Southeastern Bank Financial Corp. Reports Record Earnings for the Fourth Quarter and Year-End 2013

Southeastern Bank Financial Corp. Reports Record Earnings for the Fourth
Quarter and Year-End 2013

AUGUSTA, Ga., Jan. 31, 2014 (GLOBE NEWSWIRE) -- Southeastern Bank Financial
Corp. (OTCQB:SBFC), the holding company for Georgia Bank & Trust Company of
Augusta (GB&T), today reported record quarterly net income of $4.4 million for
the three months ended Dec. 31, 2013, or $0.65 in diluted earnings per share,
compared to $3.9 million, or $0.58 in diluted earnings per share, in the
fourth quarter of 2012. For the full year, the company reported record net
income of $16.3 million, or $2.45 per diluted share, compared to net income of
$14.4 million, or $2.16 per diluted share, for 2012.

"We are pleased to have continued our consistently solid performance for 2013
with record earnings for both the fourth quarter and the year," said President
and Chief Executive Officer R. Daniel Blanton. "We continued to grow net
interest income in a historically low interest rate environment and grew loans
in a market with lingering low demand. Another reflection of our strong
performance is our improved asset quality, with healthy reductions in
nonperforming assets allowing for a continued reduction in our provision for
loan losses."

Total assets at Dec. 31, 2013, were $1.7 billion, an increase of $26.8 million
from Dec. 31, 2012. Loans outstanding at the end of the fourth quarter were
$916.4 million, an increase of $14.9 million from Dec. 31, 2012. Total
deposits were $1.5 billion at Dec. 31, 2013, an increase of $33.5 million from
Dec. 31, 2012. Cash and cash equivalents totaled $47.3 million at the end of
the fourth quarter of 2013.

Net interest income for the fourth quarter of 2013 totaled $13.1 million, a
slight increase from the same period in 2012. Noninterest income for the
fourth quarter totaled $3.6 million, a decrease from $5.5 million for the same
period a year ago, due to lower mortgage origination volume and bond losses
taken to improve the Banks' interest rate risk profile in anticipation of
rising rates. Noninterest expense was $9.1 million in the fourth quarter of
2013, a 19.3 percent decrease from a year ago resulting from reduced salary
and other real estate expenses.

The net interest margin was 3.21 percent for the quarter-ended Dec. 31, 2013,
compared to 3.31 percent for the third quarter of 2013, and 3.30 percent for
the same period a year ago. Annualized return on average assets (ROA) was 1.01
percent for the fourth quarter of 2013, an increase of 9 basis points from the
same period a year ago, and annualized return on average shareholder's equity
(ROE) was 13.02 percent, an increase of 150 basis points from the fourth
quarter of 2012.

Nonperforming assets at Dec. 31, 2013, were 1.58 percent of total assets,
compared to 1.78 percent at Sept. 30, 2013, and 2.08 percent at Dec. 31, 2012.
Net charge-offs for the fourth quarter of 2013 totaled 0.68 percent of average
loans on an annualized basis, compared to 1.17 percent annualized in the third
quarter of 2013 and 0.84 percent annualized in the fourth quarter of 2012. The
company held $1.0 million in OREO at Dec. 31, 2013, compared to $3.5 million
at December 31, 2012.

The company's loan-loss provision expense was $1.4 million in the fourth
quarter of 2013, a 26.3 percent decrease from $1.9 million in the third
quarter of 2013, and a 11.50 percent decrease from $1.6 million in the fourth
quarter a year ago. The allowance for loan losses at Dec. 31, 2013, was $26.4
million, or 2.92 percent of loans outstanding, compared to $28.8 million, or
3.31 percent of loans outstanding, at Dec. 31, 2012.

Net interest income for the 12 months ended Dec. 31, 2013, was $52.8 million,
a 2.3 percent increase from $51.6 million in the full year 2012. Noninterest
income was $18.5 million for the 12 months ended Dec. 31, 2013, a 15.4 percent
decrease from $21.9 million in the same period of 2012, as a result of a
decrease in mortgage income for the year and intentionally taken bond losses.
Noninterest expense was $40.4 million for the full year 2013, compared to
$44.4 million in the same period in 2012.

"We saw expected decreases in noninterest income for the fourth quarter and
the year," said Blanton. "We have actively worked to position the balance
sheet for increasing interest rates, and we maintain strong loan loss
reserves, in keeping with our consistent long term approach to our business."

On January 15, 2014, the Board of Directors of Southeastern Bank Financial
Corp. declared a regular quarterly cash dividend of $0.13 per share of common
stock payable on February 14, 2014, to shareholders of record as of January
31, 2014. Based on the share price of $21.18 at the close of business on
Thursday, January 30, 2014, this dividend represents an annualized yield to
shareholders of 2.46%.

About Southeastern Bank Financial Corp.

Southeastern Bank Financial Corp. is the $1.7 billion-asset bank holding
company of Georgia Bank & Trust Company of Augusta (GB&T). GB&T is the largest
locally owned and operated community bank in the Augusta metro market, with
nine full-service Augusta-area offices, three full-service offices in Aiken
County, S.C., operating as Southern Bank & Trust and one limited service Loan
Production Office in Athens, Ga. 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 under the symbol SBFC on OTCQB.
Investors can find Real-Time quotes and market information for the Company on
www.otcmarkets.com or by visiting 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.

SOUTHEASTERN BANK FINANCIAL CORPORATION
                                                             
Consolidated Balance Sheets
                                                             
                                              December 31,    
                                              2013            December 31,
Assets                                         (Unaudited)     2012
                                                             
Cash and due from banks                        $36,766,420   $39,565,757
Interest-bearing deposits in other banks       10,570,222     4,322,317
Cash and cash equivalents                      47,336,642     43,888,074
                                                             
Available-for-sale securities                  649,979,319    654,738,964
                                                             
Loans held for sale                            10,638,179     30,051,204
                                                             
Loans                                          905,712,691    871,446,844
Less allowance for loan losses                26,408,723     28,846,336
Loans, net                                     879,303,968    842,600,508
                                                             
Premises and equipment, net                    27,002,697     26,145,378
Accrued interest receivable                    6,221,061      6,602,879
Bank-owned life insurance                      35,744,649     34,825,588
Restricted equity securities                   4,869,600      5,295,600
Other real estate owned                        1,013,563      3,489,887
Prepaid FDIC assessment                        --            2,023,977
Deferred tax asset                             21,022,576     10,406,187
Other assets                                   6,193,363      2,434,228
                                                             
                                              $1,689,325,617 $1,662,502,474
                                                             
Liabilities and Stockholders' Equity                          
                                                             
Deposits                                                      
Noninterest-bearing                           $187,287,015  $158,066,510
Interest-bearing:                                            
NOW accounts                                  351,798,554    349,531,376
Savings                                       521,656,334    504,193,793
Money management accounts                     16,065,409     18,032,530
Time deposits of $100,000 or more             293,003,961    280,870,648
Other time deposits                           84,991,883     110,576,827
                                              1,454,803,156  1,421,271,684
                                                             
Securities sold under repurchase agreements    808,311        976,433
Advances from Federal Home Loan Bank           64,000,000     64,000,000
Accrued interest payable and other liabilities 16,598,876     18,924,619
Subordinated debentures                        21,546,646     21,546,646
                                                             
Total liabilities                              1,557,756,989  1,526,719,382
                                                             
Stockholders' equity:                                         
Preferred stock, no par value; 10,000,000
shares authorized; 0 shares outstanding in     --            --
2013 and 2012, respectively
Common stock, $3.00 par value; 10,000,000
shares authorized; 6,680,225 and 6,680,225
shares issued in 2013 and 2012, respectively;  20,040,675     20,040,675
6,679,982 and 6,675,000 shares outstanding in
2013 and 2012, respectively
Additional paid-in capital                     62,863,774     62,835,122
Retained earnings                              58,768,914     45,028,153
Treasury stock, at cost; 243 and 5,225 shares  (3,380)        (72,680)
in 2013 and 2012, respectively
Accumulated other comprehensive income (loss), (10,101,355)   7,951,822
net
                                                             
Total stockholders' equity                     131,568,628    135,783,092
                                                             
                                              $1,689,325,617 $1,662,502,474
                                                             


SOUTHEASTERN BANK FINANCIAL CORPORATION
                                                             
Consolidated Statements of Comprehensive Income (Loss)
                                                             
(Unaudited)
                                                             
                     Three Months Ended          Twelve Months Ended
                     December 31,                December 31,
                     2013          2012          2013           2012
Interest income:                                              
Loans, including     $11,375,646 $11,732,583 $46,478,776  $46,692,599
fees
Investment           4,009,862    4,093,654    15,763,823    16,895,170
securities
Interest-bearing
deposits in other     20,945       20,272       71,085        81,848
banks
Total interest income 15,406,453   15,846,509   62,313,684    63,669,617
                                                             
Interest expense:                                             
Deposits             1,643,282    2,106,626    6,793,541     9,425,091
Securities sold
under repurchase      640          2,602        6,265         12,010
agreements
Other borrowings     684,095      686,102      2,714,121     2,596,700
Total interest        2,328,017    2,795,330    9,513,927     12,033,801
expense
                                                             
Net interest income   13,078,436   13,051,179   52,799,757    51,635,816
                                                             
Provision for loan    1,391,745    1,573,465    7,437,791     8,140,563
losses
                                                             
Net interest income
after provision for   11,686,691   11,477,714   45,361,966    43,495,253
loan losses
                                                             
Noninterest income:                                           
Service charges and  1,838,583    1,819,570    7,155,146     6,848,502
fees on deposits
Gain on sales of     1,127,436    2,471,324    6,843,443     9,738,712
loans
Gain on sale of      4,194        --          25,898        10,459
fixed assets, net
Investment
securities gains      (703,259)    (120,192)    (895,204)     320,994
(losses), net
Other-than-temporary                                         
loss:
Total impairment     --          --          --           (13,314)
loss
Less loss recognized
in other              --          --          --           (4,268)
comprehensive income
Net impairment loss
recognized in         --          --          --           (9,046)
earnings
Retail investment    553,959      494,764      2,099,021     1,941,313
income
Trust service fees   294,690      288,611      1,184,474     1,145,695
Earnings from cash
surrender value of    289,590      281,225      1,186,553     1,112,100
bank-owned life
insurance
Miscellaneous income 189,424      221,217      897,364       756,491
Total noninterest     3,594,617    5,456,519    18,496,695    21,865,220
income
                                                             
Noninterest expense:                                          
Salaries and other   5,028,984    6,546,113    23,079,461    25,889,475
personnel expense
Occupancy expenses   907,097      982,430      3,721,582     4,093,548
Other real estate    13,969       532,348      641,777       1,784,617
losses, net
Other operating      3,153,867    3,226,654    12,922,900    12,671,510
expenses
Total noninterest     9,103,917    11,287,545   40,365,720    44,439,150
expense
                                                             
Income before income  6,177,391    5,646,688    23,492,941    20,921,323
taxes
                                                             
Income tax expense    1,813,032    1,750,627    7,147,212     6,486,350
                                                             
Net income            $4,364,359  $3,896,061  $16,345,729  $14,434,973
                                                             
Other comprehensive                                           
income (loss):
Unrealized gain      343,754      173,776      1,647,857     (154,049)
(loss) on derivatives
Unrealized gain
(loss) on securities  (7,232,944)  (1,664,019)  (32,089,995)  7,530,452
available-for-sale
Reclassification
adjustment for
realized (gain)       703,259      120,192      895,204       (311,948)
losson securities,
net of OTTI
Tax effect           2,406,327    532,950      11,493,757    (2,748,073)
Total other
comprehensive income  (3,779,604)  (837,101)    (18,053,177)  4,316,382
(loss)
                                                             
Comprehensive income  $584,755    $3,058,960  $(1,707,448) $18,751,355
(loss)
                                                             
Basic net income per  $0.65       $0.58       $2.45        $2.16
share
                                                             
Diluted net income    $0.65       $0.58       $2.45        $2.16
per share
                                                             
Weighted average
common shares         6,679,982    6,675,000    6,678,914     6,678,215
outstanding
                                                             
Weighted average
number of common      6,679,982    6,675,000    6,678,914     6,678,215
andcommon equivalent
shares outstanding
                                                             

CONTACT: For More Information:
         Ronald L. Thigpen
         Executive Vice President and COO
         Southeastern Bank Financial Corp.
         706-481-1014
 
Press spacebar to pause and continue. Press esc to stop.