The parent company of Bank of Hawaii (ASX: BOH) has entered into a definitive agreement to acquire TriCo Bancshares (ASX: TCBK) in an all-stock transaction valued at approximately $2.01 billion.

The deal terms stipulate that for each share of TriCo Bancshares held, shareholders will receive approximately 2.1 shares of Bank of Hawaii stock. Based on Bank of Hawaii's closing price last week, this values TriCo shares at about $63.12 each.

According to data from financial information provider FactSet, and considering TriCo Bancshares has roughly 31.9 million shares outstanding, the total enterprise value of the transaction exceeds $2 billion.

Following the announcement, shares of Bank of Hawaii fell approximately 4% to $29.07, while shares of TriCo Bancshares surged 12% to $59.88.

Upon completion of the acquisition, existing shareholders of Bank of Hawaii are expected to own approximately 65% of the combined company, with former TriCo shareholders owning the remaining 35%.

As part of the agreement, four directors from TriCo Bancshares will join the board of the combined entity. The selection of the remaining three board members will be jointly determined by both companies prior to the deal's closing. The companies stated that the management team will include executives from both organizations to ensure a smooth transition and uninterrupted customer service.

The companies also indicated that the Tri Counties Bank brand will be maintained for its operations on the U.S. mainland, and there are currently no plans to close any physical branch locations.