SUPPLEMENTAL RETIREMENT AGREEMENT

<PAGE>

                                                                    EXHIBIT 10.5

                        SUPPLEMENTAL RETIREMENT AGREEMENT

        THIS SUPPLEMENTAL RETIREMENT AGREEMENT is made as of January 1, 2006 by
and between ATLANTIC COAST FEDERAL (the "Bank"), its successors and assigns and
CARL W. INSEL. (the "Executive").

1.      DEFINITIONS. In this Agreement, the following words and phrases shall
        have the following meanings:

        (A)     ACCRUED BENEFIT PERCENTAGE shall mean, except as otherwise
                provided in this Agreement, 1.15% for each full calendar quarter
                of the Executive's employment with the Bank since January 1,
                2006, calculated through the last day of the calendar quarter in
                which the Executive (i) experiences a Separation from Service or
                (ii) attains the Normal Retirement Date, whichever shall first
                occur; PROVIDED, HOWEVER, that in no event shall the Accrued
                Benefit Percentage exceed 60%.

        (B)     ADMINISTRATOR shall mean the person or committee appointed by
                the Board of Directors of the Bank to administer this Agreement.
                If a committee is appointed by the Board of Directors, a
                majority of those persons shall constitute a quorum and the act
                of the majority of such of persons either at a meeting or by
                written consent, shall be the act of the Administrator. The
                administrator may adopt such rules and procedures, not
                inconsistent with this Agreement, as it deems necessary or
                appropriate in order to administer this Agreement.

        (C)     AVERAGE COMPENSATION shall mean the amount determined by
                dividing by three (3) the total monetary compensation earned by
                the Executive from the Bank and its affiliates and subsidiaries
                (or any successors thereto by merger or purchase) during the
                three annual periods in the ten year period prior to his
                Separation from Service that results in the largest total,
                including but not limited to salary, bonuses and incentive
                compensation (but excluding specifically stock-based
                compensation, such as restricted stock, stock options and stock
                appreciation rights). An annual period shall consist of any
                twelve (12) month consecutive period not including any portion
                of another twelve (12) month period.

        (D)     BENEFIT COMMENCEMENT DATE shall mean the first business day of
                the calendar month following the earliest of (i) the Executive's
                Normal Retirement Date; (ii) the Executive's Separation from
                Service; (iii) the Executive's death; (iv) the Executive's
                Disability; or (v) a Change in Control.

        (E)     CAUSE shall mean a Separation from Service due to the
                Executive's personal dishonesty, incompetence, willful
                misconduct, breach of fiduciary duty involving personal profit,
                intentional failure to perform stated duties, and willful
                violation of any law, rule, or regulation (other than traffic
                violations or similar offenses) or final cease-and-desist order.

                                       1
<PAGE>

        (F)     CHANGE IN CONTROL shall mean the following:

                (1)     "Change in Control" shall mean (i) a change in the
                ownership of the Bank or Atlantic Coast Federal Corporation (the
                "Company"), (ii) a change in the effective control of the Bank
                or Company, or (iii) a change in the ownership of a substantial
                portion of the assets of the Bank or Company, as described
                below. Notwithstanding anything herein to the contrary, the
                reorganization of Atlantic Coast Federal, MHC by way of a
                "second-step conversion" shall not be deemed a Change in
                Control.

                (2)     A change in ownership occurs on the date that any one
                person, or more than one person acting as a group (as defined in
                Proposed Treasury Regulations section 1.409A-3(g)(5)(v)(B)),
                acquires ownership of stock of the Bank or Company that,
                together with stock held by such person or group, constitutes
                more than 50% of the total fair market value or total voting
                power of the stock of such corporation.

                (3)     A change in the effective control of the Bank or Company
                occurs on the date that either (i) any one person, or more than
                one person acting as a group (as defined in Proposed Treasury
                Regulations section 1.409A-3(g)(5)(vi)(B)) acquires (or has
                acquired during the 12-month period ending on the date of the
                most recent acquisition by such person or persons) ownership of
                stock of the Bank or Company possessing 35% or more of the total
                voting power of the stock of the Bank or Company, or (ii) a
                majority of the members of the Bank's or Company's board of
                directors is replaced during any 12-month period by directors
                whose appointment or election is not endorsed by a majority of
                the members of the Bank's or Company's board of directors prior
                to the date of the appointment or election, provided that this
                sub-section "(ii)" is inapplicable where a majority shareholder
                of the Bank or Company is another corporation.

                (4)     A change in a substantial portion of the Bank's or
                Company's assets occurs on the date that any one person or more
                than one person acting as a group (as defined in Proposed
                Treasury Regulations section 1.409A-3(g)(5)(vii)(C)) acquires
                (or has acquired during the 12-month period ending on the date
                of the most recent acquisition by such person or persons) assets
                from the Bank or Company that have a total gross fair market
                value equal to or more than 40% of the total gross fair market
                value of (i) all of the assets of the Bank or Company, or (ii)
                the value of the assets being disposed of, either of which is
                determined without regard to any liabilities associated with
                such assets. For all purposes hereunder, the definition of
                Change in Control shall be construed to be consistent with the
                requirements of Proposed Treasury Regulations section
                1.409A-3(g)(5), except to the extent that such proposed
                regulations are superseded by subsequent guidance.

        (G)     DISABLED OR DISABILITY shall mean the Executive:

                (1)     is unable to engage in any substantial gainful activity
                by reason of any medically determinable physical or mental
                impairment which can be expected to result in death, or last for
                a continuous period of not less than 12 months;

                                       2
<PAGE>

                (2)     by reason of any medically determinable physical or
                mental impairment which can be expected to result in death, or
                last for a continuous period of not less than 12 months, is
                receiving income replacement benefits for a period of not less
                than three months under an accident and health plan covering
                employees of the Bank; or

                (3)     is determined to be totally disabled by the Social
                Security Administration.

        (H)     INVOLUNTARY TERMINATION shall mean Separation from Service
                without the Executive's express written consent, and shall
                include a material diminution of or interference with the
                Executive's duties, responsibilities and benefits as Executive
                Vice President of the Bank, including (without limitation) any
                of the following actions unless consented to in writing by the
                Executive: (i) a change in the principal workplace of the
                Executive to a location outside of a 30 mile radius from the
                Executive's principal workplace as of the date hereof; (ii) a
                material demotion of the Executive; (iii) a material reduction
                in the number or seniority of other personnel reporting to the
                Executive or a material reduction in the frequency with which,
                or on the nature of the matters with respect to which, such
                personnel are to report to the Executive, other than as part of
                an institution-wide reduction in staff; (iv) a material adverse
                change in the Executive's salary, perquisites, benefits,
                contingent benefits or vacation, other than as part of an
                overall program applied uniformly and with equitable effect to
                all members of the senior management of the Bank; and (v) a
                material permanent increase in the required hours of work or the
                workload of the Executive. The term "Involuntary Termination"
                does not include termination for Cause or termination of
                employment due to retirement, death, Disability or suspension or
                temporary or permanent prohibition from participation in the
                conduct of the Bank's affairs under Section 8 of the Federal
                Deposit Insurance Act.

        (I)     MONTHLY BENEFIT shall mean the Average Compensation multiplied
                by the Accrued Benefit Percentage and then divided by twelve
                (12), calculated at the Benefit Commencement Date.

        (J)     NORMAL RETIREMENT DATE shall mean the date the Executive attains
                age 55.

        (K)     SEPARATION FROM SERVICE shall mean the date of cessation of the
                employment relationship (other than an approved leave of
                absence) between the Executive and the Bank and its affiliates
                and subsidiaries (including any successor in interest, if
                applicable), and shall be construed to comply with Code Section
                409A and Proposed Treasury Regulations Section 1.409A-1(h).

        (L)     SPECIFIED EMPLOYEE shall mean a key employee of the Bank within
                the meaning of Code Section 416(i) without regard to paragraph 5
                thereof, determined in accordance with Code Section 409A and
                Proposed Treasury Regulations Section 1.409A-1(i).

                                       3
<PAGE>

2.      PAYMENT OF BENEFITS.

        (A)     NORMAL BENEFIT.

                If the Executive is living on the Benefit Commencement Date, the
                Bank shall pay the Monthly Benefit to him on such date and on
                the first business day of each calendar month thereafter for a
                total of 180 months (i.e., monthly payments for 15 years),
                regardless of whether the Executive has experienced a Separation
                from Service; provided however, that, if the Executive has
                experienced a Separation from Service, then, to the extent
                necessary to comply with Code Section 409A and the regulations
                thereunder, such payments shall not commence until the first day
                of the seventh month following the date of the Executive's
                Separation from Service if the Executive is a Specified Employee
                on his date of Separation from Service.

        (B)     DEATH BENEFIT.