Huntington sells its retirement planning service business

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Huntington Bancshares has sold its retirement planning service business — a transaction that allows the Columbus, Ohio, company to more than offset the costs of two other recently announced initiatives.

The business line that Huntington sold works with employers that sponsor workplace savings plans. It was purchased by the consulting firm OneDigital in a transaction that closed on March 31, the two companies said Tuesday.

Though the deal's financial terms were not disclosed, Huntington said in a securities filing that the sale will yield a pretax gain of roughly $57 million, including associated goodwill allocation. 

In the same filing, Huntington said that it plans to report a pretax charge of $6 million during the first quarter of 2023 in connection with a business line reorganization that it detailed in February. The $182.9 billion-asset company also disclosed that it will incur a pretax charge of $36 million related to a voluntary retirement plan that it recently offered to employees in middle-level and senior-level roles.

Taken together, the pretax impact of the three moves is approximately $15 million, Huntington said.

Scott Siefers, a Piper Sandler analyst who covers Huntington, wrote in a research note that he is glad the bank "has found a gain to offset the charges."

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Huntington, which has been in the retirement plan advisory business for more than 30 years, has grown the unit over the years through both organic growth and acquisitions of other banks, according to spokesman Jeff Allison. The bank's retirement planning service currently does business with approximately 1,200 employer plans and has $5.6 billion of assets under management.

Under the terms of the deal with OneDigital, Huntington will receive reimbursement for client referrals, according to the bank's securities filing.

Huntington said that it had been evaluating options for the business since mid-2022 and selected a provider that will limit disruptions to its existing clients.

"We started this journey the middle of last year, with a goal to strategically partner with a company that shares Huntington's vision to provide retirement plan solutions that create value for our clients by keeping them at the center of all we do, and we found that with OneDigital," Michael Robinson, Huntington's director of wealth management, said in a press release.