Appalachian Bancshares Inc. in Ellijay, Ga., is warning that it might be unable to survive.
In belatedly filing its second-quarter results with the Securities and Exchange Commission this week, the $1.2 billion-asset company said that its bank unit is undercapitalized and that it is uncertain whether it can satisfy a regulatory order to raise capital.
"Management has concluded that there is substantial doubt about its ability to continue as a going concern," the filing said.
Appalachian also widened its previously reported second-quarter loss by 20%, to $30.9 million.
The revised results included a $2 million goodwill impairment charge. The company also added a $3.1 million valuation allowance on its deferred tax assets, on top of the $3.3 million allowance it had reported July 30.
An April 24 regulatory order gave the bank unit 90 days to boost its total risk-based capital ratio to 10%. But at June 30, the ratio was 7.26%, the results showed.
This was the fourth consecutive quarterly loss for the company, which had 15.11% of its loans nonperforming. It earned $701,000 the year earlier.