Company Announcements

• The Board of Directors of First National (with conflicted directors abstaining) and the Special Committee unanimously recommend that Shareholders vote IN FAVOUR of the Arrangement Resolution.
• Your vote is important no matter how many shares you hold. Vote today.
• Shareholders who have questions or need assistance with voting their shares should contact First National's proxy solicitation agent and shareholder communications advisor Laurel Hill Advisory Group by telephone at 1-877-452-7184 or by email at assistance@laurelhill.com .

TORONTO , Sept. 2, 2025 /CNW/ - First National Financial Corporation (the "Company" or "First National") (TSX: FN) (TSX: FN.PR.A) (TSX: FN.PR.B) today announced the filing of its management information circular (the "Circular") and related materials for the special meeting (the "Meeting") of holders (the "Shareholders") of common shares (the "Shares") of First National to approve the previously-announced plan of arrangement under the Business Corporations Act (Ontario) (the "Arrangement"), pursuant to which a newly-formed acquisition vehicle (the "Purchaser") controlled by private equity funds managed by Birch Hill Equity Partners and private equity funds managed by Brookfield Asset Management will acquire all of the outstanding Shares, other than certain Shares owned by the Company's founders, Stephen Smith and Moray Tawse (together with their associates and affiliates, the "Rollover Shareholders"), for $48.00 per Share in cash (the "Consideration"), all as more particularly described in the Circular (the "Transaction"). As part of the Transaction, the Rollover Shareholders, who currently hold approximately 37.4% and 34.0%, respectively, of the outstanding Shares, will each sell approximately two-thirds of their current shareholdings in the Company for the same cash consideration per Share as other shareholders, and have agreed to exchange their remaining Shares (the "Rollover Shares") for indirect 19% ownership interests in the Purchaser, respectively.

Unanimous Board and Special Committee Recommendations

Both the Company's board of directors (the "Board") (with conflicted directors abstaining) and the special committee of independent directors (the "Special Committee") of the Board unanimously determined, after receiving financial and legal advice, that the Transaction is in the best interests of the Company and the Consideration to be received by the Shareholders (other than the Rollover Shareholders) is fair, and recommend that Shareholders vote IN FAVOUR of the Transaction at the Meeting.

Reasons for the Recommendation

In reaching their conclusion that the Arrangement is in the best interests of the Company and that the Consideration to be received by the Shareholders (other than the Rollover Shareholders) is fair to such Shareholders, the Special Committee, with the assistance of its independent financial and legal advisors, and the Board (with the conflicted directors abstaining), with the assistance of its financial and legal advisors, carefully reviewed and relied on a number of factors in making their determinations and recommendations, including, among others, the following:

• All Cash Consideration, Compelling Value and Immediate Liquidity to Shareholders . The Consideration is all cash, which will provide Shareholders (other than the Rollover Shareholders in respect of the Rollover Shares) with certainty of value and immediate liquidity that enables them to realize significant value for their interest in the Company without having to assume long-term business and execution risk (and without incurring brokerage and other costs typically associated with market sales). The Consideration represents a premium of approximately 15.2% and 22.8% to the 30 and 90-trading day volume weighted average trading price, respectively, per Share as of July 25, 2025. The Consideration is also above the 52-week high closing price of the Shares as of that date.
  
  
• Market Check . The Arrangement is the result of a comprehensive and robust strategic review process led by the Company's financial advisor, RBC, which included outreach to a broad pool of potential buyers and resulted in multiple acquisition proposals, of which the proposal submitted by the Purchaser offered the highest value to Shareholders.
  
  
• Formal Valuation . The Special Committee received a valuation from its independent valuator and financial advisor BMO Capital Markets ("BMO") that, as of July 27, 2025, and based on BMO's analysis and subject to the assumptions, limitations and qualifications to be set forth in BMO's written valuation (the full text of which is included in the Circular), the fair market value of the Shares is in the range of $44.00 to $50.00 per Share. The Consideration being offered to Shareholders (other than the Rollover Shareholders in respect of the Rollover Shares) under the Arrangement is in the upper half of BMO's valuation range.
  
  
• Fairness Opinion . The Special Committee and the Board received an opinion from BMO (the full text of which is included in the Circular) that, as of July 27, 2025, and subject to the assumptions, limitations and qualifications set forth therein, the Consideration to be received by Shareholders (other than the Rollover Shareholders in respect of the Rollover Shares) pursuant to the Arrangement is fair, from a financial point of view, to such Shareholders.

A full description of the information and factors considered by the Special Committee and the Board (with the conflicted directors abstaining) is located in the Circular under the heading "The Arrangement – Reasons for the Recommendation".

Details About First National's Special Meeting of Shareholders

The Meeting is scheduled to be held in a virtual only format conducted via a live webcast platform at https://meetnow.global/MSWP6AX at 10:30 a.m. (Toronto time) on September 30, 2025. Shareholders of record as of the close of business on August 21, 2025 are entitled to receive notice of and vote at the Meeting. Shareholders are urged to vote well in advance of the Meeting and, in any event, prior to the proxy voting deadline of 10:30 a.m. (Toronto time) on September 26, 2025.

The Circular provides important information on the Arrangement and related matters, including voting procedures, how to attend the virtual Meeting and instructions for Shareholders unable to attend the virtual Meeting. Shareholders are urged to read the Circular and accompanying materials carefully and in their entirety. The mailing of the Circular and accompanying materials to Shareholders of record as of August 21, 2025 has commenced and they are available on SEDAR+ at www.sedarplus.ca and on the Company's website at www.firstnational.ca.

Receipt of the Interim Order

On August 27, 2025, the Ontario Superior Court of Justice (Commercial List) (the "Court") granted an interim order providing for the calling and holding of the Meeting and certain other matters related to the Meeting and the Arrangement. A copy of the interim order is included in the Circular.

The anticipated hearing date for the application for the final order of the Court (the "Final Order") is October 3, 2025. Subject to obtaining the required approval of Shareholders at the Meeting, the Final Order and the satisfaction or waiver of the other conditions to implementing the Arrangement as set out in the arrangement agreement entered into among First National and the Purchaser on July 27, 2025, the Transaction is expected to close in the fourth quarter of 2025.

Shareholder Questions and Voting Assistance

Shareholders who have questions about the information contained in the Circular or require assistance with the procedure for voting, including to complete the form of proxy, may contact the Company's proxy solicitation agent and shareholder communications advisor:

Laurel Hill Advisory Group
Toll-Free: 1‑877‑452‑7184 (for Shareholders in North America)
International: 1-416-304-0211 (for Shareholders outside North America),
By Email: assistance@laurelhill.com.

 About First National

First National Financial Corporation is the parent company of First National Financial LP, a Canadian-based originator, underwriter and servicer of predominantly prime residential (single-family and multi-unit) and commercial mortgages. With almost $160 billion in mortgages under administration, First National is one of Canada's largest non-bank mortgage originators and underwriters. For more information, please visit www.firstnational.ca.

Forward-Looking Information

This news release contains statements that are "forward-looking information" within the meaning of applicable securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward-looking statements include, among other things, statements with respect to the Transaction, the timing for the Meeting, the proxy voting deadline, the Final Order and closing of the Transaction. Forward-looking statements are necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by the Company as of the date of this news release, are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated by the forward-looking information. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking information include, but are not limited to: the possibility that the Transaction will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all due to a failure to obtain or satisfy, in a timely manner or otherwise, required Shareholder and court approvals and other conditions of closing necessary to complete the Transaction or for other reasons; the possibility of adverse reactions or changes in business relationships resulting from the announcement or completion of the Transaction; risks relating to the retention of key personnel during the interim period; the possibility of litigation relating to the Transaction; and risks related to the diversion of management's attention from the Company's ongoing business operations. See also the risks and uncertainties identified under the headings "Forward-Looking Information" and "Risk Factors" in the Circular and under the headings "Risks and Uncertainties Affecting the Business" and "Forward-Looking Information" in the Company's latest management's discussion and analysis and in other periodic filings that the Company has made and may make in the future with the securities commissions or similar regulatory authorities in Canada, all of which are available under the Company's SEDAR+ profile at www.sedarplus.ca. These factors are not intended to represent a complete list of the factors that could affect the Company. However, such risk factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. You should not place undue reliance on forward-looking information, which speaks only as of the date of this release and is subject to change after such date. Management and First National disclaim any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required under securities laws. 

SOURCE First National Financial Corporation