8-K: Huntington Bancshares to Acquire Veritex Holdings, Announces Strong Preliminary Q2 2025 Results

Huntington Bancshares Incorporated announced the acquisition of Veritex Holdings, Inc. for $1.9 billion in an all-stock transaction, alongside preliminary strong second-quarter 2025 financial results.

Summary

• Huntington Bancshares (HBAN) entered into a definitive merger agreement to acquire Veritex Holdings, Inc. (VBTX).
• The transaction is an all-stock deal, with Huntington issuing 1.95 shares for each outstanding Veritex share.
• Based on Huntington's closing price of $17.39 as of July 11, 2025, the consideration implies $33.91 per Veritex share, totaling an aggregate transaction value of $1.9 billion.
• As of March 31, 2025, Veritex reported approximately $13 billion in assets, $9 billion in loans, and $11 billion in deposits.
• The acquisition is expected to be modestly accretive to Huntington's earnings per share, neutral to regulatory capital at close, and slightly dilutive to tangible book value per share with payback in approximately one year.
• Preliminary second quarter 2025 earnings per common share (EPS) are $0.34, unchanged from the prior quarter, and up over 13% from the year-ago quarter.
• The preliminary Q2 2025 EPS included a $0.04 impact resulting from a $58 million decrease in earnings from a securities repositioning and Notable Items that decreased earnings by $3 million.
• Net interest income for Q2 2025 was $1.5 billion, an increase of $41 million or 3% from the prior quarter and $155 million or 12% from the year-ago quarter.
• Average loans and leases were $133.2 billion, an increase of $2.3 billion or 2% from the prior quarter and $9.8 billion or 8% from the year-ago quarter.
• Average deposits were $163.4 billion, an increase of $1.8 billion or 1% from the prior quarter and $9.9 billion or 6% from the year-ago quarter.
• Net charge-offs were 0.20% of average total loans and leases for the quarter, 6 basis points lower than the prior quarter.
• Allowance for credit losses (ACL) was $2.5 billion, or 1.86% of total loans and leases, at quarter end, an increase of $37 million from the prior quarter.
• Tangible book value per share was $9.13, up $0.33 or 4% from the prior quarter and $1.24 or 16% from a year ago.
• Huntington is funding $10 million toward philanthropic investments in Texas as an initial step in community support.

Sentiment

Score: 8

Explanation: The document announces a strategic acquisition in a high-growth market with favorable financial projections (EPS accretive, capital neutral, quick TBV payback) and strong preliminary quarterly results showing growth in key metrics and improved credit performance. While there's initial TBV dilution and some one-time impacts to EPS, the overall tone and reported figures are positive, indicating a strong strategic move and solid operational performance.

Positives

• The acquisition accelerates Huntington's organic growth initiatives by expanding its presence in high-growth Texas markets, including Dallas/Fort Worth and Houston.
• Veritex brings deep local relationships, a strong commercial banking franchise, and customer loyalty, serving as a springboard for substantial future growth in Texas.
• Huntington was the #1 SBA lender in Texas in 2024, demonstrating strong existing capabilities in the region.
• The transaction is expected to be modestly accretive to Huntington's earnings per share.
• The transaction is expected to be neutral to regulatory capital at close.
• The slight dilution to tangible book value per share is expected to have a payback in approximately one year.
• Preliminary Q2 2025 EPS of $0.34 is up over 13% from the year-ago quarter.
• Net interest income for Q2 2025 increased by $41 million (3%) from the prior quarter and $155 million (12%) from the year-ago quarter.
• Average loans and leases increased by $2.3 billion (2%) from the prior quarter and $9.8 billion (8%) from the year-ago quarter.
• Average deposits increased by $1.8 billion (1%) from the prior quarter and $9.9 billion (6%) from the year-ago quarter.
• Net charge-offs of 0.20% were 6 basis points lower than the prior quarter, indicating strong credit performance.
• Tangible book value per share increased by $0.33 (4%) from the prior quarter and $1.24 (16%) from a year ago.
• Huntington is committed to continuing Veritex's strong legacy of community support through local partnerships, investment, and engagement, including an initial $10 million philanthropic investment in Texas.
• Malcolm Holland, Veritex's Chairman, President, and CEO, will join Huntington in a non-executive role as Chairman of Texas, ensuring continuity and leveraging local expertise.

Negatives

• Preliminary Q2 2025 EPS included a $0.04 impact resulting from a $58 million decrease in earnings from a securities repositioning and $3 million in Notable Items.
• The transaction is expected to be slightly dilutive to tangible book value per share initially.

Risks

• Changes in general economic, political, or industry conditions.
• Deterioration in business and economic conditions, including persistent inflation, supply chain issues or labor shortages, instability in global economic conditions and geopolitical matters, as well as volatility in financial markets.
• Changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs.
• The impact of pandemics and other catastrophic events or disasters on the global economy and financial market conditions and business, results of operations, and financial condition.
• The impacts related to or resulting from bank failures and other volatility, including potential increased regulatory requirements and costs, such as FDIC special assessments, long-term debt requirements and heightened capital requirements, and potential impacts to macroeconomic conditions, which could affect the ability of depository institutions to attract and retain depositors and to borrow or raise capital.
• Unexpected outflows of uninsured deposits which may require the sale of investment securities at a loss.
• Changing interest rates which could negatively impact the value of the portfolio of investment securities.
• The loss of value of the investment portfolio which could negatively impact market perceptions and could lead to deposit withdrawals.
• The effects of social media on market perceptions of the company and banks generally.
• Cybersecurity risks.
• Uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Federal Reserve.
• Volatility and disruptions in global capital, foreign exchange and credit markets.
• Movements in interest rates.
• Competitive pressures on product pricing and services.
• Success, impact, and timing of business strategies, including market acceptance of any new products or services.
• Changes in policies and standards for regulatory review of bank mergers.
• The nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations, including those related to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III regulatory capital reforms, as well as those involving the SEC, OCC, Federal Reserve, FDIC, CFPB and state-level regulators.
• The occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement between Huntington and Veritex.
• The outcome of any legal proceedings that may be instituted against Huntington or Veritex.
• Delays in completing the transaction.
• The failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction).
• The failure to obtain Veritex shareholder approval or to satisfy any of the other conditions to the transaction on a timely basis or at all.
• The possibility that the anticipated benefits of the transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Huntington and Veritex do business.
• The possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events.
• Diversion of management's attention from ongoing business operations and opportunities.
• Potential adverse reactions or changes to business, customer or employee relationships, including those resulting from the announcement or completion of the transaction.
• The ability to complete the transaction and integration of Huntington and Veritex successfully.
• The dilution caused by Huntington's issuance of additional shares of its capital stock in connection with the transaction.
• Other factors that may affect the future results of Huntington and Veritex.

Future Outlook

The acquisition of Veritex Holdings, Inc. is expected to close early in the fourth quarter of 2025, subject to regulatory approvals and customary closing conditions. Upon conversion, Veritex teams and branches will operate under the Huntington Bank name and brand. The transaction is anticipated to be modestly accretive to Huntington's earnings per share, neutral to regulatory capital at close, and slightly dilutive to tangible book value per share with a payback period of approximately one year. Huntington expects to issue its full earnings release for the second quarter ended June 30, 2025, on Friday, July 18, 2025.

Management Comments

• "This combination supports our ambitions and reflects our long-term commitment to the state of Texas, one of the most dynamic and fastest-growing economies in the country." Steve Steinour, Chairman, President and CEO of Huntington Bancshares.
• "The Veritex team brings deep local relationships, a strong commercial banking franchise and customer loyalty, and this partnership will serve as a springboard for substantial future growth in the state." Steve Steinour, Chairman, President and CEO of Huntington Bancshares.
• "Veritex has always been a people and community focused bank. We have found a partner in Huntington Bank who shares and lives out those same values." Malcolm Holland, Chairman, President and CEO of Veritex.
• "We are very excited about becoming part of the Huntington family and bringing more capabilities to our Texas clients than ever before." Malcolm Holland, Chairman, President and CEO of Veritex.
• "Were excited to build on their impressive legacy and, together with Veritex colleagues, continue to be a reliable partner supporting our customers and communities." Brant Standridge, President of Consumer & Regional Banking at Huntington.

Industry Context

The acquisition of Veritex Holdings, Inc. by Huntington Bancshares Incorporated signifies a strategic expansion into the high-growth Texas markets, particularly Dallas/Fort Worth and Houston. This move aligns with a broader industry trend where larger regional banks seek to capitalize on robust economic growth in specific geographic regions. Texas is highlighted as a key growth market, ranking among the top global economies by GDP and leading the U.S. in job creation and Fortune 500 company headquarters. Huntington's existing strong presence as the #1 SBA lender in Texas further positions it to leverage Veritex's established local relationships and commercial banking franchise, enhancing its competitive footprint in a dynamic banking landscape.

Comparison to Industry Standards

• Texas is the 8th largest economy in the world by GDP, surpassing countries like Italy, Canada, and Brazil.
• Texas ranks #1 in the U.S. by the number of Fortune 500 companies headquartered (52 companies).
• Texas ranks #2 in the U.S. by the number of jobs created, adding approximately 220,000 jobs in the past year, which is about 1.5 times more than the next state.
• Dallas-Fort Worth is identified as the 4th largest deposit market and ranks 5th by Fortune 500 headquarters.
• Houston is identified as the 11th largest deposit market and ranks 3rd by Fortune 500 headquarters.
• Huntington is the nation's largest originator, by volume, of Small Business Administration (SBA) 7(a) loans and was the #1 SBA lender in Texas in 2024.

Management Changes

Stakeholder Impact

• Shareholders (Huntington): Expected to benefit from modest EPS accretion, neutral regulatory capital impact, and long-term growth from expansion into high-growth Texas markets, despite initial slight tangible book value dilution.
• Shareholders (Veritex): Will receive 1.95 Huntington shares for each Veritex share, becoming shareholders of the combined entity.
• Employees (Veritex): Veritex teams and branches will operate under the Huntington Bank name and brand upon conversion, with Malcolm Holland joining Huntington in a non-executive role, suggesting integration and continued employment opportunities.
• Customers (Veritex): Will gain access to a broader suite of banking, payments, wealth management, and risk management products and services offered by Huntington.
• Communities (Texas): Huntington is committed to continuing Veritex's strong legacy of community support, including an initial $10 million philanthropic investment in Texas.

Next Steps

• Huntington will file a Registration Statement on Form S-4 that will include a Proxy Statement of Veritex and a Prospectus of Huntington, as well as other relevant documents concerning the proposed transaction, with the SEC.
• The proposed transaction involving Huntington and Veritex will be submitted to Veritex's shareholders for their consideration.
• The combination is expected to close early in the fourth quarter of 2025, subject to regulatory approvals and customary closing conditions.
• Upon conversion, Veritex teams and branches will operate under the Huntington Bank name and brand.
• Huntington expects to issue its full earnings release for the quarter ended June 30, 2025, on Friday, July 18, 2025.
• Huntington's senior management will host a conference call to discuss the acquisition on Monday, July 14, 2025, at 8:30 a.m. Eastern Time.
• Huntington will host a conference call to review quarterly financial results on Friday, July 18, 2025, at 9 a.m. Eastern Time.

Key Dates

Recommendation

Keywords

Banking, Financial Services, Merger, Acquisition, Regional Bank, Commercial Banking, Deposits, Loans, SEC Filing, 8-K, Huntington Bancshares, Veritex Holdings, Texas Market, Financial Results, Q2 2025, Earnings, Net Interest Income, Tangible Book Value, Credit Performance, SBA Lending