Atlantic Coast Financial Corporation (the "Company")(NASDAQ: ACFC), the holding company for Atlantic Coast Bank (the "Bank"), today announced that its Board of Directors has engaged Stifel, Nicolaus & Company, Incorporated ("Stifel Nicolaus Weisel") to assist the Company in exploring strategic alternatives to enhance stockholder value.
In its prospectus, dated November 12, 2010, distributed to investors in connection with the Company's second-step conversion and stock offering that was completed in February 2011, the Company disclosed its intent to raise additional capital through a rights offering at such time as permitted by regulators in order to meet an individual minimum capital requirement for the Bank, which was subsequently set at a Tier 1 leverage ratio of 7.0%. As previously disclosed, the Bank's Tier 1 leverage ratio was 6.22% as of September 30, 2011, and, therefore, the Bank did not meet this requirement at the end of the third quarter of 2011. In light of current economic and market conditions, as well as recent operating results, the Company's Board of Directors has begun a review of its strategic alternatives and has authorized Stifel Nicolaus Weisel to explore such alternatives, including a potential business combination in addition to the previously disclosed rights offering.
The regulatory approval letter issued in connection with the Company's second-step conversion prohibited the Company for a period of three years from taking certain actions, such as discussions relating to a potential business combination that would require stockholder approval, without the prior written consent of regulators. As part of its review of strategic alternatives, the Company has requested and received approval from its primary regulator, the Federal Reserve Board (the "Federal Reserve"), to pursue strategic alternatives that may lead to a transaction that requires stockholder approval. With the Federal Reserve's consent, the Company may now take the necessary actions to explore its strategic alternatives.