Exhibit 99.1

Atlantic Coast Federal Corporation Increases Quarterly Dividend to
$0.06 Per Common Share

       WAYCROSS, Ga.--(BUSINESS WIRE)--June 29, 2005--Atlantic Coast
Federal Corporation (NASDAQ/NM: ACFC), the holding company for
Atlantic Coast Federal, today announced that its Board of Directors
has voted to increase the Company's regular quarterly cash dividend
rate on common stock to $0.06 per share. This new rate represents a
$0.01 increase over the Company's initial dividend rate of $0.05 per
share and goes into effect with the next dividend to be paid on August
1, 2005, to all stockholders of record as of July 15, 2005.
       Commenting on the announcement, Robert J. Larison, Jr., President
and Chief Executive Officer, said, "We are gratified that business
conditions allow us to increase our quarterly dividend payment, which
commenced earlier this year. As this action demonstrates, we remain
committed to creating greater shareholder value for our investors over
time."
       Atlantic Coast Federal Corporation is the holding company for
Atlantic Coast Federal, a federally chartered and insured stock
savings association that was organized in 1939 as a credit union to
serve the employees of the Atlantic Coast Line Railroad. In November
2000, the credit union converted its charter from a federal credit
union to a federal mutual savings association and, in January 2003,
Atlantic Coast Federal Corporation was formed as the holding company.
The Company completed its initial public stock offering in October
2004. Investors may obtain additional information about Atlantic Coast
Federal Corporation on the Internet at www.acfederal.net, under the
Investor Information section.
       Atlantic Coast Federal, with approximately $674 million in assets
as of March 31, 2005, is a community-oriented financial institution.
It serves southeastern Georgia and northeastern Florida through 13
offices, including a growing presence in the Jacksonville metropolitan
area.
       This news release contains forward-looking statements within the
meaning of the federal securities laws. Statements in this release
that are not strictly historical are forward-looking and are based
upon current expectations that may differ materially from actual
results. These forward-looking statements, identified by words such as
"believe" and "outlook," involve risks and uncertainties that could
cause actual results to differ materially from those anticipated by
the statements made herein. These risks and uncertainties involve
general economic trends and changes in interest rates, increased
competition, changes in consumer demand for financial services, the
possibility of unforeseen events affecting the industry generally, the
uncertainties associated with newly developed or acquired operations,
and market disruptions and other effects of terrorist activities. The
Company undertakes no obligation to release revisions to these
forward-looking statements publicly to reflect events or circumstances
after the date hereof or to reflect the occurrence of unforeseen
events, except as required to be reported under the rules and
regulations of the Securities and Exchange Commission.

    CONTACT: Corporate Communications, Inc.
             Patrick J. Watson, 615-254-3376