Local banks stable, in 'solid shape'

Appalachian Community Bank, a member of the Independent Community Bankers of America (ICBA), which represents 5,000 community banks nationwide, said today that community banks remain a stable source of mortgage and small business loans even as the national mortgage market is being buffeted by talk of a credit crunch.

"Despite talk of a credit crunch, the truth is community banks are open for business," said Tracy Newton, Appalachian Community Bank CEO. "Community banking is a relationship-oriented business. Appalachian Community Bank is here for our community to not only help families get a mortgage loan, but help them get a mortgage loan they can afford for the long-term. We won't put a family in a home they can't afford to keep."

"Wall Street may be suffering but "Main Street's" community banks are in solid shape and open for business," said Camden Fine, ICBA president and CEO. "Community banks are the foundation of our nation's diversified financial system. A credit crunch like we're seeing now is exactly why the nation needs the community banking industry - to ensure that credit remains consistently and widely available in good times and bad. Today, consumers and communities can continue to rely on community banks for their financial needs."

Fine added that the community banking business is weathering this latest crisis in the mortgage market because community banks are well run, highly capitalized and among the most highly regulated financial institutions in the country.

Notably, community banks provide a stable and reliable source of mortgage money, whether they sell mortgage loans into the secondary market or hold them on their own books. ICBA reports that nearly 90 percent of mortgages made through community banks that do business with ICBA Mortgage, an ICBA subsidiary, are owner-occupied homes. They also have a delinquency rate that is below the national rate for one-to-fourunit residential properties, an indication of the conservative financial principles community banks hold.

About Appalachian Bancshares Inc.

Appalachian Bancshares Inc., based in Ellijay, Ga., is the $874 million-asset bank holding company of Appalachian Community Bank, a state-chartered bank organized under the laws of the State of Georgia, and Appalachian Community Bank, F.S.B., a federally chartered thrift. Through its subsidiaries, Appalachian Bancshares provides a full range of community banking services to individuals, small and medium-sized businesses, real estate developers, contractors and farmers. Appalachian Community Bank, which also operates under the trade names Gilmer County Bank and Banco Fuerza, has full-service banking offices throughout North Georgia in Ellijay, East Ellijay, Blue Ridge, Blairsville, Chatsworth, Dawsonville, Dahlonega and Dalton. Appalachian Community Bank, F.S.B. has full-service banking offices in McCaysville, Ga., Ducktown, Tenn., and Murphy, N.C. The common stock of Appalachian Bancshares is traded on the Nasdaq Global Market, under the symbol APAB. For more information, please visit the Company's website at www.apab.com.