Wave of Fannie Writedowns for Smaller Banks?

First Place Financial Corp., a small Ohio thrift,
says it will write down the value of its Fannie
Mae preferred stock by $1.3 million and, according
to one stock analyst, "a wave of writedowns could be
coming for smaller banks." FPFC of Warren, Ohio,
declared that its investment in Fannie Mae preferred
stock is now in a category called "other-than-temporary,"
which means it will take a loss on the shares that will
flow through to earnings, thus reducing its net income.

If FPFC felt it could recover its investment in Fannie's
preferred stock it would not have to label the investment
"other than temporary" and could avoid taking the charge
to earnings