Huntington Plagued by Franklin Worries

Huntington Bancshares(HBAN Quote) stock slid as much as 13% Monday after some analysts questioned whether the bank's previous reserve assumptions for losses related to subprime lender Franklin Credit Management(FCMC Quote) would be high enough.

Late Friday, Franklin, one of Huntington's largest commercial relationships, delayed its quarterly filing with the Securities and Exchange Commission after warning of higher loan losses and significant provisioning on originated and purchased loans as a result of the deterioration in the housing and subprime mortgage markets.

Franklin Credit said it entered into additional amendments to its forbearance agreements with Huntington, its lead lending bank, where "the minimum net worth covenant was eliminated, and all identified forbearance defaults that existed as of June 30, 2008 were waived." The subprime lender currently owes Huntington $1.13 billion. ...