1284077--3/30/2007--ATLANTIC_COAST_FEDERAL

related topics

{loan, real, estate}

{stock, price, share}

{stock, price, operating}

{loss, insurance, financial}

{regulation, government, change}

{personnel, key, retain}

{condition, economic, financial}

Risks Relating to the Business The loan portfolio possesses increased risk due to the substantial number of multi-family, commercial real estate, commercial business and consumer loans, which could increase the level of provision for loan losses. Commercial Real Estate and Commercial Business Loans. Commercial Real Estate and Commercial Business Loans. Commercial and Multi-Family Construction Loans. Commercial and Multi-Family Construction Loans. The loan portfolio possesses increased risk due to rapid expansion and the overall unseasoned nature of the portfolio. The geographic concentration in loans secured by one- to four- family residential real estate may increase credit losses, which could increase the level of provision for loan losses. If the allowance for loan losses is not sufficient to cover actual losses, income may be negatively affected. Dependence on the management team to implement business strategy and execute successful operations. Changes in interest rates may hurt profits. Strong competition in the primary market area may reduce the ability to attract and retain deposits and obtain loans. If economic conditions deteriorate, results of operations and financial condition could be adversely impacted as borrowers ability to repay loans declines and the value of the collateral securing loans decreases. The Bank operates in a highly regulated environment and may be adversely affected by changes in laws and regulations. Risks Relating to an Investment in Common Stock Stock price may be volatile due to limited trading volume. Public stockholders own a minority of Atlantic Coast Federal Corporation s common stock and will not be able to exercise voting control over most matters put to a vote of stockholders. Stock issued pursuant to the exercise of stock options awarded to directors and management will dilute public stockholder ownership. Ability to pay dividends is limited. Atlantic Coast Federal MHC may never convert from a mutual stock to a capital stock form which could adversely affect the market value of the common stock.

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1284077--3/30/2007--ATLANTIC_COAST_FEDERAL_CORP