Huntington(HBAN) - 2025 Q2 - Quarterly Results

Acquisition of Veritex by Huntington Bancshares Huntington Bancshares is acquiring Veritex to expand its presence in Texas through an all-stock transaction valued at approximately $1.9 billion, expected to close in early Q4 2025 Strategic Rationale Huntington aims to accelerate growth in Texas by acquiring Veritex, leveraging its strong local relationships and established commercial banking franchise - The acquisition is designed to accelerate Huntington's growth in Texas, one of the fastest-growing economies in the U.S., by expanding its presence in Dallas/Fort Worth and Houston[3][4] - As of March 31, 2025, Veritex reported approximately $13 billion in assets, $9 billion in loans, and $11 billion in deposits[3] - Huntington plans to maintain and invest in Veritex's network of over 30 branches. Veritex Chairman, President, and CEO, Malcolm Holland, will join Huntington as Chairman of Texas[4][5] - To continue Veritex's community support, Huntington is initially funding $10 million for philanthropic investments in Texas[7] Transaction Terms The all-stock acquisition of Veritex is valued at approximately $1.9 billion, expected to close in early Q4 2025, and is projected to be modestly accretive to Huntington's EPS Transaction Details | Metric | Value | | :--- | :--- | | Transaction Type | 100% stock transaction | | Exchange Ratio | 1.95 Huntington shares per Veritex share | | Implied Value per Share | $33.91 (as of July 11, 2025) | | Aggregate Transaction Value | $1.9 billion | | Expected Closing | Early Q4 2025 | - The transaction is expected to be modestly accretive to Huntington's earnings per share[9] - The deal is projected to be neutral to regulatory capital at closing and slightly dilutive to tangible book value per share, with a payback period of approximately one year[9] Preliminary Second Quarter 2025 Financial Results Huntington reported strong preliminary Q2 2025 results with EPS of $0.34, robust growth in net interest income, loans, and deposits, and excellent credit quality Key Financial Highlights | Financial Metric | Q2 2025 | Change from Prior Quarter | Change from Year-Ago Quarter | | :--- | :--- | :--- | :--- | | Earnings per Common Share (EPS) | $0.34 | Unchanged | +13% | | Net Interest Income | $1.5 billion | +$41 million (+3%) | +$155 million (+12%) | | Average Loans and Leases | $133.2 billion | +$2.3 billion (+2%) | +$9.8 billion (+8%) | | Average Deposits | $163.4 billion | +$1.8 billion (+1%) | +$9.9 billion (+6%) | | Net Charge-offs (% of avg. loans) | 0.20% | -6 bps | N/A | | Allowance for Credit Losses (ACL) | $2.5 billion | +$37 million | N/A | | Tangible Book Value per Share | $9.13 | +$0.33 (+4%) | +$1.24 (+16%) | - EPS for the quarter included a $0.04 negative impact from a $58 million decrease in earnings due to a securities repositioning and $3 million from other Notable Items[12] Company & Event Information This section provides profiles of Huntington and Veritex, along with details for upcoming conference calls regarding the acquisition and Q2 2025 financial results Company Profiles Huntington is a $210 billion regional bank operating across 13 states, while Veritex is a $13 billion community bank focused on Texas markets - Huntington is a $210 billion asset regional bank holding company headquartered in Columbus, Ohio, with 968 branches in 13 states[16] - Veritex is a community bank with approximately $13 billion in assets, headquartered in Dallas, Texas, and serving customers in Houston, Fort Worth, and Dallas[17] Conference Call Information Huntington will host separate conference calls on July 14, 2025, for the Veritex acquisition and July 18, 2025, for Q2 2025 financial results - A conference call to discuss the acquisition will be held on Monday, July 14, 2025, at 8:30 a.m. Eastern Time[13] - A conference call to review Q2 2025 financial results will be held on Friday, July 18, 2025, at 9:00 a.m. Eastern Time[14] Disclosures & Legal Information This section provides non-GAAP financial reconciliation, forward-looking statement warnings, and important additional information regarding the transaction Non-GAAP Reconciliation This section provides a non-GAAP reconciliation of Tangible Book Value per share, showing its calculation and consistent increase across recent quarters Tangible Book Value per Share Reconciliation | ($ in millions, except per share) | 2Q24 | 1Q25 | 2Q25 | | :--- | :--- | :--- | :--- | | Common shareholders' equity | $17,121 | $18,445 | $18,939 | | Less: goodwill | $5,561 | $5,561 | $5,561 | | Less: other intangible assets, net of tax | $94 | $67 | $58 | | Tangible common equity (A) | $11,466 | $12,817 | $13,320 | | Number of common shares outstanding (B) | 1,452 | 1,457 | 1,459 | | Tangible book value per share (A/B) | $7.89 | $8.80 | $9.13 | Forward-Looking Statements This section warns that forward-looking statements regarding the transaction and future performance are subject to significant risks and uncertainties, which could cause actual results to differ materially - The communication contains forward-looking statements about the plans, expectations, and benefits of the proposed transaction, which are subject to risks and uncertainties[19] - Key risks that could cause actual results to differ include: changes in economic conditions, interest rate policies, regulatory reviews of bank mergers, failure to obtain necessary approvals, and potential difficulties in integrating the two companies[20] - Neither Huntington nor Veritex is obligated to update forward-looking statements to reflect future events or new information[21] Important Additional Information & Participants in Solicitation This section advises investors that Huntington will file a Form S-4 Registration Statement with the SEC, including a Proxy Statement/Prospectus, urging shareholders to review these important transaction documents - Huntington will file a Form S-4 Registration Statement with the SEC that includes a Proxy Statement for Veritex and a Prospectus for Huntington[22] - Investors and shareholders of Veritex are urged to read the registration and proxy statement/prospectus when available because they will contain important information[22] - Directors and executive officers of Huntington and Veritex may be deemed participants in the solicitation of proxies from Veritex shareholders. Their interests will be described in the proxy statement/prospectus[23]