Core Insights - Huntington Bancshares, Inc. (HBAN) has successfully completed its merger with Veritex Holdings, Inc. in a $1.9 billion all-stock transaction, enhancing its commitment to the Texas market [1][10] - The merger aims to accelerate HBAN's organic growth in Texas, particularly in the Dallas/Fort Worth and Houston areas, resulting in a combined asset base of nearly $223 billion [2][10] Financial Metrics - The combined entity holds $176 billion in deposits and $148 billion in loans, with Huntington planning to maintain and grow Veritex's branch network of 31 locations [2] - Integration of Veritex is expected to generate approximately $20 million in core pre-provision net revenue benefits in Q4 2025, alongside a projected efficiency ratio improvement of around 1 percentage point and a 30-basis-point increase in return on average tangible common equity (ROTCE) for 2025 [3] - Following the merger, net interest income (NII) growth is now projected to be between 10% and 11%, up from a previous outlook of 8% to 9%, supported by strong loan and deposit growth [4][10] Growth Projections - Average deposit balance growth is anticipated to be in the range of 6.5% to 7%, while loan growth is expected to reach approximately 9% to 9.5% for the year [4] - For 2026, mid to high single-digit loan growth is projected, driven by expansion in high-growth markets like Texas [5] Strategic Expansion - HBAN has previously announced plans to expand its commercial banking business in Texas, enhancing its footprint in the Dallas-Fort Worth area [6] - The company has broadened its middle-market banking presence and introduced new verticals, including the Financial Institutions Group and the Aerospace & Defense Group, to strengthen its commercial banking capabilities [7][8] Market Performance - Over the past six months, shares of Huntington have increased by 14.6%, outperforming the industry growth of 9.5% [9]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Viewpoint - The Ademi Firm is investigating Veritex for potential breaches of fiduciary duty and other legal violations related to its transaction with Huntington, particularly focusing on the treatment of shareholders and the conduct of the Veritex board [1][2]. Group 1: Transaction Details - In the completed transaction, Veritex shareholders received 1.95 shares for each outstanding share of Veritex [2]. - Veritex insiders benefited significantly from change of control arrangements as part of the transaction [2]. Group 2: Investigation Focus - The transaction agreement allegedly unreasonably limited competing offers for Veritex, raising concerns about the fairness of the deal [2]. - The investigation will assess whether the Veritex board fulfilled its fiduciary duties to all shareholders, considering potential misrepresentations and omissions in the transaction documents [2].

Core Insights - Huntington Bancshares has completed its merger with Veritex Holdings, enhancing its growth strategy in Texas markets [1] - The combined entity now holds approximately $223 billion in assets, $176 billion in deposits, and $148 billion in loans as of September 30, 2025 [1] - The merger will expand Huntington's branch network to over 1,000 locations, including Veritex's 31 branches in Texas [1] Company Strategy - The acquisition is positioned as a catalyst for future growth in Texas, particularly in the Dallas-Fort Worth and Houston areas [1] - Huntington plans to maintain and invest in Veritex's branch network to further enhance its market presence [1] - The company aims to strengthen its commitment to Texas, which is recognized as one of the fastest-growing economies in the U.S. [1] Leadership and Operations - C. Malcolm Holland III, former CEO of Veritex, will take on a non-executive role as Chairman of Texas at Huntington [1] - Huntington has been active in Texas since 2009, focusing on middle-market business banking solutions and is a leading SBA lender in the state [1] - The transition for Veritex customers to Huntington's systems is scheduled for the first quarter of 2026, with no impact on existing Huntington customers during this process [1]

Core Viewpoint - BrightSpring Health Services Inc. will replace Veritex Holdings Inc. in the S&P SmallCap 600 effective October 20, 2025, due to an acquisition by Huntington Bancshares Inc. of Veritex Holdings [1] Group 1: Company Changes - BrightSpring Health Services Inc. will be added to the S&P SmallCap 600 index [1] - Veritex Holdings Inc. will be removed from the S&P SmallCap 600 index [1] - The effective date for these changes is October 20, 2025 [1] Group 2: Acquisition Details - Huntington Bancshares Inc. is acquiring Veritex Holdings Inc. [1] - The acquisition is expected to close soon, pending final closing conditions [1]

Core Viewpoint - Huntington Bancshares and Veritex Holdings have received all necessary regulatory approvals for their merger, with the transaction expected to be completed on October 20, 2025 [1] Company Summary - The merger involves Veritex being merged into Huntington, which will continue as the surviving corporation [1] - Veritex Community Bank will merge into The Huntington National Bank as part of the transaction [1] Regulatory Approval - The merger has been approved by the Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency [1] - All required regulatory approvals have been obtained, indicating a significant step towards finalizing the merger [1]

Core Viewpoint - The Federal Reserve Board has approved Huntington Bancshares Incorporated's application to acquire Veritex Holdings, Inc., which includes the indirect acquisition of Veritex Community Bank [1] Group 1 - Huntington Bancshares Incorporated is based in Columbus, Ohio [1] - Veritex Holdings, Inc. and Veritex Community Bank are located in Dallas, Texas [1]

Core Viewpoint - The proposed sale of Veritex Holdings, Inc. to Huntington Bancshares Incorporated is under investigation to assess whether the transaction adequately values Veritex and the process leading to this valuation [1]. Group 1 - Veritex shareholders will receive 1.95 shares of Huntington for each share of Veritex they own as part of the proposed transaction [1]. - Kahn Swick & Foti, LLC is investigating the adequacy of the consideration offered to Veritex shareholders [1].

Company Overview - Veritex Holdings (VBTX) is based in Dallas and operates in the Finance sector, with a year-to-date share price change of 13.51% [3] - The company currently pays a dividend of $0.22 per share, resulting in a dividend yield of 2.85%, which is higher than the Banks - Southeast industry's yield of 2.38% and the S&P 500's yield of 1.51% [3] Dividend Performance - The current annualized dividend of Veritex Holdings is $0.88, reflecting a 10% increase from the previous year [4] - Over the past five years, the company has increased its dividend two times on a year-over-year basis, with an average annual increase of 3.74% [4] - The current payout ratio is 39%, indicating that the company paid out 39% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Veritex Holdings' earnings per share for 2025 is $2.23, representing a year-over-year growth rate of 2.76% [5] - The company is positioned as a strong dividend play, appealing to income investors seeking consistent cash flow [6] Investment Considerations - Veritex Holdings is considered a compelling investment opportunity due to its strong dividend performance and solid earnings growth prospects [6] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a stable outlook [6]

[PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Glossary of Acronyms, Abbreviations, and Terms](index=3&type=section&id=Glossary%20of%20Acronyms%2C%20Abbreviations%2C%20and%20Terms) This section defines key financial and regulatory acronyms, abbreviations, and terms for clarity - The glossary defines key financial and regulatory terms such as **ACL** (Allowance for Credit Loss), **AFS** (Available-For-Sale), **HTM** (Held-To-Maturity), **CET1** (Common Equity Tier 1), **CRE** (Commercial Real Estate), **EPS** (Earnings Per Share), and **RWA** (Risk-Weighted Assets)[7](index=7&type=chunk) [Item 1. Financial Statements – Unaudited](index=4&type=section&id=Item%201.%20Financial%20Statements%20%E2%80%93%20Unaudited) This section presents the unaudited consolidated financial statements for the period ended June 30, 2025 [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) The balance sheets show a slight decrease in total assets and deposits, while stockholders' equity increased Consolidated Balance Sheet Highlights (Dollars in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | |:---|:---|:---|:---|:---| | Total assets | $12,527,868 | $12,768,341 | $(240,473) | -1.88% | | Total cash and cash equivalents | $770,565 | $855,200 | $(84,635) | -9.89% | | Total investments | $1,492,790 | $1,548,176 | $(55,386) | -3.58% | | Total LHI, net | $9,340,778 | $9,392,799 | $(52,021) | -0.55% | | Total deposits | $10,417,920 | $10,752,592 | $(334,672) | -3.11% | | Total liabilities | $10,878,649 | $11,167,272 | $(288,623) | -2.58% | | Total stockholders' equity | $1,649,219 | $1,601,069 | $48,150 | 3.01% | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income increased for the three and six-month periods due to higher net interest and noninterest income Consolidated Statements of Income Highlights (Dollars in thousands, except per share amounts) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | |:---|:---|:---|:---|:---| | Total interest and dividend income | $175,123 | $191,247 | $(16,124) | -8.43% | | Total interest expense | $78,788 | $95,011 | $(16,223) | -17.07% | | NET INTEREST INCOME | $96,335 | $96,236 | $99 | 0.10% | | Provision for credit losses on loans | $1,750 | $8,250 | $(6,500) | -78.79% | | Total noninterest income | $13,499 | $10,578 | $2,921 | 27.61% | | Total noninterest expense | $67,162 | $63,141 | $4,021 | 6.37% | | NET INCOME | $30,906 | $27,202 | $3,704 | 13.62% | | Basic EPS | $0.57 | $0.50 | $0.07 | 14.00% | | Diluted EPS | $0.56 | $0.50 | $0.06 | 12.00% | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | |:---|:---|:---|:---|:---| | Total interest and dividend income | $348,848 | $375,834 | $(26,986) | -7.18% | | Total interest expense | $157,072 | $186,792 | $(29,720) | -15.91% | | NET INTEREST INCOME | $191,776 | $189,042 | $2,734 | 1.45% | | Provision for credit losses on loans | $5,750 | $15,750 | $(10,000) | -63.49% | | Total noninterest income | $27,788 | $17,240 | $10,548 | 61.18% | | Total noninterest expense | $133,996 | $125,257 | $8,739 | 6.98% | | NET INCOME | $59,976 | $51,358 | $8,618 | 16.78% | | Basic EPS | $1.10 | $0.94 | $0.16 | 17.02% | | Diluted EPS | $1.09 | $0.94 | $0.15 | 15.96% | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income rose significantly due to net income growth and positive other comprehensive income Consolidated Statements of Comprehensive Income Highlights (Dollars in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | |:---|:---|:---|:---|:---| | NET INCOME | $30,906 | $27,202 | $3,704 | 13.62% | | Net unrealized (losses) gains on debt securities AFS | $(1,955) | $(4,762) | $2,807 | -58.95% | | Net unrealized gains (losses) on derivative instruments | $6,565 | $(2,228) | $8,793 | -394.66% | | Other comprehensive income (loss), net of tax | $3,642 | $(5,556) | $9,198 | -165.55% | | COMPREHENSIVE INCOME | $34,548 | $21,646 | $12,902 | 59.61% | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | |:---|:---|:---|:---|:---| | NET INCOME | $59,976 | $51,358 | $8,618 | 16.78% | | Net unrealized (losses) gains on debt securities AFS | $20,324 | $(5,954) | $26,278 | -441.35% | | Net unrealized gains (losses) on derivative instruments | $13,281 | $(10,723) | $24,004 | -223.85% | | Other comprehensive income (loss), net of tax | $26,548 | $(13,250) | $39,798 | -300.36% | | COMPREHENSIVE INCOME | $86,524 | $38,108 | $48,416 | 127.05% | [Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Total stockholders' equity increased due to net income and other comprehensive income Changes in Stockholders' Equity (Six Months Ended June 30, 2025 vs. December 31, 2024) (Dollars in thousands) | Item | Balance at Dec 31, 2024 | Net Income | Dividends Paid | Stock Buyback | Other Comprehensive Income, net of tax | Balance at Jun 30, 2025 | |:---|:---|:---|:---|:---|:---|:---| | Total Stockholders' Equity | $1,601,069 | $59,976 | $(22,864) | $(16,569) | $26,548 | $1,649,219 | Changes in Stockholders' Equity (Six Months Ended June 30, 2024 vs. December 31, 2023) (Dollars in thousands) | Item | Balance at Dec 31, 2023 | Net Income | Dividends Paid | Stock Buyback | Other Comprehensive Loss, net of tax | Balance at Jun 30, 2024 | |:---|:---|:---|:---|:---|:---|:---| | Total Stockholders' Equity | $1,531,323 | $51,358 | $(21,799) | $(3,497) | $(13,250) | $1,548,616 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) A net decrease in cash resulted from financing activities, partially offset by cash from investing activities Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) (Dollars in thousands) | Cash Flow Activity | 2025 | 2024 | |:---|:---|:---| | Net cash provided by operating activities | $70,972 | $85,560 | | Net cash provided by (used in) investing activities | $126,382 | $(324,751) | | Net cash (used in) provided by financing activities | $(281,989) | $261,965 | | Net change in cash and cash equivalents | $(84,635) | $22,774 | | Cash and cash equivalents at end of period | $770,565 | $651,837 | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes on accounting policies, securities, loans, capital, and a subsequent merger event [1. Operations and Summary of Significant Accounting Policies](index=11&type=section&id=1.%20Operations%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the Company's banking operations and the basis of presentation for its interim financial statements - Veritex Holdings, Inc. operates 19 branches in the DFW metroplex and 12 branches in the Houston metropolitan area, offering a full range of banking services[25](index=25&type=chunk) - The financial statements are unaudited and prepared in accordance with GAAP for interim financial information, with intercompany transactions eliminated in consolidation[27](index=27&type=chunk) - The Company operates as a single reportable segment, community banking, with all significant operating decisions based on the consolidated results of the Bank[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) EPS Reconciliation (Three and Six Months Ended June 30) (In thousands, except per share amounts) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Net income | $30,906 | $27,202 | $59,976 | $51,358 | | Weighted average shares outstanding for basic EPS | 54,251 | 54,457 | 54,368 | 54,451 | | Dilutive effect of employee stock-based awards | 515 | 366 | 576 | 381 | | Adjusted weighted average shares outstanding | $54,766 | $54,823 | $54,944 | $54,832 | | Basic EPS | $0.57 | $0.50 | $1.10 | $0.94 | | Diluted EPS | $0.56 | $0.50 | $1.09 | $0.94 | [2. Supplemental Statement of Cash Flows](index=13&type=section&id=2.%20Supplemental%20Statement%20of%20Cash%20Flows) This note details supplemental cash flow information, including cash paid for interest and taxes and noncash transactions Supplemental Cash Flow Information (Six Months Ended June 30) (Dollars in thousands) | Item | 2025 | 2024 | |:---|:---|:---| | Cash paid for interest | $176,065 | $194,144 | | Cash paid for income taxes | $20,879 | $1,826 | | Right-of-use assets obtained in exchange for lease liabilities | $774 | $1,087 | | Transfer of loans to other real estate | $3,330 | $26,650 | [3. Share Transactions](index=13&type=section&id=3.%20Share%20Transactions) This note details the Company's stock buyback program, which was extended through March 31, 2026 - The Board authorized the extension of the Stock Buyback Program through March 31, 2026, allowing for purchases up to **$50,000 in aggregate**[38](index=38&type=chunk) Stock Buyback Program (Three and Six Months Ended June 30) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Numbers of shares repurchased | 286,291 | 175,688 | 663,637 | 175,688 | | Weighted average price per share | $24.06 | $19.90 | $24.72 | $19.90 | [4. Securities](index=14&type=section&id=4.%20Securities) This note provides a breakdown of the Company's equity and debt securities, including fair values and unrealized losses - As of June 30, 2025, 127 AFS debt securities were in an unrealized loss position totaling **$61.6 million**, and 55 HTM securities were in an unrealized loss position totaling **$24.2 million**; Management believes these unrealized losses are due to noncredit-related factors and no ACL has been recognized[48](index=48&type=chunk) Equity Securities with Readily Determinable Fair Value (Dollars in thousands) | Date | Fair Value | |:---|:---| | June 30, 2025 | $9,980 | | December 31, 2024 | $9,781 | Debt Securities AFS and HTM (June 30, 2025) (Dollars in thousands) | Category | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |:---|:---|:---|:---|:---| | AFS | $1,295,684 | $8,230 | $61,629 | $1,242,285 | | HTM | $176,519 | $0 | $24,200 | $152,319 | Debt Securities AFS and HTM (December 31, 2024) (Dollars in thousands) | Category | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |:---|:---|:---|:---|:---| | AFS | $1,368,669 | $6,474 | $80,631 | $1,294,512 | | HTM | $184,026 | $0 | $23,466 | $160,560 | [5. LHI and ACL](index=18&type=section&id=5.%20LHI%20and%20ACL) This note details the loan portfolio, allowance for credit losses, and credit quality indicators - The Company modified **$34.7 million** in payment deferrals and **$26.5 million** in combination concessions for borrowers experiencing financial difficulty during the six months ended June 30, 2025[63](index=63&type=chunk) LHI, carried at amortized cost (Dollars in thousands) | Loan Type | June 30, 2025 | December 31, 2024 | |:---|:---|:---| | Construction and land | $1,142,457 | $1,303,711 | | 1 - 4 family residential | $1,086,342 | $957,341 | | Multi-family residential | $718,946 | $750,218 | | OOCRE | $800,881 | $780,003 | | NOOCRE | $2,311,466 | $2,382,499 | | Commercial | $2,692,209 | $2,693,538 | | MW | $669,052 | $605,411 | | Total LHI, gross | $9,461,738 | $9,513,526 | | Less: ACL | $(112,262) | $(111,745) | | Total LHI, net | $9,340,778 | $9,392,799 | ACL Activity (Three Months Ended June 30, 2025) (Dollars in thousands) | Loan Type | Balance at beginning of period | Credit loss expense (non-PCD) | Credit loss expense (PCD) | Charge-offs | Recoveries | Ending Balance | |:---|:---|:---|:---|:---|:---|:---| | Construction and Land | $19,419 | $962 | $0 | $0 | $0 | $20,381 | | Residential | $16,823 | $1,664 | $65 | $0 | $1 | $18,553 | | NOOCRE | $35,491 | $(497) | $0 | $(215) | $0 | $34,779 | | Commercial | $16,728 | $1,653 | $0 | $(1,571) | $131 | $16,941 | | Total | $111,773 | $1,528 | $222 | $(1,841) | $580 | $112,262 | Nonaccrual Loans (Dollars in thousands) | Loan Type | June 30, 2025 | December 31, 2024 | |:---|:---|:---| | Construction and land | $6,120 | $6,373 | | NOOCRE | $27,486 | $10,967 | | Commercial | $17,550 | $24,680 | | Total Nonaccrual | $61,338 | $52,521 | [6. Borrowings](index=29&type=section&id=6.%20Borrowings) This note details borrowings from the FHLB and subordinated debt, including a recent redemption of subordinated notes - Advances from FHLB totaled **$169.0 million** at June 30, 2025, with a weighted average rate of 4.75% and a maturity date of July 1, 2025; There were no outstanding FHLB advances as of December 31, 2024[83](index=83&type=chunk) - The Company redeemed **$75.0 million** of its 4.75% fixed-to-floating subordinated notes in the first quarter of 2025[84](index=84&type=chunk) Subordinated Debentures and Notes (Dollars in thousands) | Item | June 30, 2025 | December 31, 2024 | |:---|:---|:---| | Subordinated notes, net | $124,843 | $199,607 | | Subordinated debentures, net | $31,239 | $31,129 | | Total | $156,082 | $230,736 | [7. Fair Value](index=30&type=section&id=7.%20Fair%20Value) This note summarizes assets and liabilities measured at fair value, categorized by the fair value hierarchy Assets Measured at Fair Value on a Recurring Basis (June 30, 2025) (Dollars in thousands) | Financial Assets | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | |:---|:---|:---|:---|:---| | AFS debt securities | $0 | $1,242,285 | $0 | $1,242,285 | | Equity securities with a readily determinable fair value | $9,980 | $0 | $0 | $9,980 | | LHFS | $0 | $68,798 | $0 | $68,798 | | Interest rate derivatives designated as hedging instruments | $0 | $9,735 | $0 | $9,735 | Assets Measured at Fair Value on a Non-Recurring Basis (Dollars in thousands) | Assets | June 30, 2025 (Level 3 Inputs) | December 31, 2024 (Level 3 Inputs) | |:---|:---|:---| | Collateral dependent loans with an ACL | $1,531 | $4,182 | | Servicing assets with a valuation allowance | $3,675 | $3,356 | | OREO | $9,218 | $24,737 | [8. Derivative Financial Instruments](index=33&type=section&id=8.%20Derivative%20Financial%20Instruments) This note describes the use of derivatives to manage interest rate risk, categorized as hedging or non-designated instruments - The Company uses interest rate swaps, floors, caps, and collars as cash flow hedges to mitigate exposure to future cash flow variability from interest rate risk, with changes in fair value recorded in AOCI[98](index=98&type=chunk) - Non-designated derivatives, primarily customer-related interest rate agreements, are offset with correspondent bank counterparties, and changes in their net fair value are recognized in noninterest income, with minimal impact on operations[99](index=99&type=chunk) Notional Amounts and Estimated Fair Values of Derivatives (June 30, 2025) (Dollars in thousands) | Derivative Type | Notional Amount | Asset Derivative | Liability Derivative | |:---|:---|:---|:---| | Designated as hedging instruments | $1,550,000 | $9,735 | $30,196 | | Not designated as hedging instruments | $1,810,116 | $19,658 | $19,462 | | Total Derivatives | $3,360,116 | $6,814 | $27,079 | [9. OBS Loan Commitments](index=36&type=section&id=9.%20OBS%20Loan%20Commitments) This note outlines off-balance sheet loan commitments and the allowance for unfunded commitment credit losses OBS Financial Instruments (Dollars in thousands) | Commitment Type | June 30, 2025 | December 31, 2024 | |:---|:---|:---| | Commitments to extend credit | $3,677,573 | $3,115,682 | | MW commitments | $650,948 | $562,589 | | Standby and commercial letters of credit | $112,686 | $111,930 | | Total | $4,441,207 | $3,790,201 | ACL on Unfunded Commitments (Dollars in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Beginning balance | $7,403 | $6,504 | $6,103 | $8,045 | | Provision (benefit) for credit losses | $1,500 | $0 | $2,800 | $(1,541) | | Ending balance | $8,903 | $6,504 | $8,903 | $6,504 | [10. Income Taxes](index=37&type=section&id=10.%20Income%20Taxes) This note presents the income tax expense and effective tax rates for the reported periods - The effective income tax rates differ from the **21% U.S. statutory federal income tax rate** primarily due to tax-exempt income from investment securities and bank-owned life insurance, as well as nondeductible compensation and state income taxes[110](index=110&type=chunk) Income Tax Expense and Effective Tax Rate (Dollars in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---| | Income tax expense | $8,516 | $8,221 | $17,042 | $15,458 | | Effective tax rate | 21.6% | 23.2% | 22.1% | 23.1% | [11. Legal Contingencies](index=37&type=section&id=11.%20Legal%20Contingencies) This note states that current legal actions are not expected to have a material adverse effect on the Company - Management believes that the likelihood is remote that any adverse outcome from legal proceedings would have a material effect on the Company's financial position, liquidity, or results of operations[111](index=111&type=chunk) [12. Capital Requirements and Restrictions on Retained Earnings](index=38&type=section&id=12.%20Capital%20Requirements%20and%20Restrictions%20on%20Retained%20Earnings) This note details compliance with regulatory capital requirements, confirming the Company is 'well capitalized' - As of June 30, 2025 and December 31, 2024, the Company and the Bank's capital ratios exceeded the levels necessary to be categorized as **'well capitalized'** under PCA regulations[115](index=115&type=chunk) - The Bank had a capital conservation buffer of **4.84%** as of June 30, 2025, exceeding the 2.5% limitation on dividend payouts[119](index=119&type=chunk) Capital Ratios (June 30, 2025) (Dollars in thousands) | Capital Ratio | Company Actual Amount | Company Actual Ratio | Bank Actual Amount | Bank Actual Ratio | Required for Capital Adequacy | To Be Well Capitalized | |:---|:---|:---|:---|:---|:---|:---| | Total capital (to RWA) | $1,539,632 | 13.46% | $1,462,950 | 12.84% | 8.0% | 10.0% | | Tier 1 capital (to RWA) | $1,294,270 | 11.31% | $1,342,431 | 11.78% | 6.0% | 8.0% | | CET1 (to RWA) | $1,264,049 | 11.05% | $1,342,431 | 11.78% | 4.5% | 6.5% | | Tier 1 leverage ratio | $1,294,270 | 10.73% | $1,342,431 | 11.17% | 4.0% | 5.0% | [13. Subsequent Event](index=40&type=section&id=13.%20Subsequent%20Event) This note discloses a definitive merger agreement with Huntington Bancshares Incorporated signed on July 13, 2025 - Veritex Holdings, Inc. and Huntington Bancshares Incorporated signed a definitive merger agreement on **July 13, 2025**[120](index=120&type=chunk) - Veritex shareholders will receive **1.95 shares** of Huntington's common stock for each share of Company common stock[121](index=121&type=chunk) - The merger is anticipated to close in the **fourth quarter of 2025**, subject to regulatory and stockholder approvals[122](index=122&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition, operating results, and recent developments - The Company's primary markets are the DFW metroplex and Houston metropolitan area, generating revenue mainly from interest income on loans, customer service, loan fees, and gains on government-guaranteed loans[126](index=126&type=chunk)[127](index=127&type=chunk) - A definitive merger agreement with Huntington Bancshares Incorporated was signed on July 13, 2025, with Veritex shareholders to receive **1.95 shares** of Huntington's common stock per share[129](index=129&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) This section analyzes financial performance, comparing recent quarters and six-month periods [Results of Operations for the Three Months Ended June 30, 2025 and March 31, 2025](index=42&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%20March%2031%2C%202025) Net income increased by $1.8 million sequentially, driven by higher net interest income and lower credit loss provisions - Net interest margin increased by **2 basis points to 3.33%**, primarily due to decreased funding costs on certificates of deposits and subordinated debt, and a shift from lower-yielding to higher-yielding assets, partially offset by higher deposit funding costs[135](index=135&type=chunk) - Net charge-offs decreased by **$2.7 million to $1.3 million**, mainly due to lower net charge-offs of NOOCRE loans[143](index=143&type=chunk) Key Financial Highlights (Three Months Ended June 30, 2025 vs. March 31, 2025) (Dollars in thousands, except per share amounts) | Item | June 30, 2025 | March 31, 2025 | Change ($) | Change (%) | |:---|:---|:---|:---|:---| | Net income | $30,906 | $29,100 | $1,806 | 6.21% | | Basic EPS | $0.57 | $0.53 | $0.04 | 7.55% | | Diluted EPS | $0.56 | $0.53 | $0.03 | 5.66% | | Net interest income | $96,335 | $95,441 | $894 | 0.94% | | Net interest margin | 3.33% | 3.31% | 0.02% | 0.60% | | Provision for credit losses on loans | $1,750 | $4,000 | $(2,250) | -56.25% | | Total noninterest income | $13,499 | $14,289 | $(790) | -5.53% | | Total noninterest expense | $67,162 | $66,834 | $328 | 0.49% | | Income tax expense | $8,516 | $8,526 | $(10) | -0.12% | [Results of Operations for the Six Months Ended June 30, 2025 and June 30, 2024](index=49&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%20June%2030%2C%202024) Net income increased by $8.6 million year-over-year, driven by higher noninterest income and lower credit loss provisions - Noninterest income increased significantly by **$10.5 million (61.2%)**, primarily due to the absence of a $6.3 million loss on sales of debt securities recorded in 2024, higher service charges on deposit accounts, increased government-guaranteed loan income, and higher customer swap income[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) - Salaries and employee benefits increased by **$5.4 million (8.2%)**, mainly due to higher salaries, incentive accruals, and payroll taxes, driven by increased headcount, partially offset by lower stock grant expense[171](index=171&type=chunk) Key Financial Highlights (Six Months Ended June 30, 2025 vs. 2024) (Dollars in thousands, except per share amounts) | Item | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | |:---|:---|:---|:---|:---| | Net income | $59,976 | $51,358 | $8,618 | 16.78% | | Basic EPS | $1.10 | $0.94 | $0.16 | 17.02% | | Diluted EPS | $1.09 | $0.94 | $0.15 | 15.96% | | Net interest income | $191,776 | $189,042 | $2,734 | 1.45% | | Net interest margin | 3.32% | 3.27% | 0.05% | 1.53% | | Provision for credit losses on loans | $5,750 | $15,750 | $(10,000) | -63.49% | | Total noninterest income | $27,788 | $17,240 | $10,548 | 61.18% | | Total noninterest expense | $133,996 | $125,257 | $8,739 | 6.98% | | Income tax expense | $17,042 | $15,458 | $1,584 | 10.25% | [Financial Condition](index=54&type=section&id=Financial%20Condition) This section details the Company's financial position, loan portfolio, credit quality, and changes in deposits - Total assets decreased by **$240.5 million (1.9%) to $12.53 billion** as of June 30, 2025, from $12.77 billion at December 31, 2024, primarily due to declines in cash balances, securities, and loan portfolios[178](index=178&type=chunk) - The increase in nonperforming loans was primarily due to two NOOCRE relationships totaling **$18.5 million** being added to nonaccrual status[186](index=186&type=chunk) - Total deposits decreased by **$334.7 million (3.1%) to $10.42 billion** as of June 30, 2025, from $10.75 billion at December 31, 2024, with decreases across all deposit categories[202](index=202&type=chunk) Loan Portfolio by Type (Dollars in thousands) | Loan Type | June 30, 2025 | % of Total | December 31, 2024 | % of Total | Change ($) | % Change | |:---|:---|:---|:---|:---|:---|:---| | Commercial | $2,692,209 | 28.4% | $2,693,538 | 28.3% | $(1,329) | 0.0% | | MW | $669,052 | 7.1% | $605,411 | 6.4% | $63,641 | 10.5% | | OOCRE | $800,881 | 8.5% | $780,003 | 8.2% | $20,878 | 2.7% | | NOOCRE | $2,311,466 | 24.4% | $2,382,499 | 25.0% | $(71,033) | -3.0% | | Construction and land | $1,142,457 | 12.1% | $1,303,711 | 13.7% | $(161,254) | -12.4% | | 1-4 family residential | $1,086,342 | 11.5% | $957,341 | 10.1% | $129,001 | 13.5% | | Total LHI, gross | $9,461,738 | 100.0% | $9,513,526 | 100.0% | $(51,788) | -0.5% | Nonperforming Assets (Dollars in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | |:---|:---|:---|:---|:---| | Total nonperforming loans | $65,979 | $54,435 | $11,544 | 21.21% | | OREO | $9,218 | $24,737 | $(15,519) | -62.74% | | Total nonperforming assets | $75,197 | $79,172 | $(3,975) | -5.02% | | Nonperforming assets to total assets | 0.60% | 0.62% | -0.02% | -3.23% | | Nonperforming loans to total LHI | 0.70% | 0.57% | 0.13% | 22.81% | [Liquidity and Capital Resources](index=61&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses liquidity management, capital resources, and compliance with regulatory capital requirements - Liquidity needs are primarily met by core deposits, wholesale borrowings, and security and loan amortization and maturities[206](index=206&type=chunk) - The Company had a total remaining borrowing capacity of **$2.18 billion** with FHLB and **$2.99 billion** with FRB as of June 30, 2025[207](index=207&type=chunk)[208](index=208&type=chunk) - Total stockholders' equity increased by **$48.2 million (3.0%) to $1.65 billion** as of June 30, 2025, driven by net income and an increase in AOCI, partially offset by dividends and stock buybacks[218](index=218&type=chunk) - The Company and the Bank were in compliance with all applicable regulatory capital requirements and the Bank was classified as **'well capitalized'** as of June 30, 2025[219](index=219&type=chunk) Sources and Uses of Funds (Average as % of Total Assets) | Category | Six Months Ended June 30, 2025 | Year Ended December 31, 2024 | |:---|:---|:---| | **Sources of Funds:** ||| | Noninterest-bearing deposits | 18.4% | 19.0% | | Interest-bearing deposits | 43.9% | 37.4% | | Certificates and other time deposits | 21.9% | 27.5% | | **Uses of Funds:** ||| | Loans | 74.1% | 75.2% | | Debt Securities | 11.7% | 10.9% | | Interest-bearing deposits in other banks | 6.2% | 0.6% | [Critical Accounting Policies](index=64&type=section&id=Critical%20Accounting%20Policies) This section identifies the Allowance for Credit Losses and goodwill as critical accounting policies involving significant judgment - The critical accounting policies are the **Allowance for Credit Losses (ACL)** and **goodwill**, which require a high degree of judgment and estimation[221](index=221&type=chunk) - No changes have occurred in these critical accounting policies since December 31, 2024[221](index=221&type=chunk) [Cautionary Notice Regarding Forward-Looking Statements](index=64&type=section&id=Cautionary%20Notice%20Regarding%20Forward-Looking%20Statements) This section provides a cautionary notice regarding forward-looking statements and associated risks and uncertainties - Forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from projections[222](index=222&type=chunk) - Key risks include those related to the proposed merger with Huntington (e.g., integration difficulties, regulatory approvals, termination risks), concentration of business in Texas, uncertain market conditions, changes in interest rates, and regulatory requirements[222](index=222&type=chunk)[223](index=223&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=66&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section discusses the Company's primary market risk from interest rate volatility and its management strategies - The Company's primary market risk is interest rate volatility, managed by the Asset-Liability Committee to minimize risk while maximizing income[225](index=225&type=chunk)[228](index=228&type=chunk) - An interest rate risk simulation model and shock analysis are used to test sensitivity, with internal policy limiting net income at risk to a **5.0% decline** for a 100 bps shift over a one-year period[229](index=229&type=chunk)[230](index=230&type=chunk) Simulated Change in Net Interest Income and Fair Value of Equity (June 30, 2025) | Change in Interest Rates (BPS) | Percent Change in Net Interest Income | Percent Change in Fair Value of Equity | |:---|:---|:---| | +300 | 8.41% | (12.10)% | | +200 | 6.06% | (7.51)% | | +100 | 3.29% | (3.41)% | | Base | — | — | | -100 | (2.78)% | 0.34% | | -200 | (5.52)% | (2.63)% | [Item 4. Controls and Procedures](index=67&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures as of June 30, 2025 - The Company's disclosure controls and procedures were evaluated and deemed **effective** as of June 30, 2025[232](index=232&type=chunk) - No significant changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[233](index=233&type=chunk) [PART II — OTHER INFORMATION](index=66&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) This section states that current legal proceedings are not likely to have a material adverse effect on the Company - The Company is involved in legal actions arising from normal business activities, including allegations of banking regulation violations, competition law, labor laws, and consumer protection laws[234](index=234&type=chunk) - Management believes the likelihood is remote that any individual or aggregate legal proceeding would have a material adverse effect on the Company's financial position, liquidity, or results of operations[235](index=235&type=chunk) [Item 1A. Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, emphasizing new risks related to the pending merger with Huntington Bancshares - New risk factors primarily relate to the proposed merger with Huntington, including the possibility of integration being more difficult, costly, or time-consuming than expected[238](index=238&type=chunk) - Risks include potential loss of key employees, disruption of ongoing businesses, and adverse effects on client, customer, depositor, and employee relationships due to the integration process[239](index=239&type=chunk) - Termination of the merger agreement could negatively affect Veritex, potentially leading to adverse market reactions, loss of other beneficial opportunities, and a required termination fee of **$56 million** to Huntington under certain circumstances[240](index=240&type=chunk)[241](index=241&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's stock buyback program and shares repurchased during the second quarter of 2025 - The Board extended the stock buyback program through March 31, 2026, authorizing purchases up to **$50.0 million** of outstanding common stock[247](index=247&type=chunk) Stock Buyback Activity (Three Months Ended June 30, 2025) | Period | Total number of shares purchased | Average price paid per share | Approximate dollar value of shares that may yet be purchased (in thousands) | |:---|:---|:---|:---| | April 1 - April 30, 2025 | 36,000 | $23.15 | $36,113 | | May 1 - May 31, 2025 | 169,597 | $24.18 | $32,012 | | June 1 - June 30, 2025 | 80,694 | $24.22 | $30,057 | | Quarterly totals | 286,291 | $24.06 | $30,057 | [Item 6. Exhibits](index=69&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including the merger agreement and executive certifications - Key exhibits include the Agreement and Plan of Merger with Huntington Bancshares Incorporated (Exhibit 2.1), the 2025 Amended and Restated Omnibus Incentive Plan (Exhibit 10.1), and certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2)[249](index=249&type=chunk)