Financial Chief of Huntington comments on Veritex's rigorous standards for takeovers
Huntington Bancshares, a leading regional bank, has announced its strategic entry into the dynamic Texas market with the acquisition of Veritex Holdings, a Dallas-based community bank, in a deal worth $1.9 billion. The acquisition, set to close in early Q4 2025, positions Huntington to accelerate growth in Texas, a key focus area for geographic expansion.
The acquisition of Veritex will significantly boost Huntington's footprint in Texas, offering access to a high-growth market. This move aligns with Huntington's broader strategy of geographic expansion combined with disciplined balance sheet management and proactive risk mitigation.
The deal is expected to drive robust loan and deposit growth for Huntington. The bank has revised its 2025 loan growth guidance to 6–8%, driven by commercial lending strength and the integration of new markets such as Texas through the Veritex deal. Deposit growth is also strong, with guidance revised to 4–6% for the year, supported by increased deposits from Texas and other newly entered markets.
Huntington aims for medium-term financial targets, including a 6–9% compound annual growth rate (CAGR) in pre-provision net revenue and a return on tangible common equity of 16-17%+ by 2027 while maintaining positive operating leverage. The Veritex deal factors into this outlook by boosting Huntington’s revenue base and deposit funding in Texas.
The acquisition also allows Huntington to optimize its balance sheet and apply risk management strategies to navigate various economic conditions, indicating a measured approach to growth alongside maintaining credit quality.
Post-acquisition, Huntington plans to invest in talent and expand the Texas platform. The majority of Veritex employees are expected to remain, ensuring continuity and stability. Veritex's brand recognition and local expertise are valuable assets that can help bolster growth in Texas, particularly in the Dallas/Fort Worth and Houston markets where Veritex currently operates.
Huntington remains focused on its organic growth strategy but remains "opportunistic" for potential future M&A deals. The deal has an earn-back period of about one year. After the Veritex deal closes, Huntington will have around 1,000 employees in Texas, making it the bank's third-largest state in terms of deposits.
Another area of opportunity for Huntington is consumer banking, as neither bank is targeting the consumer market in Texas. Huntington plans to bring its services and capabilities to those Veritex clients. The bank expects to realize 25% cost synergies from Veritex’s expense base, with half in the first year and the remainder in the second year.
JPMorgan analyst Andrew J. Dietrich has noted that retaining relationship managers will be crucial to the success of the acquisition. With the acquisition, Huntington plans to use Veritex as a springboard for local business in Texas, capitalizing on the opportunities presented by this dynamic market.
The acquisition of Veritex Holdings in Texas will not only increase Huntington's revenue base and deposit funding but also provide an opportunity to optimize its balance sheet and apply risk management strategies. Post-acquisition, Huntington aims to invest in talent and expand the Texas platform, capitalizing on Veritex's brand recognition and local expertise in the Dallas/Fort Worth and Houston markets.
