By Arasu Kannagi Basil and Pritam Biswas
(Reuters) -U.S. regional lender Huntington Bancshares will buy Texas-based smaller rival Veritex Holdings in a $1.9 billion all-stock deal, as it looks to expand its presence in the state that is fast emerging as a major financial hub.
Shares of Columbus, Ohio-based Huntington Bancshares, a regional bank with $210 billion in assets, fell 1.8%, while Veritex jumped 20% after the companies announced the news.
Wall Street is expecting dealmaking activity among U.S.
banks to pick up in the second half of 2025 as recession fears fade and regulators become more open to consolidation.
Huntington will issue 1.95 shares for each outstanding share of Veritex, valuing the company at $33.91 per share. The offer price represents a 23.5% premium to Veritex's last close.
"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," said Huntington CEO Steve Steinour.
In recent years, Huntington has extended its geographic footprint, mainly in North and South Carolina and Texas.
Business-friendly policies of Texas as well as its growing tech and energy sectors, have attracted companies looking to tap into its long-term growth potential.
Texas GDP hit a record $2.7 trillion in 2024.
Truist Securities analyst Brian Foran said the Veritex acquisition may signal more deals ahead for Huntington.
TEXAS PUSH
Huntington CEO Steinour told analysts the deal will be a "springboard" to drive faster growth in Texas, where Veritex operates over 30 branches, with $13 billion in assets.
Following the deal, Texas will rank as Huntington's third largest deposit state, with a $15 billion loan portfolio.
Veritex will help accelerate commercial lending and capital markets opportunities across commercial real estate, corporate middle market and regional banking, Huntington said.
The transaction, set to close early in the fourth quarter of 2025, is expected to be "modestly accretive to Huntington's earnings per share," the bank said.
Veritex CEO Malcolm Holland will join Huntington in a non-executive role as chairman of Texas.
Separately, Huntington projected a 13% jump in second-quarter profit to 34 cents per share, underpinned by higher interest income.
Evercore and Commerce Street Capital advised Huntington, while Keefe, Bruyette & Woods advised Veritex.
(Reporting by Arasu Kannagi Basil and Pritam Biswas in Bengaluru; Editing by Shreya Biswas and Shinjini Ganguli)
