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Southeastern Bank Financial Corp. Reports Positive Earnings for the Fourth Quarter and Year-End 2010

AUGUSTA, Ga., Jan. 28, 2011 (GLOBE NEWSWIRE) -- Southeastern Bank Financial Corp. (OTCBB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta (GB&T) and Southern Bank & Trust (SB&T), today reported quarterly net income of $2.1 million, or $0.32 in diluted earnings per share, for the three months ended Dec. 31, 2010, compared to a quarterly net loss of $9.4 million, or a loss of $1.41 per share, in the fourth quarter of 2009. For the full year, the company reported net income of $6.9 million, or $1.03 per diluted share, compared to a net loss of $8.0 million, or a loss of $1.24 per diluted share, for 2009.
/ Source: GlobeNewswire

AUGUSTA, Ga., Jan. 28, 2011 (GLOBE NEWSWIRE) -- Southeastern Bank Financial Corp. (OTCBB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta (GB&T) and Southern Bank & Trust (SB&T), today reported quarterly net income of $2.1 million, or $0.32 in diluted earnings per share, for the three months ended Dec. 31, 2010, compared to a quarterly net loss of $9.4 million, or a loss of $1.41 per share, in the fourth quarter of 2009. For the full year, the company reported net income of $6.9 million, or $1.03 per diluted share, compared to a net loss of $8.0 million, or a loss of $1.24 per diluted share, for 2009.

"We had a strong finish to 2010," said R. Daniel Blanton, president and chief executive officer. "We grew our net interest income, which we consider core earnings, in the fourth quarter by nearly 15 percent from 2009, deposits increased 10.2 percent and trends in our credit quality showed solid improvement over last year. As a consequence, we lowered our provision for loan losses compared to the fourth quarter of 2009, which, combined with a $4.8 million drop in noninterest expenses, contributed to our income and earnings growth.

"In addition, we continue to be pleased with the growth of our Aiken County subsidiary, which grew its assets by $25.1 million in 2010 and has generated a year of solid profitability," said Blanton.

At Dec. 31, 2010, total assets were $1.6 billion, an increase of $116.0 million, or 7.8 percent, from Dec. 31, 2009. The company's SB&T subsidiary closed the fourth quarter of 2010 with $184.7 million in total assets, reflecting growth of $25.1 million, or 15.7 percent, since Dec. 31, 2009.

Loans outstanding at the end of the fourth quarter of 2010 were $886.9 million, compared to $956.6 million at Dec. 31, 2009. Total deposits at Dec. 31, 2010, were $1.4 billion, an increase of 10.2 percent from the same period a year ago. Cash and cash equivalents totaled $65.1 million at the end of the fourth quarter.

Net interest income for the fourth quarter of 2010 was $12.2 million, an increase of $1.6 million, or 14.6 percent, from the same period a year ago. Noninterest income for the quarter was $5.3 million, a decrease of $129,274 from the fourth quarter of 2009. Noninterest expense in the fourth quarter of 2010 decreased $4.8 million from a year ago to $10.8 million, primarily due to a steep decline in losses associated with the sale of other real estate owned (OREO) and lower occupancy expenses.

Nonperforming assets at Dec. 31, 2010, were 2.12 percent of total assets, compared to 1.98 percent at Sept. 30, 2010, and 2.70 percent at Dec. 31, 2009. Net charge-offs for the fourth quarter of 2010 totaled 1.27 percent of average loans on an annualized basis, compared to 1.36 percent annualized in the third quarter of 2010 and 4.42 percent annualized in the fourth quarter of 2009. Net charge-offs for the year totaled 1.24 percent of average loans, compared to 2.42 percent for 2009. The company held $7.8 million in OREO at Dec. 31, 2010, compared to $7.1 million at Sept. 30, 2010, and $8.0 million at Dec. 31, 2009. Net losses from the sale of and writedowns of OREO in the fourth quarter of 2010 totaled $574,518, compared to $5.8 million in the fourth quarter of 2009.

The provision for loan losses totaled $4.0 million for the fourth quarter of 2010, compared to $4.8 million in the third quarter of 2010 and $16.2 million in the fourth quarter of 2009. Allowance for loan losses increased to $26.7 million, or 3.05 percent of loans outstanding, at Dec. 31, 2010, from $25.5 million, or 2.87 percent of loans outstanding, at Sept. 30, 2010, and $22.3 million, or 2.38 percent of loans outstanding, at Dec. 31, 2009.

Return on average assets (ROA) was 0.52 percent for the fourth quarter of 2010, and return on average shareholders' equity (ROE) was 8.16 percent. The company's net interest margin was 3.17 percent at Dec. 31, 2010, compared to 3.12 percent at Sept. 30, 2010, and 3.03 percent a year ago.

Net interest income for the 12 months ended Dec. 31, 2010, was $45.9 million, an increase of $3.6 million from the same period in 2009. Noninterest income for the full year 2010 was $21.1 million, an increase from $20.7 million in 2009, reflecting gains in mortgage origination income, retail investment income and trust income. Noninterest expense in 2010 totaled $41.8 million, a decrease of $4.7 million from 2009. The company's net interest margin was 3.18 percent for the full year, compared to 3.12 percent for 2009.

"We are quite pleased with the direction in which we are headed," said Blanton. "The economy remains an unknown, however, and as such, we will maintain a cautious, conservative approach moving forward."

About Southeastern Bank Financial Corp.

Southeastern Bank Financial Corp. is the $1.6 billion-asset bank holding company of Georgia Bank & Trust Company of Augusta (GB&T) and Southern Bank & Trust (SB&T). GB&T is the largest locally owned and operated community bank in the Augusta metro market, with nine full-service Augusta-area offices and an office in Athens, Ga. SB&T is a state charted bank serving the Aiken County, S.C., market, with three full-service offices. The company also has mortgage operations in Augusta and Savannah. The banks focus primarily on real estate, commercial and consumer loans to individuals, small to medium-sized businesses and professionals, and also provide wealth management and trust services. The company's common stock is publicly traded on the OTC Bulletin Board under the symbol SBFC. For more information, please visit the company's Web site, www.georgiabankandtrust.com.

Safe Harbor Statement – Forward-Looking Statements

Statements made in this release by Southeastern Bank Financial Corporation (The Company) other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are made based upon management's belief as well as assumptions made by, and information currently available to, management pursuant to "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The Company's actual results may differ materially from the results anticipated in forward-looking statements due to a variety of factors, including: unanticipated changes in the Bank's local economy and in the national economy; governmental monetary and fiscal policies; deposit levels, loan demand, loan collateral values and securities portfolio values; difficulties in interest rate risk management; difficulties in operating in a variety of geographic areas; the effects of competition in the banking business; changes in governmental regulation relating to the banking industry, including regulations relating to branching and acquisitions; failure of assumptions underlying the establishment of reserves for loan losses, including the value of collateral underlying delinquent loans; and other factors. The Company cautions that such factors are not exclusive. The Company does not undertake to update any forward-looking statement that may be made from time to time by, or on behalf of, the Company.

CONTACT: Ronald L. Thigpen Executive Vice President and COO Southeastern Bank Financial Corp. 706-481-1014 Andy Mus Senior Vice President Marsh Communications LLC 404-327-7662