First Hawaiian (NASDAQ:FHB) and TriCo Bancshares have entered into a definitive agreement to combine in a 100% stock transaction valued at approximately $2 billion, according to remarks made on an investor call led by executives from both companies.
Bob Harrison, chairman, president and chief executive officer of First Hawaiian, said the transaction would create what he called “the leading Pacific banking franchise,” combining First Hawaiian’s Hawaii-based franchise and mainland lending experience with TriCo’s California retail banking network.
TriCo shareholders will receive 2.095 shares of First Hawaiian common stock for each share of TriCo common stock, First Hawaiian Chief Financial Officer Jamie Moses said. Based on First Hawaiian’s closing stock price as of July 10, 2026, the transaction represents about $2 billion in aggregate value.
At closing, First Hawaiian shareholders are expected to own approximately 65% of the combined company, while TriCo shareholders are expected to own approximately 35%. The companies expect the deal to close in the fourth quarter, subject to shareholder and regulatory approvals.
Combined Bank to Have $34 Billion in Assets
Harrison said the combined company will have approximately $34 billion in assets, $22 billion in loans, $29 billion in deposits and 117 branches. He emphasized that First Hawaiian’s Hawaii franchise would remain central to the company’s identity.
“This partnership does not change our commitment to Hawaii,” Harrison said. “Hawaii remains the foundation of our franchise, and we will continue to be central to our identity.”
TriCo Bancshares, through Tri Counties Bank, operates a retail network across Northern California and the Central Valley, along with additional banking offices in three Southern California markets. Harrison said TriCo brings a differentiated deposit franchise, local leadership and credit discipline that align with First Hawaiian’s culture.
Rick Smith, chairman, president and chief executive officer of TriCo Bancshares, said the two companies share similar values, including relationship banking, disciplined credit and commitment to local communities.
“That cultural alignment gives me real confidence that First Hawaiian is the right banking partner for Tri Counties Bank,” Smith said.
Tri Counties Bank Brand to Remain in California
Moses said Tri Counties Bank will retain its brand in California and that 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 adviser to the CEO, and TriCo executives Dan Bailey and Peter Wiese are expected to take senior leadership roles.
During the question-and-answer session, Smith said keeping the institution intact and avoiding branch closures should help with employee retention. Harrison added that First Hawaiian was seeking a partner with a strong management team that wanted to remain with the organization.
“We don’t have a management team to replace them with,” Harrison said. “Want to make real sure that we found the right partner, as we have with TriCo, for that reason.”
Financial Targets Include EPS Accretion and Cost Savings
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 based on expected cost savings of 25%.
First Hawaiian expects the deal to produce 6% earnings-per-share accretion, a high-teens internal rate of return, tangible book value dilution of less than 5% and an earnback period of 2.8 years. Moses said the combined company’s pro forma CET1 ratio is expected to be 12.4%.
Importantly, Moses said the financial metrics do not rely on branch closures or modeled revenue synergies. In response to an analyst question, he said the 25% cost savings assumption is expected to come from areas including information technology contracts and vendor consolidation.
“We’re confident we can get to a 25% number,” Moses said. “We think that’s very doable.”
Moses also said the model assumes no share repurchases through 2027, though First Hawaiian retains flexibility to buy back shares.
Executives Emphasize Deposit Strength and Credit Discipline
Executives repeatedly highlighted the deposit franchises of both banks. Harrison said the combined company is expected to have top-decile deposit costs, no brokered balances and excess liquidity. Moses said TriCo’s liability-sensitive balance sheet should help reduce First Hawaiian’s asset sensitivity from an asset-liability management perspective.
In the Q&A session, Harrison and Smith said the combination is not intended to change the combined bank’s risk profile. Harrison said the near-term focus will be on integration, though the larger balance sheet could provide additional flexibility over time.
“We’re not really looking to change our risk profile at this time,” Harrison said. “We’ve got two very good operating banks.”
Smith said the deal provides greater scale and capacity, but not necessarily a shift toward larger or riskier lending.
“This just gives us the ability to have more scale and mass and do more volume, not necessarily bigger deals,” Smith said.
Harrison also said the companies have no current plans to prune legacy assets or loan portfolios at either First Hawaiian or TriCo. Moses said any future balance sheet optimization strategies were not included in the pro forma financial targets.
Integration and Growth Outlook
Harrison said First Hawaiian has operated in California lending since 1995 and that nearly a quarter of its loan portfolio is currently based on the mainland. He said the company has lacked a branch network since its separation from Bank of the West, making TriCo’s California footprint strategically important.
Asked about integration risks, Harrison said First Hawaiian has experience with a recent core conversion, while Smith noted that TriCo has a track record of integrating prior acquisitions. Harrison said the companies will work with technology partners to determine the timing of a systems conversion after required approvals.
On growth, executives said the deal model is based on historical growth rates rather than aggressive assumptions. Moses said potential revenue synergies, cross-selling opportunities and larger loan holds could be additive but are not built into the model.
Harrison also briefly addressed First Hawaiian’s preliminary second-quarter 2026 results, describing them as strong, with solid profitability, continued net interest margin expansion and tangible book value per share growth. He said the company plans a more detailed second-quarter earnings discussion on July 24.
About First Hawaiian (NASDAQ:FHB)
First Hawaiian, Inc is the oldest and largest bank in Hawaii, operating as the bank holding company for First Hawaiian Bank. Established in 1858, the company offers a full suite of financial services to individual, business and institutional clients. Its product portfolio includes consumer and commercial lending, deposit accounts, treasury and cash management, foreign exchange and trade finance, as well as wealth management and trust services.
First Hawaiian serves customers through an extensive network of branches, ATMs and digital channels across the Hawaiian Islands, Guam, Saipan and American Samoa.
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