This is the part of the 10Q that is most troubling.
"However, based on the recent deterioration of the loan portfolio, there is a pressing need for additional capital. Although we do not believe we currently have the ability to raise new capital at an acceptable price in the current economic environment, we continue to evaluate alternative capital strengthening strategies, and are currently working on other initiatives to strengthen our capital position including the potential sale of other loans and normal loan amortization. In accordance with our regulatory agreement, capital plans for First State and the Bank were submitted timely, but have not been accepted by the regulators due to the lack of solid evidence supporting an increase in capital levels that the regulators deem acceptable. While we continue to work toward full compliance with the requirements of the regulatory agreement, there can be no assurance that we will be able to comply fully or that efforts to comply with the regulatory agreement will not have adverse effects on First State's ability to continue as a going concern. The most significant ramification of being adequately capitalized is our inability to rollover or renew existing brokered deposits, including CDARS reciprocal deposits, that mature or come up for renewal, without a waiver from the FDIC. The Bank is currently not seeking a waiver from the FDIC"
“There are three kinds of men. The ones that learn by readin’. The few who learn by observation. The rest of them have to pee on the electric fence for themselves.” –Will Rogers
