Peoples Bank of East Tennessee has agreed to acquire substantially all of the assets and assume the majority of deposits of Appalachian Community Bank, FSB from the Federal Deposit Insurance Corporation (FDIC) as Receiver for Appalachian Community Bank, FSB. Beginning December 18, 2010, the three branch offices of Appalachian Community Bank, FSB, located in McCaysville, GA, Murphy, NC and Ducktown, TN will become branches of Peoples Bank of East Tennessee.

The acquisition became effective at the close of business on Friday, December 17, 2010. The Office of Thrift Supervision closed Appalachian Community Bank, FSB and named the FDIC as receiver. The FDIC then approved the whole bank acquisition through a loss share agreement with Peoples Bank of East Tennessee, which includes all assets, loans and the majority of deposits.

Peoples Bank of East Tennessee is a locally-owned community bank headquartered in Madisonville, Tennessee with $170 million in assets and 82 employees. Established in 1997, Peoples Bank currently has nine locations, with two offices located in Madisonville and additional offices in Tellico Plains, Sweetwater, Vonore, Niota, Englewood, Greenback and Ducktown with its primary emphasis on serving smaller communities. Peoples Bank is very familiar with the Tri-State market after having purchased the Ducktown office from The Home Bank in 2006. Chris White, the president and CEO of Peoples Bank, announced that ?we are thrilled to expand our presence through the purchase of these three offices. Our bank has been built on a foundation of personalized service delivered by local people working in a family environment.? It is important to stress that no depositors of Appalachian Community Bank, FSB lost any money and all of our new customers will continue to be fully insured by the FDIC.

Customers of Appalachian Community Bank, FSB should continue to use their existing branches, checks, ATM and debit cards. All branches will continue to operate with their normal hours. For more information about Peoples Bank of East Tennessee customers can contact them at 1-423-442-7262 or visit their website at www.PeoplesBank-TN.com.

For additional information and answers to frequently asked questions at the FDIC website, www.fdic.gov/bank/individual/failed/banklist.html.