Huntington Exec Leaves, Spurring Sale Talk

The departure of the likely successor to Huntington Bancshares(HBAN) CEO Thomas Hoaglin has some observers suggesting that the regional bank should put the "for sale" sign on the door.

The Columbus, Ohio-based bank said Monday that Marty Adams, Huntington's president and COO, will retire at the end of the month. Adams was previously the CEO at Sky Financial, which Huntington acquired in July.

As part of the terms of the deal, Adams, 55, was set to succeed Hoaglin as Huntington's CEO in December 2009. Hoaglin was to remain chairman until 2011, but his plans to retire "are no longer in effect," Huntington said on Monday.

But Adams' so-called retirement comes just two weeks after Huntington disclosed that it would take an after-tax charge of up to $300 million, or 81 cents a share, and post a net loss in the fourth quarter related to an increase in the allowance for loan losses tied to its exposure to subprime lender Franklin Credit Management(FCMC). Huntington, which had $1.5 billion of loans out to Franklin Credit at the end of the third quarter, inherited the commercial relationship through its acquisition of Sky.

At least one analyst believes the company's probability of a sale is "high," considering the scrapped succession plan and ongoing problems with Franklin Credit.

The departure of Adams and "related actions increase the probability that [Huntington] will be sold as this is a major blemish on management," writes Andrew Marquardt, an analyst at Fox-Pitt, Kelton Cochran Caronia Waller. Marquardt adds that Huntington executives "arguably did a good job improving stand-alone fundamentals over the years, but failed to properly realize the magnitude of [Franklin Credit's] relationship with the [Sky Financial] deal."