DEFM14A: Veritex to Merge with Huntington Bancshares

Veritex Holdings, Inc. shareholders are urged to approve an all-stock merger with Huntington Bancshares Incorporated, where Veritex will receive 1.95 shares of Huntington common stock for each share held.

Summary

• Veritex Holdings, Inc. (Veritex) will merge with and into Huntington Bancshares Incorporated (Huntington), with Huntington as the surviving corporation.
• Veritex shareholders will receive 1.95 shares of Huntington common stock for each share of Veritex common stock.
• Based on Huntington's closing price of $17.39 on July 11, 2025, the merger consideration was valued at approximately $33.91 per Veritex share.
• Based on Huntington's closing price of $16.81 on August 14, 2025, the merger consideration was valued at approximately $32.78 per Veritex share.
• Huntington expects to issue approximately 106,820,257 shares of Huntington common stock to Veritex shareholders.
• Former Veritex shareholders are estimated to own approximately 7% of the combined company, while existing Huntington shareholders will own approximately 93%.
• The merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes for U.S. holders, except for cash received in lieu of fractional shares.
• The Veritex board of directors unanimously recommends voting FOR the merger agreement, the non-binding advisory compensation proposal, and the adjournment proposal.
• The Veritex special meeting will be held virtually on September 22, 2025, at 10:00 a.m. Central Time.
• Veritex Community Bank, a wholly-owned subsidiary of Veritex, will merge into The Huntington National Bank, a wholly-owned subsidiary of Huntington.

Sentiment

Score: 8

Explanation: The filing presents a strong positive outlook for the merger, emphasizing strategic benefits, financial strength, and shareholder value, despite acknowledging standard integration and regulatory risks. The board's unanimous recommendation and the financial advisor's fairness opinion support a favorable sentiment.

Positives

• The combined company can leverage increased scale and financial capabilities to make further investments in innovation and technology, enhancing customer offerings and service.
• The merger creates one of the largest financial services organizations in the United States in terms of market capitalization, loans, deposits, and net income.
• Expanded distribution channels and scale position the combined entity to serve a broader customer base and drive enhanced financial performance.
• Huntington's broader product and service offerings, along with its digital capabilities, will be leveraged across the expanded customer base, complemented by Veritex's community banking expertise.
• Huntington is committed to remaining connected and invested in Texas, utilizing Veritex's strong team and local relationships to drive growth and expansion in the region.
• Veritex will become part of a significantly larger, better-capitalized financial institution with greater resources and a more diversified balance sheet, providing enhanced strength against economic cycles and market volatility.
• The combined company will have a higher lending limit, which can facilitate organic growth.
• The merger is expected to improve and strengthen Veritex's existing deposit base by integrating Huntington's stable, low-cost deposit base.
• Anticipated cost and revenue synergies are expected from the merger.
• The combined company will have attractive concentration ratios, including lower concentration levels in key growth areas like commercial real estate and acquisition, development, and construction (ADC) lending.
• The corporate cultures of both companies are believed to be similar and compatible, which should facilitate successful integration.
• The merger is expected to be generally tax-free for U.S. federal income tax purposes for Veritex shareholders.
• Huntington's history of paying quarterly cash dividends provides an additional source of returns and liquidity to its shareholders.
• The merger agreement includes provisions for employee benefits and indemnification for Veritex directors and officers.
• Keefe, Bruyette & Woods, Inc. (KBW) delivered a fairness opinion to the Veritex board of directors regarding the exchange ratio.
• Huntington will contribute $10 million to The Huntington Foundation, dedicated to the markets in which Veritex operates, to be distributed over a five-year period.

Negatives

• The market value of the merger consideration will fluctuate based on the market price of Huntington common stock, and neither company can terminate the agreement solely due to stock price changes.
• Huntington's business differs from Veritex's, meaning the combined company's market price may be affected by different factors.
• Substantial costs related to the merger and integration will be incurred, regardless of whether the merger is completed.
• Combining the businesses may be more difficult, costly, or time-consuming than expected, potentially leading to a failure to realize anticipated benefits.
• There is a risk of losing key employees during the pendency of the merger or after its completion.
• The integration process could disrupt ongoing businesses or lead to inconsistencies in standards, controls, procedures, and policies.
• Regulatory approvals may be delayed or not received, or may impose conditions that are not presently anticipated or could adversely affect the combined company.
• Certain Veritex directors and executive officers have interests in the merger that may differ from, or be in addition to, the interests of general shareholders.
• If the merger is not completed, Veritex could experience negative reactions from financial markets, customers, and employees, and may be required to pay a $56 million termination fee to Huntington.
• Veritex will be subject to business uncertainties and contractual restrictions while the merger is pending, potentially limiting its ability to pursue other opportunities.
• Veritex shareholders will have a reduced ownership and voting interest (approximately 7%) in the combined company.
• Veritex shareholders will not have appraisal or dissenters' rights in connection with the merger under Texas law.
• Demand letters from purported stockholders alleging omitted material information in the registration statement have been received, which could result in litigation and potentially delay or prevent the merger.
• The merger agreement limits Veritex's ability to solicit or engage in discussions regarding alternative acquisition proposals.
• The fairness opinion from Veritex's financial advisor (KBW) was delivered on July 13, 2025, and does not reflect changes in circumstances occurring after that date.

Risks

• The market price of Huntington common stock after the merger may be affected by factors different from those affecting Veritex or Huntington common stock currently.
• Veritex and Huntington are expected to incur substantial costs related to the merger and integration; if the merger is not completed, these expenses will be incurred without realizing expected benefits.
• Combining Huntington and Veritex may be more difficult, costly, or time-consuming than expected, and the anticipated benefits of the merger may not be realized fully or at all, or may take longer to realize.
• The integration process could result in the loss of key employees, disruption of ongoing businesses, or inconsistencies in standards, controls, procedures, and policies.
• Regulatory approvals may not be received, may take longer than expected, or may impose conditions that are not presently anticipated or that could have a material adverse effect on the combined company following the merger.
• Certain of Veritex's directors and executive officers may have interests in the merger that may differ from, or be in addition to, the interests of holders of Veritex common stock generally.
• Termination of the merger agreement could negatively affect Veritex, including adverse reactions from financial markets, customers, and employees, and a potential $56 million termination fee.
• Veritex will be subject to business uncertainties and contractual restrictions while the merger is pending, potentially impairing its ability to attract/retain key personnel or pursue other beneficial opportunities.
• The shares of Huntington common stock to be received by holders of Veritex common stock will have different rights from the shares of Veritex common stock.
• Holders of Veritex common stock will have a reduced ownership and voting interest (approximately 7%) in the combined company after the merger.
• Holders of Veritex common stock will not have appraisal rights or dissenters' rights in the merger under Section 10.354 of the Texas Business Organizations Code.
• Demand letters from purported stockholders alleging omitted material information in the registration statement have been received, which could result in litigation, prevent or delay the completion of the merger, or negatively impact business operations.
• The merger agreement limits Veritex's ability to pursue alternatives to the merger and may discourage other companies from trying to acquire Veritex, including a $56 million termination fee under certain circumstances.
• The opinion of Veritex's financial advisor delivered prior to the signing of the merger agreement will not reflect changes in circumstances occurring after the date of such opinion.
• Risks specific to Huntington's business and Veritex's business, as described in their respective Annual Reports on Form 10-K and other SEC filings, will also affect the combined company.

Future Outlook

The merger is expected to close in the fourth quarter of 2025, subject to shareholder and regulatory approvals. The combined company anticipates leveraging increased scale, diversified revenue streams, and enhanced financial strength to drive future growth, invest in technology, and expand customer offerings, particularly in the Texas market. Management believes the strategic combination will create superior future earnings and prospects compared to Veritex operating on a standalone basis.

Management Comments

• Stephen D. Steinour, Chairman of the Board, President and Chief Executive Officer of Huntington Bancshares Incorporated, stated: 'We strongly support this combination of our companies and join the Veritex board of directors in their recommendation.'
• C. Malcolm Holland, III, Chairman of the Board, Chief Executive Officer and President of Veritex Holdings, Inc., stated: 'We strongly support this combination of our companies and join the Veritex board of directors in their recommendation.'
• The Veritex board of directors unanimously determined that the merger agreement and the transactions contemplated thereby are advisable and fair to and in the best interest of Veritex and its shareholders.

Industry Context

This announcement reflects the ongoing trend of consolidation within the U.S. financial services industry, where regional banks seek to achieve greater scale, diversify operations, and enhance financial strength to navigate competitive pressures, evolving regulatory environments, and economic uncertainties. The merger positions the combined entity as a larger regional bank, leveraging Huntington's broader multi-state presence and digital capabilities with Veritex's strong community banking foundation in key Texas metropolitan markets. This strategic move aims to create a more resilient and competitive institution capable of making significant investments in technology and expanding its product offerings.

Comparison to Industry Standards

• Veritex's financial advisor, Keefe, Bruyette & Woods, Inc. (KBW), compared Veritex's financial performance and market valuation to seven selected major exchange-traded banks headquartered in the U.S. Southwestern region with total assets between $5 billion and $40 billion.
• KBW also compared Huntington's financial performance and market valuation to six selected major exchange-traded U.S. banks with total assets between $100 billion and $250 billion.
• The implied transaction multiples for Veritex in the proposed merger (e.g., Price/Tangible Book Value of 1.53x, Price/2025 EPS of 15.4x, Price/2026 EPS of 14.3x, Core Deposit Premium of 7.4%, and One-Day Market Premium of 23.5%) were generally above the median and average of fourteen selected U.S. bank transactions announced since January 1, 2021, with deal values between $1 billion and $3 billion, suggesting a favorable valuation for Veritex shareholders.
• The Huntington National Bank has a Community Reinvestment Act (CRA) rating of 'outstanding,' while Veritex Community Bank has a CRA rating of 'satisfactory,' indicating a strong compliance record for the acquiring entity.

Management Changes

Corporate Governance

Legal Proceedings

• Since July 21, 2025, Veritex and its board of directors have received demand letters from purported stockholders alleging that the registration statement filed with the SEC omits material information.
• The demand letters specifically request disclosure of additional information pertaining to certain financial projections of Veritex and Huntington, and information regarding KBW's financial analysis.
• Veritex believes the allegations in the demand letters are without merit.
• Potential litigation arising from these demand letters could prevent or delay the completion of the merger or negatively impact the business and operations of Huntington and Veritex.

Related Party Transactions

• C. Malcolm Holland, III (Veritex Chairman, President, CEO) has entered into a letter agreement with Huntington to serve as an advisor (Chairman of Texas) for three years post-merger, receiving a $7.0 million lump-sum cash payment at the effective time and an annual advisory fee of $3.5 million for three years, plus certain executive-level benefits.
• Mr. Holland's employment termination at the effective time will be deemed a Change-in-Control Termination under his existing employment agreement, entitling him to a severance payment of $5.3 million, a prorated annual bonus, and COBRA premium payment.
• Terry S. Earley (retired Veritex CFO, current consultant) has entered into a retention agreement with Huntington, entitling him to a $3.5 million retention bonus ($1.0 million vesting at closing, $2.5 million later) for advisory services and compliance with restrictive covenants.
• Other named executive officers (Dom Karaba, LaVonda Renfro, Angela Harper, William Holford) are eligible for cash severance payments and benefits upon a qualifying termination post-merger, based on multiples of base salary and average annual cash incentive bonus, plus a prorated annual bonus and healthcare premiums.
• The estimated aggregate amount for the three executive officers who are not named executive officers (Messrs. Anderson, Donnelly, and McDaniel) for severance and other benefits is $4,264,293.69, assuming a change-in-control termination on October 1, 2025.
• The estimated aggregate amount for the twelve non-employee directors in settlement of their Veritex equity awards is $1,718,256.54, assuming an effective time of October 1, 2025.

Stakeholder Impact

• **Shareholders (Veritex)**: Will receive Huntington common stock, resulting in a reduced ownership and voting interest (approximately 7%) in the combined company. They will not have appraisal or dissenters' rights. The value of their consideration is subject to Huntington's stock price fluctuations. They stand to benefit from the strategic advantages and synergies of the combined entity.
• **Shareholders (Huntington)**: Will own approximately 93% of the combined company and are expected to benefit from the strategic growth, diversification, and cost/revenue synergies resulting from the acquisition.
• **Employees (Veritex)**: Continuing employees are guaranteed comparable base salary/wages and target incentive opportunities for a period, and substantially comparable benefits. Severance benefits are provided for qualifying terminations. There is a risk of job loss or changes due to integration efforts.
• **Customers**: Expected to benefit from enhanced customer offerings, broader product lines, and improved service across business lines due to the combined company's increased scale and investment in technology.
• **Communities in Texas**: Huntington has committed to contributing $10 million to The Huntington Foundation, dedicated to the markets where Veritex operates, to be distributed over five years, indicating a continued investment in these communities.

Next Steps

• Veritex will hold a special meeting of shareholders on September 22, 2025, to vote on the merger agreement, the non-binding advisory compensation proposal, and the adjournment proposal.
• Huntington and Veritex must obtain necessary regulatory approvals from the Federal Reserve Board, OCC, and other authorities, with initial filings made on July 14, 2025.
• Huntington will cause the shares of Huntington common stock to be issued in the merger to be approved for listing on NASDAQ, subject to official notice of issuance.
• Veritex common stock will be delisted from NASDAQ and deregistered under the Exchange Act after merger completion.
• Huntington will file a post-effective amendment to the S-4 or an effective registration statement on Form S-8 for Adjusted RSU Awards.
• Huntington will make payments to former holders of Veritex Stock Options and issue shares for Veritex Vested RSU Awards on the first regular payroll date after closing.
• Huntington will issue shares for Veritex Director RSU Awards as soon as reasonably practicable, no later than 10 days after closing.
• Huntington will contribute $10 million to The Huntington Foundation, dedicated to Veritex's markets, to be distributed over a five-year period.
• Huntington and Veritex will coordinate the declaration of any dividends in respect of their common stock.
• Huntington or The Huntington National Bank will assume the due and punctual performance and observance of covenants for Veritex and Veritex Community Bank indebtedness.

Key Dates

Recommendation

The merger offers strategic benefits and a premium for Veritex shareholders, with the transaction structured as a tax-free reorganization. However, the fixed exchange ratio means the value is subject to Huntington's stock price fluctuations. Significant integration risks, potential regulatory hurdles, and ongoing litigation create uncertainty. While the long-term outlook for the combined entity appears positive due to scale and diversification, the immediate risks and the nature of the all-stock consideration suggest a 'Hold' for existing Veritex shareholders to await merger completion and observe integration, and for potential investors to monitor the combined entity's performance post-merger.

Keywords

Bank Merger, Financial Services, Acquisition, Huntington Bancshares, Veritex Holdings, HBAN, VBTX, SEC Filing, Proxy Statement, Shareholder Vote, Corporate Governance, Risk Management, Strategic Combination, Regional Bank, Texas Market, Ohio Bank