- What I Know: Huntington Bankshares, based in Columbus, Ohio, aims to finalize a $1.9 billion acquisition of Veritex Financial in Dallas by the start of the fourth quarter, continuing a trend observed in recent closings.
- Deeper Diving: Huntington has acquired a significant amount of land for planned branch expansions in North and South Carolina, with aspirations to speed up construction starting in 2026.
- Conclusion: Growth in Texas and the Carolinas is positively influencing the $207.7 billion regional bank’s lending activities and net interest margin.
I think Huntington’s plan to acquire Dallas-based Veritex Holdings, as discussed earlier in the fourth quarter, serves as a stepping stone for future growth in Texas. Blunt Standridge, Huntington’s President of Consumer and Local Banking Services, expressed confidence during remarks at the Barclays Global Financial Services Conference in New York, noting they might reach closer to closing a quarter early.
This optimism aligns with similar moves by other financial institutions, like the $71 billion Former National Bancorp and the $37.3 billion Atlantic Union Bank, which have been rapidly closing deals of late.
While some experts believe that quicker approval timelines may fuel more merger activities, Standridge indicated that Huntington’s growth strategies in Texas and the Carolinas likely don’t hinge on new acquisitions. “We’re committed to organic growth, which is our primary focus,” he stated.
The Veritex deal, announced on July 14th, provides Huntington a substantial presence in the Dallas area and a vital foothold in Houston, as Standridge mentioned. “It’s a great customer base that we can integrate into our broader franchise.”
Huntington has plans to move into North Carolina and South Carolina, aiming to establish 55 branches by September 2024. This $200.7 billion asset regional bank has already opened three branches, with many more on the way, and Standridge noted that expansion could ramp up significantly in 2026.
“We have a considerable portion of the site already,” he remarked. “Next year is poised to be pivotal for us.” Furthermore, Huntington has strengthened its home lending and wealth management services in the Carolinas.
As for results from Texas and the Carolinas, they’ve been pivotal in driving loans and boosting the bank’s net profit margins, as noted by CFO Zack Wasserman, who also spoke at the conference.
In a Monday research note, Piper Sandler analyst Scott Siefers pointed out that the optimistic forecasts might create upward pressure on revenue per share moving into 2025 and beyond.
TD Cowen’s Stephen Alexopoulos, in his research notes, labeled Huntington “one of the industry’s leading organic growth success stories,” remarking on their robust growth in both Carolina and Texas while also maintaining solid performance in its traditional Midwest markets.
Founded in 1866, Huntington has historically been recognized as a Midwest franchise. However, following its acquisition of TCF Financial in 2021, it began expanding beyond its foundational territories, notably reaching into the Minneapolis-St. Paul market and even Colorado.
Initially, Huntington had plans to boost commercial lending in the Carolinas by December 2023 and in Texas by March 2024. However, those plans got intertwined with the branch construction initiatives in both Carolinas as well as the Veritex transaction in Texas.
