Exhibit 99.1
Atlantic Coast Federal Corporation Announces
Continued Growth in the Third Quarter Ended September 30, 2005
WAYCROSS, Ga.--(BUSINESS WIRE)--Nov. 1, 2005--Atlantic Coast
Federal Corporation (NASDAQ/NM: ACFC), the holding company for
Atlantic Coast Federal, today announced financial results for the
third quarter and nine months ended September 30, 2005. The Company's
report, highlighted by record levels of assets and deposits, also
reflected continued solid growth in its loan portfolio and ongoing
improvements in asset quality measures.
Net income for the third quarter of 2005 increased to a record
quarterly amount of $1.915 million versus $1.004 million in the same
period last year, largely due to the recognition of an income tax
benefit of $0.895 million. This benefit, which more than offset the
normal provision for income taxes in the current quarter, resulted
from the elimination of a tax-related contingent liability set up in
2000 when the Company became a taxable entity. Income before income
taxes for the third quarter, which was unaffected by the tax benefit,
totaled $1.527 million compared with $1.585 million in the
year-earlier quarter. Third quarter 2005 earnings reflected a
continued increase in average interest-earning assets and a lower
provision for loan losses on improving asset quality, together with
strong growth in non-interest income. These factors were offset by
ongoing margin compression, primarily from rising deposit costs, and
increased non-interest expense related largely to the recent
implementation of the Company's ESOP, higher professional fees, and
costs associated with the implementation of share-based compensation
plans.
Earnings per share for the third quarter of 2005 totaled $0.14,
inclusive of the tax benefit, versus $0.12 in the year-earlier period.
Comparative shares outstanding for the third quarter of 2005 increased
primarily because of the Company's public offering of common stock in
October 2004.
Commenting on the Company's announcement, Robert J. Larison, Jr.,
President and Chief Executive Officer, said, "With today's report, our
company demonstrates continued momentum in its operations. This is
especially apparent in our loan portfolio, which has increased 10%
over the past year and has been a principal driver for an 18% increase
in total assets since September 30, 2004. On the other side of the
balance sheet, we have supported this growth with the proceeds from
our stock offering, as well as by continuing to attract new deposits,
especially with our new interest checking product, which has been
particularly successful in the Jacksonville market.
"Importantly, concurrent with this growth we have maintained a
keen focus on asset quality and we are pleased with the continued
improvements we have witnessed," Larison continued. "These were
typified by steady reductions this year in the absolute amount of
non-performing loans and impaired loans and also in their amounts
relative to total asset and loans. Year-over-year improvements in our
loan quality metrics allowed us to reduce our loan loss provision from
the prior year's amount, which in turn contributed to our earnings for
the quarter."
Larison noted that the Company experienced further margin
compression in the third quarter of 2005, as net interest margin
declined to 2.86% from 3.50% in the year-earlier period. For the first
nine months of 2005, net interest margin was down to 3.05% versus
3.68% in the comparable 2004 period. These continued declines in 2005
reflect the relatively flat yield curve that currently exists, as the
cost of deposits has risen throughout the year without a corresponding
increase in the yield on longer-term loan assets. Although the Company
continues to believe that the repricing of existing loans to higher
market levels over time will help counter the trend in net interest
income, current pressure on interest margins will likely continue in
the near term as a result of the flat yield curve environment.
For the third quarter of 2005, net interest income declined to
$4.823 million from $5.011 million in the year-earlier period.
However, the provision for loan losses also declined to $0.442 million
in the third quarter from $0.675 million in the same period last year.
As a result, net interest income after provision for loan losses
increased to $4.381 million in the third quarter of 2005 from $4.336
million in the prior-year period.
For the first nine months of 2005, net interest income increased
to $14.886 million from $14.605 million in the year-earlier period.
The year-to-date provision for loan losses declined to $1.542 million
from $2.327 million in the comparable 2004 period, resulting in net
interest income after provision for loan losses of $13.344 million for
the first nine months of 2005 versus $12.278 million in the same
period last year. Net income for the year to date totaled $3.600
million, including the aforementioned tax benefit recorded in the
third quarter of 2005, up from $2.699 million in the first nine months
of 2004. Earnings per diluted share for the first nine months of 2005
totaled $0.25 versus $0.31 in the year-earlier period on increased
shares outstanding.
Concluding, Larison added, "Ongoing loan and deposit growth gives
us solid momentum in many aspects of our business as we approach
year's end. Although we recognize that market conditions remain
challenging, with stiff competition and a stubborn yield curve, we
continue to see opportunities in lending areas that hold attractive
potential for profitable growth, such as second mortgage and home
equity products. Our goal in the fourth quarter will be to continue to
capitalize on these opportunities as we work to increase our market
penetration, especially in the fast-growing Jacksonville area."
During the third quarter, the Company completed its previously
announced repurchase of 285,131 shares of its common stock - 1.96% of
its total outstanding common stock or 4.9% of the Company's publicly
traded shares. These repurchases were used to offset the effect of
stock issued on July 1, 2005, in connection with the Company's
restricted stock plan. With the completion of that repurchase program,
Atlantic Coast Federal Corporation's Board of Directors authorized a
new stock repurchase program for up to 10%, or 579,520 shares, of the
Company's currently outstanding publicly held shares of common stock.
The new program, which reflects the Board's view that the Company's
common stock continues to be an attractive investment, will commence
this month and is expected to be completed within a year.
The Company's total assets increased 15% to $733.2 million at
September 30, 2005, from $637.7 million at December 31, 2004, and were
18% ahead of total assets amounting to $623.1 million on September 30,
2004. Loans receivable, net increased 8% to $557.2 million at
September 30, 2005, from $517.7 million at December 31, 2004, and were
10% higher than loans receivable, net of $508.0 million as of
September 30, 2004. Deposits rose 15% to $502.1 million at the end of
the third quarter of 2005 from $435.7 million at December 31, 2004,
and increased 13% from deposits of $444.5 million at September 30,
2004.
Total stockholders' equity declined 1% to $97.5 million at
September 30, 2005, from $98.7 million as of December 31, 2004,
primarily because of the Company's recently completed share repurchase
program. Stockholders' equity at the end of the third quarter of 2005
was 113% higher than the $45.9 million reported at September 30, 2004,
with the large year-over-year increase primarily reflecting the
Company's October 2004 initial public stock offering.
Return on average stockholders' equity for the third quarter and
nine months ended September 30, 2005, was 7.65% and 4.78%,
respectively, versus 8.67% and 7.97%, respectively, for the comparable
periods last year. Return on average total assets for the third
quarter and nine months ended September 30, 2005, was 1.06% and 0.69%,
respectively, compared with 0.66% and 0.64%, respectively, for the
same periods in 2004.
In September 2005, Atlantic Coast Federal Corporation's Board of
Directors voted to increase the Company's regular quarterly cash
dividend rate on common stock to $0.07 per share. The new rate, paid
on October 31, 2005, to stockholders of record as of October 14, 2005,
represents a $0.01 increase over the previous rate and was the second
increase since cash dividends commenced 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 $733 million in assets
as of September 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 Nine Months Ended
September 30, September 30,
-------------------- -------------------
2005 2004 2005 2004
-------- -------- -------- --------
Total interest income $ 9,407 $ 8,096 $ 27,069 $ 23,306
Total interest expense 4,584 3,085 12,183 8,701
-------- -------- -------- --------
Net interest income 4,823 5,011 14,886 14,605
Provision for loan
losses 442 675 1,542 2,327
-------- -------- -------- --------
Net interest income
after provision
for loan losses 4,381 4,336 13,344 12,278
Non-interest income 2,259 1,308 5,340 3,994
Non-interest expense 5,113 4,059 14,597 12,063
-------- -------- -------- --------
Income before income
taxes 1,527 1,585 4,087 4,209
Income tax (benefit)
expense (388) 581 487 1,510
-------- -------- -------- --------
Net income $ 1,915 $ 1,004 $ 3,600 $ 2,699
======== ======== ======== ========
Basic and diluted
earnings per share $ 0.14 $ 0.12 $ 0.25 $ 0.31
======== ======== ======== ========
Basic weighted
average shares 14,055 8,729 14,104 8,729
======== ======== ======== ========
Diluted weighted
average shares 14,092 8,729 14,116 8,729
======== ======== ======== ========
Sept. 30, Dec. 31,
2005 2004
-------- --------
Total assets $733,171 $637,678
Cash and cash equivalents 52,129 25,708
Securities available for sale 71,569 53,363
Loans receivable, net 557,165 517,711
Total deposits 502,147 435,682
Federal Home Loan Bank advances 129,000 100,314
Stockholders' equity 97,492 98,700
Selected Consolidated Financial Ratios and Other Data (unaudited)
for the third quarter and nine months ended September 30, 2005 and
2004, may be found at the following link:
http://www.irinfo.com/acfc/3Q05fsd.pdf. Investors should refer to the
Company's Form 10-Q for the quarter ended September 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