Huntington Bancshares Inc., Columbus, Ohio, has announced that it will take a fourth-quarter charge of up to $300 million that will produce a net loss for the company, citing a need to shore up loan-loss allowances in connection with about $1.5 billion in loans to Franklin Credit Management Corp.Franklin, a New York-based company that acquires, originates, and services residential mortgage loans, recently announced the suspension of loan acquisition and origination and a delay in reporting its third-quarter operating results. "We only recently learned of Franklin's actions to reassess the adequacy of their loan-loss reserves," said Thomas E. Hoaglin, Huntington's chairman and chief executive. "Franklin's mortgages represent the underlying collateral for our loans to Franklin. As a result of this new information, we needed to reassess the collectability of the Franklin loans." As a result of Huntington's announcement, Fitch Ratings downgraded the company's long-term issuer default rating from A to A-minus, while affirming its short-term IDR at F1.
