Atlantic Coast Financial Corporation Signs Definitive Merger Agreement With Bond Street Holdings, Inc., The Fifth Largest Independent Banking Organization Headquartered In Florida

Atlantic Coast Financial Corporation (the "Company") (NASDAQ: ACFC), the holding company for Atlantic Coast Bank (the "Bank"), today announced a strategic transaction that will achieve immediate enhanced value for all stockholders with respect to the present value of their investment, as well as a financially strong banking platform, and a competitive community banking organization that is well positioned to meet the needs of its customers and communities for the long term.

Specifically, the Company has entered into a definitive merger agreement with Bond Street Holdings, Inc. ("Bond Street") under which the Company will merge into Bond Street, a community-oriented bank holding company with $3.2 billion in total assets that operates 41 community banking branches along both Florida coasts and in the Orlando area. Upon completion of that transaction, Atlantic Coast Bank will merge into Florida Community Bank, N.A., Bond Street's banking subsidiary.

As a result of this strategic merger agreement, the Company's stockholders will receive $5.00 per share in cash for each common share owned. The $5.00 per share merger consideration to be realized by the Company's stockholders represents a premium of approximately 49% to the Company's average stock price of $3.36 over the 10-day period ended February 25, 2013. Of the total transaction price of $5.00, $2.00 will be held in an escrow account and will be available to cover losses from stockholder claims for one year or until the final resolution of such claims, if later. The transaction is expected to be completed by the end of the second quarter of 2013, subject to customary conditions, including regulatory approvals and the approval of Company stockholders.

G. Thomas Frankland, President and Chief Executive Officer of the Company, said, "This transaction is a win for our stockholders, a win for our customers and a win for our banking franchise. This strategic business combination significantly enhances our combined abilities to be one of the financially strongest and most competitive community banking organizations in the northeast Florida and southeast Georgia markets. This transaction is an important and meaningful opportunity for our stockholders, our customers and our communities. The keys to community banking going forward are the resources that an organization can dedicate to build its customer market potential, the soundness of the capital and operating capabilities of its platform, and its expertise about its markets and products to meet the financial services needs of its customers. We are confident that this merger is a highly attractive strategic alignment. Its completion will fulfill as well the capital mandate we have received from our regulators."

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