Atlantic Coast hires CEO, files to sell stock
Atlantic Coast Financial Corp. on Tuesday announced the hiring of John Stephens to fill the vacant president and chief executive officer positions of the company and its bank subsidiary, Atlantic Coast Bank.
Meanwhile, the Jacksonville-based company also took steps
to raise additional capital by filing a registration statement with the Securities and Exchange Commission to sell up to $46 million in stock in a secondary offering.
Atlantic Coast Financial has been operating under a consent order from the U.S. Office of the Comptroller of the Currency since August 2012 requiring the bank to increase its capital. The company thought it solved that problem earlier this year by agreeing to a buyout offer from a South Florida banking company. However, shareholders rejected that deal in June.
After the buyout fell apart, CEO G. Thomas Frankland resigned, and the company had been searching for a new CEO since then.
Stephens served as chief lending officer for the Central and North Florida affiliate banks of Fifth Third Bank from 2006 to 2011.
Most recently, Stephens was president of Orlando-based Tower Bridge Capital Inc.
“During his more than 23 years in the financial industry, he has been a key player in all aspects of the banking industry, advancing to virtually every critical position in a bank’s structure,” Atlantic Coast Financial board member Jay Sidhu said in a news release.
Sidhu, a former chairman of the company, led the search for a CEO. Sidhu had led opposition to the buyout proposal earlier this year and at last month’s annual shareholders meeting, three candidates nominated by Sidhu were added to Atlantic Coast Financial’s board of directors.
Atlantic Coast Financial said Stephens’ appointment is contingent upon receipt of a regulatory non-objection from the Comptroller and the Federal Reserve Bank of Atlanta.
The company did not mention the stock sale in its late afternoon announcement of Stephens’ hiring. It filed the registration statement afterward.
The registration statement does not say when the shares will be sold. It said the stock sale is part of a plan to turn around the bank’s performance, which also includes bringing in the new CEO and reducing the bank’s level of bad loans.
Atlantic Coast Financial has lost money every year since 2008 and recorded a net loss of $3.6 million in the first half of this year.
Stephens expressed optimism in a statement in the company’s news release.
“I am impressed by the company’s potential, the markets in which it operates and the opportunities they present, as well as the energy and commitment demonstrated by the entire team to strengthening the Company’s capital structure and building Atlantic Coast Bank’s community banking model,” he said.