Appalachian Community Bank, F.S.B., McCaysville, Georgia

Appalachian Community Bank, F.S.B., McCaysville, Georgia, is the 154th FDIC-insured institution to fail in the nation in 2010. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $26.0 million.

Appalachian Community Bank, F.S.B., McCaysville, Georgia, was closed today by The Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Peoples Bank of East Tennessee, Madisonville, Tennessee, to assume all of the deposits of Appalachian Community Bank, F.S.B., except for brokered deposits and certain out-of-state certificates of deposit (CD).

The three branches of Appalachian Community Bank, F.S.B. will reopen during normal business hours beginning Saturday as branches of Peoples Bank of East Tennessee. Depositors of Appalachian Community Bank, F.S.B. will automatically become depositors of Peoples Bank of East Tennessee. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Appalachian Community Bank, F.S.B. should continue to use their existing branch until they receive notice from Peoples Bank of East Tennessee that it has completed systems changes to allow other Peoples Bank of East Tennessee branches to process their accounts as well.

This evening and over the weekend, depositors of Appalachian Community Bank, F.S.B. can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of September 30, 2010, Appalachian Community Bank, F.S.B. had approximately $68.2 million in total assets and $76.4 million in total deposits. Peoples Bank of East Tennessee did not pay the FDIC a premium for the deposits of Appalachian Community Bank, F.S.B. In addition to assuming all of the deposits of the failed bank, Peoples Bank of East Tennessee agreed to purchase approximately $67.5 million of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and Peoples Bank of East Tennessee entered into a loss-share transaction on $46.4 million of Appalachian Community Bank, F.S.B.’s assets. Peoples Bank of East Tennessee will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.

Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-350-2746. The phone number will be operational this evening until 9:00 p.m., Eastern Standard Time (EST); on Saturday from 9:00 a.m. to 6:00 p.m., EST; on Sunday from noon to 6:00 p.m., EST; and thereafter from 8:00 a.m. to 8:00 p.m., EST.

If you should have any further questions do not hesitate to visit the FDIC webpage for Appalachian Community Bank.