A small Chicago bank that is largely owned by the members of an area church has warned that it could fail if it does not raise additional capital.

The $61 million-asset Covenant Bank is undercapitalized and nearly 14% of its loans were at least 90 days past due as of March 31, according to Federal Deposit Insurance Corp. data. In its annual report filed with the Securities and Exchange Commission in late May, the bank said that given "precipitous decline in the value of the collateral securing its loan portfolio and a sharp decrease" in its capital...no assurances can be made about [its] ability to continue as a going concern."

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