First National Financial Corporation (FN-PA.TO) Earnings Call Transcript & Summary

The special meeting of First National is about to begin. Please note this meeting is being recorded on September 30, 2025, and registered shareholders can submit questions or comments at any time by clicking on the message icon. We now turn the proceedings over to First National.

Good morning. My name is Robert Mitchell, and I have the honor of serving as Lead Independent Director and Chair of the Special Committee of First National Financial Corporation. I'm pleased to welcome all of you to the Special Meeting of Shareholders of First National Financial Corporation. On behalf of the Board of Directors and the management team, I thank you all for joining us today. As you know, the purpose of today's meeting is to consider, and if deemed advisable, to pass, with or without variation, a special resolution approving a plan of arrangement involving the company and a newly formed acquisition vehicle controlled by private equity funds managed by Birch Hill Equity Partners Management Inc. and private equity funds managed by Brookfield Asset Management, all as more particularly described in the management information circular that was mailed to shareholders in advance of this meeting. It is my pleasure to officially call the meeting to order. Unless there are any objections, I will preside as Chair of this meeting. I would like to welcome our shareholders, directors and officers of the company and various guests attending today. This virtual meeting format offers registered shareholders and duly appointed proxyholders the opportunity to participate, submit questions and vote in accordance with the instructions to be provided. All other attendees who have registered as guests for today's meeting will have the ability to attend this meeting, but are not able to submit questions or vote. In attendance today are many members of our leadership team, including Jason Ellis, our President and Chief Executive Officer; Robert Inglis, our Chief Financial Officer; and Hilda Wong, our Executive Vice President and General Counsel. Also in attendance are many members of the Board of Directors of the company. Thank you to all of our shareholders who submitted their proxies in advance of the meeting. I would note at the outset that management holds proxies in favor of the special resolution representing more than 2/3 of the votes represented in person or by proxy at the meeting and more than 50% of the votes represented in person or by proxy at the meeting other than those owned or controlled by Stephen Smith, Moray Tawse and their associates and affiliates, whose votes are required to be excluded from such vote in the context of a business combination under Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions, which are the two thresholds required to be met in order for the special resolution to be passed. As a result, we expect that the special resolution will be passed at today's meeting. As this meeting is being held in virtual meeting format, I will set out a few instructions for the orderly conduct of the meeting. For the purposes of this meeting, voting on all matters will be conducted via online ballot through the live webcast platform that you have logged into today. Only registered shareholders and duly appointed proxyholders are able to vote via online ballot. Those in attendance who have registered as guests are able to attend the meeting, but are not able to ask questions or vote. Please note that we will be recording this meeting. Note that any votes cast via online ballot during the meeting will revoke any votes previously submitted via proxy. Therefore, we recommend that registered shareholders who have already voted via proxy and do not wish to change their vote not vote during the meeting. When you are asked to vote, please click on the Vote tab on the virtual platform. Voting will remain open during the formal portion of the meeting. You may vote on the special resolution and change your vote at any time during this period. We will provide you with the preliminary voting results at the end of the meeting. For specific vote tabulations, please see the company's report on voting results, which will be posted to the company's SEDAR+ profile at www.sedarplus.ca shortly after the meeting. Registered shareholders and duly appointed proxyholders will be able to post questions to the presenters on the virtual platform. Participants who are not registered shareholders or duly appointed proxyholders are not permitted to ask questions on the virtual platform. Questions can be submitted using the Q&A feature on the virtual platform. Please note that there may be a slight delay before the moderator will be able to see a submitted question. Therefore, at various intervals throughout the meeting, we will pause and provide you with time to ask your questions using the Q&A feature. Although questions can be submitted throughout the meeting, they will be addressed at the appropriate time during the meeting. Please limit your questions to topics relating to today's subject matter and keep your questions concise. For each question we answer, the secretary will read the question aloud so that all attendees can hear the question. We will then provide an oral response. Only questions regarding procedural matters or directly related to topics relating to today's subject matter will be addressed during the meeting. Any questions which were already answered, that are redundant or repetitive or otherwise disruptive to the orderly conduct of the meeting will not be answered. If during the course of the meeting, we encounter any technical difficulties with the webcast, please remain logged on, and we will resume as soon as possible. For the sake of expediency, I will propose all motions. Jason Ellis, the President and Chief Executive Officer of the company, will second motions today where applicable. Hilda Wong, Executive Vice President and General Counsel of the company, will act as Secretary of this meeting. Melody Tong of Computershare Investor Services will act as scrutineer for this meeting. If you have an objection regarding the appointment of the secretary or the scrutineer, you may now submit your objection via the Q&A feature. As no objections have been received, I will now move to the notice of the meeting and quorum. The notice of special meeting accompanies the management information circular of the company dated August 27, 2025. The Board of Directors of the company fixed the close of business on August 21, 2025 as the record date for determining the shareholders entitled to receive notice of and vote at this meeting. I have before me a copy of the affidavits from Computershare Investor Services Inc. and Broadridge Investor Communication Solutions indicating that the proper notice of the meeting has been given in accordance with the Business Corporations Act (Ontario), the bylaws of the company and the interim order of the Ontario Superior Court of Justice (Commercial List) dated August 27, 2025. I direct that a copy of such affidavits be annexed to the minutes of this meeting. Copies of the notice of special meeting, management information circular and other meeting materials are available under the company's profile on SEDAR+ at www.sedarplus.ca. Unless there is any objection, I will dispense the reading of the notice of special meeting, and we'll now move to the scrutineer's report and quorum of the meeting. The preliminary scrutineer's report on attendance shows that the persons virtually present or represented by proxy at this meeting represent approximately 84.35% of the outstanding common shares. Based on the scrutineer's report, I declare that the requisite quorum of shareholders is virtually present. I therefore declare that this meeting is duly and properly constituted for the transaction of business. I direct that the final scrutineer's report on attendance be attached to the minutes of the meeting. I will now proceed with the business of this meeting. The only formal item of business is to consider, and if thought advisable, to pass, with or without variation, a special resolution to approve a plan of arrangement pursuant to Section 182 of the Business Corporations Act (Ontario) involving First National Financial Corporation and Regal Bidco Inc., which I will refer to as the purchaser, a newly formed acquisition vehicle controlled by private equity funds managed by Birch Hill Equity Partners Management Inc. and private equity funds managed by Brookfield Asset Management. Pursuant to such arrangement, the purchaser will acquire all of the outstanding common shares of First National Financial Corporation for a cash consideration other than the portion of the common shares owned or controlled by the company's founders that are subject to rollover agreements, all as further described in the management information circular. The complete text of the special resolution is set out in Appendix A to the management information circular. To be effective, the special resolution will require the affirmative vote of: One, at least 2/3 or 66 and 2/3% of the votes cast by shareholders attending this meeting or represented by proxy at this meeting and entitled to vote at the meeting; and two, more than 50% of the votes cast by shareholders attending this meeting or represented by proxy at the meeting other than Stephen Smith, Moray Tawse and their associates and affiliates whose votes are required to be excluded from such vote in the context of a business combination under Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. For the reasons stated in the management information circular, the Board of the Directors of the company, excluding Stephen Smith and Moray Tawse, and the Special Committee have each unanimously determined that the arrangement is in the best interest of the company and that the consideration to be received by the shareholders other than Stephen Smith and Moray Tawse and their associates and affiliates is fair to such shareholders and have unanimously recommended that the shareholders vote in favor of the special resolution. Unless there is any objection, I will dispense with the reading of the special resolution. As no objections have been received, I will dispense with the reading of the special resolution. At this time, we would like to open this meeting to a discussion of any questions on the special resolution that have been submitted to this meeting. Hilda, have any questions regarding the arrangement come in from attendees?

Mr. Chair, I confirm that we have not received any questions from shareholders relating to the arrangement.

Thank you, Hilda. In order that a vote may be held on this matter, I move that the special resolution regarding the arrangement as set out in Appendix A to the management information circular of the company and as placed before the meeting be approved. May I have a seconder for the motion?

Mr. Chair, I second that motion.

As previously mentioned, I note that any votes cast by online ballot during the meeting will revoke any votes previously submitted by proxy. Therefore, for any shareholders that have already voted by proxy and do not wish to change their vote, it is not necessary to vote again on this ballot. I would now ask registered shareholders and duly appointed proxyholders virtually present to vote online. Please click on the Vote tab on the virtual platform to make your selection as either For if you wish to vote in favor of the special resolution, or as Against if you wish to vote against the special resolution. We will now pause while you record your votes, and I will then declare the voting closed on the special resolution. The electronic balloting will close in 30 seconds, and then the voting page will disappear, and your votes will automatically be submitted. [Voting]

I hereby declare the polls are now closed with respect to the business item. We will now have a brief pause to ascertain the preliminary voting results. We have been informed by the scrutineer that the preliminary vote report shows that the special resolution has passed with the requisite shareholder support. Based on the preliminary tabulation, I declare the special resolution approved. I direct that the scrutineer's complete report on the ballot be annexed to the minutes of the meeting. We will be reporting the final vote results of this meeting in a press release, and they will be posted on the company's SEDAR+ profile, www.sedarplus.ca, shortly after this meeting. The formal item of business as set out in the notice of special meeting has now been dealt with. If there isn't any other business, we will proceed to conclude the formal part of the meeting. If you would like to raise any further business at this meeting, you can do so using the Q&A feature. Hilda, have any comments come in from attendees regarding additional items of business that may be properly brought before this meeting?

Mr. Chair, I confirm that we have not received any comments from shareholders specifically relating to additional items of business that may be properly brought before this meeting.

Thank you, Hilda. As there is no more formal business, this concludes the formal part of this meeting. I move that the formal part of the meeting be concluded. Is there any objection to the meeting being concluded? As there are no objections, I declare the formal portion of the meeting concluded. On behalf of the Board of Directors of the company, I would like to thank you for attending today.

This concludes the meeting. You may now disconnect.