Atlantic Coast Federal Corporation (NASDAQ:ACFC), the holding company for Atlantic Coast Bank, today reported financial results for the second quarter and six months ended June 30, 2010. Highlights of the Company's second quarter report included:
  • A significant decline in non-performing assets; non-performing assets decreased to 3.2% of total assets at June 30, 2010, from 4.3% at March 31, 2010, and 4.7% at June 30, 2009, and non-performing loans at June 30, 2010, declined over 48% from the prior-year total;
  • An ongoing improvement in net interest margin, leading to a 20% increase in net interest income for the second quarter compared with the same period last year;
  • Significantly higher non-interest income for the quarter coupled with lower non-interest expense; and
  • A 43% decline in net loss before income taxes to $4.1 million in the second quarter of 2010 from $7.2 million in the second quarter of 2009.

On an after-tax basis, the Company recorded a net loss of $4.1 million or $0.31 per diluted share for the second quarter of 2010 compared with a net loss of $4.6 million or $0.36 per diluted share for the year-earlier quarter. For the first six months of 2010, the net loss totaled $6.8 million or $0.52 per diluted share compared with a net loss of $7.7 million or $0.59 per diluted share for the first six months of 2009. The Company no longer records the income tax benefit of its net losses following the establishment of a deferred tax asset valuation allowance during 2009; the income tax benefit reduced the net loss by $2.5 million and $4.2 million, respectively, in the second quarter and first six months of 2009.

"During the second quarter, credit costs remained high as we continued to confront loan quality issues aggressively," said Robert J. Larison, Jr., President and Chief Executive Officer. "During the quarter, we took advantage of an opportunity to dispose of two pools of non-performing loans, together totaling $6.3 million. This step, combined with our other efforts to work through loan problems, helped reduce the level of non-performing loans in our loan portfolio to almost one-half of the balance at June 30, 2009. Based on this ongoing progress, together with continued improvements in net interest margin, non-interest income and non-interest expense, we remain cautiously optimistic about the direction of the Company as we continue to navigate a challenging economy."