TriCo Bancshares to Merge With First Hawaiian in $2B All-Stock Bank Deal

Key Points

• First Hawaiian and TriCo Bancshares agreed to merge in an all-stock deal valued at about $2 billion, creating a combined bank with roughly $34 billion in assets. First Hawaiian shareholders would own about 65% of the new company, while TriCo shareholders would own about 35%.
• The merger is aimed at expanding First Hawaiian’s presence in California and strengthening its Pacific/West Coast franchise, while Tri Counties Bank is expected to keep its brand and there are no anticipated branch closures. Executives stressed that TriCo’s leadership and relationship-based banking culture will remain in place.
• Management said the deal should deliver about 6% EPS accretion, a 2.8-year earnback, and around 25% cost savings without relying on branch cuts or revenue synergies. The companies expect the transaction to close in the fourth quarter, pending regulatory and shareholder approvals.

First Hawaiian and TriCo Bancshares NASDAQ: TCBK announced a definitive agreement to combine in an all-stock transaction that executives said would create a larger Pacific and West Coast banking franchise with approximately $34 billion in assets.

On an investor call discussing the deal, First Hawaiian Chairman, President and CEO Bob Harrison described TriCo as “the ideal partner” and said the transaction would extend First Hawaiian’s strategy in California while maintaining its commitment to Hawaiʻi.

“Hawaiʻi remains the foundation of our franchise, and we will continue to be central to our identity,” Harrison said. He added that the transaction is expected to strengthen First Hawaiian through greater diversification, additional growth opportunities and capital generation.

Deal Terms and Ownership

First Hawaiian Chief Financial Officer Jamie Moses said TriCo shareholders will receive 2.095 shares of First Hawaiian common stock for each share of TriCo common stock under a fixed exchange ratio agreement. The transaction is structured as 100% common stock consideration.

Based on First Hawaiian’s closing price as of July 10, 2026, Moses said the deal represents approximately $2 billion in aggregate transaction value. At closing, First Hawaiian shareholders are expected to own about 65% of the combined company, while TriCo shareholders are expected to own about 35%.

The combined company is expected to have approximately $34 billion of assets, $22 billion of loans, $29 billion of deposits and 117 branches, according to Harrison.

Moses said the transaction is priced at 1.98 times tangible book value and 14.4 times 2027 earnings, or 10.7 times fully synergized earnings assuming expected cost savings of 25%.

The transaction remains subject to shareholder and regulatory approvals, and executives said they expect it to close in the fourth quarter of this year.

Tri Counties Bank Brand to Remain in California

TriCo Chairman, President and CEO Rick Smith said Tri Counties Bank has spent more than 50 years building relationships with customers and communities across California. He said the company had evaluated a range of strategic options, including acquisitions where it could have been either buyer or seller.

“Any partnership with another financial institution had to be the right fit,” Smith said. He cited shared values between TriCo and First Hawaiian, including relationship banking, disciplined credit culture, low-cost core deposits and community commitment.

Moses said Tri Counties Bank will retain its brand in California, and the companies do not anticipate any branch closures. Four TriCo directors, including Smith, are expected to join the First Hawaiian board. Smith will also serve as an advisor to the CEO, with additional senior leadership roles planned for Dan Bailey and Peter Weiss.

Smith said retaining the institution’s identity and branch network was important for employee retention and continuity. Harrison said First Hawaiian does not have a management team intended to replace TriCo’s leadership and emphasized the importance of keeping TriCo’s team in place.

California Expansion and Deposit Franchise

Harrison said First Hawaiian has operated in California for decades, beginning lending there in 1995. He said nearly a quarter of First Hawaiian’s loan portfolio is currently based on the mainland, but the company has lacked a branch network to expand client relationships and offer a full suite of products since its separation from Bank of the West.

The transaction gives First Hawaiian a larger retail footprint in California, including TriCo’s network throughout Northern California and the Central Valley, as well as offices in three major Southern California markets.

Harrison said California represents a substantial opportunity, describing it as the world’s fourth-largest economy by GDP. He said the deal adds scale, local leadership and retail funding in markets where First Hawaiian already has experience.

Executives also emphasized the combined company’s deposit profile. Harrison said both banks have maintained meaningful cost-of-deposit advantages relative to the broader banking industry. On a combined basis, he said the company is expected to have top-decile deposit costs, no brokered balances and excess liquidity.

In response to an analyst question, Moses said the combined company does not expect to change its deposit pricing approach. “Both of us are relationship based in how we do things, and that’s been part of our ability to be able to maintain this type of deposit franchise,” he said.

Financial Targets and Integration Plans

Moses said the transaction is expected to generate 6% earnings per share accretion, a high-teens internal rate of return, less than 5% tangible book value per share dilution and a 2.8-year earnback period. He said the pro forma common equity Tier 1 ratio is expected to be 12.4%.

Executives said the financial projections do not rely on branch closures or modeled revenue synergies. Moses said the 25% cost savings target is expected to come from areas such as information technology contracts and vendor consolidation.

Harrison said the near-term priority will be integration, regulatory approvals and shareholder approvals. He said First Hawaiian completed a core conversion in recent years and learned from that process, while Smith said TriCo has experience integrating prior transactions.

Analysts asked whether the larger balance sheet would change the company’s lending risk profile. Harrison said the company is not seeking to change its risk profile, adding that the rationale for the deal is not based on taking larger risks. Smith said the transaction provides “more scale and mass” and the ability to do more volume, “not necessarily bigger deals.”

Capital Deployment and Preliminary Results

Moses said the combined company is expected to generate more than $325 million of capital annually after closing. Harrison said First Hawaiian’s first priority for capital will be supporting organic growth, followed by maintaining its dividend profile and considering opportunistic share repurchases.

The company’s model assumes no share repurchases through 2027, Moses said, though he added that First Hawaiian retains flexibility to buy back shares.

Harrison also briefly addressed First Hawaiian’s preliminary second-quarter 2026 results, saying the company had “strong results” with solid profitability, continued net interest margin expansion and tangible book value per share growth. He said the company plans to discuss its second-quarter results in more detail on July 24.

About TriCo Bancshares NASDAQ: TCBK

TriCo Bancshares, Inc is the bank holding company for Tri Counties Bank, a community-oriented financial institution headquartered in Chico, California. Through its wholly owned subsidiary, the company provides a comprehensive range of banking and financial services to individuals, small businesses, and commercial clients. Offering a full suite of deposit accounts, lending solutions and digital banking tools, TriCo Bancshares combines personalized service with modern technology to meet the evolving needs of its customers.

The company's core products and services include commercial and consumer lending, deposit and cash management solutions, mortgage banking, and agricultural financing.

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