Companies Report GSE-Related Impairments

Several companies -- VIST Financial Corp., Bank of the James Financial Group Inc., and Torchmark Corp. -- have announced that they will likely take impairment charges against their holdings of preferred stock in Fannie Mae and Freddie Mac. VIST, based in Wyomissing, Pa., said it held preferred stock in the government-sponsored enterprises with a total cost of $7.3 million as of June 30. The company said it expects to record a noncash other-than-temporary impairment charge of up to $7.3 million on the stock in the third quarter. Bank of the James Financial, based in Lynchburg, Va., reported that it held GSE preferred stock with a par value of $3.9 million as of Sept. 18, and noted that the shares were trading at less than 5% of par value. It estimated that it will take a noncash other-than-temporary impairment charge of $1.7 million to $1.9 million for the third quarter. Torchmark, based in McKinney, Texas, said it held about $2 million in GSE preferred stock, plus $207 million in the senior and subordinated debt of American International Group, Lehman Brothers, and Washington Mutual, as of Aug. 31. "In the unlikely event that the company determines the entire amount of these investments to be other than temporarily impaired, the after-tax impairment cost would be $136 million," Torchmark said. The companies can be found online at http://www.vistfc.com, http://www.bankofthejames.com, and http://www.torchmarkcorp.com.