Under the terms of the agreement, each TriCo share will be exchanged for 2.095 shares of First Hawaiian common stock, equivalent to $63.12 per TriCo share based on First Hawaiian's July 10, 2026 closing price. The transaction is valued at approximately 1.98 times TriCo's tangible book value and 14.4 times TriCo's estimated 2027 earnings per share, or 10.7 times on a fully synergized basis. At closing, First Hawaiian shareholders are expected to own approximately 65 percent of the combined company, with TriCo shareholders owning the remaining 35 percent.
First Hawaiian Chief Executive Officer Bob Harrison said TriCo is "an ideal partner to execute this next phase of our growth: a well-managed, relationship-focused bank in California with a strong deposit franchise, disciplined credit culture, experienced local leadership and deep commitment to its communities." TriCo Chief Executive Officer Rick Smith said First Hawaiian "shares those values and brings the scale, capital strength and broader product capabilities to help us do even more for our customers and communities." The combined bank is expected to have approximately $34 billion in total assets, $21.5 billion in loans and $29.2 billion in deposits across 117 branches, making it the sixth largest bank headquartered in the western United States. The California franchise will continue to operate as Tri Counties Bank, a division of First Hawaiian Bank, with no branch closures anticipated.
First Hawaiian disclosed expected annual run-rate cost savings of $61 million pretax, equal to approximately 25 percent of TriCo's estimated 2026 cash non-interest expense base, with 50 percent of those savings phased in during 2027 and the full amount realized thereafter. The company estimates the deal will be accretive to earnings per share by approximately 1 percent on a 50-percent-phased-in basis and by approximately 6 percent once synergies are fully phased in, with tangible book value dilution of approximately 4.7 percent and an earnback period of approximately 2.8 years. First Hawaiian also disclosed one-time pretax merger and integration costs of approximately $125 million and a credit mark on acquired loans of approximately $135 million, or 1.8 percent of TriCo's gross loans.
On the financial advisory side, Keefe, Bruyette & Woods, A Stifel Company served as the lead financial advisor to the target, TriCo Bancshares, while Holland & Knight LLP served as TriCo's legal counsel. For the acquirer, First Hawaiian, Evercore acted as the lead financial advisor and Sullivan & Cromwell LLP served as legal counsel. Both financial advisors held lead roles in their respective engagements advising each party on the transaction.
As part of the agreement, four current TriCo directors, including Rick Smith, are expected to join the boards of First Hawaiian and First Hawaiian Bank at closing, with three additional TriCo directors to be mutually agreed upon before the transaction closes.
The transaction has not yet closed. It remains subject to approval by both companies' shareholders and customary regulatory approvals, with First Hawaiian's and TriCo's special shareholder meetings scheduled for October 29, 2026. The companies have targeted closing by the end of the fourth quarter of 2026.