Exhibit 99.1
Atlantic Coast Federal Corporation to Restate Financial Statements
WAYCROSS, Ga.--(BUSINESS WIRE)--June 7, 2007--Atlantic Coast
Federal Corporation (NASDAQ:ACFC), the holding company for Atlantic
Coast Bank (collectively the "Company"), today announced that it will
restate its historical financial statements for the years ended
December 31, 2006, 2005, and 2004, and for individual quarter ended
March 31, 2007. The restatements involve the Company's accounting for
two interest rate swaps under Statement of Financial Accounting
Standards 133, Accounting for Derivative Instruments and Hedging
Activities ("SFAS 133"), entered into in connection with the Company's
Federal Home Loan Bank ("FHLB") advances. The non-cash cumulative
increase in net income over the three-year period is approximately
$422,000, net of taxes, with no change in reported stockholders'
equity as of March 31, 2007, and an increase in reported total assets
of only $260,000. Nevertheless, the decision to restate prior
financial information reflects primarily the impact of fluctuations
within the individual quarters.
Commenting on the announcement, Robert J. Larison, Jr., President
and Chief Executive Officer said, "Our hedging activities have always
focused on reducing interest rate risk and volatility, and in fact
these particular transactions were deemed to be economically effective
cash flow hedges. Upon further review of the underlying facts and
circumstances of the transactions, however, we now have determined
that these swaps do not qualify for cash flow hedge accounting."
"It is important to note that the change in accounting treatment
has no significant effect on our financial condition and cumulative
results of operations," Larison added. "It has no effect on cash
flows. Earnings per diluted share remain unchanged from previously
reported amounts for the first quarter of 2007 and the year ended
December 31, 2006. The cumulative effect on earnings from March 31,
2004, to March 31, 2007, was $422,000, net of taxes. It is only from
the perspective of individual quarters during the restatement period
that fluctuations in the fair value of the two interest rate swaps,
and their effect on current net income, become meaningful, which
explains our purpose in making the restatements at this time."
During 2004, the Company entered into two interest rate swap
agreements with notional amounts totaling $15 million, of which $10
million remained in effect as of December 31, 2006, to hedge the
variability in expected future cash flows on certain floating-rate
Federal Home Loan Bank ("FHLB") advances. At inception, the critical
terms of these swaps were viewed as matching the critical terms of the
hedged FHLB advances and, as a result, it was determined that changes
in cash flows were expected to completely offset at inception and on
an ongoing basis as provided under Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities ("SFAS 133"). Therefore, the interest rate swap agreements
were deemed to be effective cash flow hedges during the first quarter
of 2007 and the years 2006, 2005 and 2004, consistent with SFAS 133.
During the reporting periods between 2004 and 2007, the Company's
independent registered public accounting firm, Crowe Chizek and
Company LLC, did not disagree with the accounting treatment of the
interest rate swaps as part of their year-end audit or review of the
Company's interim financial statements.
In conjunction with the preparation of the Company's prospectus
associated with the conversion and stock offering announced on May 7,
2007, and based on discussions with Crowe Chizek and Company LLC, the
Company has now determined that although these swaps were economically
effective, the initial assessment of matching critical terms for the
interest rate swaps and the corresponding hedged FHLB advances was
incorrect. In each circumstance, the interest rate swap contained an
embedded written option that allowed the counterparty to terminate the
interest rate swap under certain conditions, while the FHLB advance
did not contain such matching terms. The Company did have the option
to prepay the FHLB advances, however, it was not a contractual
requirement. Since the interest rate swaps and the FHLB advances did
not have absolute parity and the critical terms of the instruments did
not completely match, the Company and its Audit Committee have
concluded that the swap transactions did not qualify as cash flow
hedges and, therefore, any fluctuations in the market value of the
interest rate swaps, including any accrued interest, should have been
included in other non-interest income resulting in quarterly and
annual mark-to-market adjustments. As originally recorded,
fluctuations in the fair value of the interest rate swaps were
recorded in other comprehensive income, with accrued interest recorded
as a reduction of interest expense on FHLB advances. There is no
effect on cash flows or stockholders' equity from these revisions.
Attached on the following four pages is a summary of the primary
changes from previous financial statements as a result of the
restatement for the years ended December 31, 2006, 2005, 2004, the
first quarter of 2007, and the first, second, third and fourth
quarters of 2006, 2005, and 2004.
Atlantic Coast Federal Corporation 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.
On May 7, 2007, the Company announced its intention to convert from
the mutual holding company form of ownership to the full stock form of
ownership. 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, with approximately $886 million in assets as
of March 31, 2007, is a community-oriented financial institution. It
serves southeastern Georgia and northeastern Florida through 14
offices, including a focus on 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
"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.
ATLANTIC COAST FEDERAL CORPORATION
(Unaudited)
(Dollars in Thousands, Except Share Information)
As of December 31,
--------------------------------------------
CONDENSED CONSOLIDATED 2006 2005
---------------------- ---------------------
BALANCE SHEETS As As
Originally As Originally As
Reported(a) Restated Reported(a) Restated
----------- --------- ----------- ---------
ASSETS
Total cash and cash
equivalents $41,057 $41,057 $37,959 $37,959
Securities available for
sale 99,231 99,231 71,965 71,965
Loans, net of allowance
for loan losses 639,517 639,517 580,441 580,441
Other assets 63,020 63,274 53,484 53,751
----------- --------- ----------- ---------
Total assets $842,825 $843,079 $743,849 $744,116
=========== ========= =========== =========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits $573,052 $573,052 $516,321 $516,321
Securities sold under
agreements to repurchase 29,000 29,000 - -
Federal Home Loan Bank
advances 144,000 144,000 129,000 129,000
Accrued expenses and other
liabilities 5,686 5,940 5,611 5,877
Stock subscriptions
received - - - -
----------- --------- ----------- ---------
Total liabilities 751,738 751,992 650,932 651,198
Total stockholders' equity 91,087 91,087 92,917 92,918
----------- --------- ----------- ---------
Total liabilities
and stockholders'
equity $842,825 $843,079 $743,849 $744,116
=========== ========= =========== =========
CONDENSED CONSOLIDATED 2004
-------------------------------------
BALANCE SHEETS As Originally As
Reported(a) Restated
------------------ -----------------
ASSETS
Total cash and cash equivalents $25,708 $25,708
Securities available for sale 53,363 53,363
Loans, net of allowance for
loan losses 517,711 517,711
Other assets 40,896 40,956
------------------ -----------------
Total assets $637,678 $637,738
================== =================
LIABILITIES AND STOCKHOLDERS'
EQUITY
Deposits $435,683 $435,683
Securities sold under
agreements to repurchase - -
Federal Home Loan Bank advances 100,314 100,314
Accrued expenses and other
liabilities 2,981 3,041
Stock subscriptions received - -
------------------ -----------------
Total liabilities 538,978 539,038
Total stockholders' equity 98,700 98,700
------------------ -----------------
Total liabilities and
stockholders' equity $637,678 $637,738
================== =================
For the years ended December 31,
--------------------------------------------
2006 2005
---------------------- ---------------------
CONDENSED CONSOLIDATED As As
Originally As Originally As
STATEMENTS OF INCOME Reported(a) Restated Reported(a) Restated
------------ --------- ----------- ---------
Total interest and
dividend income $46,407 $46,407 $37,254 $37,254
Total interest expense 24,550 24,747 17,158 17,139
------------ --------- ----------- ---------
Net interest income 21,857 21,660 20,096 20,115
Provision for loan losses 475 475 2,121 2,121
------------ --------- ----------- ---------
Net interest income after
provision for loan losses 21,382 21,185 17,975 17,994
Noninterest income 7,842 8,005 7,413 7,937
Noninterest expense 21,679 21,679 19,616 19,616
------------ --------- ----------- ---------
Income before income tax
expense 7,545 7,511 5,772 6,315
Income tax expense 2,393 2,382 1,083 1,290
------------ --------- ----------- ---------
Net income 5,152 5,129 4,689 5,025
============ ========= =========== =========
Earnings per common share:
Basic 0.38 0.38 0.34 0.36
============ ========= =========== =========
Diluted 0.38 0.38 0.33 0.36
============ ========= =========== =========
2004
---------------------------------------
CONDENSED CONSOLIDATED As Originally As
STATEMENTS OF INCOME Reported(a) Restated
-------------------- ------------------
Total interest and dividend
income $31,772 $31,772
Total interest expense 11,916 11,644
-------------------- ------------------
Net interest income 19,856 20,128
Provision for loan losses 2,975 2,975
-------------------- ------------------
Net interest income after
provision for loan losses 16,881 17,153
Noninterest income 5,322 5,208
Noninterest expense 17,256 17,256
-------------------- ------------------
Income before income tax
expense 4,947 5,105
Income tax expense 1,755 1,815
-------------------- ------------------
Net income 3,192 3,290
==================== ==================
Earnings per common share:
Basic $0.32 $0.33
==================== ==================
Diluted $0.32 $0.33
==================== ==================
For the years ended December 31,
--------------------------------------------
2006 2005
---------------------- ---------------------
SELECTED RATIOS Original Restated Original Restated
----------- --------- ----------- ---------
Return on average assets 0.66% 0.66% 0.67% 0.71%
Return on average equity 5.50% 5.48% 4.73% 5.07%
Average equity to average
assets 12.00% 12.00% 14.07% 14.07%
Net interest margin 3.02% 2.99% 3.05% 3.06%
Efficiency ratio 73.00% 73.08% 71.31% 69.93%
Book value per common
share $6.61 $6.61 $6.57 $6.57
2004
----------------------------------------
SELECTED RATIOS Original Restated
------------------ ---------------------
Return on average assets 0.55% 0.56%
Return on average equity 5.87% 6.05%
Average equity to average
assets 9.29% 9.29%
Net interest margin 3.59% 3.64%
Efficiency ratio 68.54% 68.11%
Book value per common share $6.78 $6.78
ATLANTIC COAST FEDERAL CORPORATION
(Unaudited)
(Dollars in Thousands, Except Share Information)
As of As of
March 31, December 31,
CONDENSED CONSOLIDATED 2007 2006
--------------------- ---------------------
BALANCE SHEETS As As
Originally As Originally As
Reported(a) Restated Reported(a) Restated
----------- --------- ----------- ---------
ASSETS
Total cash and cash
equivalents $47,314 $47,314 $41,057 $41,057
Securities available for
sale 129,402 129,402 99,231 99,231
Loans, net of allowance for
loan losses 642,068 642,068 639,517 639,517
Other assets 67,172 67,432 63,020 63,274
----------- --------- ----------- ---------
Total assets $885,956 $886,216 $842,825 $843,079
=========== ========= =========== =========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits $594,201 $594,201 $573,052 $573,052
Securities sold under
agreements to repurchase 53,500 53,500 29,000 29,000
Federal Home Loan Bank
advances 142,000 142,000 144,000 144,000
Accrued expenses and other
liabilities 6,304 6,564 5,686 5,940
Stock subscriptions
received - - - -
----------- --------- ----------- ---------
Total liabilities 796,005 796,265 751,738 751,992
Total stockholders' equity 89,951 89,951 91,087 91,087
----------- --------- ----------- ---------
Total liabilities
and stockholders'
equity $885,956 $886,216 $842,825 $843,079
=========== ========= =========== =========
As of As of
September 30, June 30,
CONDENSED CONSOLIDATED 2006 2006
--------------------- ---------------------
BALANCE SHEETS As As
Originally As Originally As
Reported(a) Restated Reported(a) Restated
----------- --------- ----------- ---------
ASSETS
Total cash and cash
equivalents $29,839 $29,839 $40,470 $40,470
Securities available for
sale 77,901 77,901 69,143 69,143
Loans, net of allowance
for loan losses 623,628 623,628 613,838 613,838
Other assets 61,762 62,019 55,417 55,742
----------- --------- ----------- ---------
Total assets $793,130 $793,387 $778,868 $779,193
=========== ========= =========== =========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits $546,050 $546,050 $548,044 $548,044
Securities sold under
agreements to repurchase 12,000 12,000 12,000 12,000
Federal Home Loan Bank
advances 139,000 139,000 119,000 119,000
Accrued expenses and other
liabilities 5,078 5,335 4,734 5,052
Stock subscriptions
received - - - -
----------- --------- ----------- ---------
Total liabilities 702,128 702,385 683,778 684,096
Total stockholders' equity 91,002 91,002 95,090 95,097
----------- --------- ----------- ---------
Total liabilities
and stockholders'
equity $793,130 $793,387 $778,868 $779,193
=========== ========= =========== =========
As of
March 31,
CONDENSED CONSOLIDATED 2006
---------------------
BALANCE SHEETS As
Originally As
Reported(a) Restated
----------- ---------
ASSETS
Total cash and cash equivalents $47,585 $47,585
Securities available for sale 69,061 69,061
Loans, net of allowance for loan losses 599,295 599,295
Other assets 54,578 54,951
----------- ---------
Total assets $770,519 $770,892
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $530,113 $530,113
Securities sold under agreements to repurchase 12,000 12,000
Federal Home Loan Bank advances 129,000 129,000
Accrued expenses and other liabilities 5,368 5,729
Stock subscriptions received - -
----------- ---------
Total liabilities 676,481 676,842
Total stockholders' equity 94,038 94,050
----------- ---------
Total liabilities and stockholders'
equity $770,519 $770,892
=========== =========
For the quarters ended
--------------------------------------------
March 31, December 31,
2007 2006
-------------------- --------------------
CONDENSED CONSOLIDATED As As
Originally As Originally As
STATEMENTS OF INCOME Reported(a) Restated Reported(a) Restated
----------- -------- ----------- --------
Total interest and dividend
income $13,256 $13,256 $12,730 $12,730
Total interest expense 7,855 7,903 7,236 7,287
----------- -------- ----------- --------
Net interest income 5,401 5,353 5,494 5,443
Provision for loan losses 296 296 292 292
----------- -------- ----------- --------
Net interest income after
provision for loan losses 5,105 5,057 5,202 5,151
Noninterest income 1,765 1,830 1,922 1,965
Noninterest expense 5,735 5,735 5,788 5,788
----------- -------- ----------- --------
Income before income tax
expense 1,135 1,152 1,336 1,328
Income tax expense 361 367 420 417
----------- -------- ----------- --------
Net income $774 $785 $916 $911
=========== ======== =========== ========
Earnings per common share:
Basic $0.06 $0.06 $0.07 $0.07
=========== ======== =========== ========
Diluted $0.06 $0.06 $0.07 $0.07
=========== ======== =========== ========
September 30, June 30,
2006 2006
-------------------- --------------------
CONDENSED CONSOLIDATED As As
Originally As Originally As
STATEMENTS OF INCOME Reported(a) Restated Reported(a) Restated
----------- -------- ----------- --------
Total interest and dividend
income $12,006 $12,006 $11,156 $11,156
Total interest expense 6,399 6,448 5,679 5,734
----------- -------- ----------- --------
Net interest income 5,607 5,558 5,477 5,422
Provision for loan losses (98) (98) 204 204
----------- -------- ----------- --------
Net interest income after
provision for loan losses 5,705 5,656 5,273 5,218
Noninterest income 2,094 1,963 2,188 2,118
Noninterest expense 5,403 5,403 5,254 5,254
----------- -------- ----------- --------
Income before income tax
expense 2,396 2,216 2,207 2,082
Income tax expense 759 698 714 672
----------- -------- ----------- --------
Net income $1,637 $1,518 $1,493 $1,410
=========== ======== =========== ========
Earnings per common share:
Basic $0.12 $0.11 $0.11 $0.10
=========== ======== =========== ========
Diluted $0.12 $0.11 $0.11 $0.10
=========== ======== =========== ========
March 31,
2006
--------------------
CONDENSED CONSOLIDATED As
Originally As
STATEMENTS OF INCOME Reported(a) Restated
----------- --------
Total interest and dividend income $10,515 $10,515
Total interest expense 5,236 5,278
----------- --------
Net interest income 5,279 5,237
Provision for loan losses 76 76
----------- --------
Net interest income after provision for loan
losses 5,203 5,161
Noninterest income 1,638 1,959
Noninterest expense 5,234 5,234
----------- --------
Income before income tax expense 1,607 1,886
Income tax expense 500 595
----------- --------
Net income $1,107 $1,291
=========== ========
Earnings per common share:
Basic $0.08 $0.10
=========== ========
Diluted $0.08 $0.10
=========== ========
For the quarters ended
--------------------------------------------
March 31, December 31,
2007 2006
----------------- -----------------
SELECTED RATIOS Original Restated Original Restated
-------- -------- -------- --------
Return on average assets 0.36% 0.36% 0.45% 0.44%
Return on average equity 3.42% 3.47% 4.01% 3.95%
Average equity to average assets 10.48% 10.48% 11.24% 11.24%
Net interest margin 2.68% 2.66% 2.87% 2.85%
Efficiency ratio 80.03% 79.84% 77.93% 78.13%
Book value per common share $6.58 $6.58 $6.61 $6.61
September 30, June 30,
2006 2006
----------------- -----------------
SELECTED RATIOS Original Restated Original Restated
-------- -------- -------- --------
Return on average assets 0.84% 0.78% 0.78% 0.74%
Return on average equity 6.94% 6.44% 6.37% 6.02%
Average equity to average assets 12.07% 12.06% 12.26% 12.26%
Net interest margin 3.09% 3.06% 3.09% 3.06%
Efficiency ratio 70.16% 71.84% 68.55% 69.68%
Book value per common share $6.59 $6.59 $6.72 $6.72
March 31,
2006
-----------------
SELECTED RATIOS Original Restated
-------- --------
Return on average assets 0.59% 0.69%
Return on average equity 4.77% 5.56%
Average equity to average assets 12.35% 12.35%
Net interest margin 3.04% 3.02%
Efficiency ratio 75.67% 72.73%
Book value per common share $6.65 $6.65
ATLANTIC COAST FEDERAL CORPORATION
(Unaudited)
(Dollars in Thousands, Except Share Information)
As of As of
December 31, September 30,
CONDENSED CONSOLIDATED 2005 2005
--------------------- ---------------------
BALANCE SHEETS As As
Originally As Originally As
Reported(a) Restated Reported(a) Restated
----------- --------- ----------- ---------
`
Total cash and cash
equivalents $37,959 $37,959 $52,129 $52,129
Securities available for
sale 71,965 71,965 71,569 71,569
Loans, net of allowance
for loan losses 580,441 580,441 557,165 557,165
Other assets 53,484 53,751 52,308 52,534
----------- --------- ----------- ---------
Total assets $743,849 $744,116 $733,171 $733,397
=========== ========= =========== =========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits $516,321 $516,321 $502,147 $502,147
Securities sold under
agreements to repurchase - - - -
Federal Home Loan Bank
advances 129,000 129,000 129,000 129,000
Accrued expenses and other
liabilities 5,611 5,877 4,532 4,757
Stock subscriptions
received - - - -
----------- --------- ----------- ---------
Total liabilities 650,932 651,198 635,679 635,904
Total stockholders' equity 92,917 92,918 97,492 97,493
----------- --------- ----------- ---------
Total liabilities
and stockholders'
equity $743,849 $744,116 $733,171 $733,397
=========== ========= =========== =========
As of As of
June 30, March 31,
CONDENSED CONSOLIDATED 2005 2005
--------------------- ---------------------
BALANCE SHEETS As As
Originally As Originally As
Reported(a) Restated Reported(a) Restated
----------- --------- ----------- ---------
`
Total cash and cash
equivalents $51,555 $51,555 $35,191 $35,191
Securities available for
sale 65,513 65,513 50,214 50,214
Loans, net of allowance
for loan losses 550,551 550,551 547,455 547,455
Other assets 41,680 41,785 41,380 41,611
----------- --------- ----------- ---------
Total assets $709,299 $709,404 $674,240 $674,471
=========== ========= =========== =========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits $485,567 $485,567 $461,442 $461,442
Securities sold under
agreements to repurchase - - - -
Federal Home Loan Bank
advances 119,657 119,657 109,657 109,657
Accrued expenses and
other liabilities 4,537 4,641 3,623 3,853
Stock subscriptions
received - - - -
----------- --------- ----------- ---------
Total
liabilities 609,761 609,865 574,722 574,952
Total stockholders'
equity 99,538 99,539 99,518 99,519
----------- --------- ----------- ---------
Total liabilities
and
stockholders'
equity $709,299 $709,404 $674,240 $674,471
=========== ========= =========== =========
For the quarters ended
------------------------------------------
December 31, September 30,
2005 2005
-------------------- --------------------
CONDENSED CONSOLIDATED As As
Originally As Originally As
STATEMENTS OF INCOME Reported(a) Restated Reported(a) Restated
----------- -------- ----------- --------
Total interest and dividend
income $10,185 $10,185 $9,407 $9,407
Total interest expense 4,974 4,999 4,584 4,588
----------- -------- ----------- --------
Net interest income 5,211 5,186 4,823 4,819
Provision for loan losses 579 579 442 442
----------- -------- ----------- --------
Net interest income after
provision for loan losses 4,632 4,607 4,381 4,377
Noninterest income 2,073 2,205 2,259 2,582
Noninterest expense 5,019 5,019 5,113 5,113
----------- -------- ----------- --------
Income before income tax
expense 1,686 1,793 1,527 1,846
Income tax expense 597 638 (387) (266)
----------- -------- ----------- --------
Net income $1,089 $1,155 $1,914 $2,112
=========== ======== =========== ========
Earnings per common share:
Basic $0.08 $0.08 $0.14 $0.15
=========== ======== =========== ========
Diluted $0.07 $0.08 $0.14 $0.15
=========== ======== =========== ========
June 30, March 31,
2005 2005
-------------------- --------------------
CONDENSED CONSOLIDATED As As
Originally As Originally As
STATEMENTS OF INCOME Reported(a) Restated Reported(a) Restated
----------- -------- ----------- --------
Total interest and dividend
income $9,219 $9,219 $8,443 $8,443
Total interest expense 4,122 4,107 3,478 3,445
----------- -------- ----------- --------
Net interest income 5,097 5,112 4,965 4,998
Provision for loan losses 577 577 523 523
----------- -------- ----------- --------
Net interest income after
provision for loan losses 4,520 4,535 4,442 4,475
Noninterest income 1,795 1,448 1,287 1,703
Noninterest expense 4,977 4,977 4,507 4,507
----------- -------- ----------- --------
Income before income tax
expense 1,338 1,006 1,222 1,671
Income tax expense 436 310 440 611
----------- -------- ----------- --------
Net income $902 $696 $782 $1,060
=========== ======== =========== ========
Earnings per common share:
Basic $0.06 $0.05 $0.06 $0.08
=========== ======== =========== ========
Diluted $0.06 $0.05 $0.06 $0.08
=========== ======== =========== ========
For the quarters ended
------------------------------------------
December 31, September 30,
2005 2005
----------------- -----------------
SELECTED RATIOS Original Restated Original Restated
-------- -------- -------- --------
Return on average assets 0.59% 0.62% 1.06% 1.17%
Return on average equity 4.57% 4.85% 7.65% 8.44%
Average equity to average assets 12.88% 12.88% 13.81% 13.81%
Net interest margin 3.06% 3.04% 2.86% 2.86%
Efficiency ratio 68.90% 67.91% 72.20% 69.09%
Book value per common share $6.57 $6.57 $6.58 $6.58
June 30, March 31,
2005 2005
----------------- -----------------
SELECTED RATIOS Original Restated Original Restated
-------- -------- -------- --------
Return on average assets 0.52% 0.40% 0.42% 0.56%
Return on average equity 3.58% 2.76% 3.38% 4.58%
Average equity to average assets 14.41% 14.43% 12.32% 12.32%
Net interest margin 3.11% 3.12% 3.21% 3.23%
Efficiency ratio 72.21% 75.87% 72.10% 67.26%
Book value per common share $6.84 $6.84 $6.84 $6.84
ATLANTIC COAST FEDERAL CORPORATION
(Unaudited)
(Dollars in Thousands, Except Share Information)
As of As of
December 31, September 30,
CONDENSED CONSOLIDATED 2004 2004
--------------------- ----------------------
BALANCE SHEETS As As
Originally As Originally As
Reported(a) Restated Reported(a) Restated
----------- --------- ----------- ----------
Total cash and cash
equivalents $25,708 $25,708 $43,623 $43,623
Securities available for
sale 53,363 53,363 31,592 31,592
Loans, net of allowance
for loan losses 517,711 517,711 508,040 508,040
Other assets 40,896 40,956 39,824 39,822
----------- --------- ----------- ----------
Total assets $637,678 $637,738 $623,079 $623,077
=========== ========= =========== ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits $435,683 $435,683 $444,527 $444,527
Securities sold under
agreements to repurchase - - - -
Federal Home Loan Bank
advances 100,314 100,314 90,314 90,314
Accrued expenses and other
liabilities 2,981 3,041 4,031 4,028
Stock subscriptions
received - - 38,327 38,327
----------- --------- ----------- ----------
Total liabilities 538,978 539,038 577,199 577,196
Total stockholders' equity 98,700 98,700 45,880 45,881
----------- --------- ----------- ----------
Total liabilities
and stockholders'
equity $637,678 $637,738 $623,079 $623,077
=========== ========= =========== ==========
As of As of
June 30, March 31,
CONDENSED CONSOLIDATED 2004 2004
--------------------- ---------------------
BALANCE SHEETS As As
Originally As Originally As
Reported(a) Restated Reported(a) Restated
----------- --------- ----------- ---------
Total cash and cash
equivalents $29,623 $29,623 $98,995 $98,995
Securities available for
sale 21,861 21,861 41,994 41,994
Loans, net of allowance
for loan losses 499,423 499,423 456,731 456,731
Other assets 28,721 28,851 23,798 23,623
----------- --------- ----------- ---------
Total assets $579,628 $579,758 $621,518 $621,343
=========== ========= =========== =========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits $440,380 $440,380 $492,121 $492,121
Securities sold under
agreements to repurchase - - - -
Federal Home Loan Bank
advances 90,971 90,971 80,971 80,971
Accrued expenses and
other liabilities 3,258 3,387 5,198 5,024
Stock subscriptions
received - - - -
----------- --------- ----------- ---------
Total
liabilities 534,609 534,738 578,290 578,116
Total stockholders'
equity 45,019 45,020 43,228 43,227
----------- --------- ----------- ---------
Total liabilities
and
stockholders'
equity $579,628 $579,758 $621,518 $621,343
=========== ========= =========== =========
For the quarters ended
-----------------------------------------
December 31, September 30,
2004 2004
-------------------- --------------------
CONDENSED CONSOLIDATED As As
Originally As Originally As
STATEMENTS OF INCOME Reported(a) Restated Reported(a) Restated
----------- -------- ----------- --------
Total interest and dividend
income $8,466 $8,466 $8,095 $8,095
Total interest expense 3,215 3,174 3,085 3,000
----------- -------- ----------- --------
Net interest income 5,251 5,292 5,010 5,095
Provision for loan losses 648 648 674 674
----------- -------- ----------- --------
Net interest income after
provision for loan losses 4,603 4,644 4,336 4,421
Noninterest income 1,329 1,453 1,308 876
Noninterest expense 5,194 5,194 4,059 4,059
----------- -------- ----------- --------
Income before income tax
expense 738 903 1,585 1,238
Income tax expense 245 308 581 449
----------- -------- ----------- --------
Net income $493 $595 $1,004 $789
=========== ======== =========== ========
Earnings per common share:
Basic $0.03 $0.04 $0.11 $0.09
=========== ======== =========== ========
Diluted $0.03 $0.04 $0.11 $0.09
=========== ======== =========== ========
June 30, March 31,
2004 2004
-------------------- --------------------
CONDENSED CONSOLIDATED As As
Originally As Originally As
STATEMENTS OF INCOME Reported(a) Restated Reported(a) Restated
----------- -------- ----------- --------
Total interest and dividend
income $7,670 $7,670 $7,540 $7,540
Total interest expense 2,805 2,718 2,811 2,752
----------- -------- ----------- --------
Net interest income 4,865 4,952 4,729 4,788
Provision for loan losses 109 109 1,544 1,544
----------- -------- ----------- --------
Net interest income after
provision for loan losses 4,756 4,843 3,185 3,244
Noninterest income 1,332 2,046 1,355 835
Noninterest expense 3,969 3,969 4,036 4,036
----------- -------- ----------- --------
Income before income tax
expense 2,119 2,920 504 43
Income tax expense 765 1,069 163 (12)
----------- -------- ----------- --------
Net income $1,354 $1,851 $341 $55
=========== ======== =========== ========
Earnings per common share:
Basic $0.15 $0.21 $0.03 $ -
=========== ======== =========== ========
Diluted $0.15 $0.21 $0.03 $ -
=========== ======== =========== ========
For the quarters ended
-----------------------------------------
December 31, September 30,
2004 2004
----------------- -----------------------
SELECTED RATIOS Original Restated Original Restated
-------- -------- ----------- -----------
Return on average assets 0.30% 0.37% 0.66% 0.52%
Return on average equity 2.40% 2.91% 8.67% 6.82%
Average equity to average
assets 12.57% 12.57% 7.57% 7.57%
Net interest margin 3.35% 3.38% 3.50% 3.55%
Efficiency ratio 78.93% 77.01% 64.23% 67.98%
Book value per common share $6.78 $6.78 $45,880.00 $45,881.00
June 30, March 31,
2004 2004
----------------------- -----------------------
SELECTED RATIOS Original Restated Original Restated
----------- ----------- ----------- -----------
Return on average
assets 0.97% 1.33% 0.26% 0.04%
Return on average
equity 12.12% 16.57% 3.07% 0.50%
Average equity to
average assets 8.04% 8.04% 8.53% 8.53%
Net interest margin 3.71% 3.78% 3.87% 3.92%
Efficiency ratio 64.05% 56.72% 66.34% 72.54%
Book value per common
share $45,019.00 $45,020.00 $43,228.00 $43,227.00
CONTACT: For Atlantic Coast Federal Corporation:
Corporate Communications, Inc.
Patrick J. Watson, 615-254-3376