Appalachian Community Bank closed by feds

Georgia owned bank was 34th FDIC insured bank to fail in nation this year

Appalachian Community Bank in Blairsville was closed along with nine other branches in North Carolina and Georgia. All branches operated under the trade name of Gilmer County Bank.

On Friday the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver taking action to protect depositors. The FDIC entered into a purchase and assumption agreement with Community & Southern Bank. The bank reopened on Monday under its new ownership.

Depositors continue to be insured by the FDIC. Customers should continue to use their existing branch until they receive notice from Community & Southern Bank that it has completed systems changes.

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 is to pay the FDIC a premium of one percent to assume al of the deposits of Appalachian Community Bank. In addition to assuming al of the deposits of the failed bank, Community & Southern Bank agreed to purchase essentially all of the bank’s assets.

FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $419.3 million. Community & Southern Bank’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to all alternatives, according to its press release.

Appalachian Community Bank is the 34th FDIC-insured institution to fail in the nation this year, and the fourth in Georgia.