Atlantic Coast Federal Corporation (NASDAQ:ACFC), the holding company for Atlantic Coast Bank, today reported financial results for the first quarter of 2010. Highlights of the Company's report included:
A continued trend of declining non-performing loans on a sequential-quarter basis;
A lower provision for loan losses in the first quarter of 2010 versus the same quarter last year;
A steadily improving net interest margin; and
A 42% decrease in net loss before income taxes to $2.8 million in the first quarter of 2010 from $4.7 million in the first quarter of 2009.
On an after-tax basis, the Company recorded a net loss of $2.8 million or $0.21 per diluted share for the first quarter of 2010 compared with a net loss of $3.1 million or $0.23 per diluted share for the year-earlier quarter, which included an income tax benefit of $1.7 million. The Company no longer records the income tax benefit of its net losses following the establishment of a deferred valuation allowance in the second half of 2009. "We are pleased to see ongoing indications of improvement, though still modest, in asset quality," said Robert J. Larison, Jr., President and Chief Executive, "as the level of non-performing loans continues to decline and our loan portfolio demonstrates increasing stability. Importantly, this represents the third consecutive quarter of progress in this key area. We are further encouraged by ongoing signs of operational strength, indicated by positive trends with respect to net interest margin, higher year-over-year loan originations, and deposit growth since the end of 2009. While we know the Company's overall performance continues to be influenced by broader economic fundamentals and an eventual recovery in the real estate market – areas that to date show mixed results at best – we remain cautiously optimistic about the positive trends seen over the past few quarters. As these trends continue, and as our past efforts to reduce expenses gain traction and become more evident in our operating results, we believe the Company is positioned to improve future performance and to take advantage of growth opportunities in our markets when the economy begins to rebound."