Stephen Steinour, Huntington Bancshares Inc.'s new leader, said Wednesday that his first priority is cleaning up the lingering effects of a subprime lending unit that was part of a 2007 acquisition.

Huntington inherited Franklin Credit Management Corp., a Jersey City subprime mortgage lender, when it acquired Sky Financial Group of Bowling Green, Ohio. The relationship has been a drag on earnings, and Huntington continues to have $1.1 billion of exposure to the lender, Mr. Steinour said in an interview.

"We made one big mistake with Franklin," said Mr. Steinour, who was named Huntington's chairman, chief executive, and president on Wednedsay. It is "something we'd like to put behind us."

Mr. Steinour, 50, also said he will move quickly to examine Huntington's expense base and risk management controls.

He succeeded Thomas E. Hoaglin, who made the Sky acquisition. Mr. Hoaglin, 59, moved up his retirement by one year, Huntington said.

Mr. Steinour has been a banker for 29 years, most recently as a partner with the Boston investment firm CrossHarbor Capital Partners LLC. In 2007 he became the CEO of Citizens Financial Group Inc., the Providence, R.I., arm of Royal Bank of Scotland Group PLC. He was the president of Citizens from 2005 to 2007.

Mr. Steinour began his career at the Federal Deposit Insurance Corp. in the division of receiverships and resolution.

When asked if Huntington would sell its position in Franklin or unwind it, Mr. Steinour said: "All options are open. This is day one. I really can't comment."

Huntington posted a loss of $239.3 million for the fourth quarter of 2007, the year the Sky deal closed.

Andrew Marquardt, an analyst with Fox-Pitt Kelton Cochran Caronia Waller LLC, said Wednesday that Huntington could face additional charges if it sought to sell its position in Franklin.

The portfolio has already been marked down about 25%, Mr. Marquardt said, but it is currently worth 15% to 25% of its face value, and Huntington may be forced to raise capital if it seeks to divest the position at a loss.

Mr. Steinour said his company is "well capitalized," though he did not rule out the prospect of raising capital if necessary as he tackles the Franklin exposure.

"Whether we choose to raise capital or how we might do it, I don't know," he said. "I think I need to be open to many options."

In November, Huntington said it had received $1.4 billion through the Treasury Department's Capital Purchase Program. Mr. Steinour said the company would use the government funds to increase lending, though he would not offer specifics on that plan.

Mr. Steinour said another top priority in his first 90 days will be to analyze Huntington's budget to determine what is feasible "in the context of this current environment."

Without going into specific details, he said his analysis could result in adjustments to the company's expense outlook for this year.

He also said he would "spend a lot of time" focusing on credit and risk management, given his background. Mr. Steinour oversaw Citizens' credit and risk management operations during his tenure there from 1992 to 2007.

Huntington will also strive to boost market share in core areas like Ohio and western Michigan, where Mr. Steinour said he believes it has an edge over rivals with broader exposure to subprime mortgages, as well as exposure to leveraged loans.

Anthony R. Davis, an analyst with Stifel, Nicolaus & Co. Inc., said Huntington has done a good job managing the credit crisis outside of its problems with Franklin.

Nonperforming assets, excluding the Franklin exposure, rose 280% from the first quarter of 2007 to the third quarter of last year, Mr. Davis said; that beat the average increase of 325% at the roughly 2,000 midcap banking companies he covers.

Huntington's shares fell 16% on Wednesday. It is scheduled to report fourth-quarter earnings Jan. 22. Its third-quarter profit fell 17% from a year earlier, to $115.2 million, beating the average analyst estimates by 2 cents a share.

Jeri Grier, a spokeswoman for Huntington, said Mr. Hoaglin had accelerated a previous plan to retire at the end of this year. After the Sky deal closed, Mr. Hoaglin planned to pass the CEO baton to Marty Adams, Huntington's then-president and chief operating officer and the former CEO of Sky. Mr. Adams retired from Huntington at the end of 2007, after the problems with Franklin emerged.

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