Combined entity serves more than 2 million customers

MONTREAL and TORONTO, March 26, 2024 /CNW/ - Fairstone Bank of Canada ("Fairstone Bank") and Home Trust Company ("Home Trust") today announced the signing of a definitive agreement to merge their respective businesses. This transaction will create the leading alternative lender in Canada and boast an extensive Canadian footprint servicing more than 2 million customers with more than 250 branches from coast to coast. The combined business will offer diversified product lines, including residential and commercial mortgages, personal loans, credit cards, retail financing, auto financing, digital lending and consumer deposits. It will also add meaningful competition within the Canadian financial services sector, improving Canadians' access to essential financial services and delivering responsible, accessible and value-driven financial solutions.

The new group will provide services to the millions of Canadians who have been historically underserved and whose financial needs are often overlooked by traditional banks. This segment is large, attractive and growing, underpinned by strong immigration growth and post-pandemic normalization in the number of non-prime consumers. By offering a unique omnichannel model, the combined entity is creating the only alternative lender with a national branch and broker network – complemented by innovative digital capabilities – that customers can rely on for a full suite of responsible lending products.

"Our vision is to enhance the quality and scope of financial services within the Canadian landscape, seizing market opportunities for both entities. This combination is characterized by a strong cultural fit and complementary strengths between Fairstone Bank and Home Trust," commented Stephen Smith, founder and CEO of Smith Financial Corporation and chair of the board of directors of both organizations. "Having observed and engaged with both companies for many years, I am convinced that this combination of expertise in financial products and market-leading experiences will benefit our existing and future borrowers and depositors."

Scott Wood, President and CEO of Fairstone Bank, highlighted the strong track record of both businesses leading to this pivotal transaction: "This combination is the next natural step in our goal to be Canada's most accessible and responsible lending bank. Together with Home Trust, we aim to capitalize on significant growth opportunities and continue to serve millions of Canadians, especially those historically underserved."

Yousry Bissada, President and CEO of Home Trust, remarks that the new company will be pivotal for improving access to financial security for all Canadians. "Home Trust is a leader in the Canadian mortgage industry with a deep affinity to our customers, brokers, employees and other stakeholders. The opportunity to expand our product offerings by merging with Fairstone Bank will greatly enhance our ability to help our clients achieve financial success. We are excited about the future and the many opportunities this new company will bring. Our focus will remain the same: delivering exceptional service to our customers and business partners as we combine our businesses."

Eric Hoffman, Senior Managing Director at Centerbridge Partners, added, "This transaction brings together two great businesses with a rich legacy of offering financial services, evolving into a unified entity that offers a new comprehensive suite of products to customers with diverse financial needs, including mortgages, personal loans, auto financing, credit cards, retail point-of-sale solutions, and fully digital lending experiences through valued partners."

Jeff Markusson, Senior Managing Director, Financial Services at Ontario Teachers', commented on how the merger is filling a need in the market. "While Canada's banking system is world-renowned, there remains an unmet demand for a lender dedicated to supporting underserved segments of the population. We see incredible upside in this merger to increase competition in the market and broaden access to financial services, ensuring an even more inclusive financial landscape for all Canadians."

The agreement provides that the transaction is subject to customary closing conditions, including regulatory approvals. Following the closing of the transaction, Smith Financial Corporation will own a majority interest in the combined entity. Fairstone Bank's current shareholders, Centerbridge Partners, L.P., Ontario Teachers' Pension Plan Board and management, will continue as minority shareholders in the combined entity.

RBC Capital Markets is acting as financial advisor to Smith Financial Corporation on the transaction. Torys LLP is acting as legal counsel to Smith Financial Corporation. Willkie Farr & Gallagher LLP is acting as legal counsel to Centerbridge Partners, L.P. Stikeman Elliott LLP is acting as legal counsel to Ontario Teachers' Pension Plan Board. Goldman Sachs acted as financial advisor to Centerbridge Partners, L.P., and BMO Capital Markets acted as financial advisor to Ontario Teachers' Pension Plan Board.

About Smith Financial Corporation

Smith Financial Corporation invests for the long term in market-leading financial services companies with proven brands, client relationships and management teams. Alone and in partnership with like-minded institutions, it provides capital and expertise to help its portfolio companies thrive by embracing the entrepreneurial spirit. Its holdings include Canada Guaranty Mortgage Insurance Company, Fairstone Bank of Canada, First National Financial Corporation (TSX: FN), Glass-Lewis & Co., Home Trust Company, and Peloton Capital Management and its private equity funds. Smith Financial Corporation is a family enterprise founded by Stephen Smith, one of Canada's leading financial services entrepreneurs. Please visit Smith Financial Corporation (https://www.smithfc.ca/) for more information.

About Fairstone Bank of Canada

Fairstone Bank of Canada ("Fairstone Bank") and its subsidiary, Fairstone Financial Inc. ("Fairstone"), provide a wide range of innovative financial services that enable Canadian consumers and businesses to achieve their goals. Collectively, Fairstone Bank and its subsidiaries offer credit cards and rewards programs, point-of-sale financing, automobile financing and fully digital personal loans through partners, in addition to unsecured and secured personal loans and mortgages online and at more than 250 branches coast to coast. With a long-established Canadian history, Fairstone Bank and Fairstone are committed to being Canada's most accessible and responsible consumer lending bank. More at FairstoneBank.ca.

About Home Trust Company

Home Trust Company is a federally regulated trust company offering residential and non-residential mortgage lending, securitization of residential mortgage products, consumer lending and credit card services. In addition, Home Trust Company and its wholly owned subsidiary, Home Bank, offer deposits via brokers and financial planners, and through a direct-to-consumer brand, Oaken Financial. Licensed to conduct business across Canada, Home has offices in Ontario, Alberta, British Columbia, Nova Scotia, and Quebec. For more information, please visit Home Trust Company.

About Centerbridge Partners, L.P.

Centerbridge Partners, L.P. is a private investment management firm employing a flexible approach across investment disciplines—private equity, private credit and real estate—in an effort to develop the most attractive opportunities for our investors. The firm was founded in 2005 and, as of December 31, 2023, has approximately US$38 billion in capital under management with offices in New York and London. Centerbridge is dedicated to partnering with world-class management teams across targeted industry sectors and geographies. For more information, please visit www.centerbridge.com .

About Ontario Teachers' Pension Plan Board

Ontario Teachers' Pension Plan Board (Ontario Teachers') is a global investor with net assets of $247.5 billion as at December 31, 2023. We invest in more than 50 countries in a broad array of assets including public and private equities, fixed income, credit, commodities, natural resources, infrastructure, real estate and venture growth to deliver retirement income for 340,000 working members and pensioners. Our more than 450 investment professionals operate in key financial centres around the world and bring deep expertise in a broad range of sectors and industries. We are a fully funded defined benefit pension plan and have earned an annual total-fund net return of 9.3% since the plan's founding in 1990. At Ontario Teachers', we don't just invest to make a return, we invest to shape a better future for the teachers we serve, the businesses we back, and the world we live in. For more information, visitotpp.com and follow us onLinkedIn .

SOURCE Fairstone Financial Inc.

For further information: Smith Financial Corporation, Ernie Stapleton, President, Fundamental Creative Inc., ernie@fundamental.ca, +1 905-483-5331; Fairstone Bank, Caroline Morin, Vice President, Corporate Communications, media@fairstone.ca, +1 833-461-2900; Home Trust, Brad Kotush, Executive Vice President & CFO, investor.relations@hometrust.ca, +1 416-775-5002

We are pleased to announce that Home Capital Group, the parent company of Oaken Financial, has now received regulatory approval to be acquired by Smith Financial Corporation and the transaction has now closed.

The most important thing to know is that it is business as usual for you and all of our Oaken customers. The acquisition will have no impact on the quality products and services you have with Oaken, or how you do business with us. Smith Financial is a company known for providing innovative financial products and services that meet the needs of a diverse range of Canadians. If you would like more information about the acquisition, please refer to our HCG website.

At Oaken, we remain committed to providing you with market-leading solutions to meet your needs and the exceptional services you have come to expect from us.

We look forward to continuing to serve you and we thank you for your trust and confidence in us.

We would like to share some exciting news about Home Capital, the parent company of Oaken Financial. Home Capital has reached an agreement to be acquired by Smith Financial, a company backed by one of Canada’s leading investors in the financial services industry.

The most important thing to know is that it is business as usual for you and all our Oaken customers. This news will have no impact on the quality products and services you have with Oaken, or how you do business with us. Our parent company, Home Capital, is thrilled about the prospect of partnering with Smith Financial, a company known for providing innovative financial products and services that meet the needs of a diverse range of Canadians. It marks an exciting milestone in the evolution of our company and acknowledges the value that we offer those that work with us. The acquisition of Home Capital by Smith Financial is expected to be completed in the next 6 – 12 months.

At Oaken, we will remain focused on providing you with market-leading solutions to meet your needs and the exceptional service you have come to expect from us.

We look forward to continuing to serve you and we thank you for your trust and confidence in us.

We are pleased to announce the following updates that are effective from July 11th, 2022:

• Vancouver Oaken store will be open for walk-ins and will continue to take appointments 9 am to 5 pm, Monday to Friday.
• Toronto Oaken store will reopen to 5 days a week on an appointment-only basis from 9 am to 4 pm, Monday to Friday.

We look forward to seeing all of you in our stores soon!

Thank you for your continued business.

We are excited to announce on April 11th, 2022 that our Calgary and Vancouver stores will reopen to 5 days a week. We will be operating on an appointment-only basis from the hours of 10 am to 4 pm Monday to Friday. We look forward to seeing all of you in our stores soon!

If you are feeling unwell or have symptoms including a fever, cough, or shortness of breath on the day of your appointment, we kindly ask that you contact us to reschedule your appointment.

Thank you for your continued business.

In keeping with recent public health guidance, Oaken Financial stores will operate on a reduced schedule until further notice. We will continue to serve our customers on Mondays, Wednesdays and Fridays, but will be closed to the public on Tuesdays and Thursdays.

We regret that this measure was necessary, but we remain committed to offering our customers the best service and support possible while prioritizing safety. The Contact Centre remains available and our customers can continue to use Digital Banking or the Oaken Digital App, specifically for iOS and Android to manage their accounts. If you need assistance, you can speak with an Oaken service representative by calling 1-855-OAKEN-22 (1-855-625-3622) Monday to Friday, 8:00am to 8:00pm EST and Saturday 9:00am – 5:00pm EST.

We sincerely appreciate your business and look forward to returning to our regular hours.

Please note that our stores and Contact Centre will be closed on September 30th, 2021 in observation of the National Day for Truth and Reconciliation. However, our Oaken Online Banking remains available 24/7.

If you have any questions, please feel free to get in touch. We can be reached at 1-855-OAKEN-22 (625-3622) from Monday to Friday, 8:00am to 10:00pm and Saturday 9:00am – 5:00pm ET, or by sending an email to service@oaken.com.

At Oaken, we’re committed to ensuring the health and safety of our customers and employees. We also understand that as a community, we must work together during these challenging times and do everything possible to minimize the spread of the COVID-19 virus.

That’s why effective the close of business Monday, March 16, we will temporarily close our Oaken stores until further notice.

The Oaken team remains committed to delivering service and support to our customers. Our Contact Centre and mailroom are open and our Online Banking remains available so you can continue to manage your accounts online. If you need assistance, you can speak with an Oaken service representative by calling 1-855-OAKEN-22 (1-855-625-3622) Monday to Friday from 8:00AM to 8:00PM.

We sincerely value your business and look forward to serving you in person again when the Oaken stores re-open.

Oaken continues to operate on a “business as usual” basis and we’ve implemented several new actions to safeguard our customers and employees. We understand that these specific steps must be taken to reduce the spread of the COVID-19 virus while ensuring that we can continue to meet the needs of our customers.

Protecting our people and our customers

The health and safety of our customers and employees is a top priority. Based on the latest information from the Government of Canada, the risk for the general population remains low, but the possibility remains that the situation could change rapidly.

Reducing public exposure is one of the Government’s prime recommendations to help minimize the potential for spreading the COVID-19 virus. In keeping with this guideline, we encourage you to use Oaken’s Online Banking to manage your Oaken account. As well, Oaken representatives are available Monday to Friday, from 8:00AM to 8:00PM ET by calling 1-855-OAKEN-22 (625-3622) to assist you.

Ensuring Oaken’s business continuity

We’re confident that the infrastructure we have in place and the steps we’ve taken are appropriate and will help protect the health of our customers and employees. We thank you for your understanding and as we continue to monitor the situation, we’ll provide further updates as required.

Thank you for your continued business.

We are currently experiencing longer than normal wait times on our phone lines. In order to serve you better, we recommend that you send your questions or comments to our message centre through Oaken Online Banking.

Simply sign into Online Banking and use the secure Message Management Centre to forward your message. We will respond to all messages as soon as we can and you will receive an email notification once we have replied to your request. Once you receive this alert, log into Online Banking to read the full message.

If you are not enrolled for Online Banking, please click here to get started.

Thank you for your patience.

On March 25, 2020, the federal government introduced a change to the Registered Income Fund (RIF) withdrawal rules to ease the impact of the COVID-19 pandemic. With this change, you now have the option to reduce the minimum annual amount you are required to withdraw from your RIF by up to 25%.

This reduction is intended to help those who have seen their RIF balances impacted by the ongoing crisis. Because this is a temporary measure, it is only available for the 2020 tax year.

To take advantage of this legislated change for your Oaken RIF, you must provide Oaken with a signed letter of direction. This letter must include clear instructions for Oaken to proceed with the change and you must also specify the percentage by which you wish the minimum annual withdrawal to be reduced, to a maximum reduction of 25%.

Note that in order to qualify, you must meet the following conditions:

• You must not have already withdrawn the full 2020 minimum amount at the time you request the reduced withdrawal amount.

• If you have selected an Annual withdrawal frequency you must not have received payment at the time of your request.

• If your RIF withdrawal is set up as Monthly, Quarterly, or Semi-Annual, you must still have remaining payments at the time of your request

We’re pleased to announce that our Oaken stores are now open to serve our customers in person. Please note that for now, we are operating under reduced hours and our Vancouver and Calgary stores are open for appointments only, while our Toronto office is open for both walk-ins and appointments.

Here’s what you can expect when you visit an Oaken Store:

- An enhanced cleaning protocol has been implemented to sanitize hard surfaces after each client visit
- Plexi-glass dividers have been installed at all reception desks
- All Oaken team members will be wearing masks
- Oaken customers are required to wear masks while in the store
- If you feel unwell or have symptoms including a fever, cough, or shortness of breath, we respectfully ask that you do not visit an Oaken store until you’re feeling better

Please note that when you arrive, an Oaken team member will ask you a few questions before escorting you into the store. These questions will include:

• Have you had close contact with someone who has been diagnosed with COVID-19?
• Have you recently experienced any of the following symptoms?       
• fever, cough, or shortness of breath       
• sore throat, nasal congestion, or difficulty swallowing       
• loss of sense of smell, chills, headaches, or unexplained fatigue       
• diarrhea, abdominal pain, or nausea
• Have you or anyone in your household had close contact with anyone exhibiting these symptoms?
• Are you taking any medication that might suppress any of these symptoms?
• Have you or anyone in your household travelled outside Canada in the last 14 days?
• Have you or anyone in your household attended a large gathering of 50 or more people indoors, or 100 or more people outdoors, in the last 14 days where physical distancing was not observed?

In light of the recent changes to the provincial government guidelines and to help ensure the safety of our customers and staff, the Toronto Oaken store will be closed until further notice. The Oaken team remains committed to delivering service and support to our customers. Our Contact Centre is open and our Online Banking remains available so you can continue to manage your accounts online. If you need assistance, you can speak with an Oaken service representative by calling 1-855-OAKEN-22 (1-855-625-3622) Monday to Friday from 8:00AM to 8:00PM.

We sincerely value your business and look forward to serving you in person again when the Oaken stores re-open.