**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q/A**

**x      QUARTERLY REPORT      PURSUANT TO SECTION 13 OR 15(d)**

**OF      THE SECURITIES EXCHANGE ACT OF 1934**

**For      the quarterly period ended March 31, 2007**

**OR**

**o TRANSITION      REPORT      PURSUANT TO SECTION 13 OR 15(d)**

**OF      THE SECURITIES EXCHANGE ACT OF 1934**

**Commission      File Number 000-50962**

| **ATLANTIC                COAST FEDERAL CORPORATION**(Exact                name of registrant as specified in its charter)      |
|---------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                            |   |   |
| **FEDERAL**(State                or other jurisdiction of incorporation or organization)                                        |   | **59-3764686**(I.R.S.                Employer Identification Number) |
|                                                                                                                            |   |   |
| **505                Haines Avenue****Waycross,                Georgia**(Address                of principal Executive Offices) |   |  **31501**(Zip                Code) |

**x**
**o**

**o    **
**o**
**x**

**o**
**x**

|  Class                                                       |  Outstanding                at May 8, 2007 |
|-------------------------------------------------------------------|-------------------------------------------------|
|  Common                Stock, $0.01 Par                Value |  13,676,071                shares          |

----

**ATLANTIC      COAST FEDERAL CORPORATION**

**Form      10-Q/A Quarterly Report**

**Table      of Contents**

|                                                 |   |                                                                                                                     |   | PageNumber |
|------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------|--------|------------|
|  **PART              I. FINANCIAL INFORMATION** |   |                                                                                                                     |
|                                                 |   |                                                                                                                     |
|  **EXPLANATORY              NOTE**              |   | 2                                                                                                                        |
| Item                1.                               |   | Financial                Statements                                                                                      |   | 4          |
| Item                2.                               |   | Management’s                Discussion and Analysis of Financial Condition and Results of                Operation |   | 14         |
| Item                3.                               |   | Quantitative                and Qualitative Disclosures about Market Risk                                                |   | 17         |
|                                                 |   |                                                                                                                     |   |       |
|  **PART              II. OTHER INFORMATION**    |   |                                                                                                                     |
|                                                 |   |                                                                                                                     |   |       |
| Form                10-Q                             |   | Signature                Page                                                                                            |   | 18         |
|                                                 |   |                                                                                                                     |   |       |
| Ex-31.1                                              |   | Section                302 Certification of CEO                                                                          |   | 19         |
| Ex-31.2                                              |   | Section                302 Certification of CFO                                                                          |   | 20         |
| Ex-32                                                |   | Section                906 Certification of CEO and CFO                                                                  |   | 21         |

----

**EXPLANATORY      NOTE**

*Accounting      for Derivative Instruments and Hedging Activities *

----

**EXPLANATORY      NOTE **

|                                      |   | For                the Quarter Ended  |   |
|-------------------------------------------|--------|---------------------------------------|--------|
|                                      |   | March                31,              |   | March                31, |   |
|                                      |   | 2007                                  |   | 2006 |   |
|                                      |   | (Dollars                in Thousands) |   |
| Total                interest expense     |   | $                                     | 48     |   | $ | 42 |   |
| Noninterest                income         |   |                                  | 65     |   |   | 321 |   |
| Income                tax expense         |   |                                  | 6      |   |   | 95 |   |
| Net                income                 |   | $                                     | 11     |   | $ | 184 |   |
| Earnings                per common share: |   |                                  |   |   |   |   |   |
| Basic                                     |   | $                                     | -      |   | $ | 0.01 |   |
| Diluted                                   |   | $                                     | -      |   | $ | 0.01 |   |

----

**ATLANTIC        COAST FEDERAL CORPORATION**

**CONSOLIDATED        BALANCE SHEET**

**March        31, 2007 (unaudited) and December 31, 2006**

**(Dollars        in Thousands, Except Share Information) (restated)**

|                                                                                                                                                                                                                                                                                                               |   | 2007   |    | 2006   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|
| ASSETS                                                                                                                                                                                                                                                                                                             |   |   |    |   |   |
| Cash                and due from financial institutions                                                                                                                                                                                                                                                            |   | $      | 10,192  |   | $      | 10,571 |   |
| Short-term                interest earning deposits                                                                                                                                                                                                                                                                |   |   | 37,122  |   |   | 30,486 |   |
| Total                cash and cash equivalents                                                                                                                                                                                                                                                                     |   |   | 47,314  |   |   | 41,057 |   |
| Other                interest earning deposits in other financial institutions                                                                                                                                                                                                                                     |   |   | 700     |   |   | 1,200 |   |
| Securities                available for sale                                                                                                                                                                                                                                                                       |   |   | 129,402 |   |   | 99,231 |   |
| Real                estate mortgages held for sale                                                                                                                                                                                                                                                                 |   |   | 8,392   |   |   | 4,365 |   |
| Loans,                net of allowance for loan losses of $4,853 at March 31, 2007 and                $4,705 at                December 31, 2006                                                                                                                                                                   |   |   | 642,068 |   |   | 639,517 |   |
| Federal                Home Loan Bank stock                                                                                                                                                                                                                                                                        |   |   | 7,988   |   |   | 7,948 |   |
| Accrued                interest receivable                                                                                                                                                                                                                                                                         |   |   | 3,619   |   |   | 3,499 |   |
| Land,                premises and equipment                                                                                                                                                                                                                                                                        |   |   | 17,365  |   |   | 17,610 |   |
| Bank                owned life insurance                                                                                                                                                                                                                                                                           |   |   | 21,578  |   |   | 21,366 |   |
| Other                real estate owned                                                                                                                                                                                                                                                                             |   |   | 932     |   |   | 286 |   |
| Goodwill                                                                                                                                                                                                                                                                                                           |   |   | 2,661   |   |   | 2,661 |   |
| Other                assets                                                                                                                                                                                                                                                                                        |   |   | 4,197   |   |   | 4,339 |   |
| Total                assets                                                                                                                                                                                                                                                                                        |   | $      | 886,216 |   | $      | 843,079 |   |
| LIABILITIES                AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                                                |   |   |    |   |   |   |   |
| Deposits                                                                                                                                                                                                                                                                                                           |   |   |    |   |   |   |   |
| Non-interest-bearing                demand                                                                                                                                                                                                                                                                         |   | $      | 43,002  |   | $      | 38,301 |   |
| Interest-bearing                demand                                                                                                                                                                                                                                                                             |   |   | 53,883  |   |   | 52,895 |   |
| Savings                and money market                                                                                                                                                                                                                                                                            |   |   | 189,406 |   |   | 158,229 |   |
| Time                                                                                                                                                                                                                                                                                                               |   |   | 307,910 |   |   | 323,627 |   |
| Total                deposits                                                                                                                                                                                                                                                                                      |   |   | 594,201 |   |   | 573,052 |   |
| Securities                sold under agreements to repurchase                                                                                                                                                                                                                                                      |   |   | 53,500  |   |   | 29,000 |   |
| Federal                Home Loan Bank advances                                                                                                                                                                                                                                                                     |   |   | 142,000 |   |   | 144,000 |   |
| Accrued                expenses and other liabilities                                                                                                                                                                                                                                                              |   |   | 6,564   |   |   | 5,940 |   |
| Total                liabilities                                                                                                                                                                                                                                                                                   |   |   | 796,265 |   |   | 751,992 |   |
| Commitments                and contingencies                                                                                                                                                                                                                                                                       |   |   | -       |   |   | - |   |
|                                                                                                                                                                                                                                                                                                               |   |   |    |   |   |   |   |
| Preferred                stock: $0.01 par value; 2,000,000 shares authorized none                issued                                                                                                                                                                                                            |   |   | -       |   |   | - |   |
| Common                stock: $0.01 par value; 18,000,000 shares authorized, shares issued                of                14,813,469 at March 31, 2007 and December 31, 2006; shares outstanding                of                13,672,724 at March 31, 2007 and 13,784,330 at December 31,                2006 |   |   | 148     |   |   | 148 |   |
| Additional                paid in capital                                                                                                                                                                                                                                                                          |   |   | 58,161  |   |   | 57,708 |   |
| Unearned                employee stock ownership plan (ESOP) shares of 314,226 at March 31,                2007                and 325,864 at December 31, 2006                                                                                                                                                    |   |   | (3,142  | )      |   | (3,259 | ) |
| Retained                earnings                                                                                                                                                                                                                                                                                   |   |   | 52,895  |   |   | 52,711 |   |
| Accumulated                other comprehensive income (loss)                                                                                                                                                                                                                                                       |   |   | (64     | )      |   | (204 | ) |
| Treasury                  stock, at cost, 1,140,745 shares at March 31, 2007 and 1,029,139                  at December 31, 2006                                                                                                                                                                                   |   |   | (18,047 | )      |   | (16,017 | ) |
| Total                stockholders' equity                                                                                                                                                                                                                                                                          |   |   | 89,951  |   |   | 91,087 |   |
| Total                liabilities and stockholders' equity                                                                                                                                                                                                                                                          |   | $      | 886,216 |   | $      | 843,079 |   |

----

**ATLANTIC          COAST FEDERAL CORPORATION**

**CONSOLIDATED          STATEMENTS OF INCOME**

**(Dollars          in Thousands, Except Share Information) (restated)**

**(unaudited)**

|                                                                                                       |   |  Three                months ended March 31,  |   |
|------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|
|                                                                                                       |   | 2007                                                    |   | 2006 |   |
| Interest                and dividend income                                                                |   |                                                    |   |   |   |
| Loans,                including fees                                                                       |   | $                                                       | 11,052 |   | $ | 9,407 |   |
| Securities                  and interest-earning deposits in                  other financial institutions |   |                                                    | 2,204  |   |   | 1,108 |   |
| Total                interest and dividend income                                                          |   |                                                    | 13,256 |   |   | 10,515 |   |
| Interest                expense                                                                            |   |                                                    |   |   |   |   |   |
| Deposits                                                                                                   |   |                                                    | 5,820  |   |   | 3,852 |   |
| Federal                Home Loan Bank advances                                                             |   |                                                    | 1,608  |   |   | 1,369 |   |
| Securities                sold under agreements to repurchase                                              |   |                                                    | 475    |   |   | 57 |   |
| Total                interest expense                                                                      |   |                                                    | 7,903  |   |   | 5,278 |   |
| Net                interest income                                                                         |   |                                                    | 5,353  |   |   | 5,237 |   |
| Provision                for loan losses                                                                   |   |                                                    | 296    |   |   | 76 |   |
| Net                interest income after provision for loan losses                                         |   |                                                    | 5,057  |   |   | 5,161 |   |
| Noninterest                income                                                                          |   |                                                    |   |   |   |   |   |
| Service                charges and fees                                                                    |   |                                                    | 1,228  |   |   | 1,342 |   |
| Gain                on sale of real estate mortgages held for sale                                         |   |                                                    | 10     |   |   | 3 |   |
| Gain                on sale of foreclosed assets                                                           |   |                                                    | 7      |   |   | 3 |   |
| Loss                on sale of securities available for sale                                               |   |                                                    | (8     | ) |   | (177 | ) |
| Commission                income                                                                           |   |                                                    | 74     |   |   | 81 |   |
| Interchange                fees                                                                            |   |                                                    | 210    |   |   | 195 |   |
| Bank                owned life insurance earnings                                                          |   |                                                    | 211    |   |   | 204 |   |
| Other                                                                                                      |   |                                                    | 98     |   |   | 308 |   |
|                                                                                                       |   |                                                    | 1,830  |   |   | 1,959 |   |
| Noninterest                expense                                                                         |   |                                                    |   |   |   |   |   |
| Compensation                and benefits                                                                   |   |                                                    | 3,016  |   |   | 2,627 |   |
| Occupancy                and equipment                                                                     |   |                                                    | 588    |   |   | 508 |   |
| Data                processing                                                                             |   |                                                    | 335    |   |   | 365 |   |
| Advertising                                                                                                |   |                                                    | 146    |   |   | 216 |   |
| Outside                professional services                                                               |   |                                                    | 631    |   |   | 493 |   |
| Interchange                charges                                                                         |   |                                                    | 100    |   |   | 166 |   |
| Collection                expense and repossessed asset losses                                             |   |                                                    | 47     |   |   | 83 |   |
| Telephone                                                                                                  |   |                                                    | 113    |   |   | 123 |   |
| Other                                                                                                      |   |                                                    | 759    |   |   | 653 |   |
|                                                                                                       |   |                                                    | 5,735  |   |   | 5,234 |   |
| Income                before income tax expense                                                            |   |                                                    | 1,152  |   |   | 1,886 |   |
| Income                tax expense                                                                          |   |                                                    | 367    |   |   | 595 |   |
| Net                income                                                                                  |   | $                                                       | 785    |   | $ | 1,291 |   |
| Earnings                per common share:                                                                  |   |                                                    |   |   |   |   |   |
| Basic                                                                                                      |   | $                                                       | 0.06   |   | $ | 0.10 |   |
| Diluted                                                                                                    |   | $                                                       | 0.06   |   | $ | 0.10 |   |
| Dividends                declared per common share                                                         |   | $                                                       | 0.13   |   | $ | 0.09 |   |

----

**ATLANTIC        COAST FEDERAL CORPORATION**

**CONSOLIDATED        STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY**

**For        the Three Months Ended March 31, 2007 and March 31, 2006**

**(Dollars        in Thousands, Except Share Information) (restated)**

**(unaudited)**

|                                                            |   |       |   |                       |   |         |   |         |   | **ACCUMULATED**   |   |         |   |       |   |
|-----------------------------------------------------------------|--------|------------|--------|----------------------------|--------|--------------|--------|--------------|--------|-------------------|--------|--------------|--------|------------|--------|
|                                                            |   |       |   | **ADDITIONAL**             |   | **UNEARNED** |   |         |   | **OTHER**         |   |         |   |       |   |
|                                                            |   | **COMMON** |   | **PAID                IN** |   | **ESOP**     |   | **RETAINED** |   | **COMPREHENSIVE** |   | **TREASURY** |   | **TOTAL**  |   |
|                                                            |   | **STOCK**  |   | **CAPITAL**                |   | **STOCK**    |   | **EARNINGS** |   | **INCOME**        |   | **STOCK**    |   | **EQUITY** |   |
| For                the three months ended March 31, 2007        |   |       |   |                       |   |         |   |         |   |              |   |         |   |       |   |
| Balance                at January 1, 2007                       |   | $          | 148    |                       | $      | 57,708       |   | $            | (3,259 | )                 | $      | 52,711       |   | $          | (204   | ) | $ | (16,017 | ) | $ | 91,087 |   |
| ESOP                shares earned, 11,638 shares                |   |       |   |                       |   | 95           |   |         | 117    |              |   |         |   |       |   |   |   |   |   |   | 212 |   |
| Stock                options exercised                          |   |       |   |                       |   | (6           | )      |         |   |              |   |         |   |       |   |   |   | 52 |   |   | 46 |   |
| Management                restricted stock expense              |   |       |   |                       |   | 167          |   |         |   |              |   |         |   |       |   |   |   |   |   |   | 167 |   |
| Stock                options expense                            |   |       |   |                       |   | 179          |   |         |   |              |   |         |   |       |   |   |   | (97 | ) |   | 82 |   |
| Dividends                declared ( $.13 per share)             |   |       |   |                       |   |         |   |         |   |              |   | (601         | )      |       |   |   |   |   |   |   | (601 | ) |
| Director's                deferred compensation                 |   |       |   |                       |   | 18           |   |         |   |              |   |         |   |       |   |   |   | (18 | ) |   | - |   |
| Treasury                stock purchased at cost, 105,838 shares |   |       |   |                       |   |         |   |         |   |              |   |         |   |       |   |   |   | (1,967 | ) |   | (1,967 | ) |
| Comprehensive                income:                            |   |       |   |                       |   |         |   |         |   |              |   |         |   |       |   |   |   |   |   |   |   |   |
| Net                income                                       |   |       |   |                       |   |         |   |         |   |              |   | 785          |   |       |   |   |   |   |   |   | 785 |   |
| Other                comprehensive income (loss)                |   |       |   |                       |   |         |   |         |   |              |   |         |   |       | 140    |   |   |   |   |   | 140 |   |
| Total                comprehensive income                       |   |       |   |                       |   |         |   |         |   |              |   |         |   |       |   |   |   |   |   |   | 925 |   |
| Balance                at March 31, 2007                        |   | $          | 148    |                       | $      | 58,161       |   | $            | (3,142 | )                 | $      | 52,895       |   | $          | (64    | ) | $ | (18,047 | ) | $ | 89,951 |   |
| For                the three months ended March 31, 2006        |   |       |   |                       |   |         |   |         |   |              |   |         |   |       |   |   |   |   |   |   |   |   |
| Balance                at January 1, 2006                       |   | $          | 148    |                       | $      | 56,876       |   | $            | (3,724 | )                 | $      | 49,629       |   | $          | (408   | ) |   | ($9,603 | ) | $ | 92,918 |   |
| ESOP                shares earned, 11,638 shares                |   |       |   |                       |   | 53           |   |         | 116    |              |   |         |   |       |   |   |   |   |   |   | 169 |   |
| Management                restricted stock expense              |   |       |   |                       |   | 145          |   |         |   |              |   |         |   |       |   |   |   |   |   |   | 145 |   |
| Stock                options expense                            |   |       |   |                       |   | 76           |   |         |   |              |   |         |   |       |   |   |   |   |   |   | 76 |   |
| Dividend                declared ($.09 per share)               |   |       |   |                       |   |         |   |         |   |              |   | (458         | )      |       |   |   |   |   |   |   | (458 | ) |
| Comprehensive                income:                            |   |       |   |                       |   |         |   |         |   |              |   |         |   |       |   |   |   |   |   |   |   |   |
| Net                income                                       |   |       |   |                       |   |         |   |         |   |              |   | 1,291        |   |       |   |   |   |   |   |   | 1,291 |   |
| Other                comprehensive income (loss)                |   |       |   |                       |   |         |   |         |   |              |   |         |   |       | (91    | ) |   |   |   |   | (91 | ) |
| Total                comprehensive income                       |   |       |   |                       |   |         |   |         |   |              |   |         |   |       |   |   |   |   |   |   | 1,200 |   |
| Balance                at March 31, 2006                        |   | $          | 148    |                       | $      | 57,150       |   | $            | (3,608 | )                 | $      | 50,462       |   | $          | (499   | ) | $ | (9,603 | ) | $ | 94,050 |   |

----

**ATLANTIC        COAST FEDERAL CORPORATION**

**CONSOLIDATED        STATEMENTS OF CASH FLOWS**

**(Dollars        in Thousands, restated)**

**(unaudited)**

|                                                                                                            |   | Three                months ended March 31, |    |
|-----------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|---------|
|                                                                                                            |   | 2007                                        |    | 2006 |   |
| Cash                flows from operating activities                                                             |   |                                        |    |   |   |
| Net                income                                                                                       |   | $                                           | 785     |   | $ | 1,291 |   |
| Adjustments                  to reconcile net income to to                  net cash from operating activities: |   |                                        |    |   |   |   |   |
| Provision                for loan losses                                                                        |   |                                        | 296     |   |   | 76 |   |
| Gain                on sale of real estate mortgages held for sale                                              |   |                                        | (10     | ) |   | (3 | ) |
| Loans                originated for sale                                                                        |   |                                        | (28,932 | ) |   | (235 | ) |
| Proceeds                from loan sales                                                                         |   |                                        | 24,915  |   |   | 283 |   |
| Gain                on sale of other real estate owned                                                          |   |                                        | (7      | ) |   | (3 | ) |
| Loss                  on sale of securities available                  for sale                                 |   |                                        | 8       |   |   | 177 |   |
| Loss                on disposal of equipment                                                                    |   |                                        | 117     |   |   | 30 |   |
| ESOP                compensation expense                                                                        |   |                                        | 212     |   |   | 169 |   |
| Share-based                compensation expense                                                                 |   |                                        | 249     |   |   | 221 |   |
| Net                depreciation and amortization                                                                |   |                                        | 401     |   |   | 487 |   |
| Net                change in accrued interest receivable                                                        |   |                                        | (120    | ) |   | (282 | ) |
| Increase                in cash surrender value of bank owned life insurance                                    |   |                                        | (211    | ) |   | (204 | ) |
| Net                change in other assets                                                                       |   |                                        | 57      |   |   | (435 | ) |
| Net                  change in accrued expenses and                  other liabilities                          |   |                                        | 591     |   |   | (191 | ) |
| Net                cash from operating activites                                                                |   |                                        | (1,649  | ) |   | 1,381 |   |
| Cash                flows from investing activities                                                             |   |                                        |    |   |   |   |   |
| Proceeds                  from maturities and payments of                  securites available for sale         |   |                                        | 4,321   |   |   | 4,606 |   |
| Proceeds                  from the sales of securities available                  for sale                      |   |                                        | 5,681   |   |   | - |   |
| Purchase                of securities available for sale                                                        |   |                                        | (39,964 | ) |   | (2,059 | ) |
| Loans                purchased                                                                                  |   |                                        | (3,138  | ) |   | (7,782 | ) |
| Net                change in loans                                                                              |   |                                        | (483    | ) |   | (11,421 | ) |
| Expenditures                on premises and equipment                                                           |   |                                        | (250    | ) |   | (526 | ) |
| Proceeds                from the sale of other real estate owned                                                |   |                                        | 119     |   |   | 277 |   |
| Purchase                of FHLB stock                                                                           |   |                                        | (40     | ) |   | (228 | ) |
| Net                change in other investments                                                                  |   |                                        | 500     |   |   | - |   |
| Net                cash from investing activities                                                               |   |                                        | (33,254 | ) |   | (17,133 | ) |

----

**ATLANTIC        COAST FEDERAL CORPORATION**

**CONSOLIDATED        STATEMENTS OF CASH FLOWS**

**(Dollars        in Thousands, restated)**

**(unaudited)**

|                                                                                              |   |  Three                months ended March 31, |    |
|---------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|---------|
|                                                                                              |   | 2007                                              |    | 2006 |   |
| Cash                flows from financing activities                                               |   |                                              |    |   |   |
| Net                increase in deposits                                                           |   | $                                                 | 21,149  |   | $ | 13,792 |   |
| FHLB                advances                                                                      |   |                                              | 10,000  |   |   | - |   |
| Proceeds                  from sale of securities under                  agreements to repurchase |   |                                              | 24,500  |   |   | 12,000 |   |
| Repayment                of FHLB advances                                                         |   |                                              | (12,000 | ) |   | - |   |
| Proceeds                from exercise of stock options                                            |   |                                              | 46      |   |   | - |   |
| Treasury                stock repurchased                                                         |   |                                              | (1,967  | ) |   | - |   |
| Dividends                paid                                                                     |   |                                              | (568    | ) |   | (414 | ) |
| Net                cash from financing activities                                                 |   |                                              | 41,160  |   |   | 25,378 |   |
|                                                                                              |   |                                              |    |   |   |   |   |
| Net                change in cash and cash equivalents                                            |   |                                              | 6,257   |   |   | 9,626 |   |
|                                                                                              |   |                                              |    |   |   |   |   |
| Cash                and equivalents beginning of period                                           |   |                                              | 41,057  |   |   | 37,959 |   |
| Cash                and equivalents at end of period                                              |   | $                                                 | 47,314  |   | $ | 47,585 |   |
|                                                                                              |   |                                              |    |   |   |   |   |
| Supplemental                information:                                                          |   |                                              |    |   |   |   |   |
| Interest                paid                                                                      |   | $                                                 | 7,784   |   | $ | 5,161 |   |
| Income                taxes paid                                                                  |   |                                              | 50      |   |   | 765 |   |
|                                                                                              |   |                                              |    |   |   |   |   |
| Supplemental                noncash disclosures:                                                  |   |                                              |    |   |   |   |   |
| Loans                transferred to other real estate                                             |   | $                                                 | 758     |   | $ | 96 |   |

----

**ATLANTIC            COAST FEDERAL CORPORATION**

**CONDENSED            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**March            31, 2007**

**(Dollars            in Thousands, restated)**

**(unaudited)**

**NOTE      1 - RESTATEMENT**

*Accounting      for Derivative Instruments and Hedging Activities *

----

**ATLANTIC        COAST FEDERAL CORPORATION**

**CONDENSED        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**March        31, 2007**

**(Dollars        in Thousands, restated)**

**(unaudited)**

**NOTE        1 - RESTATEMENT**

|                                                      |   |                                            |    |                                 |
|-----------------------------------------------------------|--------|-------------------------------------------------|---------|--------------------------------------|
|                                                      |   | March                    31, 2007               |    | December                    31, 2006 |   |
| Restated                    Consolidated Balance          |   | As                    Originally                |    | As                                   |   | As                    Originally |   | As |   |
| Sheet                    Data:                            |   | Reported                                        |    | Restated                             |   | Reported |   | Restated |   |
|                                                      |   |  (Dollars                    in Thousands) |    |
|                                                      |   |                                            |    |                                 |   |   |   |   |   |
| Other                    assets                           |   | $                                               | 67,172  |                                 | $ | 67,432 |   | $ | 63,020 |   | $ | 63,274 |   |
| Total                    assets                           |   | $                                               | 885,956 |                                 | $ | 886,216 |   | $ | 842,825 |   | $ | 843,079 |   |
| Accrued                    expenses and other liabilities |   | $                                               | 6,304   |                                 | $ | 6,564 |   | $ | 5,686 |   | $ | 5,940 |   |
| Total                    liabilities                      |   | $                                               | 796,005 |                                 | $ | 796,265 |   | $ | 751,738 |   | $ | 751,992 |   |
| Retained                    earnings                      |   | $                                               | 52,470  |                                 | $ | 52,895 |   | $ | 52,297 |   | $ | 52,711 |   |
| Accumulated                    other comprehensive income |   | $                                               | 361     |                                 | $ | (64 | ) | $ | 210 |   | $ | (204 | ) |
| Total                    stockholders' equity             |   | $                                               | 89,951  |                                 | $ | 89,951 |   | $ | 91,087 |   | $ | 91,087 |   |

|                                                                              |   | **For                the Quarter Ended** |   |
|-----------------------------------------------------------------------------------|--------|------------------------------------------|--------|
|                                                                              |   | March                31, 2007            |   | March                31, 2006 |   |
|                                                                              |   | As                Originally             |   | As |   | As                Originally |   | As |   |
| Selected                  Consolidated Statement of                  Income Data: |   | Reported                                 |   | Restated |   | Reported |   | Restated |   |
|                                                                              |   | (Dollars                in Thousands)    |   |
| Total                interest expense                                             |   | $                                        | 7,855  |   | $ | 7,903 |   | $ | 5,236 |   | $ | 5,278 |   |
| Net                interest income                                                |   |                                     | 5,401  |   |   | 5,353 |   |   | 5,279 |   |   | 5,237 |   |
| Net                interest income                                                |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| after                provision for loan losses                                    |   |                                     | 5,105  |   |   | 5,057 |   |   | 5,203 |   |   | 5,161 |   |
| Noninterest                income                                                 |   |                                     | 1,765  |   |   | 1,830 |   |   | 1,638 |   |   | 1,959 |   |
| Income                before income taxes                                         |   |                                     | 1,135  |   |   | 1,152 |   |   | 1,607 |   |   | 1,886 |   |
| Income                tax expense                                                 |   |                                     | 361    |   |   | 367 |   |   | 500 |   |   | 595 |   |
| Net                Income                                                         |   | $                                        | 774    |   | $ | 785 |   | $ | 1,107 |   | $ | 1,291 |   |
| Earnings                per share:                                                |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                             |   | $                                        | 0.06   |   | $ | 0.06 |   | $ | 0.08 |   | $ | 0.10 |   |
| Earnings                per share:                                                |   |                                     |   |   |   |   |   |   |   |   |   |   |   |
| Diluted                                                                           |   | $                                        | 0.06   |   | $ | 0.06 |   | $ | 0.08 |   | $ | 0.10 |   |

----

**ATLANTIC        COAST FEDERAL CORPORATION**

**CONDENSED        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**March        31, 2007**

**(Dollars        in Thousands, restated)**

**(unaudited)**

**NOTE      1 - RESTATEMENT**

|                                                                                                                                                 |   | March                  31, 2007         |   | March                  31, 2006 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|---------------------------------|--------|
| Restated                  Statement of Changes in Stockholders' Equity                                                                               |   | As                  OriginallyReported  |   | AsRestated                      |   | As                  OriginallyReported |   | AsRestated |   |
|                                                                                                                                                 |   | (Dollars                  in Thousands) |   |
| Balance,                  beginning of period                                                                                                        |   | $                                       | 91,087 |                            | $      | 91,087 |   | $ | 92,917 |   | $ | 92,918 |   |
| Increase                  attributable to net income                                                                                                 |   |                                    | 774    |                            |   | 785 |   |   | 1,107 |   |   | 1,291 |   |
| Increase/(decrease)                    attributable to changes                    in accumulated other  comprehensive                    income |   |                                    | 151    |                            |   | 140 |   |   | 83 |   |   | (90 | ) |
| Balance,                  end of period                                                                                                              |   | $                                       | 89,951 |                            | $      | 89,951 |   | $ | 94,038 |   | $ | 94,050 |   |

**NOTE      2. BASIS OF PRESENTATION**

----

**ATLANTIC        COAST FEDERAL CORPORATION**

**CONDENSED        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**March        31, 2007**

**(Dollars        in Thousands, restated)**

**(unaudited)**

**NOTE      8. EARNINGS PER COMMON SHARE**

|                                                                           |   | For                  the three months ended                  March 31, |       |
|--------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|------------|
|                                                                           |   | 2007                                                                        |       | 2006  |   |
|                                                                           |   | (Dollars                in Thousands, ExceptShare Information)              |       |
|  Basic                                                                    |   |                                                                        |       |   |   |
| Net                income                                                      |   | $                                                                           | 785        |   | $ | 1,291 |   |
| Weighted                average common shares outstanding                      |   |                                                                        | 13,754,774 |   |   | 14,141,350 |   |
| Less:                Average unallocated ESOP shares                           |   |                                                                        | (325,864   | ) |   | (372,416 | ) |
| Average                unvested restricted stock awards                        |   |                                                                        | (227,362   | ) |   | (258,469 | ) |
| Average                Shares                                                  |   |                                                                        | 13,201,548 |   |   | 13,510,465 |   |
| Basic                earnings per common share                                 |   | $                                                                           | 0.06       |   | $ | 0.10 |   |
| Diluted                                                                        |   |                                                                        |       |   |   |   |   |
| Net                Income                                                      |   | $                                                                           | 785        |   | $ | 1,291 |   |
| Weighted                average common shares outstanding                      |   |                                                                        | 13,201,548 |   |   | 13,510,465 |   |
|  Add:Dilutive                effects of assumed exercise of stock options |   |                                                                        | 67,125     |   |   | - |   |
| Dilutive                effects of full vesting of stock awards                |   |                                                                        | 98,278     |   |   | 20,563 |   |
|  Average              shares and dilutive potential common shares         |   |                                                                        | 13,366,951 |   |   | 13,531,028 |   |
| Diluted                earnings per common share                               |   | $                                                                           | 0.06       |   | $ | 0.10 |   |

----

**ATLANTIC        COAST FEDERAL CORPORATION**

**CONDENSED        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**March        31, 2007**

**(Dollars        in Thousands, restated)**

**(unaudited)**

**NOTE      9. OTHER COMPREHENSIVE INCOME **

|                                                                                                        |   |  (Dollars                in Thousands, restated) |   |
|-------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|
|                                                                                                        |   | 2007                                                  |   | 2006 |   |
| Unrealized                  holding gains and (losses) on                  securities available for sale    |   | $                                                     | 231    |   | $ | (318 | ) |
| Less                  reclassification adjustments for (gains) losses                  recognized in income |   |                                                  | 8      |   |   | 177 |   |
| Net                unrealized gains and (losses)                                                            |   |                                                  | 223    |   |   | (141 | ) |
| Tax                effect                                                                                   |   |                                                  | (83    | ) |   | 51 |   |
| Other                comprehensive income                                                                   |   | $                                                     | 140    |   | $ | (90 | ) |

----

**ATLANTIC      COAST FEDERAL CORPORATION**

**ITEM      2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS      OF      OPERATIONS**

**Forward-Looking      Statements**

*This      Form 10-Q/A contains forward-looking statements that are statements that are      not      historical or current facts. When used in this filing and in future filings      by      Atlantic Coast Federal Corporation with the Securities and Exchange Commission,      in Atlantic Coast Federal Corporation’s press releases or other public or      shareholder communications, or in oral statements made with the approval of      an      authorized executive officer, the words or phrases, “anticipate,” “would be,”“will allow,” “intends to,” “will likely result,” “are expected to,” will      continue,” “is anticipated,” “estimated,” “projected,” or similar expressions      are intended to identify, “forward looking statements.” Such statements are      subject to risks and uncertainties, including but not limited to changes in      economic conditions in Atlantic Coast Federal Corporation’s market area, changes      in policies by regulatory agencies, fluctuations in interest rates, demand      for      loans in Atlantic Coast Federal Corporation’s market area, changes in the      position of banking regulators on the adequacy of our allowance for loan losses,      and competition, all or some of which could cause actual results to differ      materially from historical earnings and those presently anticipated or      projected. *

*Atlantic      Coast Federal Corporation wishes to caution readers not to place undue reliance      on any such forward-looking statements, which speak only as of the date made,      and advise readers that various factors, including regional and national      economic conditions, substantial changes in levels of market interest rates,      credit and other risks of lending and investing activities, and competitive      and      regulatory factors, could affect Atlantic Coast Federal Corporation’s financial      performance and could cause Atlantic Coast Federal Corporation’s actual results      for future periods to differ materially from those anticipated or      projected.*

*Atlantic      Coast Federal Corporation does not undertake, and specifically disclaims any      obligation, to update any forward-looking statements to reflect occurrences      or      unanticipated events or circumstances after the date of such      statements.*

**Restatement**

*Accounting      for Derivative Instruments and Hedging Activities *

----

**Comparison      of Financial Condition at March 31, 2007 and December 31,      2006**

**General.      **

|                                                      |   | March                31,              |    | December                31, |   | Increase                (decrease) |   |
|-----------------------------------------------------------|--------|---------------------------------------|---------|-----------------------------|--------|------------------------------------|--------|
|                                                      |   | 2007                                  |    | 2006                        |   | Dollars                            |   | Percentage |   |
| Assets                                                    |   | (Dollars                in Thousands) |    |
| Other                assets                               |   | $                                     | 58,340  |                        | $      | 57,709                             |   | $ | 631 |   |   | 1.1 | % |
| Total                assets                               |   | $                                     | 886,216 |                        | $      | 843,079                            |   | $ | 43,137 |   |   | 5.1 | % |
|                                                      |   |                                  |    |                        |   |                               |   |   |   |   |   |   |   |
| Liabilities                and Stockholders' equity       |   |                                  |    |                        |   |                               |   |   |   |   |   |   |   |
| Accrued                expenses and other liabilities     |   | $                                     | 6,564   |                        | $      | 5,940                              |   | $ | 624 |   |   | 10.5 | % |
| Total                liabilities                          |   | $                                     | 796,265 |                        | $      | 751,992                            |   | $ | 44,273 |   |   | 5.9 | % |
| Total                liabilities and stockholders' equity |   | $                                     | 886,216 |                        | $      | 843,079                            |   | $ | 43,137 |   |   | 5.1 | % |

**Federal      Home Loan Bank advances**

**Stockholders’      equity**

**Comparison      of Results of Operations for the Three Months Ended March 31, 2007 and      2006**

**General**
** **

----

**Average      Balances, Net Interest Income, Yields Earned and Rates Paid**

|                                           |   | For                the three months ended March 31, |    |
|------------------------------------------------|--------|-----------------------------------------------------|---------|
|                                           |   | 2007                                                |    | 2006 |   |
|                                           |   | (Dollars                in Thousands, restated)     |    |
|                                           |   | AverageBalance                                      |    | Interest |   | Average                Yield /Cost |   | Average                Balance |   | Interest |   | Average                Yield /Cost |   |
| Federal                Home Loan Bank advances |   |                                                | 143,644 |   |   | 1,608 |   |   | 4.48 | % |   | 129,000 |   |   | 1,368 |   |   | 4.24 | % |
| Net                interest income             |   |                                                |    |   | $ | 5,353 |   |   |   |   |   |   |   | $ | 5,237 |   |   |   |   |
| Net                interest spread             |   |                                                |    |   |   |   |   |   | 2.22 | % |   |   |   |   |   |   |   | 2.63 | % |
| Net                interest margin (1)         |   |                                                |    |   |   |   |   |   | 2.66 | % |   |   |   |   |   |   |   | 3.02 | % |

**Rate/Volume      Analysis**

|                                                |   | Increase/(Decrease)     |   | Total    |   |
|-----------------------------------------------------|--------|-------------------------|--------|----------|--------|
|                                                |   | Due                  to |   | Increase |   |
|                                                |   | Volume                  |   | Rate     |   | (Decrease) |   |
| Federal                  Home Loan Bank advances    |   |                    | 161    |     |   | 79 |   |   | 240 |   |
| Total                  interest-bearing liabilities |   |                    | 1,419  |     |   | 1,207 |   |   | 2,626 |   |
| N                  et interest income               |   | $                       | 189    |     | $      | (74 | ) | $ | 115 |   |

**Non-interest      income**

|                               |   |                                              |   |   |   | Increase(decrease) |   |
|------------------------------------|--------|---------------------------------------------------|--------|--------|--------|--------------------|--------|
|                               |   | 2007                                              |   | 2006   |   |  Dollars      |   | Percentage |   |
|                               |   | (Dollars                in Thousands)   |   |
| Other                              |   |                                              | 98     |   |   | 308                |   |   | (210 | ) |   | -68.2 | % |
| Non-interest                income |   | $                                                 | 1,830  |   | $      | 1,959              |   | $ | (129 | ) |   | -6.6 | % |

**Income      tax expense.**

----

**ITEM      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET      RISK**

----

**ATLANTIC      COAST FEDERAL CORPORATION**

**FORM      10-Q/A**

**March      31, 2007**

**Part      II - Other Information**

**Signatures**

|                             |                                                                                      |                                            |
|----------------------------------|-------------------------------------------------------------------------------------------|-------------------------------------------------|
|                             | ATLANTIC COAST FEDERAL CORPORATION                                                        |
|                             |             (Registrant)      |
|                        |                                                                                 |                                       |
| Date:              June 18, 2007 |                                                                            |  /s/                Robert J. Larison, Jr. |
|                             | Robert              J. Larison, Jr., President and Chief Executive                Officer |

|                                     |                                                                                               |                |
|------------------------------------------|----------------------------------------------------------------------------------------------------|---------------------|
|                                |                                                                                          |           |
| Date:                June 18, 2007  |                                                                                          | /s/ Dawna R. Miller |
|                                     | Dawna                R. Miller, Senior Vice President and Chief                  Financial Officer |

----