##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarter period ended June 30, 2007
 o
    
    TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 CONFIRMATION FILE NUMBER: 0001385090
 SOUTHEAST BANCSHARES, INC.
  Tennessee
    
    20-8101695(State or other jurisdiction or organization)
    
    (I.R.S. Employer ID No.)
 1878 S. Congress Parkway
Athens, Tennessee 37303
 (423) 745-6444
 N/A
 Yes þ No o
 (Outstanding shares of small business issuers common stock as of June 30, 2007.)
 o þ




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##### 



SOUTHEAST BANCSHARES, INC.
 INDEX
 PagePART I. FINANCIAL INFORMATIONItem 1. Financial StatementsBalance Sheet June 30, 2007 (unaudited)
    
    
    1Statements of Operations
Six Months Ended June 30, 2007 and 2006 (unaudited)
    
    
    2Statements of Cash Flows
Six Months Ended June 30, 2007 and 2006 (unaudited)
    
    
    3Statements of Changes in Stockholders Equity
Six Months Ended June 30, 2007 and 2006 (unaudited)
    
    
    4Notes to Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    7Item 3. Controls and Procedures
    
    
    16PART II. OTHER INFORMATIONItem 1  Legal Proceedings
    
    
    16Item 2  Unregistered Sales of Securities and Use of Proceeds
    
    
    16Item 3  Defaults Upon Senior Securities
    
    
    17Item 4 - Submission of Matters to a Vote of Security Holders
    
    
    17Item 5  Other Information
    
    
    18Item 6 - Exhibits
    
    
    18Signatures
    
    
    19EX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CFO




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##### Table of Contents



SOUTHEAST BANCSHARES, INC.
Quarterly Report on Form 10-QSB
For the quarter ended June 30, 2007
 Table of Contents
 Item
    
    PageNumber
    
    NumberPart I  Financial Information1. Financial Statements
    
    
    12. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    73. Controls and Procedures
    
    
    16Part II  Other Information1. Legal Proceedings
    
    
    162. Unregistered Sales of Securities and Use of Proceeds
    
    
    163. Defaults Upon Senior Securities
    
    
    174. Submission of Matters to a Vote of Security Holders
    
    
    175. Other Information
    
    
    186. Exhibits
    
    
    18Signatures
    
    
    19




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##### Table of Contents



(Unaudited)
 ASSETSCash and due from banks
    
    $
    5,320,954Federal funds sold
    
    
    3,488,477Total cash and cash equivalents
    
    
    8,809,431Securities available for sale
    
    
    20,824,783Restricted investments
    
    
    826,723Loans, net of unearned interest and allowance for loan losses
    
    
    164,329,656Premises and equipment
    
    
    7,709,568Accrued interest receivable
    
    
    986,925Intangible assets
    
    
    891,981Cash surrender value of life insurance
    
    
    1,125,236Other assets
    
    
    1,402,017Total assets
    
    $
    206,906,320LIABILITIES AND STOCKHOLDERS EQUITYDeposits:Noninterest-bearing demand deposits
    
    $
    18,873,390Interest-bearing demand deposits
    
    
    22,767,489Savings and money market accounts
    
    
    33,547,442Time deposits
    
    
    107,025,029Total deposits
    
    
    182,213,350Accrued interest payable
    
    
    657,173Subordinated debentures
    
    
    3,093,000Federal Home Loan Bank advances
    
    
    6,000,000Other liabilities
    
    
    784,493Total liabilities
    
    
    192,748,016Stockholders equity:Common stock, $1.00 par value; 10,000,000 shares authorized;
1,280,879 shares outstanding
    
    
    1,280,879Surplus
    
    
    12,157,618Undivided profits
    
    
    916,808Accumulated other comprehensive income
    
    
    (197,001
    )Total stockholders equity
    
    
    14,158,304Total liabilities and stockholders equity
    
    $
    206,906,320
 Page 1




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##### Table of Contents



(Unaudited)
 Six Months Ended
    
    
    Three Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006INTEREST INCOMELoans, including fees
    
    $
    6,410,845
    
    
    $
    4,586,213
    
    
    $
    3,356,242
    
    
    $
    2,389,631Securities
    
    
    424,089
    
    
    
    305,844
    
    
    
    232,021
    
    
    
    169,685Federal funds sold and deposits in bank
    
    
    243,919
    
    
    
    109,001
    
    
    
    118,479
    
    
    
    42,2367,078,853
    
    
    
    5,001,058
    
    
    
    3,706,742
    
    
    
    2,601,552INTEREST EXPENSEDeposits
    
    
    3,121,735
    
    
    
    2,050,118
    
    
    
    1,603,054
    
    
    
    1,080,112Federal Home Loan Bank advances
    
    
    70,984
    
    
    
    85,824
    
    
    
    36,710
    
    
    
    40,414Subordinated debentures and other
    
    
    72,970
    
    
    
    
    
    
    
    53,401
    
    
    
    Total interest expense
    
    
    3,265,689
    
    
    
    2,135,942
    
    
    
    1,693,165
    
    
    
    1,120,526Net interest income
    
    
    3,813,164
    
    
    
    2,865,116
    
    
    
    2,013,577
    
    
    
    1,481,026Provision for loan losses
    
    
    255,000
    
    
    
    210,000
    
    
    
    135,000
    
    
    
    105,000Net interest income after provision
for loan losses
    
    
    3,558,164
    
    
    
    2,655,116
    
    
    
    1,878,577
    
    
    
    1,376,026NONINTEREST INCOMECustomer service fees
    
    
    814,435
    
    
    
    654,824
    
    
    
    429,916
    
    
    
    354,156Other noninterest income
    
    
    61,695
    
    
    
    145,261
    
    
    
    26,261
    
    
    
    71,634876,130
    
    
    
    800,085
    
    
    
    456,177
    
    
    
    425,790NONINTEREST EXPENSESSalaries and employee benefits
    
    
    1,712,399
    
    
    
    1,346,407
    
    
    
    939,936
    
    
    
    738,696Occupancy and equipment
    
    
    520,592
    
    
    
    370,714
    
    
    
    269,447
    
    
    
    200,531Data processing
    
    
    210,583
    
    
    
    149,832
    
    
    
    104,347
    
    
    
    77,756Other operating expenses
    
    
    1,053,634
    
    
    
    814,759
    
    
    
    513,390
    
    
    
    452,0663,497,208
    
    
    
    2,681,712
    
    
    
    1,827,120
    
    
    
    1,469,049Net income before income taxes
    
    
    937,086
    
    
    
    773,489
    
    
    
    507,634
    
    
    
    332,767Provision for income taxes
    
    
    357,000
    
    
    
    89,000
    
    
    
    191,000
    
    
    
    89,000Net income
    
    $
    580,086
    
    
    $
    684,489
    
    
    $
    316,634
    
    
    $
    243,767EARNINGS PER COMMON SHAREBasic
    
    $
    0.45
    
    
    $
    0.53
    
    
    $
    0.25
    
    
    $
    0.19Diluted
    
    
    0.43
    
    
    
    0.51
    
    
    
    0.24
    
    
    
    0.18
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##### Table of Contents



(Unaudited)
 2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    580,086
    
    
    $
    684,489Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation
    
    
    262,877
    
    
    
    199,260Provision for loan losses
    
    
    255,000
    
    
    
    210,000Net accretion on securities
    
    
    (10,785
    )
    
    
    (6,666
    )Restricted stock dividends
    
    
    (5,240
    )
    
    
    (12,501
    )Net loss on sale of other real estate and repossessions
    
    
    9,901
    
    
    
    Gain on disposal of equipment
    
    
    
    
    
    
    (71
    )Write down of other real estate and repossessions
    
    
    5,350
    
    
    
    2,967Stock based compensation expense
    
    
    
    
    
    
    48,000Change in operating assets and liabilities:Accrued interest receivable
    
    
    (79,281
    )
    
    
    (46,112
    )Other assets
    
    
    (821,134
    )
    
    
    (388,745
    )Accrued interest payable
    
    
    80,932
    
    
    
    74,781Other liabilities
    
    
    532,564
    
    
    
    286,126Net cash provided by operating activities
    
    
    810,270
    
    
    
    1,051,528CASH FLOWS FROM INVESTING ACTIVITIESLoan originations and principal collections, net
    
    
    (20,343,990
    )
    
    
    (10,266,676
    )Purchases of securities available for sale
    
    
    (7,036,145
    )
    
    
    (5,040,576
    )Proceeds from maturities, calls and prepayments of
securities available for sale
    
    
    3,332,038
    
    
    
    2,137,448Purchase of restricted investments
    
    
    (13,100
    )
    
    
    (20,100
    )Proceeds from sale of other real estate
    
    
    108,991
    
    
    
    121,380Purchase of premises and equipment
    
    
    (403,101
    )
    
    
    (642,526
    )Proceeds from sale of equipment
    
    
    
    
    
    
    800Net cash used in investing activities
    
    
    (24,355,307
    )
    
    
    (13,710,250
    )CASH FLOWS FROM FINANCING ACTIVITIESNet increase in deposits
    
    
    17,717,268
    
    
    
    10,982,759Increase (decrease) in Federal Home Loan Bank advances
    
    
    3,000,000
    
    
    
    (2,000,000
    )Issuance of subordinated debentures
    
    
    3,000,000
    
    
    
    Purchase of common stock
    
    
    (70,000
    )
    
    
    Net cash provided by financing activities
    
    
    23,647,268
    
    
    
    8,982,759NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    102,231
    
    
    
    (3,675,963
    )CASH AND CASH EQUIVALENTS, beginning of period
    
    
    8,707,200
    
    
    
    8,327,342CASH AND CASH EQUIVALENTS, end of period
    
    $
    8,809,431
    
    
    $
    4,651,379SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONCash paid during the period for:Interest
    
    $
    3,184,757
    
    
    $
    2,061,161Income taxes
    
    
    479,298
    
    
    
    
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##### Table of Contents



(Unaudited)
 AccumulatedTotal
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    OtherComprehensive
    
    
    Stockholders
    
    
    Common
    
    
    
    
    
    
    Undivided
    
    
    ComprehensiveIncome
    
    
    Equity
    
    
    Stock
    
    
    Surplus
    
    
    Profits
    
    
    IncomeBALANCE, January 1, 2006
    
    
    
    
    
    $
    12,047,728
    
    
    $
    1,284,379
    
    
    $
    12,176,118
    
    
    $
    (1,157,278
    )
    
    $
    (255,491
    )Comprehensive income:Net income
    
    $
    684,489
    
    
    
    684,489
    
    
    
    
    
    
    
    
    
    
    
    684,489
    
    
    
    Issuance of stock based
compensation
    
    
    
    
    
    
    48,000
    
    
    
    
    
    
    
    48,000
    
    
    
    
    
    
    
    Other comprehensive income:Unrealized holding gains (losses)
on securities available for sale,
net of related tax effect
    
    
    (145,827
    )
    
    
    (145,827
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (145,827
    )Total comprehensive income
    
    $
    538,662BALANCE, June 30, 2006
    
    
    
    
    
    $
    12,634,390
    
    
    $
    1,284,379
    
    
    $
    12,224,118
    
    
    $
    (472,789
    )
    
    $
    (401,318
    )BALANCE, January 1, 2007
    
    
    
    
    
    $
    13,809,910
    
    
    $
    1,284,379
    
    
    $
    12,224,118
    
    
    $
    336,722
    
    
    $
    (35,309
    )Comprehensive income:Net income
    
    $
    580,086
    
    
    
    580,086
    
    
    
    
    
    
    
    
    
    
    
    580,086
    
    
    
    Other comprehensive income:Unrealized holding gains (losses)
on securities available for sale,
net of related tax effect
    
    
    (161,692
    )
    
    
    (161,692
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (161,692
    )Total comprehensive income
    
    $
    418,394Purchase of common stock
    
    
    
    
    
    
    (70,000
    )
    
    
    (3,500
    )
    
    
    (66,500
    )
    
    
    
    
    
    
    BALANCE, June 30, 2007
    
    
    
    
    
    $
    14,158,304
    
    
    $
    1,280,879
    
    
    $
    12,157,618
    
    
    $
    916,808
    
    
    $
    (197,001
    )
 Page 4




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##### Table of Contents



(1)
    
    Summary of Significant Accounting Policies. The accounting and reporting policies of
SouthEast Bancshares, Inc. (the Company) conform with generally accepted accounting
principles and practices within the banking industry. The policies that materially affect
financial position and results of operations are summarized as follows:Nature of Operations:The Company is a bank holding company the principal activity of which is the ownership and
management of its wholly-owned subsidiary, SouthEast Bank & Trust (the Bank). The Bank
provides a variety of financial services to individuals and corporate customers at its
offices in Athens, Cleveland, Decatur, Dayton, Spring City and Ten Mile, Tennessee. The
Banks primary deposit products are interest-bearing checking accounts and certificates of
deposit. Its primary lending products are commercial, residential, and consumer loans. The
Bank defines its market area as all counties in which it operates and all contiguous
counties.Basis of Consolidation:The consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiary, SouthEast Bank & Trust and its wholly-owned subsidiary, Frontier
Reinsurance Company. All material inter-company balances and transactions have been
eliminated in consolidation.(2)
    
    Subordinated Debentures. Effective February 22, 2007, a wholly owned subsidiary grantor
trust, SouthEast Bancshares, Inc. Statutory Trust I (the Trust), was established by the
Company. The Trust was created for the sole purpose of issuing and selling trust preferred
securities and using the proceeds from the sale to acquire long term subordinated debentures
issued by the Company. The debentures are the sole assets of the Trust. This subsidiary
issued $3 million of pooled trust preferred securities (Trust Preferred Securities) on March
1, 2007. The Trust Preferred Securities accrue and pay distributions periodically at
specified rates as provided in the indentures. The Trust used the net proceeds from the
offering to purchase a like amount of Junior Subordinated Debentures (the Debentures) of the
Company. The Debentures are the sole assets of the Trust. The Trust Preferred Securities
must be redeemed upon maturity of the Debentures, or earlier redemption as provided in the
indentures. The Company has the right to redeem the Debentures in whole or in part after five
years, at a redemption price of par plus any accrued but unpaid interest as of the redemption
date. The Trust Preferred Securities have a maturity of 30 years and are redeemable after
five years with certain exceptions. At June 30, 2007, the fixed rate securities in the Trust
had a 6.78% interest rate which resets March 1, 2012.For regulatory capital purposes, under current guidelines the Trust Preferred Securities
qualify as a component of Tier 1 capital, subject to certain limitations.
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Implementation of FASBI 46-R resulted in the Companys investment in the common equity of
the Trust being included in the consolidated balance sheet at June 30, 2007, as investments
totaling $93,000. As of June 30, 2007, the outstanding balance of the subordinated
debentures was $3,093,000.(3)
    
    Earnings Per Common Share. Basic earnings per share represent income available to common
stockholders divided by the weighted-average number of common shares outstanding during the
period. Diluted earnings per share reflect additional common shares that would have been
outstanding if dilutive potential common shares had been issued, as well as any adjustment to
income that would result from the assumed issuance. Potential common shares that may be
issued by the Company relate to outstanding stock options, determined using the treasury stock
method. Earnings per common share have been computed based on the following:
 2007
    
    
    2006Net income
    
    $
    580,086
    
    
    $
    684,489Average number of common shares outstanding
    
    
    1,281,304
    
    
    
    1,284,379Effect of dilutive stock options and warrants
    
    
    61,810
    
    
    
    67,933Average number of common shares outstanding used to
calculate diluted earnings per common share
    
    
    1,343,114
    
    
    
    1,352,312
 (4)
    
    Stock Options. The Bank has a stock option plan which is administered by the Board of
Directors and provides for both incentive stock options and nonqualified stock options.
The purpose of the stock option plan is to attract, retain, motivate and reward management,
key employees and directors. Under the plan the purchase price of all options granted is
to be at fair market value of the common stock on the date of grant. The maximum number of
shares of common stock that may be granted under the plan is 250,000, and options may be
granted with vesting and expiration terms not to exceed 10 years. The effect of stock
options forfeited is recognized as the forfeitures occur. There were no new grants,
terminations or expirations of stock options during the first two quarters of 2007. At
June 30, 2007, all granted options were vested.The aggregate intrinsic value of options outstanding and exercisable at June 30, 2007 is
$1,583,000. The aggregate intrinsic value represents the total pre-tax intrinsic value
(the amount by which the current market value of the underlying stock exceeds the exercise
price of the option) that would have been received by the option holders had all option
holders exercised their options on June 30, 2007. This amount changes based on changes in
the market value of the Companys stock.The interim financial statements should be read in conjunction with the notes to the
financial statements presented in Form 10-KSB filed by the Company with the Securities and
Exchange Commission (the SEC) for the year ended December 31, 2006. The quarterly
financial statements reflect all adjustments which are, in the opinion of management,
necessary for a fair presentation of the results for interim periods. All such adjustments
are of a normal recurring nature. The results for the interim periods are not necessarily
indicative of the results to be expected for the complete fiscal year.
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Forward-Looking Statements
   
    
    general business and economic conditions in the markets the Company serves may
be less favorable than anticipated;
    
    changes in market rates and prices may impact the value of securities, loans,
deposits and other financial instruments;
    
    changes in the levels of loan prepayments and the resulting effects on the value
of the Banks loan portfolio;
    
    changes in local economic and business conditions that could adversely affect
the Banks customers and their ability to transact profitable business with the
Bank, including among other things, the ability of borrowers to repay their loans
according to their terms and the value of related collateral;
    
    the failure of assumptions underlying the establishment of and provisions made
to the allowance for possible credit losses;
    
    the loss of senior management or operating personnel and the potential inability
to hire qualified personnel at reasonable compensation levels;
    
    the Companys ability to acquire, operate and maintain cost effective and
efficient systems without incurring unexpectedly difficult or expensive but
necessary technological changes;
    
    legislative or regulatory developments including changes in laws or regulations
concerning taxes, banking, securities, insurance or other aspects of the financial
services industry;
    
    competitive factors including among other things, product and pricing pressures
among financial services organizations may increase;
    
    the Companys ability to expand and grow its business and operations through
the opening of de novo branches or the acquisition of additional banks, and the
Companys ability to realize the cost savings and revenue enhancements it expects
from such expansion or acquisitions;
    
    fiscal and governmental policies of the United States government; and
    
    other factors discussed in this Report.
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##### Table of Contents



The words anticipate, estimate, project, intend, expect, believe, continue,
may, will, should and similar expressions are intended to identify forward-looking
statements. These forward-looking statements are found at various places throughout this document
and the other documents incorporated herein by reference. All written and oral forward-looking
statements attributable to the Company are expressly qualified in their entirety by these
cautionary statements. The Company undertakes no obligation to publicly update or otherwise revise
any forward-looking statements, whether as a result of new information, future events or otherwise,
unless the securities laws require the Company to do so.
 Critical Accounting Policies
   Allowance for loan losses
 Securities
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Managements Financial Review
 Introduction
  Overview
  Page 9




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##### Table of Contents



mfields@fdic.gov
    Balance Sheet Analysis
  Page 10




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##### Table of Contents



Real estate loans:Residential 1-4 family
    
    $
    63,206Commercial
    
    
    37,266Construction
    
    
    20,574Other
    
    
    7,014Total mortgage loans on real estate
    
    
    128,060Commercial and industrial loans
    
    
    20,051Consumer loans
    
    
    14,108Other
    
    
    3,978Total loans
    
    
    166,197Less: Allowance for loan losses
    
    
    (1,828
    )Less: Deferred loan fees
    
    
    (39
    )Net Loans
    
    $
    164,330
    (In Thousands)U.S. government and federal agencies
    
    $
    7,269Mortgage-backed securities
    
    
    10,533State and municipal securities
    
    
    3,023Total
    
    $
    20,825
 Page 11




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##### Table of Contents



(in thousands)JUNE 30,
    
    
    DECEMBER 31,
    
    
    %2007
    
    
    2006
    
    
    CHANGENon-Interest bearing accounts
    
    $
    18,873
    
    
    $
    13,727
    
    
    
    37.5
    %NOW Accounts
    
    
    22,768
    
    
    
    20,921
    
    
    
    8.8
    %Money Market Accounts
    
    
    25,297
    
    
    
    25,367
    
    
    
    (0.3
    %)Savings Accounts
    
    
    8,250
    
    
    
    7,103
    
    
    
    16.1
    %Certificates of Deposits
    
    
    94,175
    
    
    
    86,641
    
    
    
    8.7
    %Individual Retirement Accounts
    
    
    12,850
    
    
    
    10,737
    
    
    
    19.7
    %TOTAL DEPOSITS
    
    $
    182,213
    
    
    $
    164,496
    
    
    
    10.8
    %
    Page 12




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##### Table of Contents



Income Statement Analysis
  Quarterly Income(in thousands)2007
    
    
    2006First Quarter
    
    $
    263
    
    
    $
    441Second Quarter
    
    
    317
    
    
    
    243Third Quarter
    
    
    N/A
    
    
    
    367Fourth Quarter
    
    
    N/A
    
    
    
    443Annual Total
    
    $
    580
    *
    
    $
    1,494
 
 *
    
    As of June 30, 2007, the Companys income for the first half of 2007 totaled $580,086.
Results for the first half of 2007 are not necessarily indicative of results to be expected in
the remaining quarters of 2007.  (in thousands)
    
    
    %2007
    
    
    2006
    
    
    CHANGENet Interest Income*
    
    $
    2,014
    
    
    $
    1,481
    
    
    
    36.0
    %Provision for Loan Losses
    
    
    (135
    )
    
    
    (105
    )
    
    
    28.6
    %Non-Interest Income
    
    
    456
    
    
    
    426
    
    
    
    7.0
    %Non-Interest Expenses
    
    
    (1,827
    )
    
    
    (1,469
    )
    
    
    24.4
    %Net Income Before Income Taxes
    
    
    508
    
    
    
    333
    
    
    
    52.6
    %Provision for income taxes
    
    
    (191
    )
    
    
    (89
    )
    
    
    114.6
    %Net Income
    
    $
    317
    
    
    $
    244
    
    
    
    29.9
    %
 
 *
    
    Net interest income is the difference between the interest income received on the Companys
earning assets and the interest expense paid on its deposits and borrowings. Page 13




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##### Table of Contents



Net Interest Income
  Net Interest Margin
  Provision For Loan Losses/Asset Quality
  Non-Interest Income
  Page 14




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##### Table of Contents



Off-Balance Sheet Arrangements
     Non-Interest Expense
  Liquidity And Funding Sources
   Page 15




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##### Table of Contents



ITEM 3. CONTROLS AND PROCEDURES
  
 PART II- OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS
    Page 16




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##### Table of Contents



ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
     DIRECTOR:
    
    FOR:
    
    AGAINST:
    
    ABSTAIN:Sandra B. Boyd
    
    
    743,889
    
    
    
    
    
    
    
    420Sidney W. Breaux
    
    
    743,889
    
    
    
    
    
    
    
    420William M. Buchanan
    
    
    743,529
    
    
    
    
    
    
    
    780Tom B. Hughes III
    
    
    743,889
    
    
    
    
    
    
    
    420C. William Inman
    
    
    743,589
    
    
    
    
    
    
    
    720Gary L. Mason
    
    
    743,889
    
    
    
    
    
    
    
    420F. Stephen Miller
    
    
    743,889
    
    
    
    
    
    
    
    420Calvin D. Rockholt
    
    
    742,889
    
    
    
    
    
    
    
    1,420R. Carter Runyan
    
    
    741,489
    
    
    
    
    
    
    
    2,820Jerry D. Smith
    
    
    742,689
    
    
    
    
    
    
    
    1,620Jerry E. Smith
    
    
    743,889
    
    
    
    
    
    
    
    420Paul L. Smith
    
    
    743,529
    
    
    
    
    
    
    
    780Martin C. Wilhelm
    
    
    743,889
    
    
    
    
    
    
    
    420Shirley S. Woodcock
    
    
    743,889
    
    
    
    
    
    
    
    420
  FOR:
    
    AGAINST:
    
    ABSTAIN:739,529
    
    
    
    420
    
    
    
    4,360
 Page 17




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##### Table of Contents



ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
  Exhibit No.
    
    Description31.1
    
    
    Certification of Chief Executive Officer pursuant to Rule 13(a)-14(a)/15d-14(c)31.2
    
    
    Certification of Principal Financial Officer pursuant to Rule 13(a)-14(a)/15d-14(c)32.1
    
    
    Certificate of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.
Section 1350
 Page 18




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##### Table of Contents



SIGNATURES
  SOUTHEAST BANCSHARES, INC.Date: August 8, 2007
    
    /s/ F. Stephen MillerF. Stephen Miller, Chairman and CEODate: August 8, 2007
    
    /s/ M. Shellie FugateM. Shellie Fugate, Chief Financial Officer
 Page 19