Atlantic Coast Federal Corp Enters Into Supervisory Agreements With Office of Thrift Supervision

On November 10 after the close of the market, Atlantic Coast Federal Corp

released an 8-K stating that it will be forced to enter into supervisory agreements with the Office of Thrift Supervision (OTS). The OTS will impose minimum capital requirements for Atlantic Coast Bank which will require it to maintain capital levels higher than those required to be considered well capitalized. Atlantic Coast believes the requirements will entail reaching a core capital level of 7% and a total risk-based capital ratio of 11% by March 31, 2011, or June 30, 2011. Until the individual capital requirements are finalized, Atlantic Coast will not know the exact capital requirements or the exact date by which the bank has to realize the capital levels. According to regulatory filings as of 6/30/10, Atlantic Coast Bank's core capital ratio and total risk-based capital ratio equaled 5.80% and 11.13%. The company is currently conducting a second step offering, which if successful, should rectify the preliminary assumptions on bank capital levels. Sterne Agee has a Neutral rating on ACFC ACFC closed Wednesday at $1.40