
Gain on sales of loans           1,350       1,329          21        1.6%      3,954       3,854        100        2.6%
Gain on sale of fixed
  assets                         1,095           3       1,092    36400.0%      1,032          95        937      986.3%
Investment securities
  (losses) gains, net             (278)        (10)       (268)    2680.0%       (245)        274       (519)   (189.4%)
Retail investment income           296         192         104       54.2%        894         577        317       54.9%
Trust services fees                271         214          57       26.6%        830         605        225       37.2%
Increase in cash surrender
  value of bank-owned
  life insurance                   169         156          13        8.3%        495         445         50       11.2%
Miscellaneous income               169         151          18       11.9%        497         447         50       11.2%
                             ----------  ----------  ----------  ---------  ----------  ---------  ----------  ---------
Total noninterest income     $   4,747   $   3,458   $   1,289       37.3%  $  12,111   $  10,612  $   1,499       14.1%
                             ==========  ==========  ==========  =========  ==========  =========  ==========  =========
</TABLE>

Noninterest  income  increased  $1,289,000 (37.3%) during the three-month period
and  increased  $1,499,000  (14.1%)  during  the  nine-month  period.  The  most
significant  changes  for  the  three  and  nine month periods were increases in
service charge and fees on deposits, retail investment income, trust income, and
gain  on  sale  of  fixed assets somewhat offset by a decrease in net investment
securities  gains.  A  $278,000 investment security loss was recognized in third
quarter  2007.  The decrease in the nine month period was due to a $526,000 gain
recognized  on  the  sale  of equity securities somewhat offset by losses on the
sale  of  agency  securities  in second quarter 2006 as compared to the $245,000
losses  recognized on the sale of agency securities in 2007.  Service charge and
fees  on  deposits  increased  primarily due to increase in NSF charges in first
quarter  2007,


                                       16
<PAGE>
somewhat  offset  by  discontinued fees for daily overdraft and debit card fees.
The  increase  in retail investment income is primarily due to broker production
increases  from additional staff added in 2006.  The increase in trust income is
primarily  due  to increased levels of assets under management.  Gain on sale of
fixed  assets  increased  due  to  the  sale of the operations campus located in
Augusta,  Georgia  in  August  2007.

Noninterest  Expense
--------------------

<TABLE>
<CAPTION>
                                           Table 6 - Noninterest Expense

                              Three Months Ended                         Nine Months Ended
                                 September 30,          Variance            September 30,          Variance
                            --------------------  -------------------   -------------------   --------------------
                              2007       2006      Amount        %        2007       2006      Amount        %
                            ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
                                       (Dollars in thousands)                       (Dollars in thousands)
<S>                         <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
Salaries and other
  personnel expense         $   4,905  $   4,538  $     367       8.1%  $  14,329  $  13,483  $     846       6.3%
Occupancy expenses                845        638        207      32.4%      2,348      2,072        276      13.3%
Other operating expenses        2,558      2,058        500      24.3%      6,985      6,168        817      13.2%
                            ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Total noninterest expense   $   8,308  $   7,234  $   1,074      14.8%  $  23,662  $  21,723  $   1,939       8.9%
                            =========  =========  =========  =========  =========  =========  =========  =========
</TABLE>

Noninterest  expense  increased $1,074,000 (14.8%) during the three-month period
and  $1.9 million (8.9%) during the nine-month period.  Salary expense increased
during the three and nine month periods primarily due to opening of new branches
in North Augusta, South Carolina, and in Evans, Georgia as well as new personnel
due  to  continued  company growth, somewhat offset by a decrease in commissions
and  an  increase  in the deferral of loan production expense in compliance with
SFAS  No.  91.  Increases  in  employee benefits during the three and nine month
periods  were for FICA taxes, medical expenses, employer 401K contributions, all
directly  related  to  salaries  as well as an increase in stock option expense.
Increases  for  occupancy  expenses  during  the  three  and  nine month periods
including  miscellaneous  equipment purchases, equipment maintenance expense and
other  occupancy expenses were primarily related to the opening of new branches.
Additionally,  rent expense increased for leased property for ATM's and parking.
Property  taxes  increased  due to the opening of new branch offices at GB&T and
SB&T.  Depreciation  expense  increased primarily due to the opening of SB&T and
new branches opened for GB&T, somewhat offset by a decrease due to the Company's
core hardware and software systems, which became fully depreciated by the end of
the second quarter of 2006.  Other operating expenses increased $500,000 (24.3%)
for  the  three-month  period  and  $817,000  (13.2%) for the nine-month period.
Increases  in  processing  expenses during both the three and nine month periods
were  attributable  to  new account growth for both retail and business checking
products  and retail investment processing fees related to increased production.
Contributions  increased  for the three month period as the result of a $250,000
donation  made  to  Georgia  Bank  Foundation  in  August 2007.  Increases in IT
maintenance  expense  during the three and nine month periods were due primarily
to  additional  costs  in  software  maintenance  for  SB&T  and  GB&T.


                                       17
<PAGE>
Income  Taxes
-------------

Income  tax  expense  in  the  third  quarter  of  2007 totaled $1.8 million, an
increase  of $472,000 (35.1%) over the third quarter of 2006.  The effective tax
rate for the three months ended September 30, 2007 and 2006 was 35.1% and 31.5%,
respectively.  Income  tax  expense for the nine months ended September 30, 2007
totaled  $5.0  million  for an effective tax rate of 35.6% compared to 32.9% for
the  nine  months  ended  September 30, 2006.  The increase in the effective tax
rate  for  both  the  three  and  nine  month periods are primarily due to lower
nontaxable  interest  income  and  an  increase  in  the federal tax rate due to
anticipated  higher  income  for  the  year.

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

Table  7  which  follows  shows  the  current  and  prior  period  amounts  of
non-performing assets.  Non-performing assets were $2.6 million at September 30,
2007,  compared  to  $2.4  million  at  December  31,  2006  and $2.8 million at
September  30,  2006.  Significant  changes from December 2006 to September 2007
include  a  $50,000  increase in other real estate owned, a $178,000 increase in
non-accrual loans primarily due to a $850,000 increase for one customer added to
nonaccrual  status  somewhat  offset by a $276,000 decrease in non-accrual loans
with  balances  less  than  $100,000, and a $396,000 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 September 30, 2007, compared to 0.31%
at  December  31,  2006  and  0.40%  at  September  30,  2006.  The  control and
monitoring  of  non-performing  assets continues to be a priority of management.

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

                                       September 30, 2007    December 31, 2006    September 30, 2006
                                      --------------------  -------------------  --------------------
<S>                                   <C>                   <C>                  <C>
Nonaccrual loans                      $             2,529   $            2,351   $             2,769
Other real estate owned                                50                    -                     -
                                      --------------------  -------------------  --------------------
    Total non-performing assets       $             2,579   $            2,351   $             2,769
                                      ====================  ===================  ====================


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

Total non-performing assets to total
  loans and other real estate owned                  0.30%                0.31%                 0.40%
                                      ====================  ===================  ====================
</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."


                                       18
<PAGE>
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  September  30,  2007  and December 31, 2006.

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


                                                        September 30, 2007           December 31, 2006
                                                  ---------------------------  ---------------------------
                                                     Amount           %           Amount           %
                                                  -------------  ------------  -------------  ------------
<S>                                               <C>            <C>           <C>            <C>
                                                                   (Dollars in thousands)
          Commercial financial and agricultural   $     95,571         11.25%  $     80,823         10.78%
                                                  -------------  ------------  -------------  ------------
          Real estate
            Commercial                                 233,868         27.53%       198,453         26.46%
            Residential                                179,135         21.09%       158,543         21.14%
            Residential held for sale                    9,563          1.13%        14,857          1.98%
            Construction and development               300,436         35.37%       266,875         35.58%
                                                  -------------  ------------  -------------  ------------
                Total real estate                      723,002         85.12%       638,728         85.17%
                                                  -------------  ------------  -------------  ------------
          Lease financing                                   71          0.01%           116          0.02%
          Consumer
            Direct                                      25,314          2.98%        24,146          3.22%
            Indirect                                     4,657          0.55%         6,232          0.83%
            Revolving                                    1,840          0.22%           843          0.11%
                                                  -------------  ------------  -------------  ------------
              Total consumer                            31,811          3.75%        31,221          4.16%
                                                  -------------  ------------  -------------  ------------
          Deferred loan origination fees                (1,030)        -0.12%          (919)        -0.12%
                                                  -------------  ------------  -------------  ------------
              Total                                    849,425        100.00%  $    749,969        100.00%
                                                  =============  ============  =============  ============
</TABLE>

At  September  30,  2007,  the loan portfolio is comprised of 85.12% real estate
loans.  Commercial,  financial  and  agricultural  loans  comprise  11.25%,  and
consumer  loans  comprise  3.75%  of  the  portfolio.

While  the  Company  has  85.12%  of  its loan portfolio composed of real estate
loans,  this  percentage  is  not  significantly  higher than in previous years.
Commercial  real  estate  comprises  27.53%  of  the  loan  portfolio  and  is
approximately  half  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 (35.37%)
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, 21.09% 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,  1.13%  of  the  portfolio, comprises loans that are in the process of
being  sold  into  the  secondary  market.  In  these


                                       19
<PAGE>
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 September 30, 2007 were $14.9 million.  While management uses available
information  to recognize losses on loans, future additions to the allowance may
be  necessary  based  on  changes  in economic conditions.  In addition, various
regulatory  agencies,  as  an  integral  part  of  their  examination  process,
periodically  review the Company's allowance for loan losses.  Such agencies may
advise  additions  to  the  allowance based on their judgments about information
available to them at the time of their examination.  Such regulatory guidance is
considered,  and  the  Company  may  recognize  additions  to the allowance as a
result.

Additions to the allowance for loan losses are made periodically to maintain the
allowance  at an appropriate level based upon management's analysis of 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 $1,001,000 was charged to
expense  for  the  quarter ended September 30, 2007 compared to $667,000 for the
quarter  ended  September  30,  2006,  and  $2,607,000 for the nine months ended
September  30,  2007  compared to $1,627,000 for the nine months ended September
30,  2006.  The  increase  in  provision for loan losses for both three and nine
month  periods is primarily due to the provision related to overall loan growth,
including  the new Thrift's loan portfolio, an increase in specifically-reserved
loans  and  increased  levels  of  classified/watch  loans rated debt as well as
management's  assessment  of  current economic environment.  The increase in the
allowance  for loan losses as of September 30, 2007 as compared to September 30,
2006  is  primarily  due to increases in outstanding loan balances including the
Thrift's  loan  portfolio,  increases  in  the  allowance applicable to specific
loans,  and  increases  to  the allowance due to higher levels of Classified and
Watch-rated  debt  as  well  as  management's  assessment  of  current  economic
environment.

<TABLE>
<CAPTION>
                                 Table 9 - Allowance For Loan Losses
                                       (Dollars in thousands)

                                                      2007                  2006
                                                    --------              --------
<S>                                                 <C>                   <C>
          Beginning balance, January 1              $ 9,777               $ 9,125
          SAB 108 Adjustment                              -                 ($694)
          Provision charged to expense                2,607                 1,627
          Recoveries                                    596                   626
          Loans charged off                          (1,175)               (1,640)
                                                    --------              --------
          Ending balance, June 30                   $11,805               $ 9,044
                                                    ========              ========
</TABLE>

The  allowance  for  loan  loss  was decreased $694,000 as of January 1, 2006 to
adjust  for  over  accrual of estimated losses on unfunded lines and commitments
and  standby  letters  of  credit as required by the release of Staff Accounting
Bulletin  No.  108,  Considering  the  Effects  of Prior Year Misstatements when
Quantifying  Misstatements  in  Current  Year  Financial  Statements  (SAB 108).


                                       20
<PAGE>
At  September 30, 2007 the ratio of allowance for loan losses to total loans was
1.39%  compared  to  1.30% at December 31, 2006 and 1.31% at September 30, 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  September  30,  2007 was 89.3%
compared  to  93.5%  at  December 31, 2006 and 87.4% at September 30, 2006.  The
decrease  in  the  loan to deposit ratio from December 31, 2006 to September 30,
2007  reflects deposit growth at a higher rate than loan growth during the first
nine  months  of 2007.  The increase in the loan to deposit ratio from September
30, 2006 to December 31, 2006 reflects loan growth at a higher rate than deposit
growth during that time period.  Deposits at September 30, 2007 and December 31,
2006  include  $79.2  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  first mortgage loans, commercial real estate loans
and  investment securities.  These borrowings totaled $59.0 million at September
30,  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  where  outstanding in either case as of September 30, 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  $62.0  million  at  September  30,  2007.

Stockholders' equity to total assets was 7.29% at September 30, 2007 compared to
7.58%  at  December  31,  2006  and  7.40% at September 30, 2006.  Stockholders'
equity as of September 30, 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 September
30,  2007.  The  Company's  Tier  1  risk-based,  total  risk-based and leverage
capital  ratios  were  11.46%, 12.72%, and 9.35%, respectively, at September 30,
2007.  The  following  table  reflects  the current regulatory capital levels in
more  detail,  including  comparisons  to  the  regulatory  minimums.


                                       21
<PAGE>
<TABLE>
<CAPTION>
                                  Table 10 - Regulatory Capital Requirements
                                              September 30, 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              $    107,503        11.46%       37,520         4.00%       69,983         7.46%
  Total capital                    119,350        12.72%       75,040         8.00%       44,310         4.72%
Tier 1 leverage ratio              107,503         9.35%       46,010         4.00%       61,493         5.35%

Georgia Bank & Trust Company

Risk-based capital:
  Tier 1 capital              $     84,982         9.83%       34,589         4.00%       50,393         5.83%
  Total capital                     95,792        11.08%       69,179         8.00%       26,613         3.08%
Tier 1 leverage ratio               84,982         7.90%       43,020         4.00%       41,962         3.90%

Southern Bank & Trust

Risk-based capital:
  Tier 1 capital              $     14,189        20.13%        2,820         4.00%       11,369        16.13%
  Total capital                     15,070        21.37%        5,640         8.00%        9,430        13.37%
Tier 1 leverage ratio               14,189        20.18%        2,812         4.00%       11,377        16.18%
</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.


                                       22
<PAGE>
Unfunded commitments to extend credit where contract amounts represent potential
credit risk totaled $201.0 million at September 30, 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's contractual
obligations,  consisting  of deposits, FHLB advances, which are subject to early
termination  options,  and  borrowed  funds  by  contractual  maturity  date.

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

Lines of credit                                      $  200,991        -        -           -
Mortgage loan commitments                            $   12,291        -        -           -
Lease agreements                                            173      316      217         204
Deposits                                                898,145   47,256    5,827           -
Securities sold under
  repurchase agreements                                  61,954        -        -           -
FHLB advances                                                 -   17,000   13,000      29,000
Other borrowings                                            900        -        -           -
Subordinated debentures                                       -        -        -      20,000
  Total commitments and
    contractual obligations                          $1,174,454  $64,572  $19,044  $   49,204
                                                     ==========  =======  =======  ==========
</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  similar items.  Inflation and
related  increases  in  interest  rates  generally  decrease  the


                                       23
<PAGE>
market  value  of investments and loans held and may adversely affect liquidity,
earnings,  and  stockholders' equity.  Mortgage originations and refinances 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 September 30, 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.


                                       24
<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

               Current  Trends  in  the  Mortgage  Loan  Markets Could Adversely
               Affect  our  Credit  Quality  and  Profitability.

               Since  the  beginning  of  the  year, the market has seen several
               subprime  lenders  and  hedge  funds  that  had invested in loans
               supported  by  real  estate  collateral  declare  bankruptcy  and
               discontinue operations, while other lenders have continued to put
               in  place  more stringent underwriting criteria. Recent losses on
               mortgage-backed  investment  securities  recorded  by some larger
               financial  institutions  have  resulted  in  reduced  valuations,
               demand  and  liquidity  for  these  securities.

               These  challenges  have  affected  the  mortgage loan marketplace
               by  increasing the borrower's cost of funds for loan supported by
               real  estate. More stringent loan underwriting standards continue
               to  reduce  the  number  of  real  estate  borrowers who can find
               financing  in  the  marketplace, and this continues to reduce the
               number  of  properties  sold  and  refinanced.  The  number  of
               residential  properties  on the market has continued to increase,
               and  in  certain  markets  including  our  own,  there  has  been
               increasing  downward  pressure  on  the selling prices of new and
               existing  homes  and  also in the sales market values of existing
               properties,  which  are  utilized  as comparisons in valuing real
               estate  collateral.  This  affects the ability of some borrowers,
               particularly  those  in construction and development, to sell the
               properties securing their loans, which in turn makes it difficult
               for  them  to  make  the  scheduled  repayments  on  those loans.

               The  impact  of  the  described  changes  in  the  economy  as  a
               whole, and the real estate marketplace specifically, could have a
               negative  effect  on  our  ability  to  maintain or grow our loan
               levels  and on the values of the collateral underlying our loans.
               These  changes  could  limit  growth in interest income and could
               also  cause an increase in expenses associated with collecting on
               loans,  foreclosing  on  real  estate  collateral,  and  selling
               properties  that  have  already  been  foreclosed.  The potential
               impact  on  the Company would depend on the duration and depth of
               the  real  estate market downturn, which will also be affected by
               the  financial  market's


                                       25
<PAGE>
               response  to  correcting  the  problems  that  have  affected the
               market,  including  providing  accommodations  to  borrowers  in
               default  or  who  are  experiencing  financial  difficulty.

               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  third quarter of 2007. Of the 5752 shares repurchased during
               the  third  quarter, 552 were privately negotiated and 5,200 were
               made  in  the  open  market.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
                                                                           Maximum Number (or
                                                      Total Number of      Appropriate Dollar
                                                     Shares (or Uunits)    Value) of Shares (or
                     Total Number  Average Price   Purchased as Part of      Units) Yet be
                      of Shares       Paid Per      Publicly Announced    Purchased Under the
Period                Purchased        Share         Plans or Programs     Plans or Programs
-------------------  ------------  --------------  ---------------------  --------------------
<S>                  <C>           <C>             <C>                    <C>
July 1 through
July 31, 2007                 200           35.57                  5,879                94,121
-------------------  ------------  --------------  ---------------------  --------------------
August 1 through
August 31, 2007             5,000           38.46                 10,879                89,121
-------------------  ------------  --------------  ---------------------  --------------------
September 1 through
September 30, 2007            552           35.50                 11,431                88,569
-------------------  ------------  --------------  ---------------------  --------------------
Total                       5,752  $        38.08                 11,431                88,569
----------------------------------------------------------------------------------------------
</TABLE>

               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  third
               quarter  of  2007.

Item  3.       Defaults  Upon  Senior  Securities


                                       26
<PAGE>
               Not  applicable

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

               None

Item 5.        Other Information

               None


Item 6.        Exhibits

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

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

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


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


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

                    SOUTHEASTERN BANK FINANCIAL CORPORATION



Date:  November 9, 2007                  By:    /s/ Darrell R. Rains
     ---------------------                  ------------------------------------
                                         Darrell R. Rains
                                         Group Vice President, Chief
                                         Financial Officer (Duly Authorized
                                         Officer of Registrant and Principal
                                         Financial Officer)


                                       28