Fairstone Bank of Canada (“Fairstone Bank”) and Home Trust Company (“Home Trust”) have officially closed their combination transaction, initially announced on March 26, 2024. The deal was finalized following the fulfillment of all regulatory requirements and closing conditions.
The newly merged entity will operate under the parent legal entity, Fairstone Bank, encompassing a portfolio of established brands, including Home Trust, Oaken Financial, Home Bank, Fairstone, EdenPark, and Fig. Together, the combined group positions itself as Canada’s premier alternative lender, serving over 4,700 mortgage brokers and 2 million customers nationwide. With a network of more than 255 branches, the organization aims to broaden access to diverse financial solutions for Canadians traditionally underserved by mainstream banks.
Scott Wood, President and CEO of Fairstone Bank, will lead the combined group in the same capacity, while Stephen Smith, CEO of Smith Financial Corporation, will serve as Chair of the Board of Directors. Former Home Trust CEO Yousry Bissada will join as Vice Chair of the Board.
“This merger represents an exciting chapter for both companies,” remarked Scott Wood. “Together, we will provide a comprehensive suite of lending products, including residential and commercial mortgages, personal loans, credit cards, retail financing, and digital lending solutions. Our shared expertise will enable us to deliver exceptional value and innovation to customers across Canada.”
Stephen Smith highlighted the societal impact of the merger, stating, “This union strengthens our ability to serve millions of Canadians seeking an alternative to traditional banking. Our combined reach and product portfolio create a transformative platform for financial inclusion and growth.”
Smith Financial Corporation now holds a majority voting interest in Fairstone Bank. Minority shareholders include Centerbridge Partners, L.P., Ontario Teachers’ Pension Plan Board, and Fairstone Bank’s management team.
Eric Hoffman, Senior Managing Director at Centerbridge Partners, underscored the growth potential, saying, “The combined strengths of Fairstone Bank and Home Trust provide a robust platform to address diverse financial needs while fostering innovation across the sector.”
Jeff Markusson, Senior Managing Director of Financial Services at Ontario Teachers’, added, “By merging these complementary businesses, we are creating a more inclusive financial ecosystem that empowers Canadians to achieve their financial goals.”
Fairstone Bank, Home Trust, and Home Bank will remain separate members of the Canada Deposit Insurance Corporation (CDIC). Existing CDIC coverage for deposit holders remains unchanged, ensuring continuity and trust for customers.
Key advisors for this transaction included RBC Capital Markets, Goldman Sachs, and BMO Capital Markets, with legal representation from Torys LLP, Stikeman Elliott LLP, and Willkie Farr & Gallagher LLP.
This merger marks a pivotal milestone in Canada’s financial services landscape, setting a new benchmark for alternative lending with a focus on innovation, inclusion, and customer value.
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