(Reuters) -U.S. regional lender Huntington Bancshares will buy smaller rival Veritex Holdings in a $1.9 billion deal, the companies said on Monday.

Regional U.S. lenders, to better compete with larger rivals in a tough macroeconomic environment, have been looking to strengthen their balance sheets and achieve greater diversification through mergers.

The transaction, which is expected to close early in the fourth quarter of 2025, will help Huntington’s earnings per share slightly, the company said.

Dallas-based Veritex operates over 30 branches in Texas, with total assets of about $13 billion.

(Reporting by Arasu Kannagi Basil and pritam Biswas in Bengaluru; Editing by Shreya Biswas)