First Hawaiian to acquire TriCo Bancshares in $2 billion all-stock deal

First Hawaiian Bank's parent will become the sixth-largest western US lender with $34 billion in assets after acquiring TriCo Bancshares.

First Hawaiian Inc. agreed to acquire TriCo Bancshares in a $2.01 billion all-stock transaction, creating a regional banking group with $34 billion in assets and an expanded mainland footprint.

"This combination brings together two complementary franchises with strong credit cultures and a shared commitment to customer service," said Rick Smith, chairman, president and chief executive officer of TriCo Bancshares, who will join the combined company's board.

TriCo shareholders will receive 2.095 First Hawaiian shares for each share they hold, valuing the target at about $63.12 apiece based on First Hawaiian's July 10 closing price — an 18 percent premium. Existing First Hawaiian investors will own roughly 65 percent of the combined entity, with TriCo holders taking the remaining 35 percent. First Hawaiian also released preliminary second-quarter results alongside the deal, projecting net income of $73.4 million, up from $67.8 million in the prior quarter, and diluted earnings per share of $0.60 versus $0.55.

The deal reflects consolidation pressures in regional banking as lenders seek scale to spread technology and compliance costs across a larger asset base. First Hawaiian shares fell 4.8 percent Monday while TriCo gained 7 percent. The transaction, approved unanimously by both boards, is expected to close before year-end 2026, subject to regulatory and shareholder approvals.

Deal Structure and Rationale

The all-stock structure allows both sets of shareholders to participate in the upside of the combined bank. First Hawaiian's net interest margin improved six basis points to 3.25 percent in the preliminary second quarter, while its cost of deposits edged lower to 1.20 percent from 1.22 percent. Gross loans rose to $14.6 billion from $14.4 billion. The Tri Counties Bank brand will continue operating across mainland markets, and the companies said no branch closures are expected.

Board Integration and Timeline

Four members of TriCo's current board, including Smith, will join the boards of both First Hawaiian and First Hawaiian Bank. The combined lender will rank as the sixth-largest bank headquartered in the western United States. Full second-quarter results for First Hawaiian are scheduled for release July 24, when investors will receive more detail on the bank's financial trajectory and the acquisition's expected impact on earnings per share and capital ratios.

This article is for informational purposes only and does not constitute investment advice.