Appalachian Community Bank, of Ellijay, a state-chartered bank organized under the laws of the State of Georgia, was closed Friday by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.

Appalachian, which also operated under the trade name of Gilmer County Bank, had full-service banking offices throughout North Georgia in Ellijay, East Ellijay, Blue Ridge, Blairsville, Chatsworth, Dawsonville, Dahlonega and Dalton.

To protect the depositors, the FDIC entered into a purchase and assumption agreement with Community & Southern Bank, Carrollton, Georgia, to assume all of the deposits of Appalachian Community Bank.

The ten branches of Appalachian Community Bank will reopen on Saturday as branches of Community & Southern Bank. This transaction also includes all of Appalachian Community Bank's branches that operated under the trade name of Gilmer County Bank.

Friday's closure does not involve Appalachian Community Bank F.S.B., McCaysville, Georgia, or any of its branch locations. Appalachian Community Bank F.S.B., McCaysville will continue to operate as usual.

Depositors of Appalachian Community Bank will automatically become depositors of Community & Southern Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Community & Southern Bank that it has completed systems changes to allow other Community & Southern Bank branches to process their accounts as well.

Over the weekend, depositors of Appalachian Community Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed, the FDIC said in a statement. Loan customers should continue to make their payments as usual.

As of December 31, 2009, Appalachian Community Bank had approximately $1.01 billion in total assets and $917.6 million in total deposits. Community & Southern Bank will pay the FDIC a premium of one percent to assume all of the deposits of Appalachian Community Bank. In addition to assuming all of the deposits of the failed bank, Community & Southern Bank agreed to purchase essentially all of the assets.

The FDIC and Community & Southern Bank entered into a loss-share transaction on $798.6 million of Appalachian Community Bank's assets. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $419.3 million.