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, 2007
---------------------------------------
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 Bank 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 BANK
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
Waycross, Georgia
FINANCIAL STATEMENTS
December 31, 2007 and 2006
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)...... 10
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Audit Committee
Atlantic Coast Bank 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 Bank Employees' Savings & Profit Sharing Plan and Trust
(the "Plan") as of December 31, 2007 and 2006, and the related statement of
changes in net assets available for benefits for the year ended December 31,
2007. 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, 2007 and 2006, and the changes in net assets available for benefits
for the year ended December 31, 2007 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 2007 financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic 2007 financial
statements taken as a whole.
/s/ Crowe Chizek and Company LLC
Crowe Chizek and Company LLC
South Bend, Indiana
July 3, 2008
ATLANTIC COAST BANK
EMPLOYEES' SAVINGS &
PROFIT SHARING PLAN
AND TRUST
FINANCIAL STATEMENTS
December 31, 2007 and 2006
ATLANTIC COAST BANK EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2007 and 2006
- -------------------------------------------------------------------------------
2007 2006
---- ----
ASSETS
Investments at fair value $ 7,295,472 $ 8,348,118
Receivables
Employer's contributions - 10,419
Participants' contributions - 14,276
Accrued income 2,388 964
Due from broker 51,469 40,745
-------------- ---------------
53,857 66,404
-------------- ---------------
Total Assets 7,349,329 8,414,522
Liabilities
Due to broker 41,235 10,386
-------------- ---------------
Net assets reflecting all investments at fair value 7,308,094 8,404,136
Adjustment from fair value to contract value for
fully benefit-responsive contracts 14,696 7,073
-------------- ---------------
NET ASSETS AVAILABLE FOR BENEFITS $ 7,322,790 $ 8,411,209
============== ===============
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
2.
ATLANTIC COAST BANK EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 2007
- -------------------------------------------------------------------------------
Additions to net assets attributed to:
Investment income
Net depreciation in fair value of investments (Note 3) $ (1,777,788)
Interest and dividends 234,176
-------------
(1,543,612)
Contributions
Employer 318,133
Participants 523,294
-------------
841,427
-------------
Total additions (702,185)
Deductions from net assets attributed to:
Benefits paid to participants (341,189)
Administrative expenses (45,045)
-------------
Total deductions (386,234)
-------------
Net decrease (1,088,419)
Net assets available for benefits
Beginning of year 8,411,209
-------------
End of year $ 7,322,790
=============
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
3.
ATLANTIC COAST BANK EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
- -------------------------------------------------------------------------------
NOTE 1 - DESCRIPTION OF PLAN
The following description of the Atlantic Coast Bank 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
Bank (the "Employer" or "Company") 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 eligible participant a matching
contribution made by the Company 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.
Participant Elective Contribution Company 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 of 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 own contributions plus
actual earnings thereon. Vesting in the Employer's matching and discretionary
contribution and the earnings thereon is based on years of credited service. One
year credited service is received when the participant works at least 1,000
hours within the plan year. 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 BANK EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
- -------------------------------------------------------------------------------
NOTE 1 - DESCRIPTION OF PLAN (Continued)
Forfeitures: The non-vested portion of terminated participants accounts plus
earnings thereon are considered 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, 2007, forfeited
accounts totaled $66,183. During 2007 participant accounts were allocated
$32,703 from forfeited accounts.
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.
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.
- -------------------------------------------------------------------------------
(Continued)
5.
ATLANTIC COAST BANK EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
- -------------------------------------------------------------------------------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
Payment of Benefits: Benefits are recorded when paid.
Investment Valuation: The Plan's investments are stated at fair value. Quoted
market prices are used to value shares of mutual funds and common stocks traded
on a national exchange. The fair values of the Plan's interests in common
collective trust funds, other than stable value funds, are based upon the net
asset values of the funds as reported by the fund managers. The fair values of
the Plan's interests in stable value funds are based upon the net asset values
of such funds reflecting all investments at fair value, including direct and
indirect interests in fully benefit-responsive contracts, as reported by the
fund manager. Money market funds are reported at cost, which approximates fair
value. 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.
Net assets available for benefits reflects the contract value of the Plan's
investments in fully benefit-responsive contracts and stable value funds, due to
a separate adjustment presented in the statements of net assets available for
benefits to increase or decrease the carrying amount of these investments to
contract value, as applicable. Contract value represents contributions made
under the contract, plus earnings, less participant withdrawals and
administrative expenses, and is the amount participants would receive if they
were to initiate permitted transactions under the terms of the Plan.
Risks and Uncertainties: The Plan provides for various investment options in
common collective funds, certificate of deposits, and the common stock of the
employer's parent company, Atlantic Coast Federal Corporation ("ACFC"). ACFC is
traded on the NASDAQ global market. 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, 2007 and 2006, approximately 51%
and 60% of the Plan's assets were invested in ACFC common stock.
- -------------------------------------------------------------------------------
(Continued)
6.
ATLANTIC COAST BANK EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
- -------------------------------------------------------------------------------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Effect of Newly Issued But Not Yet Effective Accounting Standards: 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. In February 2008, the FASB issued Staff Position (FSP) 157-2, Effective
Date of FASB Statement No. 157. This FSP delays the effective date of FAS 157
for all nonfinancial assets and nonfinancial liabilities, except those that are
recognized or disclosed at fair value on a recurring basis (at least annually)
to fiscal years beginning after November 15, 2008, and interim periods within
those fiscal years. The impact of adoption of FASB Statement No. 157 on the
Plan's net assets available for benefits and changes in net assets available for
benefit is not anticipated to be material.
In February 2007, the FASB issued Statement No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. The standard provides reporting
entities with an option to report selected financial assets and liabilities at
fair value and establishes presentation and disclosure requirements designed to
facilitate comparisons between reporting entities that choose different
measurement attributes for similar types of assets and liabilities. The new
standard is effective for the Plan on January 1, 2008. The Plan did not elect
the fair value option for any financial assets or financial liabilities as of
January 1, 2008.
NOTE 3 - INVESTMENTS
The Bank of New York, the custodian of the Plan, held investment assets and
executed transactions during 2007 and 2006.
Investments representing more than 5% of the net assets available for benefits
at December 31, 2007 or 2006 are as follows:
Investments at fair value: 2007 2006
- ------------------------- ---- ----
State Street Global Advisors/Money Market Fund $ 762,696 $ 652,461
State Street Global Advisors/Pentegra Stable Value Fund 395,212 394,096*
State Street Global Advisors/S&P MidCap Index Series Fund 373,560 377,746*
Atlantic Coast Federal Corporation common stock 3,759,165 4,973,490
* - not greater than 5%, included for comparison only
- -------------------------------------------------------------------------------
(Continued)
7.
ATLANTIC COAST BANK EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
- -------------------------------------------------------------------------------
NOTE 3 - INVESTMENTS (Continued)
During 2007, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) depreciated in value as
follows:
Common/collective funds $ 112,414
Atlantic Coast Federal Corporation common stock (1,890,202)
--------------
$ (1,777,788)
==============
At December 31, 2007 and 2006, the Plan held 316,428 and 272,819 shares of
Atlantic Coast Federal Corporation 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 2007 fees of $4,699 were paid by the Plan
to The Bank of New York, custodian of the Plan, fees of $38,785 were paid by the
Plan to Pentegra Services, Inc., Plan recordkeeper, and fees of $1,561 were paid
by the Plan to State Street Global Advisors, investment manager, which represent
party-in-interest transactions.
Party-in-interest investments held by the Plan at December 31, 2007 and 2006
include Atlantic Coast Federal Corporation common stock totaling $3,759,165 and
$4,973,490 respectively, Atlantic Coast Federal Certificate of Deposit totaling
$8,492 and $8,087 respectively, participant loans totaling $300,204 and $288,796
respectively, The Bank of New York Collective Short Term Investors Fund totaling
$308,293 and $309,461 respectively and State Street Global Advisors common
collective funds totaling $2,933,753 and $2,775,357 respectively. Total
dividends received for 2007 from the Atlantic Coast Federal Corporation common
stock were $155,551.
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 Internal Revenue Code.
- -------------------------------------------------------------------------------
(Continued)
8.
ATLANTIC COAST BANK EMPLOYEES' SAVINGS & PROFIT SHARING PLAN
AND TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 2007 and 2006
- -------------------------------------------------------------------------------
NOTE 6 - PLAN AMENDMENT
Effective July 1, 2007, the Plan was amended to define basic salary as basic
salary plus commissions, overtime, bonuses, incentives, and personal leave.
NOTE 7 - SUBSEQUENT EVENT
Subsequent to December 31, 2007, the Atlantic Coast Federal Corporation Common
Stock experienced a decline in overall market value. The share value of the
stock at December 31, 2007 was $11.88. As of July 2, 2008, the share value of
the stock was $7.37.
- -------------------------------------------------------------------------------
9.
SUPPLEMENTAL SCHEDULE
ATLANTIC COAST BANK EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND
TRUST
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2007
- -------------------------------------------------------------------------------
Name of Plan Sponsor: Atlantic Coast Bank
-----------------------------------------------
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 Short Term Investment Fund # $ 762,696
* State Street Global Advisors S&P Flagship Securities # 243,398
Lending Series Fund
* State Street Global Advisors Passive Long TSY Fund # 109,454
* State Street Global Advisors S&P Growth Value Series Fund # 169,226
* State Street Global Advisors Pentegra Stable Value Fund # 395,212
* State Street Global Advisors Conservative Strategic
Balanced Fund # 19,611
* State Street Global Advisors Moderate Strategic Balanced Fund # 268,606
* State Street Global Advisors Aggressive Strategic
Balanced Fund # 81,171
* State Street Global Advisors S&P Growth Index Series Fund # 114,544
* State Street Global Advisors S&P MidCap Index Series Fund # 373,560
* State Street Global Advisors Russell 2000 Index Series Fund # 130,615
* State Street Global Advisors Daily EAFE Index Series Fund # 111,826
* State Street Global Advisors REIT Index Non-Lending
Series Fund # 26,531
* State Street Global Advisors Nasdaq 100 Index Fund # 127,303
-------------
2,933,753
Other Assets Mutual Funds
* State Street Global Advisors Aggregate Bond Fund # 261
Common Stock
* Atlantic Coast Federal Corporation Common Stock # 3,759,165
Cash Equivalent/Money Market Fund
* The Bank of New York Collective Short Term Investors
Fund # 308,293
* Atlantic Coast Bank Certificate of Deposit
Interest rate 5.06% mature 6/6/08 # 8,492
- -------------------------------------------------------------------------------------------------------------------
* Denotes party-in-interest
# Investment is participant-directed, therefore historical cost is not required.
10.
ATLANTIC COAST BANK EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND
TRUST
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2007
- -------------------------------------------------------------------------------
Name of Plan Sponsor: Atlantic Coast Bank
-----------------------------------------------
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
--- ---------------------------- ---------------------------- ---- --------
* Participant Loans Interest rates ranging from 4.25%
to 9.50% # 300,204
-------------
$ 7,310,168
=============
- -------------------------------------------------------------------------------------------------------------------
* Denotes party-in-interest
# Investment is participant-directed, therefore historical cost is not required.
11.
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 BANK
EMPLOYEES' SAVINGS AND PROFIT
SHARING PLAN AND TRUST
Date: July 3, 2008 By: /s/ Robert J. Larison, Jr.
-----------------------------
Name: Robert J. Larison, Jr.
Title: President and Chief Executive
Officer, Atlantic Coast Federal
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 July 3, 2008, appearing in this Annual Report on Form 11-K of the Atlantic
Coast Bank Employees' Savings & Profit Sharing Plan and Trust for the year ended
December 31, 2007.
/s/ Crowe Chizek and Company LLC
Crowe Chizek and Company LLC
South Bend, Indiana
July 3, 2008