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Investing.com - Veritex Holdings (NASDAQ:VBTX) stock surged after Huntington Bancshares (NASDAQ:HBAN) announced plans to acquire the Texas-based bank for $1.9 billion, representing a 23% premium to Friday’s closing price. The stock, currently trading near its 52-week high of $33.69, has shown remarkable momentum with a 19% gain in the past week alone, according to InvestingPro data.
The all-stock transaction values Veritex at $33.91 per share or approximately 1.5 times tangible book value, according to Keefe, Bruyette & Woods, which maintained its Market Perform rating and $30.00 price target on Veritex following the announcement.
The $12 billion-asset Veritex had previously indicated it needed to participate in some form of merger or acquisition to achieve greater scale, with its 1.2x tangible book value currency limiting its options before the Huntington deal.
Veritex has recently demonstrated improving profitability metrics with a 1% return on assets expected by third quarter 2025, while strengthening its balance sheet with loan-to-deposit ratios below 90%, commercial real estate exposure under 300% of capital, and criticized loans reduced to 4%.
Since its October 2014 initial public offering at $13 per share, Veritex has outperformed the KBW Regional Banking Index by 91%, with KBW noting the acquisition represents a "fair price" given Veritex’s "scarcity value and longer-term growth outlook."
In other recent news, Huntington Bancshares has announced its agreement to acquire Veritex Holdings in an all-stock transaction valued at $1.9 billion. This acquisition will significantly expand Huntington’s presence in Texas, adding approximately $13 billion in assets, $9 billion in loans, and $11 billion in deposits to its balance sheet. The transaction is anticipated to close in the early fourth quarter of 2025, pending regulatory approvals. Huntington expects the deal to be accretive to earnings per share and neutral to capital at closing, although it may slightly dilute tangible book value per share.
Veritex Holdings also reported its first-quarter 2025 earnings, which exceeded analysts’ expectations. The company reported an earnings per share of $0.54, surpassing the forecast of $0.52, despite a slight revenue miss with actual revenue at $109.73 million versus an expected $110.68 million. Additionally, Veritex Holdings held its annual shareholder meeting, where all nominated directors were elected, and the 2025 Amended and Restated Omnibus Incentive Plan was approved. The appointment of Grant Thornton LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, was also ratified by shareholders.
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