Exhibit 99.1
Atlantic Coast Federal Corporation Reports Continued Growth
WAYCROSS, Ga.--(BUSINESS WIRE)--March 14, 2006--
Net Income More Than Doubles in the Fourth Quarter, Up 47% for 2005
Atlantic Coast Federal Corporation (NASDAQ/NM: ACFC), the holding
company for Atlantic Coast Federal, today announced financial results
for the fourth quarter and year ended December 31, 2005. In addition
to higher earnings, other highlights of the Company's report for the
quarter and year included ongoing growth in loans and deposits, as
both rose to historic levels, and continued improvements in asset
quality.
Net income for the fourth quarter of 2005 increased 121% to
$1,089,000 or $0.07 per diluted share versus $493,000 or $0.03 per
diluted share in the same period last year. Fourth quarter 2005
earnings reflected a continued increase in average interest-earning
assets and a lower provision for loan losses on improving credit
quality metrics, together with significantly higher non-interest
income on growing fee and other income. These factors helped counter
ongoing margin compression, primarily due to rising deposit costs.
Commenting on the announcement, Robert J. Larison, Jr., President
and Chief Executive Officer, said, "We are very pleased to report a
strong and successful finish to 2005, our first full year of
operations as a publicly held company. Our continued growth in the
fourth quarter and throughout 2005 reflected ongoing momentum in our
operations and solid growth in loans and deposits - especially in the
Jacksonville area, and further improvements in asset quality. These
broad accomplishments translated into higher net income for the fourth
quarter and year, as well as attractive growth on our balance sheet in
terms of total assets, loans and deposits."
Larison noted that the Company reported steady increases in assets
throughout 2005, with the total rising 17% year over year. The loan
portfolio trended similarly, increasing 12% in 2005 and reflecting
both organic growth as well as the purchase of loans for portfolio.
Deposits also increased in 2005, up 19% from the year-end 2004 amount
primarily because of growth in time deposits and interest bearing
checking accounts.
"As we have continued to increase our loan portfolio, we also have
maintained a strong emphasis on credit quality, reporting significant
progress in 2005," Larison continued. "Non-performing loans declined
by almost two-thirds during the year, while impaired loans declined
nearly one-half from the 2004 level. We also experienced a substantial
decline in net charge-offs to annualized average loans outstanding.
With these improvements in mind, we were able to reduce our loan loss
provision 11% and 29%, respectively, for the fourth quarter and full
year 2005 versus the comparable year-earlier periods."
"Importantly, our progress in 2005 supported other initiatives
that have benefited our stockholders directly," Larison added. "Early
in the year, we initiated cash dividend payments, beginning at $0.05
per common share, and we have increased that rate by a penny in each
subsequent declaration. With our most recent dividend payment of $0.08
per common share, our total 2005 dividends were approximately 40% of
annual earnings and represent an annualized yield of more than 2%.
While our Board of Directors will continue to evaluate future
dividends in light of prevailing operating conditions and other
capital requirements, we expect to maintain at least this level of
quarterly dividends per share throughout 2006. Also, we have pursued
opportunistic stock repurchases during the past year to help support
our employee benefit plans and as a way to manage our capital
prudently. Together with our cash dividend payments, these efforts
helped create added value for our stockholders in 2005."
For the fourth quarter of 2005, net interest income declined
slightly to $5,211,000 from $5,251,000 in the year-earlier period. The
provision for loan losses for the fourth quarter also declined to
$579,000 from $648,000 in the same period last year on improved credit
quality. As a result, net interest income after provision for loan
losses increased slightly to $4,632,000 in the fourth quarter of 2005
from $4,603,000 in the prior-year period.
During the fourth quarter of 2005, the Company experienced further
margin compression as net interest margin declined to 3.06% from 3.34%
in the year-earlier period. For 2005, net interest margin was down to
3.05% versus 3.59% in 2004. This ongoing margin compression throughout
2005 reflected the relatively flat yield curve that characterized the
year, as the cost of deposits rose without a corresponding increase in
the yield on longer-term loan assets. Competition for deposits remains
aggressive and is continuing to put pressure on the Company's cost of
funds. 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 and heightened competition for deposits.
For 2005, net interest income increased to $20,096,000 from
$19,856,000 in 2004. The 2005 provision for loan losses declined to
$2,121,000 from $2,975,000 in 2004, resulting in net interest income
after provision for loan losses of $17,975,000 for 2005 versus
$16,881,000 in the same period last year. Net income for 2005 totaled
$4,689,000, including a tax benefit of $895,000 recorded in the third
quarter of 2005, up from net income of $3,192,000 in 2004. Earnings
per diluted share for 2005 totaled $0.33 versus $0.32 in the year
earlier on 40% more shares outstanding versus 2004.
Concluding, Larison said, "With our strong finish to 2005, we
enter the new year with considerable momentum. While we know market
conditions remain competitive, with a flat yield curve, we are excited
about the opportunities we see for continued growth and greater
penetration across our markets. Our focus, of course, remains on the
metropolitan Jacksonville area, where we presently are constructing
two new branches. These locations, expected to open during the second
half of 2006, will expand our presence on the south side to serve the
fast-growing area of St. Johns County."
During the fourth quarter, the Company repurchased 380,000 shares
of its common stock, representing an expenditure of approximately
$5,500,000. For the year, the Company repurchased a total of 665,000
common shares for approximately $9,600,000. A portion of these
repurchases offset the effect of stock issued on July 1, 2005, in
connection with the Company's restricted stock plan. Atlantic Coast
Federal Corporation has remaining authorization to purchase up to
200,000 common shares under its current stock repurchase program,
which was announced in September 2005.
The Company's total assets increased 17% to $743,849,000 at
December 31, 2005, from $637,678,000 at December 31, 2004. Loans
receivable, net increased 12% to $580,441,000 at December 31, 2005,
from $517,711,000 at December 31, 2004. Deposits rose 19% to
$516,322,000 at the end of 2005 from $435,682,000 at December 31,
2004.
Total stockholders' equity declined 6% to $92,917,000 at December
31, 2005, from $98,700,000 as of December 31, 2004, primarily because
of the Company's share repurchase programs during the course of the
year.
Return on average stockholders' equity for the fourth quarter and
year ended December 31, 2005, was 4.57% and 4.73%, respectively,
versus 2.40% and 5.87%, respectively, for the comparable periods last
year. Return on average total assets for the fourth quarter and year
ended December 31, 2005, was 0.59% and 0.67%, respectively, compared
with 0.30% and 0.55%, respectively, for the same periods in 2004.
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 $744 million in assets
as of December 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.
ATLANTIC COAST FEDERAL CORPORATION
Unaudited Financial Highlights
(In thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
------------------- -------------------
2005 2004 2005 2004
-------- -------- -------- --------
Total interest income $ 10,185 $ 8,466 $ 37,254 $ 31,772
Total interest expense 4,974 3,215 17,158 11,916
-------- -------- -------- --------
Net interest income 5,211 5,251 20,096 19,856
Provision for loan
losses 579 648 2,121 2,975
-------- -------- -------- --------
Net interest income
after provision
for loan losses 4,632 4,603 17,975 16,881
Non-interest income 2,073 1,328 7,413 5,322
Non-interest expense 5,019 5,193 19,616 17,256
-------- -------- -------- --------
Income before income
taxes 1,686 738 5,772 4,947
Income tax expense 597 245 1,083 1,755
-------- -------- -------- --------
Net income $ 1,089 $ 493 $ 4,689 $ 3,192
======== ======== ======== ========
Earnings per share:
Basic $ 0.08 $ 0.03 $ 0.34 $ 0.32
======== ======== ======== ========
Diluted $ 0.07 $ 0.03 $ 0.33 $ 0.32
======== ======== ======== ========
Basic weighted
average shares 13,690 13,850 14,000 10,016
======== ======== ======== ========
Diluted weighted
average shares 13,731 13,850 14,020 10,016
======== ======== ======== ========
Dec. 31, Dec. 31,
2005 2004
-------- --------
Total assets $743,849 $637,678
Cash and cash equivalents 37,959 25,708
Securities available for sale 71,965 53,363
Loans receivable, net 580,441 517,711
Total deposits 516,322 435,682
Federal Home Loan Bank advances 129,000 100,314
Stockholders' equity 92,917 98,700
Selected Consolidated Financial Ratios and Other Data (unaudited) for
the fourth quarter and year ended December 31, 2005 and 2004, may be
found at the following link: http://www.irinfo.com/acfc/4Q05fsw.pdf.
Investors should refer to the Company's Form 10-K for the year ended
December 31, 2005, for additional information and disclosures; the
Form 10-K 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