Exhibit 99.1
Atlantic Coast Federal Corporation Announces Second Quarter Results for 2005;
Company Approves Stock Repurchase Program
WAYCROSS, Ga.--(BUSINESS WIRE)--Aug. 2, 2005--Atlantic Coast
Federal Corporation (NASDAQ/NM:ACFC), the holding company for Atlantic
Coast Federal, today announced financial results for the second
quarter and six months ended June 30, 2005. Highlights of the quarter
included ongoing growth in total assets, the loan portfolio, and
deposits. The Company also continued to make notable strides during
the second quarter in improving its asset quality, continuing the
trend seen earlier this year with first quarter results.
Separately, the Company announced that its Board of Directors has
approved a stock repurchase program to fund the Atlantic Coast Federal
Corporation 2005 Recognition and Retention Plan, which was approved by
stockholders at the Company's 2005 Annual Meeting in May. Under the
plan, the Company intends to repurchase up to 285,131 shares (1.96% of
its total outstanding common stock or 4.9% of the Company's publicly
traded shares) from time to time at prevailing market prices in
open-market or privately negotiated transactions.
Commenting on the Company's financial and operational results,
Robert J. Larison, Jr., President and Chief Executive Officer, said,
"We are pleased to report on another solid quarter for the Company.
These results continue to show clear momentum in many aspects of our
business despite the difficult rate environment caused by a flat yield
curve. Our loan portfolio is growing, and concurrent with that, we are
seeing ongoing improvements in the quality of the portfolio, with
non-performing loans - both in total and as a percentage of total
loans - declining significantly in the second quarter and during the
year to date compared with year-end 2004 and year-earlier figures.
Considering the current rate climate, we have remained conservative,
augmenting loan growth by focusing on shorter-term liquid assets and
adjustable-rate products. We also have been successful in garnering
new deposits across our markets, but particularly so in the
Jacksonville area. These strong points, which we think underscore our
attractive market position, position us to take advantage of improving
rate conditions, when they occur, and ongoing opportunities to build
our loan portfolio. Moreover, the repricing of many loans in our
current loan portfolio over the near term should provide some relief
to margin pressure while we await an upturn in the yield curve."
For the second quarter of 2005, the Company's net interest income
increased 5% to $5.1 million from $4.9 million in the second quarter
of 2004. Similarly, for the six months ended June 30, 2005, net
interest income increased 5% to $10.1 million from $9.6 million in the
same period last year. The higher net interest income for the second
quarter and year-to-date period of 2005 reflected the Company's
continued growth in interest-earning assets as well as interest
collected on a loan previously classified as non-performing, which
helped offset ongoing margin compression to some extent.
The provision for loan losses in the second quarter increased to
$577,000 from $109,000 in the second quarter of 2004, with the
difference reflecting primarily a reduction in specific allocation of
$300,000 for certain loans in the 2004 quarter due to improved
borrower financial condition. Looking at the year-to-date period,
however, which the Company believes is more indicative of broader
trends, the provision for loan losses declined to $1.1 million in the
first six months of 2005 from $1.7 million in the same period last
year, primarily because of a large first quarter 2004 loan loss
provision and loan charge-off associated with a single loan
relationship.
Largely because of the provisions for loan losses and write-offs
previously discussed, net interest income, after provision for loan
losses, declined 5% to $4.5 million in the second quarter of 2005 from
$4.8 million in the year-earlier quarter, but increased 13% to $9.0
million in the first six months of 2005 from $7.9 million in the first
half of 2004. Those same factors influenced the comparison of net
income for the periods, along with higher non-interest expense
primarily related to costs associated with the Atlantic Coast Federal
Employee Stock Ownership Plan implemented in the fourth quarter of
2004, director compensation under the Company's Director Emeritus
program, and increased legal and professional expenses attributable to
the Company's new environment as a public reporting company. These
higher costs, however, were offset to some extent by growth in
non-interest income during the second quarter, primarily as a result
of increased service charges and fees due to several initiatives in
that area. Net income for the second quarter was $902,000 or $0.06 per
share compared with $1.4 million or $0.16 per share in the same period
last year. Net income for the first half of 2005 was $1.7 million or
$0.12 per share compared with $1.7 million or $0.19 per share in the
year-earlier period. Weighted average shares outstanding increased to
14.1 million shares in the second quarter and first six months of 2005
from 8.7 million shares in the comparable periods last year due to the
Company's October 2004 initial public offering of 5.8 million common
shares.
The Company's total assets increased 11% to $709.3 million at June
30, 2005, from $637.7 million at December 31, 2004, and were 22% ahead
of total assets amounting to $579.6 million on June 30, 2004. Loans
receivable, net increased 6% to $550.6 million at June 30, 2005, from
$517.7 million at December 31, 2004, and were 10% higher than loans
receivable, net of $499.4 million as of June 30, 2004. Deposits rose
11% to $485.6 million at the end of the second quarter of 2005 from
$435.7 million at December 31, 2004, and increased 10% from deposits
of $440.4 million at June 30, 2004. Total stockholders' equity
increased 1% to $99.5 million at June 30, 2005, from $98.7 million as
of December 31, 2004, and was 121% higher than stockholders' equity of
$45.0 million at June 30, 2004. The large year-over-year increase in
stockholders' equity primarily reflected the Company's fall 2004
initial public offering.
Return on average stockholders' equity for the second quarter and
six months ended June 30, 2005, was 3.58 and 3.36%, respectively,
versus 12.12% and 7.61%, respectively, for the comparable periods last
year. Return on average total assets for the second quarter and six
months ended June 30, 2005, was 0.52% and 0.50%, respectively,
compared with 0.97% and 0.63%, respectively, for the same periods in
2004.
In June 2005, Atlantic Coast Federal Corporation's Board of
Directors voted to increase the Company's regular quarterly cash
dividend rate on common stock to $0.06 per share. The new rate, paid
on August 1, 2005, to stockholders of record as of July 15, 2005,
represents a $0.01 increase over the Company's initial dividend rate
of $0.05 per share established earlier this year.
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 $709 million in assets
as of June 30, 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.
ATLANTIC COAST FEDERAL CORPORATION
Unaudited Financial Highlights
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
-------- -------- -------- --------
Total interest income $ 9,219 $ 7,670 $ 17,662 $ 15,210
Total interest expense 4,122 2,805 7,600 5,616
-------- -------- -------- --------
Net interest income 5,097 4,865 10,062 9,594
Provision for loan losses 577 109 1,100 1,653
-------- -------- -------- --------
Net interest income after
provision for loan
losses 4,520 4,756 8,962 7,941
Non-interest income 1,795 1,332 3,082 2,686
Non-interest expense 4,977 3,969 9,484 8,004
-------- -------- -------- --------
Income before income taxes 1,338 2,119 2,560 2,623
Income tax expense 36 765 875 929
-------- -------- -------- --------
Net income $ 902 $ 1,354 $ 1,685 $ 1,694
======== ======== ======== ========
Basic and diluted earnings
per share $ 0.06 $ 0.16 $ 0.12 $ 0.19
======== ======== ======== ========
Basic and diluted weighted
average shares 14,129 8,729 14,129 8,729
======== ======== ======== ========
June 30, Dec. 31,
2005 2004
-------- --------
Total assets $709,299 $637,678
Cash and cash equivalents 51,555 25,708
Securities available for sale 65,513 53,363
Loans receivable, net 550,551 517,711
Total deposits 485,567 435,682
Federal Home Loan Bank advances 119,657 100,314
Stockholders' equity 99,538 98,700
Selected Consolidated Financial Ratios and Other Data (unaudited)
for the second quarter and six months ended June 30, 2005 and 2004,
may be found at the following link:
http://www.irinfo.com/acfc/2Q05fst.pdf. Investors should refer to the
Company's Form 10-Q for the quarter ended June 30, 2005, for
additional information and disclosures; the Form 10-Q will be
available at the Investor Information section of the Company's website
immediately upon filing with the Securities and Exchange Commission.
CONTACT: Corporate Communications, Inc.
Patrick J. Watson, 615-254-3376