SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 2005
----------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED].
For the transition period from _______________ to ______________________
Commission File Number 000-50962
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Atlantic Coast Federal Employees' Savings and Profit Sharing Plan and Trust
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Atlantic Coast Federal Corporation
505 Haines Avenue
Waycross, Georgia 31501
ATLANTIC COAST FEDERAL
EMPLOYEES' SAVINGS &
PROFIT SHARING PLAN
AND TRUST
FINANCIAL STATEMENTS
December 31, 2005 and 2004
ATLANTIC COAST FEDERAL
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
Waycross, Georgia
FINANCIAL STATEMENTS
December 31, 2005 and 2004
CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM..................... 1
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS........................ 2
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS.............. 3
NOTES TO FINANCIAL STATEMENTS.......................................... 4
SUPPLEMENTAL SCHEDULE
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)......... 9
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Audit Committee
Atlantic Coast Federal Employees'
Savings & Profit Sharing Plan and Trust
Waycross, Georgia
We have audited the accompanying statements of net assets available for benefits
of the Atlantic Coast Federal Employees' Savings & Profit Sharing Plan and Trust
(the "Plan") as of December 31, 2005 and 2004, and the related statement of
changes in net assets available for benefits for the year ended December 31,
2005. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2005 and 2004, and the changes in net assets available for benefits
for the year ended December 31, 2005 in conformity with U.S. generally accepted
accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audit of the basic 2005 financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic 2005 financial
statements taken as a whole.
/s/ Crowe Chizek and Company LLC
--------------------------------
Crowe Chizek and Company LLC
South Bend, Indiana
June 1, 2006
1
ATLANTIC COAST FEDERAL EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2005 and 2004
2005 2004
---- ----
ASSETS
Investments $ 6,279,606 $ 5,840,794
Receivables
Employer's contributions 12,420 16,659
Participants' contributions 12,513 14,327
-------------- ---------------
24,933 30,986
-------------- ---------------
NET ASSETS AVAILABLE FOR BENEFITS $ 6,304,539 $ 5,871,780
============== ===============
See accompanying notes to financial statements.
2
ATLANTIC COAST FEDERAL EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 2005
Additions to net assets attributed to:
Investment income
Net appreciation in fair value of investments (Note 3) $ 183,897
Interest and dividends 78,629
----------------
262,526
Contributions
Employer 216,753
Participants 425,640
Rollover 167,636
----------------
810,029
Total additions 1,072,555
Deductions from net assets attributed to:
Benefits paid to participants 607,161
Administrative expenses 32,635
----------------
Total deductions 639,796
----------------
Net increase 432,759
Net assets available for benefits
Beginning of year 5,871,780
----------------
End of year $ 6,304,539
================
See accompanying notes to financial statements.
3
ATLANTIC COAST FEDERAL EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004
NOTE 1 - DESCRIPTION OF PLAN
The following description of the Atlantic Coast Federal Employees' Savings &
Profit Sharing Plan and Trust (the "Plan") is provided for general information
purposes only. Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions. Copies of the Plan agreement are
available from the plan administrator.
General: The Plan, established on January 1, 1994, is a defined contribution
401(k) plan for the benefit of substantially all employees of Atlantic Coast
Federal (the "Employer") who serves as plan administrator and controls and
manages the operation and administration of the Plan. The Bank of New York
serves as custodian of the Plan. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
Contributions: Each year, participants may elect to contribute up to 75% of
their pretax annual compensation, as defined in the Plan, with a total amount
not to exceed the applicable dollar limit established by the Internal Revenue
Service each year. On behalf of each participant who is eligible to share in the
matching contributions, a matching contribution equal to the following percent
of compensation up to 5% shall be provided based on the participant's salary
reduction contribution made during each pay period.
Elective Deferral Matching
Percentage Percentage
---------------- -----------
2% 1%
3 2
4 3
5-75 5
Eligibility: Employees are eligible to enroll in the Plan on January 1st, April
1st, July 1st, or October 1st following their date of hire.
Participant Accounts: Each participant's account is credited with the
participant's contribution and allocations of (a) the Employer's matching
contribution (b) Plan earnings and (c) forfeitures, and charged with an
allocation administrative expenses. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's vested
account.
Vesting: Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Employer's matching and discretionary
contribution portion of their accounts plus actual earnings thereon is based on
years of service. A participant is 20% vested after two years, 40% vested after
three years, 60% vested after four years, 80% vested after five years, and 100%
vested after six years of credited service.
(Continued)
4
ATLANTIC COAST FEDERAL EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004
NOTE 1 - DESCRIPTION OF PLAN (Continued)
Forfeitures: The non-vested portion of terminated participants accounts plus
earnings thereon are forfeited and can be used by the Plan to reduce the amount
of future employer contributions to the Plan or reallocated to participants at
the Plan's sponsor discretion. At December 31, 2005, forfeited accounts totaled
$-0-. During 2005, $58,777 of the forfeiture account was used to reduce employer
contributions or reallocated to participants.
Investment Options: Each participant may direct their contributions into any of
the investment options available under the Plan and may choose to allocate and
reallocate amounts credited to their accounts among all or any combination of
the investment funds. Earnings on the investment funds are allocated among the
accounts that have elected to invest in each such fund. Plan participants may
direct the investment of all funds credited to their account to any or all of
the available investment funds.
Participant Loans: Participants may borrow a minimum of $1,000 up to a maximum
equal to the lesser of $50,000 or 50 percent of their vested account balance.
Loan transactions are treated as a transfer to (from) the investment account
from (to) the Participant Loan account. Loan terms range from 1 to 5 years or up
to 15 years for the purchase of a primary residence. The loans are secured by
the balance in the participant's account and bear interest at rates that are
comparable to those currently available from commercial institutions for similar
loans.
Payment of Benefits: Participants may withdraw, in the form of lump-sum or
installments, all or some of the vested account balance upon termination of
employment, attainment of age 59 1/2, death or disability. In the event of death
or permanent disability, participants become fully vested.
Plan Termination: Although it has not expressed any intent to do so, the
employer has the right under the Plan to terminate the Plan subject to the
provisions of ERISA. In the event of the Plan's termination, participants shall
become fully vested.
Expenses: Certain administrative expenses are paid by the plan sponsor.
(Continued)
5
ATLANTIC COAST FEDERAL EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The policies and principles that significantly affect the determination of net
assets and results of operations are summarized below.
Basis of Accounting: The financial statements of the Plan are prepared under the
accrual method of accounting in accordance with U.S. generally accepted
accounting principles.
Use of Estimates: The preparation of financial statements in conformity with
U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of net assets
available for benefits and changes therein. Actual results could differ from
those estimates.
Investment Valuation and Income Recognition: Investments in common/collective
funds are stated at estimated fair value as determined by the custodian, based
upon the fair values of the underlying investments. Investments in common stock
are stated at fair value as determined by quoted market prices. Participant
loans are valued at estimated fair value as determined by individual participant
amortization schedules.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
Risks and Uncertainties: The Plan provides for various investment options in
common collective funds, certificate of deposits, and the employer's common
stock. The underlying investment securities are exposed to various risks, such
as interest rate, market and credit risks. Due to the level of risk associated
with certain investment securities and the level of uncertainty related to
changes in the value of investment securities, it is at least reasonably
possible that changes in the values of investment securities will occur in the
near term and that such changes could materially affect the amounts reported in
the statement of net assets available for benefits and participants' individual
account balances.
Concentration of Credit Risk: At December 31, 2005 and 2004, approximately 61%
and 60% of the Plan's assets were invested in Atlantic Coast Federal common
stock.
(Continued)
6
ATLANTIC COAST FEDERAL EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004
NOTE 3 - INVESTMENTS
The Bank of New York, the custodian of the Plan, held investment assets and
executed transactions.
Investments representing more than 5% of the net assets available for benefits
at December 31, 2005 or 2004 are as follows:
Investments at fair market value as reported by plan custodian: 2005 2004
- --------------------------------------------------------------- ---- ----
State Street Global Advisors/Money Market Fund $ 524,075 $ 585,075
Atlantic Coast Federal Common Stock 3,857,783 3,499,797
During 2005, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value as
follows:
Common/collective funds $ 67,474
Atlantic Coast Federal common stock 116,423
--------------
$ 183,897
At December 31, 2005 and 2004, the Plan held 274,380 and 254,161 shares of
Atlantic Coast Federal common stock.
NOTE 4 - PARTY-IN-INTEREST TRANSACTIONS
Parties-in-interest are defined under DOL regulations as any fiduciary of the
plan, any party rendering service to the plan, the employer, and certain others.
Certain professional fees for the administration of the Plan were paid by the
Employer on behalf of the Plan. During 2005 and 2004, fees of $2,850 and $4,116
were paid by the Plan to the Bank of New York, custodian of the Plan, fees of
$28,086 and $20,139 were paid by the Plan to Pentegra Services, Inc., Plan
recordkeeper, and fees of $1,699 and $2,919 were paid by the Plan to Barclays
Global Investors, investment manager, which represent party-in-interest
transactions.
Party-in-interest investments held by the Plan at December 31, 2005 and 2004
include Company common stock totaling $3,857,783 and $3,499,797 and participant
loans totaling $166,114 and $166,147.
(Continued)
7
ATLANTIC COAST FEDERAL EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004
NOTE 5 - TAX STATUS
Effective June 1, 2003, the Plan was restated. The Plan has been restated on a
prototype document which has received a favorable determination letter dated
July 10, 2003 from the Internal Revenue Service. Although the Plan has been
amended since receiving the determination letter, the plan administrator
believes that the Plan is designed and is currently being operated in compliance
with the applicable requirements of the IRC.
NOTE 6 - TERMINATED PARTICIPANTS
Included in net assets available for benefits are amounts allocated to
individuals who have elected to withdraw from the Plan, but who have not yet
been paid. Plan assets allocated to these participants were $26,095 and $0 at
December 31, 2005 and 2004, respectively.
8
SUPPLEMENTAL SCHEDULE
ATLANTIC COAST FEDERAL EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2005
Name of Plan Sponsor: Atlantic Coast Federal
-----------------------------------------------------------
Employer Identification Number: 58-0570960
-------------------------------------------------
Three-digit Plan Number: 033
--------------------------------------------------------
(c)
Description of Investment
(b) Including Maturity Date, (e)
Identity of Issue, Borrower Rate of Interest, Collateral, (d) Current
(a) Lessor, or Similar Party Par or Maturity Value Cost Value
--- ------------------------ --------------------- ---- -----
Common Collective Funds
State Street Global Advisors Government/ Money Market Fund # $ 524,075
State Street Global Advisors Equity Index Fund F # 162,190
State Street Global Advisors Mid Cap Equity Index Fund F # 284,623
State Street Global Advisors 20+ Treasury Bond F # 83,630
State Street Global Advisors Stable Value Fund # 251,661
State Street Global Advisors Income Plus Fund # 17,596
State Street Global Advisors Growth and Income Fund # 193,151
State Street Global Advisors Growth Fund # 38,647
State Street Global Advisors Equity Value Fund F # 100,155
State Street Global Advisors Equity Growth Fund F # 74,758
State Street Global Advisors Russell 2000 Index Fund # 132,158
State Street Global Advisors International Fund F # 52,989
State Street Global Advisors US Real Estate # 19,442
State Street Global Advisors Nasdaq 100 Index Fund F # 83,386
---------------
2,018,461
Common Stock
* Atlantic Coast Federal Common Stock # 3,857,783
Cash Equivalent/Money Market Fund
Bank of New York Collective Short Term Investors
Fund # 229,361
* Atlantic Coast Federal Certificate of Deposit # 7,887
---------------
237,248
* Participant Loans Interest rates ranging from 4.25%
to 8.5% # 166,114
---------------
$ 6,279,606
- --------------------------------------------------------------------------------
* Denotes party-in-interest
# Investment is participant-directed, therefore historical cost is not required.
9
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement No.
333-119732 on Form S-8 of Atlantic Coast Federal Corporation, of our report
dated June 1, 2006, appearing in this Annual Report on Form 11-K of the Atlantic
Coast Federal Employees' Savings & Profit Sharing Plan and Trust (the "Plan")
for the year ended December 31, 2005.
/s/ Crowe Chizek and Company LLC
--------------------------------
Crowe Chizek and Company LLC
South Bend, Indiana
June 22, 2006
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
ATLANTIC COAST FEDERAL
EMPLOYEES' SAVINGS AND PROFIT
SHARING PLAN AND TRUST
Date: June 19, 2006 By: /s/ Robert J. Larison, Jr.
Name: Robert J. Larison, Jr.
Title: President and Chief Executive Officer,
Atlantic Coast Federal