SpareBank 1 Sørøst-Norge

Earnings Release • Oct 26, 2023

Results SpareBank 1 Sørøst-Norge Third quarter 2023

Per Halvorsen (CEO) Roar Snippen (CFO)

1. OCTOBER 2023

Good results, high solvency, strong underlying operations, and positive activity in the quarter

• Net interest income, including commission income from credit institutions, increased by 3.3 percent (NOK 17 million).
• Net commission income increased by 3.4 percent (NOK 3 million).
• Reduced income and results from subsidiaries by NOK 17 million.
• Weak financial results due to a negative outcome from SB1 Gruppen and valuation of fixed-rate loans and derivatives.
• Increased costs by 3.1 percent (NOK 9 million) due to rising ICT expenses, consultant costs for implementation and compliance with regulatory requirements, as well as underlying salary and price growth.
• Loss costs in the quarter amounted to NOK 19 million, primarily due to migration to stage 2 and stage 3 Basel models related to a customer grouping.
• The result in the third quarter was NOK 303 million.
• Common equity tier 1 capital adequacy ratio for the group is 18.7 percent, and the leverage ratio is 8.0 percent
• Return on equity for the quarter was 9.4 percent, compared to 12.4 percent in the previous quarter.
• Earnings per share for the group is NOK 1.28.

Good underlying operational performance, but weaker results in the third quarter due to lower financial results, increased costs, and losses.

3

Strong operational performance and high solvency, but weak financial results in Q3

Strong performance and solid asset quality

Marginal change in volume weigthed interest margin

1) Interest on lending includes loans transferred to mortgage co 2) 3M NIBOR is calculated as average 3M NIBOR in the quarter

6

Improved deposit margins, but reduced lending margins

7

Solid income growth in both corporate and retail market compared to last year

Increasednet interest compared to 2022

Well-diversified portfolio –99.0 percent in stages 1 and 2

Risk reduction and repricing reduce capital requirements. Increase in stage 3 CM impairment provisions related to specific customer group

No material changes in the composition of the corporate market portfolio

• Increased in the portfolio compared to the previous quarter from 25.2 BNOK to 25.3 BNOK
• Marginal changes within the various industry sectors
• Continued limited number of new construction projects
• Certain completed construction projects are facing challenges in selling unsold apartments. The bank has in total a low LTV on unsold units in real estate projects (60 percent or lower)
• No significant increase in deferred payments due to liquidity challenges
• The proportion of written-down and defaulted engagements in the total BM portfolio has increased by approximately 1% over the last quarter. Additionally, the proportion of engagements in the high and highest risk categories of the total BM portfolio has also increased by approximately 1% in the last quarter. These increases are primarily linked to challenges within a specific customer group.
• Weighted PD on fresh engagements is on same level as in the previous quarter

Well positioned in an attractive region

1) Source: Telemarksforskning, K. Vareide. Regional analysis Sørøst-Norge. Buskerud, Telemark, Vestfold. Percentage growth 2012-21

2) Source SSB. County-level national accounts. Gross Domestic Product at current prices. Vestfold and Telemark

12 3) Source : Eiendomsverdi. Regionsrapport third quarter 2023 Together we create value

Appendix

Improved underlying performance compared to last year.

Improved top-line compared to last year

Increased net interest income by NOK 92 million (14 %), with net interest income increasing by NOK 130 million (29%), but squeezed margins on mortgage loans.

Decrease in other income due to reduced activity both in the real estate brokerage and accounting sectors.

Good results from BN Bank (NOK 14 million), but a negative result from SB1 Gruppen in the quarter (NOK -4 million).

Increased operating costs in the quarter are mailnly due to higher ICT costs, consultant expenses for the implementation and compliance with regulatory requirements, as well as underlying salary and price growth. Cost ratio at 43.6% compared to 44.0% excluding one-time costs in 2022. Parent bank at 37.6% compared to 39.3% excluding one-time costs in 2022.

Loss provisions in the quarter of NOK 19 million primarily due to migration to stage 2, and to stage 3 impairment provisions related to one group customer-specific

Good return on equity

Ordinary profit after tax of NOK 303 (258) million

Return on equity 9.4 (8.4) % in the quarter compared to 8,9 % ex. one-time costs in 2022

EPS group NOK 1.28 (1.09)

Poor growth in lending and deposits

Lending growth in the current quarter of 0.3 (0,5) %, and deposits -2,3 (-2,1) %

Lending growth in corporate market the current quarter of -0,03 (-0,45) %, and retail market 0.4 (0,8) %. and deposit growth of -2,8 (-1.9) % and -2,0 (-2,2) % respectively

Increased net interest income and strong underlying performance.

Enhanced Underlying Operations

Increased net income by NOK 356 million, with net interest income increasing by NOK 308 million (24.0%). Net commission and other income are at the same level as in 2022 (NOK 3 million)

Good results from BN Bank (NOK 39 million, compared to NOK 32 million).

Weakened results from SB1 Gruppen (NOK 8 million, compared to NOK 15 million)

Results from other financial investments, including dividends, have increased by NOK 46 million Increased operating costs, excluding one-time acquisition costs for the new accounting firm in Q4 2022 with full effect in 2023, increased costs for temporary staff/consultants, ICT expenses,, and general wage and price increases.

Cost ratio at 42.2% compared to 45.6% excluding one-time costs in 2022. Parent bank cost ratio at 33.8% compared to 39,8% excluding one-time costs in 2022.

Reversed NOK 15 million in losses by the end of the quarter

Good return on equity

Ordinary profit after tax of NOK 1.010 (724) million

Return on equity 10,7 (9,1) % compared to 9.7 % ex. one-time costs in 2022

EPS group 4,29 (3,08) nok

Increased activity towards the end of the period

12-month growth in lending of -0.8 (4,1) % and deposits -0,1 (1,5) %. Year-to-date lending growth -0.2 (3,1) % and deposits 1,2 (2,5) %

12-month lending growth in corporate market of -3.1 (5,5) % and retail market -0,2 (3,7) %. Deposit growth of - 2.9 (-4,1) % and 1.3 (4,7) % respectively

Year-to-date lending growth in corporate market of - 1.1 (6,6) % and retail 0,1 (2,2) %. Deposit growth of -0,6 (- 0,8) % and 2,1 (4,4) % respectively

Økning i netto renteinntekter

• Increased net interest income by 3.3 percent from the second quarter
• driven by higher market interest rates

The net interest income is showing marginal growth, while the income from subsidiaries has decreased in the quarter

The bank has adjusted customer rates following changes in the Central Bank's interest rates

Norges Bank	22. Sept.	3. Nov.	15. Dec.	23. Mar.	4. May	22. Jun	17. Aug.	21. Sep.
	22	22	22	23	23	23	23	23
Effect new loans	28. Sep.	8. Nov.	20. Dec.	29. Mar.	10. May	27. Jun.	22. Aug.	27. Sep.
	22	22	22	23	23	23	23	23
Existing corporate loans and deposits	12. Oct. 22	23. Nov. 22	3. Jan. 23	13. Apr. 23	25. May 23	12. Jul. 23	6. Sep. 23	12. Oct. 23
Existing retail loans and deposits	9. Nov. 22	21. Dec. 22	31. Jan. 23	11. May 23	22. Jun. 23	9. aug. 23	23. Oct. 23	28. Nov. 23

Note: from second half of 2022

Stable operating costs

Operating costs ex. one-off cost (mNOK) 284 354 ^{314 308 321} Q3 22 Q4 22 Q1 23 Q2 23 Q3 23

Increased operating costs in second quarter compared to same period last year of 37 mnok of which 14 mnok in parent bank and 23 mnok in subsidiaries

Increased operating costs at the parent bank are due to increased personnel costs, both directly and indirectly through consultants for the implementation and compliance of regulatory requirements, increased ICT costs, and underlying price growth.

The increase in the subsidiaries are mainly tied to new accounting house in Telemark with full effect from 2023 in addition to price and income growth

Reduced cost ratio

• Within the cost target for the parent bank

Solid return on equity

• Return on equity at 9.4 percent for the quarter and 10.7 percent year-to-date.
• Growth in earnings for both corporate and retail segments compared to the same time last year but a decrease from the previous quarter.

High capital and equity ratio

1) Starting from Q4.22 the capital ratio is at the group level, meaning subsidiaries and joint ventures are consolidated. Comparable figures have not been restated. Calculating the year-end capital ratio, the expected dividends are considered, including both regular and extra dividends

23

Weak activity also in the 3rd quarter

Our growth ambitions remain, but growth must be profitable and the risk in line with the bank's profile

Reduced in deposits in the 3dr quarter

72 percent of the bank's deposits are within the Deposit Guarantee Scheme – 40 percent CM and 90 percent RM

Lending and deposit volumes with pt-, fixed and NIBOR rates

Big proportion of loans to the retail market

No major change from Q2 in the distribution of the corporate market looking at sector and geography

The bank has a solid overweight position in favorable risk class within the corporate market portfolio

Low leverage on commercial loans secured on property (total-distributed)

• The average LTV on commercial loans secured on property including loans transferred to SB1 Næringskreditt and housing cooperatives is 39.6 %, while LTV on own balance sheet is 40.2 %. LTV ex. Housing cooperatives is 51.7 %
• Commercial loans secured on property inc. housing cooperatives is approx. 17 BNOK and 12 BNOK ex. housing cooperatives

1) The calculation of LTV is based on the market value of the collateral. With total-distributed LTV, the whole of the loan is assigned to the same interval. The figures include portfolio transferred to SpareBank 1 Næringskreditt AS.

30

Low leverage on commercial loans secured on property (interval-distributed)

1) LTV interval-distributed: The calculation of LTV is based on the market value of the collateral. In the case of interval-distributed LTV, the loan will be distributed / split within the specific intervals in the graph interval. The figures include portfolio transferred to SpareBank 1 Næringskreditt AS

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Retail market portfolio is stable over time, has a solid overweighting and positive trend in good risk classes

Low risk in the mortgage portfolio (total-distributed)

• The average LTV on the mortgage portfolio incl. loans transferred to SB1 Boligkreditt is 47.1 % which is a reduction right below 0.1 percentage point compared to the previous quarter (47.2 %)
• Similarly, LTV on own balance sheet has decreased from 51,9 % at the end of last quarter to 51.8 % at the end of this quarter

1) Loan-to-value ratio for mortgages incl. BK – LTV total-distributed: The calculation of LTV is based on the market value of the collateral. With total-distributed LTV, the whole of the loan is assigned to the same interval. The figures include portfolio transferred to SpareBank 1 Boligkreditt AS

Low risk in the mortgage portfolio (interval-distributed)

1) Loan-to-value ratio for mortgages incl. BK – LTV interval-distributed. Retail customers with a mortgage on property; lending volume as a percentage of total collateral. LTV is interval-distributed by distributing/splitting individual loans within the specific intervals in the graph

Good quarter for BN Bank with increased net interest and solid growth. Negative results from SB1 Gruppen

• SpareBank 1 Gruppen has implemented IFRS 17 and IFRS 9 per 1.1.2023. Comparable numbers for 2022 have not been restated to IFRS 17 and IFRS 9.
• SpareBank 1 Gruppen's consolidated result after tax in the 3rd quarter was negative -64 (-444) mNOK. The quarter was characterized by the weather phenomenon "Hans" and heavy rainfall in Eastern Norway. The weather events from August are estimated to have a net impact of 453 mNOK as of September. Additionally, there was an increased frequency of insurance claims and average claim costs on the main products at Fremtind, as well as a negative contribution from Kredinor due to a write-down in the portfolio.

LCR portfolio 30.09.2023

• The LCR portfolio end of quarter was of 10.4 BNOK, of which short term placement on 1.4 BNOK. Credit duration of 2.5 years and 1.4 month in short portfolio
• LCR of 226 (153) % and 237 (165) % average year-to-date 2023.
• The bank's liquidity position at the end of the first half is very strong

Good spread in the banks funding

Development in Equity Certificates of SOON

20 Biggest owners of equity certificates

20 Biggest owners of equity certificates

		% av totalt antall EK
egenkapitalbeviseierne De 20 største per 30.09.2023	Antall	bevis
SPAREBANK 1 STIFTELSEN BV	24.141.356	17,2 %
SPAREBANKSTIFTELSEN TELEMARK	18.910.174	13,5 %
SPAREBANKSTIFTELSEN SPAREBANK 1 MODUM	18.444.646	13,2 %
NØTTERØY-TØNSBERG SPAREBANKSTIFTELSEN	10.925.503	7,8 %
SPAREBANKSTIFTELSEN TELEMARK - HOLLA OG LUNDE	10.273.723	7,3 %
VPF EIKA EGENKAPITALBEVIS	4.169.991	3,0 %
SPESIALFONDET BOREA UTBYTTE	3.866.798	2,8 %
PARETO INVEST NORGE AS	2.757.852	2,0 %
BRANNKASSESTIFTELSEN MIDT-BUSKERUD	2.659.369	1,9 %
KOMMUNAL LANDSPENSJONSKASSE GJENSI	1.580.645	% 1,1
CATILINA INVEST AS	912.032	0,7 %
WENAASGRUPPEN AS	907.432	0,6 %
Landkreditt Utbytte	903.455	0,6 %
MELESIO INVEST AS	886.937	0,6 %
SANDEN EQUITY AS	707.494	0,5 %
FORETAKSKONSULENTER AS	621.230	0,4 %
SKOGEN INVESTERING AS	605.000	0,4 %
AARS AS	484.737	0,3 %
HAUSTA INVESTOR AS	420.000	0,3 %
TROVÅG AS	418.792	0,3 %
Sum 20 eiere av egenkapitalbevis største	104.597.166	74,7 %

• At the end of the quarter, the number of quity certificate holders is 5,833 (6,036).
• The 20 largest owners are listed with 74.7 % of the ownership capital. Of this, the five savings bank foundations own 59.0 %
• At the end of the quarter, the price of the bank's equity certificate was 51.00 nok

Corporate social responsibility and sustainability

SpareBank 1 Sørøst-Norge will be responsible by preventing and detecting financial crime, be climate proactive and help customers be the same and be socially engaged

Monthly meetings in the sustainability council Updates and next steps per department

Green portfolio Green bonds of 4.6 BNOK¹ Green investments of 1.1 BNOK² Green mortgages of 2.6 BNOK³

Responsible business

Preventing financial crime All employees are involved in the group ESG effort and takes actions for sustainability in own house Competence enhancement The Group's property strategy takes sustainability into account

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Equality, diversity and inclusion The Equality, Diversity and Inclusion policy was adopted in the first quarter

1) Per end of quarter (21 % of the bank's external funding 2) 12,3 % of total liquidity portfolio 3) 3.6 % of total lending portfolio on own balance sheet

Contact details

Address Fokserødveien 12 Postboks 216 3201 Sandefjord

sb1sorost.no

Per Halvorsen CEO

Tel +47 934 07 441 E-mail; Per.Halvorsen@sb1sorost.no

Roar Snippen CFO/IR

Tel +47 976 10 360 E-mail; Roar.Snippen@sb1sorost.no

Mona Storbrua Head of treasury (IR)

Tel +47 916 39 833 E-mail; Mona.Storbrua@sb1sorost.no