UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) ~~August~~October 1219, 2010

Appalachian Bancshares, Inc.

(Exact name of registrant as specified in its charter)

Georgia	001-15571	58-2242407
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
64 Sailors Drive, Suite 106, Ellijay, Georgia		30540
(Address of principal executive offices)		(Zip Code)

64 Sailors Drive, Suite 106, Ellijay, Georgia		30540
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (706) 515-9000

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.03

Bankruptcy or Receivership.

On December 17, 2010, the Office of Thrift Supervision (“OTS”) closed Appalachian Community Bank, F.S.B. (the “Thrift”), which is a wholly owned federally-chartered thrift subsidiary of Appalachian Bancshares, Inc. (the “Company”) and the Federal Deposit Insurance Corporation (“FDIC”) was named as the receiver of the Thrift. The Company’s principal assets are the capital stock it owns in the Thrift and in Appalachian Community Bank, its wholly owned commercial banking subsidiary which was closed by the Georgia Department of Banking and Finance on March 19, 2010. As a result of the closures of the Thrift and the Bank, the Company has minimal remaining assets.

As the direct owner of all of the capital stock of the Thrift and the Bank, the Company would be entitled to the net recoveries, if any, following the FDIC’s liquidation or sale of either the Thrift or the Bank or their assets. However, at this time, the Company does not believe that any recovery will be realized. Accordingly, the Company’s common stock is likely to be of no value.

In connection with the closure of the Thrift, on December 17, 2010 the FDIC issued a press release providing the following:

•

The FDIC entered into a purchase and assumption agreement with Peoples Bank of East Tennessee, Madisonville, Tennessee (“Peoples Bank”) to assume all of the deposits of the Thrift, except brokered deposits and certain out-of-state certificates of deposit. Depositors of the Thrift will automatically become depositors of Peoples Bank. Deposits with Peoples Bank 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.

•

The Thrift’s three offices will reopen on Saturday, December 18, 2010, as branches of Peoples Bank. Customers of the Thrift should continue to use their existing Thrift branch until they receive notice from Peoples Bank that their accounts have been fully integrated.

•

The FDIC and Peoples Bank entered into a loss-share transaction on $46.4 million of the Thrift’s assets which provides for Peoples Bank and the FDIC to share in the losses on the asset pools covered under the loss-share agreement.

•

Customers with questions can call the FDIC toll-free at 1-800-350-2746. Interested parties also can visit www.fdic.gov/bank/individual/failed/appalachianga.html for more information about the transaction.

A complete copy of the FDIC’s press release can be found at www.fdic.gov/news/news/press/2010/pr10273.html.

The amount of the Company’s liabilities currently exceeds the amount of the Company’s assets, and as a result of the closing of the Thrift, the Company has no continuing business operations. Accordingly, the Company is continuing to evaluate the potential winding-up of the Company, which may include the filing of a voluntary petition in the United States Bankruptcy Court, Northern District of Georgia (the “Court”), seeking relief under Chapter 7 of Title 11 of the United States Code.

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

~~(b)~~Alan ~~Departure~~S. Dover submitted his resignation as a director of ~~Director~~the Company and ~~Principal~~the ~~Executive~~Thrift, ~~Officer~~effective October 19, 2010. Mr. Dover has advised us that his resignation from these positions was not due to any disagreement with the Company or the Thrift.

Frank E. Jones submitted his resignation as a director of Appalachian Bancshares, Inc. (the “Company”), and its wholly owned subsidiary Appalachian Community Bank, F.S.B. (the “Thrift”), effective August 12, 2010. Mr. Jones has advised us that his resignation from these positions was not due to any disagreement with the Company or the Thrift.

Leland B. Rymer resigned from his positions as President and Chief Executive Officer of the Thrift effective August 19, 2010.

The Thrift’s Board of Directors appointed Danny W. Jett, age 60, as the Thrift’s Acting Interim Chief Executive Officer effective August 19, 2010. Mr. Jett has been providing consulting services to the Thrift since March 2010 pursuant to the terms of a Consulting Agreement by and between the Thrift and Mr. Jett dated March 22, 2010 (the “Agreement”). Mr. Jett will continue to be compensated for his services to the Thrift in his new role as Acting Interim Chief Executive Officer pursuant to the terms of the Agreement. Under the terms of the Agreement, Mr. Jett is entitled to receive $16,000 per month in compensation for his services to the Thrift and is entitled to reimbursement for all reasonable business expenses, provided such expenses are approved in advance by the Board of Directors of the Thrift. The term of the Agreement shall continue until terminated by either of the parties. Either Mr. Jett or the Thrift may terminate the Agreement at any time with thirty (30) days’ prior written notice to the other party, unless otherwise mutually agreed to by the parties. Mr. Jett previously served as Acting Interim Chief Operating Officer of the Company’s bank subsidiary, Appalachian Community Bank (the “Bank”), from November 16, 2009 until March 19, 2010, when the Bank was placed into receivership.

Mr. Jett has more than 30 years of experience in senior executive positions in the banking industry. Prior to his appointment at the Bank, Mr. Jett served as an Executive in Charge of Operations, Technology and Administration of Georgian Bank, where he ran all aspects of operations, technology and administration at the $2.0 billion Atlanta-based financial institution from July 2005 until September 2009. Mr. Jett served as President and Chief Executive of EastPoint Technologies, LLC, a national banking software and service provider located in Manchester, New Hampshire from June 2000 until June 2004. Mr. Jett graduated from the University of West Georgia and John Marshall Law School.

Item 9.01 Financial Statements and Exhibits

Exhibit 10.1 Consulting Agreement between Appalachian Community Bank, F.S.B. and Danny Jett, dated March 22, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~registrant~~Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


APPALACHIAN BANCSHARES, INC.

By:		/s/ Joseph C. Hensley
		Joseph C. Hensley
		President

Dated: ~~August~~December 2423, 2010

EXHIBIT INDEX

Exhibit Number 10.1 Consulting Agreement between Appalachian Community Bank, F.S.B. and Danny Jett, dated March 22, 2010.

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