Atlantic Coast Federal Corporation (NASDAQ:ACFC), the holding company of Atlantic Coast Bank (the “Bank”), today announced that Atlantic Coast Financial Corporation, a Maryland corporation and the proposed new holding company of the Bank (the “Company”) and Atlantic Coast Federal, MHC have received conditional regulatory approval from the Office of Thrift Supervision to commence Atlantic Coast Financial Corporation’s stock offering in connection with Atlantic Coast Federal, MHC’s proposed second-step conversion. The Company also announced today that the registration statement relating to the sale of common stock of Atlantic Coast Financial Corporation has been declared effective by the Securities and Exchange Commission (the “SEC”).

Atlantic Coast Financial Corporation is offering for sale the 65.1% ownership interest in the Company currently owned by Atlantic Coast Federal, MHC, which is equivalent to between $17.0 million and $23.0 million, or between 1,700,000 and 2,300,000 shares of common stock at $10.00 per share. Atlantic Coast Financial Corporation may increase the number of shares that it sells in the offering, without notice to persons who have subscribed for shares, by up to 15%, to $26.5 million or 2,645,000 shares at $10.00 per share, as a result of market demand or changes in the financial markets. The number of shares to be sold in the offering is based on an independent appraisal of the estimated pro forma market value of Atlantic Coast Financial Corporation as of August 20, 2010.

At the conclusion of the conversion and offering, the existing shares of common stock held by the public stockholders of the Company will be exchanged for between 0.1948 and 0.2635 shares of Atlantic Coast Financial Corporation, subject to a 15% increase to 0.3030 shares, based on the independent appraisal. The exchange ratio ranges could change as a result of regulatory review or due to updates to the independent appraisal, reflecting, among other things, changes in market conditions before or during the offering.