Atlantic Coast Financial Corp (fka ACFC)

[56Chevy]

Atlantic Coast Financial Corporation Reports Third Quarter 2013 Results

Company Release - 10/29/2013

JACKSONVILLE, Fla.--(BUSINESS WIRE)-- Atlantic Coast Financial Corporation (the "Company") (NASDAQ: ACFC), the holding company for Atlantic Coast Bank (the "Bank"), today reported financial results for the quarter and nine months ended September 30, 2013.

For the third quarter of 2013, the Company reported a net loss of $0.9 million or $0.38 per diluted share compared with a net loss of $1.7 million or $0.66 per diluted share in the year-earlier quarter and a net loss of $1.6 million or $0.62 per diluted share in the second quarter of 2013. For the first nine months of 2013, the net loss totaled $4.5 million or $1.81 per diluted share compared with a net loss in the year-earlier period of $6.4 million or $2.55 per diluted share.

The Company's results through September 30, 2013, included costs associated with the previously announced merger with Bond Street Holdings, Inc., which stockholders rejected at a special meeting held on June 11, 2013. In order to more clearly assess the fundamental operations of the Company, management believes it is appropriate to adjust the reported net losses for the first nine months of 2013 to exclude these merger-related costs. On this as-adjusted basis, the adjusted net loss for the nine months ended September 30, 2013, was $3.2 million or $1.29 per diluted share. Adjusted net loss is a non-GAAP measurement; see reconciliation of GAAP and non-GAAP measures at page 7 of this release.

Significant developments in the third quarter included:

• The net loss decreased 44% to $0.9 million for the third quarter of 2013 from $1.7 million for the same quarter in 2012 and decreased 40% from $1.6 million for the second quarter of 2013. The adjusted net loss decreased 49% to $3.2 million for the nine months ended September 30, 2013, from $6.4 million for the nine months ended September 30, 2012.

• Non-performing assets decreased 27% to $25.1 million or 3.51% of total assets at September 30, 2013, from $34.2 million or 4.35% of total assets at September 30, 2012, and decreased 1% from $25.2 million or 3.40% of total assets at June 30, 2013.

• Annualized net charge-offs to average loans decreased to 1.87% for the third quarter of 2013 from 2.78% for the year-earlier third quarter and increased from 1.79% in the second quarter of 2013.

• Total assets were $714.1 million at September 30, 2013, compared with $772.6 million at December 31, 2012, as the Company has continued to manage asset size consistent with its overall capital management strategy.

• On September 10, 2013, the Company named John K. Stephens, Jr. as the new Chief Executive Officer of the Company and the Bank; Stephens, who brings with him over 25 years of banking experience, also will serve as a director of the Company and the Bank. Stephens' appointment is contingent upon receipt of regulatory non-objection. Additionally, the Boards of Directors of the Company and the Bank each has four new members, all with extensive management experience and three of whom have served as executives of large community or national banks. The appointment of James D. Hogan, one of the new directors, is contingent upon receipt of regulatory non-objection.

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