Huntington acquires Dallas bank Veritex in deal valued at nearly $2 billion

The stock of Veritex Holdings soared 20% on Monday, after the Dallas-based bank agreed to a nearly $2 billion buyout by Huntington Bancshares, a Midwest regional banking powerhouse with ambitions to deepen its Texas footprint.

Veritex has over 30 branches across Texas, including Dallas-Fort Worth and Houston. Columbus, Ohio-based Huntington plans to “maintain Veritex’s branch network and invest to grow it over time,” the bank said in a joint statement.

The deal is expected to close in the fourth quarter.

“We’ve been serial buyers of banks since we started, and…over the last several years, we’ve been looking at banks to buy, and banks to buy us, and just had a lot of conversations,” Malcolm Holland, chairman, president and CEO of Veritex, told The Dallas Morning News in an interview.

Veritex passed on “several” potential suitors, but ultimately settled on Huntington, because “they clearly understood that Texans do business with Texans.”

The agreement ― in which Huntington will pay a premium of over 23% for Veritex’s stock — seeks to capitalize on the Lone Star State’s emergence as a hotbed of business and finance, with a wave of companies tapping into a booming economy valued at close to $3 trillion.

In particular, the Dallas-Fort Worth region is becoming a draw for a wide range of dealmaking and corporate relocations.

And with stocks perched near record highs, the general environment has become more favorable for mergers and acquisitions, even with uncertainty surrounding tariffs clouding the outlook.

“The Texas market, and specifically Dallas-Fort Worth, and also Houston, are some of the fastest growing economies in the entire world,” Brant Standridge, Huntington’s president of consumer & regional banking at Huntington, told The News in an interview.

The bank has been in expansion mode for several years, primarily in the Carolinas and Texas, but found that Veritex presented an opportunity Huntington didn’t want to pass up.

“We’ve been investing in Texas since 2009 and we really ramped up that investment two years ago when we added our middle market banking teams in both Dallas and Houston,” he said.

Huntington has “a very well laid out and crafted organic growth plan for the state, because we obviously see the potential that I think everyone else has seen, and see the growth that everyone else sees.”

Holland will stay on at Huntington in a nonexecutive capacity as chairman of its Texas operations. He voiced confidence in Huntington’s ability to preserve Veritex’s local appeal, which took decades to construct.

“They know that it’s difficult when you bring somebody from outside of the state here to start building relationships, when you’ve got bankers here that have decades of built-up collateral, if you will, with these clients,” Holland added.

“And so they understood that a lot of banks haven’t, and… there’s a graveyard of banks that haven’t done it well. Huntington is doing it well.”

Huntington’s stock, traded on the Nasdaq, closed down 1.84% Monday.