In the letter, Atlantic Coast Financial warns stockholders that if the proposed merger agreement is not approved, the entire value of a stockholder’s investment in Atlantic Coast Financial could be placed at high risk because a viable future for Atlantic Coast Financial is uncertain absent the completion of the proposed merger as indicated by the "going concern" disclosures issued with the Company’s financial statements for the year ended December 31, 2012. The letter also reminds stockholders that Atlantic Coast Bank is operating under a Consent Order issued by the Office of the Comptroller of the Currency, which severely impacts its banking operations and required a capital infusion of approximately $30-35 million by December 31, 2012. It is highly unlikely that such a capital infusion could be achieved in the current economic environment. Moreover, a capital infusion of this magnitude would significantly dilute existing stockholders who do not participate.
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The letter also states that, upon completion of the merger, Atlantic Coast Financial’s banking business will be well positioned to meet the needs of its customers and communities. Bond Street is the holding company for Florida Community Bank, has over $3.2 billion in total assets, and operates in 41 community banking locations along both coasts of Florida and the Orlando area. With Atlantic Coast Financial, Florida Community Bank will become the fourth largest bank headquartered in Florida, with 53 locations along both Florida coasts and Southeast Georgia.
The letter makes clear that the Board of Directors of Atlantic Coast Financial strongly recommends stockholders VOTE FOR the proposed merger with Bond Street Holdings.
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