Greater Atlantic Financial Corp. Stockholders Approve Merger with MidAtlantic Bancorp,...

Greater Atlantic Financial Corp. Stockholders Approve Merger with MidAtlantic
Bancorp, Inc.

RESTON, Va., Aug. 27 /PRNewswire-FirstCall/ -- Greater Atlantic Financial
Corp. (Pink Sheets: GAFC.PK) ("GAFC" or "Greater Atlantic") today announced
that its stockholders approved the proposed merger with MidAtlantic Bancorp,
Inc. ("MidAtlantic") at Greater Atlantic's special meeting of stockholders
held on August 26, 2009.

Under the terms of the merger agreement, each holder of Greater Atlantic
common stock will receive $0.10 in cash for each share held. In connection
with the transaction, Greater Atlantic also will initiate a tender offer for
the outstanding trust preferred securities issued by its subsidiary, Greater
Atlantic Capital Trust I ("GACT"), for aggregate consideration not to exceed
$688,558. The directors of GAFC and certain other trust preferred holders
have previously agreed to sell 311,587 shares of their trust preferred
securities to Greater Atlantic for $0.01 per share. The amount that would
have been paid to these directors and certain other holders of the trust
preferred securities above the $0.01 per share will be allocated to the
remaining trust preferred holders to provide them with a greater return.

Consummation of the merger is subject to receipt of necessary regulatory
approvals and satisfaction of certain customary representations and warranties
and conditions. The acquisition is also conditioned upon satisfaction of the
following matters prior to the close of the transaction: (a) the tender of at
least 816,627 shares (out of 960,738 shares outstanding) of the GACT trust
preferred securities, inclusive of the 311,587 shares mentioned above, and (b)
the elimination or modification to the satisfaction of MidAtlantic of the
operating constraints that currently apply to Greater Atlantic Bank, Greater
Atlantic's wholly-owned subsidiary, under orders issued by the Office of
Thrift Supervision, the primary federal regulator of Greater Atlantic Bank.

The transaction is expected to be completed by the end of the third quarter of
2009, subject to regulatory approval and the successful completion of the
tender offer referred to above.

Forward Looking Statements

This news release contains certain forward-looking statements about the
proposed merger of MidAtlantic and Greater Atlantic. Forward-looking
statements can be identified by the fact that they do not relate strictly to
historical or current facts. They often include words like "believe,"
"expect," "anticipate," "estimate," and "intend" or future or conditional
verbs such as "will," "should," "could," or "may." Certain factors that could
cause actual results to differ materially from expected results include delays
in completing the merger, difficulties in achieving cost savings from the
merger or in achieving such cost savings within the expected time frame,
difficulties in integrating the operations of MidAtlantic and Greater
Atlantic, increased competitive pressures, changes in the interest rate
environment, changes in general economic conditions, legislative and
regulatory changes that adversely affect the business in which MidAtlantic and
Greater Atlantic are engaged, changes in the securities markets and other
risks and uncertainties disclosed from time to time in documents that Greater
Atlantic files with the U.S. Securities and Exchange Commission.

Tender Offer Statement

This press release is neither an offer to purchase nor a solicitation of an
offer to sell trust preferred securities of GACT. The tender offer has not
yet commenced. At the time the offer is commenced, Greater Atlantic will file
definitive tender offer materials with the SEC, including final versions of
the Offer to Purchase, a related Letter of Transmittal and certain other offer
documents. We urge holders of GACT's trust preferred securities to read the
final tender offer materials when they become available because they will
contain important information which should be read carefully before any
decision is made with respect to the tender offer. The Offer to Purchase, the
related Letter of Transmittal and certain other offer documents will be made
available to all holders of GACT trust preferred securities at no expense to
them. The tender offer materials will be available for free at the SEC's
website at http://www.sec.gov. In addition, holders of GACT trust preferred
securities will be able to obtain a free copy of these documents from the
information agent for the tender offer, who will be identified in the tender
offer documents.

SOURCE Greater Atlantic Financial Corp.

Carroll E. Amos, President and Chief Executive Officer of Greater Atlantic
Financial Corp., +1-703-391-1300