First Hawaiian stock (NASDAQ:FHB) fell 4.8% while TriCo Bancshares shares (NASDAQ:TCBK) climbed 7% after the two banks disclosed an agreement by which First Hawaiian will acquire TriCo in an all-stock transaction.
Under the pact announced Monday, each TriCo share will be exchanged for 2.095 shares of First Hawaiian. That exchange ratio equates to $63.12 per TriCo share when calculated using First Hawaiian's closing price on July 10, 2026. Following the deal, shareholders of First Hawaiian and TriCo are expected to own roughly 65% and 35% of the combined company, respectively, upon closing.
The combined franchise would have approximately $34 billion in assets, positioning it as the sixth-largest bank headquartered in the Western United States. First Hawaiian said it will continue to operate Tri Counties Bank under its current brand on the mainland, and that no branch closures are planned as a result of the transaction.
Governance changes were also disclosed. Four sitting TriCo directors, including Chairman, President and Chief Executive Officer Rick Smith, are set to join the boards of First Hawaiian and First Hawaiian Bank. Both companies reported that their respective boards of directors unanimously approved the agreement. The parties expect to complete the transaction by the end of 2026, subject to receipt of regulatory approvals and approval by shareholders.
Alongside the deal announcement, First Hawaiian provided preliminary financial results for the second quarter ended June 30, 2026. The bank expects to report net income of $73.4 million and diluted earnings per share of $0.60 for the quarter, compared with net income of $67.8 million and diluted EPS of $0.55 in the prior quarter.
First Hawaiian said net interest margin expanded by 6 basis points quarter-over-quarter to 3.25%. The cost of deposits improved by 2 basis points, moving to 1.20% from 1.22% in the prior quarter. Gross loans rose to $14.6 billion from $14.4 billion in the previous quarter.
The company is scheduled to release its full second-quarter financial report on July 24, 2026.
The announcement combines an immediate market reaction with a set of near-term milestones and approvals that must be achieved before the transaction is final. Investors will have further financial detail when First Hawaiian posts its formal second-quarter results later this month.