Exhibit 99.1

     Atlantic Coast Federal Corporation Increases Quarterly Dividend
                        to $0.11 Per Common Share

    WAYCROSS, Ga.--(BUSINESS WIRE)--Sept. 29, 2006--Atlantic Coast
Federal Corporation (NASDAQ: ACFC), the holding company for Atlantic
Coast Bank, today announced that its Board of Directors has voted to
increase the Company's regular quarterly cash dividend rate on common
stock to $0.11 per share. This new rate represents an increase of
$0.01 from the preceding quarter and goes into effect with the next
dividend that will be paid on October 30, 2006, to all stockholders of
record as of October 13, 2006.

    Atlantic Coast Federal, MHC, which holds 8,728,500 shares or
approximately 63% of the Company's total outstanding stock, has
informed the Company that it will waive receipt of the dividend on its
shares.

    Commenting on the announcement, Robert J. Larison, Jr., President
and Chief Executive Officer, said, "Throughout the first half of the
year, the Company posted solid financial and operating results that we
believe demonstrate the ongoing strength of our business and the
favorable growth characteristics of our Atlantic Coast markets. With
these trends in mind, our Board is pleased once again to increase the
Company's cash return to stockholders - the sixth consecutive
quarterly increase since we commenced dividend payments in early 2005.
We are gratified to be able to provide a direct and tangible way for
our stockholders to participate in our growth and consider this step a
key means of enhancing stockholder value."

    Atlantic Coast Federal Corporation, with approximately $779
million in assets as of June 30, 2006, is the holding company for
Atlantic Coast Bank, 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.AtlanticCoastBank.net,
under the Investor Information section.

    Atlantic Coast Bank 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. Atlantic Coast Bank expects to open one new branch office in St.
Johns County, Florida, next month, and one additional location there
in the coming year.

    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
"will," "expected," "believe," and "prospects," 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