Many bankers have complained that valuing real estate has become more of a guessing game these days, but few have gone so far as Hugh Potts Jr., the chairman and chief executive officer of First M&F Corp. in Kosciusko, Miss.

This week the $1.7 billion-asset First M&F surprised analysts by posting a wider-than-expected loss of $10.2 million, or $1.14 a share. Potts said erring on the side of caution put the company in the red; it hiked its provision for loan losses 2,400% from a year earlier, to $19.8 million.

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