DEFA14A: Veritex Supplements Merger Proxy Amid Shareholder Lawsuits

Veritex Holdings, Inc. filed a Form 8-K to supplement its definitive proxy statement/prospectus for the merger with Huntington Bancshares Incorporated, addressing shareholder lawsuits alleging misleading disclosures.

Summary

• Veritex Holdings, Inc. (Veritex) filed a Form 8-K to supplement its definitive proxy statement/prospectus dated August 15, 2025, concerning its merger with Huntington Bancshares Incorporated (Huntington).
• The supplement addresses multiple lawsuits and demand letters from purported stockholders (Kelly v. Veritex et al., Brady v. Veritex et al., Garfield v. Veritex et al.) filed in New York and Florida courts.
• These 'Matters' allege that Huntington, Veritex, and other defendants filed a false and misleading registration statement relating to the merger, violating state securities laws, common law, Section 14(a) and 20(a) of the Exchange Act, and Rule 14a-9.
• Veritex and Huntington deny the claims' merit and the necessity of supplemental disclosures but are providing them to avoid merger delays and minimize litigation costs, without admitting liability or wrongdoing.
• The supplement clarifies the composition and role of the Veritex Board Executive Committee, which included C. Malcolm Holland, Mark C. Griege, and the chairs of the Compensation, Audit, Corporate Governance and Nominating, and Enterprise Risk Committees, along with Manuel J. Mehos.
• It adds context regarding Chairman Holland's openness to preliminary discussions with third parties about opportunities that could benefit Veritex's shareholders after equity markets stabilized and regional bank stock prices rebounded, following ceased discussions with 'Company B.'
• The mutual nondisclosure agreement between Huntington and Veritex facilitated confidential information exchange for preliminary discussions and did not contain standstill or similar provisions.
• Supplemental financial advisor opinion details include low and high stock price-to-tangible book value per share multiples for Veritex selected companies (1.15x-1.78x), 2025 estimated EPS (9.6x-16.5x), and 2026 estimated EPS (8.5x-15.5x).
• For Huntington selected companies, multiples were 1.36x-2.20x for tangible book value, 11.0x-12.9x for 2025 estimated EPS, and 9.7x-11.3x for 2026 estimated EPS.
• Selected transactions analysis showed price-to-tangible book value per share multiples of 0.99x-1.84x, pay-to-trade ratios of 0.55x-1.19x, price-to-Core LTM EPS of 3.9x-20.3x, price-to-FWD EPS of 9.3x-15.6x, and core deposit premiums of (0.0%)-8.7%.
• One-day market premiums for 12 publicly traded acquired companies in selected transactions ranged from 1.0% to 28.9%.
• KBW's cash fee for the merger is estimated at approximately $24 million, with $2,000,000 already paid and the balance contingent upon the closing of the merger.

Sentiment

Score: 5

Explanation: The filing is neutral as it primarily addresses legal challenges and provides supplemental information for an already announced merger. While the lawsuits are negative, the company's proactive response to mitigate delays is a positive. No new financial performance data is presented.

Positives

• Veritex and Huntington are proactively providing supplemental disclosures to avoid merger delays and minimize litigation costs, despite denying the claims' merit.
• The Veritex Board Executive Committee's regular meetings provided oversight and guidance to management, indicating robust corporate governance.
• Chairman Holland remained open to strategic opportunities after market stabilization, demonstrating a proactive approach to maximizing shareholder value.
• The nondisclosure agreement facilitated due diligence without obligating a transaction or including standstill provisions, maintaining strategic flexibility.

Negatives

• Multiple lawsuits and demand letters from purported stockholders allege false and misleading disclosures regarding the merger.
• The company is incurring costs, risks, and uncertainties associated with litigation, even if they believe the claims are without merit.
• The necessity for supplemental disclosures, regardless of legal admission, suggests potential areas for improvement in the original proxy statement's clarity or completeness.

Risks

• Changes in general economic, political, or industry conditions.
• Deterioration in business and economic conditions, including persistent inflation, supply chain issues, labor shortages, instability in global economic conditions, geopolitical matters, and volatility in financial markets.
• Changes in U.S. trade policies, including the imposition of tariffs and retaliatory tariffs.
• The impact of pandemics and other catastrophic events or disasters on the global economy and financial market conditions and our business, results of operations, and financial condition.
• Impacts related to or resulting from bank failures and other volatility, including potential increased regulatory requirements and costs, such as FDIC special assessments, long-term debt requirements, and heightened capital requirements, and potential impacts to macroeconomic conditions.
• Unexpected outflows of uninsured deposits which may require us to sell investment securities at a loss.
• Changing interest rates which could negatively impact the value of our portfolio of investment securities.
• The loss of value of our investment portfolio which could negatively impact market perceptions of us and could lead to deposit withdrawals.
• The effects of social media on market perceptions of us and banks generally.
• Cybersecurity risks.
• Uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Federal Reserve.
• Volatility and disruptions in global capital, foreign exchange, and credit markets.
• Movements in interest rates.
• Competitive pressures on product pricing and services.
• Success, impact, and timing of our business strategies, including market acceptance of any new products or services.
• Changes in policies and standards for regulatory review of bank mergers.
• The nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations, including those related to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Basel III regulatory capital reforms, as well as those involving the SEC, OCC, Federal Reserve, FDIC, CFPB, and state-level regulators.
• The occurrence of any event, change, or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement between Veritex and Huntington.
• The outcome of any legal proceedings that may be instituted against Veritex and Huntington.
• Delays in completing the transaction.
• The failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction).
• The failure to obtain Veritex shareholder approval or to satisfy any of the other conditions to the transaction on a timely basis or at all.
• The possibility that the anticipated benefits of the transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Veritex and Huntington do business.
• The possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events.
• Diversion of management's attention from ongoing business operations and opportunities.
• Potential adverse reactions or changes to business, customer, or employee relationships, including those resulting from the announcement or completion of the transaction.
• The ability to complete the transaction and integration of Veritex and Huntington successfully.
• The dilution caused by Huntington's issuance of additional shares of its capital stock in connection with the transaction.

Future Outlook

The communication contains forward-looking statements regarding the benefits of the proposed transaction, the plans, objectives, expectations, and intentions of Veritex and Huntington, and the expected timing of completion. These statements are subject to numerous assumptions, risks, and uncertainties that could cause actual results to differ materially, including changes in economic conditions, regulatory policies, and the outcome of legal proceedings.

Management Comments

• Huntington and Veritex believe that the claims asserted in the Matters are without merit and that supplemental disclosures are not required or necessary under applicable laws.
• In order to avoid the risk that the Matters delay or otherwise adversely affect the Merger, and to minimize the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, and reserving all rights to contest the substantive allegations in the Matters, and the jurisdiction of courts in which the Complaints were filed, the proxy statement/prospectus is being supplemented.
• Huntington, Veritex and the other named defendants deny that they have violated any laws or breached any fiduciary duties.
• Nothing in this Current Report on Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein or in the proxy statement/prospectus. To the contrary, Huntington, Veritex and the other named defendants specifically deny all allegations in the Matters and that any additional disclosure was or is required in the proxy statement/prospectus.
• Chairman Holland remained open to preliminary discussions with third parties about opportunities that could benefit Veritex's shareholders amidst improved market conditions.

Industry Context

This filing reflects the ongoing consolidation trend within the regional banking sector, as evidenced by the numerous selected transactions listed in the financial advisor's opinion. The market stabilization and rebound in regional bank stock prices mentioned suggest a more favorable environment for M&A activities, though legal challenges related to disclosure remain a common hurdle in such transactions.

Comparison to Industry Standards

• The selected transactions analysis includes a range of price-to-tangible book value multiples (0.99x to 1.84x) and one-day market premiums (1.0% to 28.9%), providing a benchmark for the Veritex-Huntington merger.
• Specific comparable transactions include Columbia Banking System, Inc. acquiring Pacific Premier Bancorp, Inc. (4/23/2025), Berkshire Hills Bancorp, Inc. acquiring Brookline Bancorp, Inc. (12/16/2024), and Old National Bancorp acquiring Bremer Financial Corporation (11/25/2024), among others.
• The financial advisor's opinion references various multiples for both Veritex and Huntington selected companies, such as price-to-tangible book value and price-to-estimated EPS, which are standard metrics used in banking M&A valuations.

Corporate Governance

Legal Proceedings

• Kelly v. Veritex et al. (Supreme Court of the State of New York)
• Brady v. Veritex et al. (Supreme Court of the State of New York)
• Garfield v. Veritex et al., Case No. 25001156CA (Circuit Court of the Twentieth Judicial Circuit of Florida)
• Several demand letters from counsel representing individual purported stockholders of Veritex.
• Allegations include filing a false and misleading registration statement relating to the Merger in violation of state securities laws, common law, Section 14(a) and Section 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 14a-9.

Stakeholder Impact

• Shareholders: Potential for delays in merger completion due to legal challenges; receipt of supplemental information to aid voting decisions; potential for dilution from Huntington's share issuance.
• Management/Employees: Diversion of management's attention from ongoing business operations due to litigation; potential for adverse reactions or changes to employee relationships due to merger and integration.
• Customers: Potential for adverse reactions or changes to customer relationships resulting from the announcement or completion of the transaction.
• Regulators: Increased scrutiny due to shareholder lawsuits and the need for supplemental disclosures.

Next Steps

• Veritex shareholders will consider the proposed transaction.
• Completion of the merger between Veritex and Huntington.
• Integration of Veritex and Huntington operations post-merger.
• Resolution of ongoing legal proceedings related to the merger disclosures.

Key Dates

Recommendation

The filing primarily addresses legal challenges to an already announced merger, providing supplemental disclosures without altering the fundamental terms or financial outlook of the transaction. While the company is proactively mitigating litigation risks, the presence of shareholder lawsuits introduces a degree of uncertainty. Investors should hold their position pending the merger's completion and the resolution of legal matters, as the core investment thesis remains tied to the merger's success rather than new operational or financial performance data.

Keywords

Veritex Holdings, Huntington Bancshares, Merger, SEC Filing, Proxy Statement, Form 8-K, Shareholder Lawsuits, Financial Advisor Opinion, Bank Merger, Corporate Governance, VBTX, M&A