Mr. Robert Inglis reports

FIRST NATIONAL COMPLETES PLAN OF ARRANGEMENT

First National Financial Corp. has completed the previously announced plan of arrangement under the Business Corporations Act (Ontario). Pursuant to the terms of the arrangement, 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 acquired all of the outstanding common shares of First National, other than certain shares owned by the company's founders, Stephen Smith and Moray Tawse (together with their associates and affiliates), for $48 per share in cash. As a result of the arrangement, Mr. Smith and Mr. Tawse each retained an indirect approximately 19-per-cent interest in First National, with Birch Hill and Brookfield holding the remaining approximately 62-per-cent interest.

In addition, on closing of the arrangement, the company's 2.961 per cent Series 3 senior unsecured notes due Nov. 17, 2025, 7.293 per cent Series 4 senior unsecured notes due Sept. 8, 2026, and 6.261 per cent Series 5 senior unsecured notes due Nov. 1, 2027, were redeemed in accordance with the terms of the arrangement.

With the arrangement complete, the shares are expected to be delisted from the Toronto Stock Exchange shortly following the date hereof. First National's Class A preference shares, Series 1, and Class A preference shares, Series 2, continue to be outstanding in accordance with their terms and listed on the Toronto Stock Exchange.

Settlement of the previously announced offering of $800-million aggregate principal amount of senior notes of the company is expected to be completed on Oct. 23, 2025, and the company and the purchaser intend to amalgamate shortly thereafter, with the amalgamated company continuing to be named and operated as First National Financial Corp. The preferred shares and the new notes will continue to be outstanding securities of First National postamalgamation with no changes to the terms of such securities. Following the amalgamation, the preferred shares will continue to be listed on the TSX, and First National will continue to be a reporting issuer under applicable Canadian securities laws.

Board of directors and management

Effective as of closing of the arrangement, the First National board of directors has been increased from nine directors to the following 10 directors: Mr. Tawse (chair), Justin Brenner, Brendan Smith, Matthew Kunica, Nicholas Bigelow, Erson Olivan, Paul Lepage, Benjamin Farrow, Steven Ranson and Robert Mitchell. The senior management team of First National remains unchanged. First National intends to amend its articles to increase the maximum size of its board of directors, at which time William Stone is expected to join the board as an 11th director.

Reminder to First National shareholders and redeemed noteholders

Registered holders of shares or redeemed notes are reminded to submit a duly completed letter of transmittal and the certificate(s) or direct registration system statement, as applicable, representing their shares or redeemed notes, as applicable, to Computershare Investor Services Inc., as depositary, to receive the consideration or the consideration payable for the redemption of the redeemed notes, in accordance with the terms of such redeemed notes, as applicable. Registered holders of shares or redeemed notes who have questions or require assistance can contact Computershare toll-free at 1-800-564-6253 in North America or at 1-514-982-7555 outside of North America, or by e-mail at corporateactions@computershare.com.

Shareholders who hold their shares through a broker, investment dealer or other intermediary should carefully follow the instructions provided by such broker, investment dealer or other intermediary to receive the consideration.

Holders of redeemed notes who hold their redeemed notes through a broker, investment dealer, bank, trust company or other intermediary will receive payment of the note consideration through their intermediary and should contact their intermediary with any questions.

For additional details regarding the arrangement, see First National's management information circular dated Aug. 27, 2025, a copy of which can be found under First National's profile on SEDAR+.

Early warning disclosure of Regal Holdings LP

In connection with the arrangement, the purchaser became an indirect wholly owned subsidiary of Regal Holdings. Regal Holdings is a limited partnership in which private equity funds managed by Birch Hill and Brookfield collectively hold approximately 62 per cent of the interests, with the remaining interests held by the company's founders, Mr. Smith and Mr. Tawse.

Pursuant to the arrangement, holders of shares, other than the rollover shares (as defined below), sold their shares to the purchaser for cash consideration of $48 per share, or approximately $2.2-billion in the aggregate.

On Aug. 28, 2025, as part of the transactions contemplated under the arrangement agreement dated July 27, 2025, between the company and the purchaser and the rollover agreements dated July 27, 2025, between, among others, the rollover shareholders, the purchaser and Regal Holdings, the rollover shareholders exchanged 14.08 million shares for ownership interests in Regal Holdings. Pursuant to the arrangement, Regal Holdings exchanged the rollover shares for indirect ownership interests in the purchaser.

Immediately prior to the arrangement, as a result of the rollover, Regal Holdings beneficially owned, or exercised control or direction over, 14.08 million shares in the aggregate, representing approximately 23.5 per cent of the issued and outstanding shares. Following the completion of the arrangement on Oct. 22, 2025, Regal Holdings owns, indirectly through the purchaser, 59,967,429 shares in the aggregate, representing 100 per cent of the issued and outstanding shares.

The purpose of the arrangement was for the purchaser to acquire all of the issued and outstanding shares. Pursuant to the arrangement and related transactions, the purchaser and the company are now subsidiaries of Regal Holdings. The amalgamation is intended to be effected following closing of the offering of the new notes.

Regal Holdings is a limited partnership existing under the laws of the Province of Ontario, and its general partner, Regal GP Inc., is a corporation existing under the laws of the Province of Ontario, each formed for the purposes of completing the transactions contemplated under the arrangement.

An early warning report will be filed by Regal Holdings under applicable Canadian securities laws and, once filed, will be available on the company's SEDAR+ profile. A copy of such report may also be obtained by contacting Hilda Wong, executive vice-president and general counsel of First National, at 416-597-7660 or hilda.wong@firstnational.ca.

About First National Financial Corp.

First National is the parent company of First National Financial LP, a Canadian-based originator, underwriter and servicer of predominantly prime residential (single family and multiunit) 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.

We seek Safe Harbor.