Huntington Bancshares Inc. in Columbus, Ohio, said Monday that Marty Adams, its president and chief operating officer, will retire at yearend, a move analysts said is not entirely unexpected given recent disclosures by the company.
The $55 billion-asset company said Thomas Hoaglin, its chairman and chief executive, will assume the role of president and postpone a plan to retire at the end of 2009. Mr. Hoaglin, 57, had planned to pass the baton to Mr. Adams.
The shake-up announcement came after the company's disclosure last month that it will report a fourth-quarter loss after taking a charge of $300 million, or 81 cents a share, because of exposure to Franklin Credit Management Corp., a Jersey City company that buys distressed mortgages. The Franklin relationship was largely the result of Huntington's July 1 purchase of the $18 billion-asset Sky Financial Corp. in Bowling Green, Ohio, where Mr. Adams, 55, then was chief executive.
The company said Monday that Mr. Adams and Mr. Hoaglin were unavailable to comment.
However, Mr. Adams said in a press release, "I have decided to retire so I can remain in close proximity to my parents." A spokeswoman said he lives in Salineville, Ohio, near East Liverpool, and Mr. Adams said in the release, "My role with Huntington would have required a permanent relocation, which became a difficult family issue."
Mr. Adams is to remain with the company as a consultant for one year to help manage the Franklin situation and assist with other transition issues, Huntington said.
Andrew Marquardt, an analyst at Fox-Pitt Kelton Cochran Caronia Waller LLC, said, "I was not surprised, given the situation and history of Franklin Credit." He said, "My understanding is that Marty Adams was one of the key reasons why Franklin Credit was allowed to have this relationship with Sky and why it was allowed to grow to the level it did."
Franklin accounted for 10% of Sky's total loan book, Mr. Marquardt said. According to information Huntington released Nov. 16 when it disclosed the $300 million charge, Franklin accounted for less than 5% of its total loans and leases as of Sept. 30.
Terry McEvoy, an equity analyst at Oppenheimer & Co. Inc., said, "The investment community has questioned who will lead Huntington in future years" because of the disclosure.
Some analysts are also questioning whether the company will remain independent.
"When the HBAN/SKYF merger was announced and Marty Adams was named Mr. Hoaglin's successor, we believed that HBAN had definitively placed itself among Midwest acquirers," Scott Siefers, a managing director at Sandler O'Neill & Partners LP, wrote in a report released Monday. "But with the heir apparent now gone, investors may conclude that Mr. Hoaglin's eventual retirement could coincide with a sale of the company."
However, Mr. Siefers said that Mr. Hoaglin is "only 57 years old, and we believe he is still interested in running the company into the foreseeable future." Huntington's spokeswoman said the company does not comment on rumor and speculation.
