July 14 (Reuters) - U.S. regional lender Huntington

Bancshares ( HBAN ) will buy Texas-based smaller rival Veritex

Holdings ( VBTX ) in a $1.9 billion all-stock deal, as it looks

to expand its presence in the state that is fast emerging as a

major financial hub.

Shares of Columbus, Ohio-based Huntington Bancshares ( HBAN ), a $210

billion asset regional lender, fell 1.1% before the bell, while

Veritex ( VBTX ) jumped 20% after the companies announced the news.

To better compete with larger rivals in a tough

macroeconomic environment, U.S. regional lenders have been

looking to strengthen their balance sheets and achieve greater

diversification through mergers.

Huntington will issue 1.95 shares for each outstanding share

of Veritex ( VBTX ), valuing the bank at $33.91 per share. The offer

price represents a 23.5% premium to Veritex's ( VBTX ) last close.

In recent years, Huntington has extended its geographic

footprint, mainly in North and South Carolina and Texas.

Business-friendly policies of Texas as well as its growing

tech and energy sectors, have attracted companies looking to tap

into its long-term growth potential.

The deal will accelerate Huntington's growth in Texas, where

Veritex ( VBTX ) operates over 30 branches, with total assets of about

$13 billion.

"This combination supports our ambitions and reflects our

long-term commitment to the state of Texas, one of the most

dynamic and fastest-growing economies in the country," said

Steve Steinour, chairman, president and CEO of Huntington

Bancshares ( HBAN ).

The transaction, expected to close early in the fourth

quarter of 2025, will help Huntington's earnings per share

slightly, the company said.

Veritex ( VBTX ) CEO Holland will join Huntington in a non-executive

role as chairman of Texas.

Separately, Huntington projected a rise in second-quarter

profit on Monday, helped by a rise in interest income. The

bank's profit is expected to be 34 cents per share, up 13% from

the year-ago period.

Evercore, Commerce Street Capital, and Wachtell, Lipton,

Rosen & Katz advised Huntington. Keefe, Bruyette & Woods and

Simpson Thacher & Bartlett advised Veritex ( VBTX ).

(Reporting by Arasu Kannagi Basil and Pritam Biswas in

Bengaluru; Editing by Shreya Biswas and Shinjini Ganguli)