Atlantic Coast Financial Corporation Signs Definitive Merger Agreement with Bond Street Holdings, Inc., the Fifth Largest

  Atlantic Coast Financial Corporation Signs Definitive Merger Agreement with
  Bond Street Holdings, Inc., the Fifth Largest Independent Banking
  Organization Headquartered in Florida

        Transaction Creates Immediate Enhanced Return to Stockholders

   Merger to Create One of the Strongest Community Banking Organizations in
               Northeast Florida and Southeast Georgia Markets

Business Wire

JACKSONVILLE, Fla. -- February 26, 2013

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

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

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."

The Company stated that its Board of Directors and the Strategic Alternatives
Committee of the Board, with the assistance of the Committee's independent
financial advisor, Stifel, Nicolaus & Company, Incorporated, an affiliate of
Keefe, Bruyette & Woods, Inc., (a Stifel Financial Corp Company), have
considered various strategic alternatives for more than a year, including a
recapitalization in the form of a rights offering as well as an outright
merger transaction. In evaluating its options, the Committee and the Board
considered the relative risks involved with the alternatives, along with the
Company's goal of maximizing the return to stockholders. These risks include
the prospects of approval by regulators for successful completion of other
alternatives, the effectiveness of each option in gaining full compliance with
the Consent Order issued by the Office of the Comptroller of the Currency
under which the Bank currently operates, the Bank's continued exposure to
credit, market, economic, and interest rate risks, as well as ongoing earnings
pressure from the Company's asset quality and wholesale debt. Considering all
these factors, the Board of Directors voted to proceed with the merger
alternative, determining that it will provide stockholders with an enhanced
return given market and business conditions, remove the prospects of future
dilution to stockholders, and eliminate the operational and regulatory risks
associated with a recapitalization.

"We are excited by the prospects of growing our bank platform with the
addition of Atlantic Coast Bank and the opportunities we foresee as we move
together to expand in the Jacksonville area as well as the Southeast Georgia
markets," added Kent Ellert, President and Chief Executive Officer of Florida
Community Bank. "This acquisition will enhance our Florida footprint
significantly by giving us attractive visibility in the state's fourth largest
metro area and will provide a substantial foundation for us to build a
commercial lending team to spur future growth – precisely as we have done with
the eight successful acquisitions we have previously completed. We look
forward to having Atlantic Coast Bank on our team, building on its tradition
and many great qualities, and together creating an even stronger community
bank for customers."

When the transaction is completed, Florida Community Bank will become the
fourth largest bank headquartered in Florida, with almost $4 billion in assets
and 53 locations along both Florida coasts and in Southeast Georgia.

About the Company

Atlantic Coast Financial Corporation is the holding company for Atlantic Coast
Bank, a federally chartered and insured stock savings bank. It is a
community-oriented financial institution serving northeastern Florida and
southeastern Georgia markets through 12 locations, with a focus on the
Jacksonville metropolitan area. Investors may obtain additional information
about Atlantic Coast Financial Corporation on the Internet at, under Investor Information.

About Bond Street

Formed in 2009 and headquartered in South Florida, Bond Street has become the
fifth largest independent bank in Florida. This transaction marks Florida
Community Bank's first entry into the northeast Florida/southeast Georgia

Forward-looking Statements

This news release contains forward-looking statements within the meaning of
the federal securities laws. Statements in this release that are not strictly
historical are forward-looking and are based upon current expectations that
may differ materially from actual results. These forward-looking statements,
identified by words such as "will," "expected," "believe," and "prospects,"
involve risks and uncertainties that could cause actual results to differ
materially from those anticipated by the statements made herein. These risks
and uncertainties involve general economic trends and changes in interest
rates, increased competition, changes in consumer demand for financial
services, the possibility of unforeseen events affecting the industry
generally, the uncertainties associated with newly developed or acquired
operations, and market disruptions and other effects of terrorist activities.
The Company undertakes no obligation to release revisions to these
forward-looking statements publicly to reflect events or circumstances after
the date hereof or to reflect the occurrence of unforeseen events, except as
required to be reported under the rules and regulations of the Securities and
Exchange Commission.

Additional Information

This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval. This
communication is being made in respect of a proposed business combination
transaction involving Atlantic Coast Financial Corporation and Bond Street
Holdings, Inc. In connection with the proposed transaction, Atlantic Coast
Financial Corporation will file with the Securities and Exchange Commission
(the "SEC") a proxy statement to be distributed to the stockholders of the
Company in connection with their vote on the proposed transaction. BEFORE
IMPORTANT INFORMATION. The final proxy statement will be mailed to
stockholders of Atlantic Coast Financial Corporation. Stockholders may obtain
copies of all documents filed with the SEC regarding this transaction, free of
charge, at the SEC's website ( and by accessing Atlantic Coast
Financial Corporation's website ( under the heading
"Investor Relations" and then under the link "SEC Filings." These documents
may also be obtained free of charge from Atlantic Coast Financial Corporation
by requesting them in writing to Atlantic Coast Financial Corporation, 10151
Deerwood Park Blvd., Building 200, Suite 100, Jacksonville, Florida 32256;
Attention: Thomas B. Wagers, Sr., Chief Financial Officer, or by telephone at
(904) 565-8570.

Atlantic Coast Financial Corporation and its directors and executive officers
may be deemed participants in the solicitation of proxies from Atlantic Coast
Financial Corporation's stockholders in connection with this transaction.
Information about the directors and executive officers of Atlantic Coast
Financial Corporation and information about other persons who may be deemed
participants in this transaction will be included in the proxy statement. You
can find information about Atlantic Coast Financial Corporation's executive
officers and directors in Atlantic Coast Financial Corporation's definitive
proxy statement filed with the SEC on April 11, 2012, a copy of which is
available at the SEC's website or from Atlantic Coast Financial Corporation as
described above.


Atlantic Coast Financial Corporation
Corporate Communications, Inc.
Patrick J. Watson, 615-324-7309
Bond Street Holdings
Kekst and Company
Ross Lovern, 212-521-4876
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