SpareBank 1 SMN

Investor Presentation • Oct 28, 2022

Third quarter 2022

28th of October 2022

Q3 2022

Profitable and solid

• Return on equity 12.0% year to date Driven by growth, increase in revenues from business areas and low loan losses
• Q3 results are impacted by higher interest rates, Seasonal effects in subsidiaries, weak results from SB1 Gruppen, SB1 Markets and financial investments
• Seeing signs of economic cool down But the savings bank model gives a competitive edge and enables growth in times of uncertainty
• SMN is well capitalised with a good dividend distribution capacity A robust loan portfolio with continued low loan losses
• The boards of directors of SpareBank 1 SMN and SpareBank 1 Søre Sunnmøre have approved a plan for merging the two banks

The overarching goal of the merged bank is to create a stronger regional bank with growth ambitions in Sunnmøre and Fjordane

Q3 2022

Net profit NOK 617m (675)

Return on equity 10.9% (12.4)

CET1 ratio 19.2% (18.1)

Lending growth 1.7% (1.6) in Q3 and 8.8% (7.0) YoY

Deposit growth -2.6% (-0.4) in Q3 and 9.9% (15.0) YoY

Loan losses NOK 22m (NOK 31m)

Book value per EC NOK 107.19 (103.57) Result per EC NOK 2.89 (3.22)

The Mid-Norwegian economy is robust in a challenging macro environment

Low unemployment

The labour market is still tight. Nordland and Trøndelag with the lowest unemployment

Wholly unemployed as a percentage of the labour force

Housing prices

Strong price growth in Trondheim since 2015, although below Norway as a whole

Sources: NAV, SSB, NordPool and Brønnøysundregisteret

Relatively low electricity prices in Mid-Norway

Relatively high hydro reservoir levels and less influence from the European power market have resulted in lower electricity prices and volatility in Mid-Norway and Northern Norway compared to other Norwegian electricity price areas

Towards normalising number of bankruptcies

Bankruptcy rates remains lower than pre-pandemic levels, but retail and service industry bankruptcies increased in September – SB 1 SMNs share of bankruptcies at 9.6% the last 12 months

Number of bankruptcies in Trøndelag and Møre og Romsdal

Focusing on increasing deposits and savings rate

Personal market

Pre-tax profit (NOKm)

EiendomsMegler 1 Midt-Norge Retail Market

Joint savings effort

SpareBank 1 Spare

• With SpareBank 1 Forvaltning, the Alliance is focusing on the investments area

Growth initiatives in 2023

Deposits

• SMN are seeing an increase in interest for deposit products and have plans in place to strengthen deposit growth in the retail market
• This includes initiatives on product development and pricing for more attractive customer offerings on fixed and floating interest products

Investments

• Despite market turmoil there is great interest from high net worth individuals for wealth management services
• The ambition with SpareBank 1 Spare is to increase the savings rate in Norway, as well as the Alliance's market share within savings
• The SpareBank 1 funds were recently launched
• To make the most of the potential, SMN has strengthened its capacity with dedicated investment advisors in Trøndelag and Møre og Romsdal

Still attractive opportunities for growth in the corporate market

Corporate market

Pre-tax profit (NOKm)

Q321 Q322 +1.004 Strong growth in 2022 Q321 Q322 +1.006 Number of clients

Regnskapshuset

Corporate banking

Growth initiatives in 2023

Establishing an Oslo branch

• Gradual build up with controlled growth, limited concentration and moderate risk
• Focusing on synergies between corporate banking, the accountancy arm and SpareBank 1 Markets
• Co-located with SpareBank 1 Markets

# trondheimsreisen

• Meeting a high demand in a very attractive market area
• A strong technological community with NTNU, SINTEF, St. Olavs Hospital and technology companies
• Exploit the potential synergies between banking and accountancy services

Broad product range and diversified income platform from ownership interests

Ownership interests

Profits after tax (NOKm)

Strong brands

SpareBank 1 Gruppen Alliance collaboration on products under a joint brand, including Fremtind and SpareBank 1 Forsikring

SpareBank 1 Forvaltning ODIN Forvaltning SpareBank 1 Kapitalforvaltning

SpareBank 1 Kreditt

SpareBank 1 Betaling SpareBank 1's holding company for their share of Vipps payment solutions

BN Bank Nationwide bank in the retail and corporate market

Mortgage companies SpareBank 1 Boligkreditt SpareBank 1 Næringskreditt

Merger plan for SpareBank 1 SMN and SpareBank 1 Søre Sunnmøre approved

The boards of directors of SpareBank 1 SMN and SpareBank 1 Søre Sunnmøre have approved the merger plan

The completion of the merger is conditional on the supervisory/general meeting making the necessary resolutions as well as government approvals

The goal is to build a stronger regional bank with growth ambitions in Sunnmøre and Fjordane

«bla bla» The merger will enable better customer offerings with specialised entities and enhanced presence in the region

A savings bank foundation will be set up with its head office in Volda. The foundation will contribute to nonprofit causes in Sunnmøre

Community dividend Activities in Q3

100 neighbourhood communities were given lean-to shelters, campfire pans, benches and neighbourhood parties. In addition, hundreds of neighbourhoods were given financial support for their own initiatives.

Young voices, a programme in cooperation with NHO and LO to train young talents. As a part of the programme they got to meet Crown Prince Haakon in connection with the SIKT Conference in Trondheim

As a partner with Arctic Race and Trondheim Marathon

• We arranged Mini Arctic Race in Namsos, Steinkjer, Levanger and Trondheim
• And 620 employees participated in Trondheim Marathon

Strategy and actions 2020 - 2023

New group management team drawing members from all business lines

New distribution system Co-location at 17 finance centres Strong local presence and

digital leadership

Improved coordination

«Housing journey» and Banking + Accounting

Profitability project

Growth, streamlined operations and reduced cost base

Greater digitalisation and use of insight

Higher degree of digitalisation

Digital sales to retail customers up from 48% in 2019 to 66% so far in 2022

28% of all business start-ups in Mid-Norway have utilised our Business Start-up offering

Data-driven growth

Increased use of analytical insight in customer recruitment, sales and customer care.

Home mortgage churn reduced by 0.4% from 2020 to 2021

Simplification and automation

AML process improvements RPA production up 40% from 2020 to 2021

Head up the development of Norway's savings banks system

Eight companies acquired by Regnskapshuset SMN in the last two years

Establishing in Oslo in 2022 Synergy between banking and SB1 Markets

Agreement of intent with SpareBank 1 Søre Sunnmøre

SpareBank 1 Markets strengthens its position SB 1 Markets to take on the markets business of SB 1 SR-Bank and SB 1 Nord-Norge

Integrating sustainability into the business

Signatory to the UN Global Compact and the UN Principles for Responsible Banking

Adoption of a sustainability strategy, goals and key results. Net zero emissions by 2050

First step in the ESG effort Innovation – customer offering – climate footprint – competence - - diversity

Exploiting the power in SMN's ownership model

Priorities set for the community dividend

Community – sports and outdoor recreation – arts and culture – innovation and value creation -- sustainability

Support for non-profit causes

Amount distributed up from NOK 80m in 2019 to 250m in 2022

Increase in public involvement

More than 10,000 suggestions received on how the community dividend should be invested

10 Third quarter 2022

SpareBank 1 SMN (MING) - an attractive investment

High return over time and solidly capitalised. Efficient banking operations and unrealised income and cost synergies in the group. Shareholder-friendly dividend policy

Strong position and good growth in an attractive region and in all business lines. Diversified customer portfolio and income base

A good brand with development potential based on ownership model, presence and sustainability

Substantial underlying value through ownership positions in and outside SpareBank 1-alliansen

Well positioned in regards to consolidation among Norwegian savings banks

Financial information

Third quarter 2022

Profitable and solid

Return on equity

CET1 ratio

Earnings per equity certificate Loan losses in per cent of total lending

Profits

NOK mill	2022	2021	Change	Q3 22	Q2 22	Q1 22	Q4 21	Q3 21
Net interest income	2,370	2,073	297	811	801	758	723	707
Commission income and other income	1,921	2,161	-240	540	745	637	671	623
Operating income	4,291	4,234	57	1,351	1,546	1,395	1,394	1,330
Total operating expenses	2,208	2,228	-20	688	758	762	765	698
Pre-loss result of core business	2,084	2,006	77	663	788	632	629	633
Losses on loans and guarantees	-26	129	-154	22	-48	0	3 2	3 1
Post-loss result of core business	2,109	1,877	232	640	836	632	597	601
Related companies	248	519	-271	109	7 7	62	186	179
Securities, foreign currency and derivates	179	289	-109	3 9	-33	173	3 3	69
Result before tax	2,536	2,685	-149	788	880	868	816	849
Tax	520	497	23	172	178	169	112	175
Result investment held for sale	0	11	-10	1	0	-1	0	1
Net profit	2,017	2,199	-182	617	702	698	703	675
Return on equity	12.0 %	13.8 %		10.9 %	12.9 %	12.5 %	12.7 %	12.4 %

Lending and deposits

Lending growth RM 7.1 % (CAGR)

Lending growth CM 7.5 % (CAGR)

Total loans NOK 209bn, YoY growth of 8.8 per cent

Market growth in mortgages 4.3 per cent (C2) last 12 months (August 2022)

Credit growth is expected to be lower going forward

Deposits

Total deposits of NOK 121bn, growth of 9.9 per cent YOY

Deposit-to-loan ratio 58 per cent (57 per cent)

Deposit growth RM 9.1 % (CAGR) Deposit growth CM 13.5 % (CAGR)

Margins versus 3M NIBOR

Policy rate raised to 2.25% in September. Norges Bank's rate path indicates a policy rate of 3.0% during the winter of 2023

Mortgages have been repriced with every policy rate hike. Further increase from 10th of November

Deposit rates for corporate and retail customers alike have also been adjusted with the increasing policy rate

Lending

CM RM

Q319 Q320

Q318 Q419 Q420 Q121

-0.26

-0.37

-0.21 -0.29

Q321

-0.32

-0.16

Q122 Q322

Robust income platform

Net interest income and other income Commission income

Commission income Boligkreditt and Næringskreditt Net interest income

NOK mill	Q3 22	Q2 22	Q1 22	Q4 21	Q3 21
Payment transmission income	83	72	60	72	61
Credit cards	1 6	1 5	1 6	1 4	1 4
Commissions savings and asset mgmt	9	1 0	9	1 3	1 7
Commissions insurance	60	59	57	55	54
Guarantee commissions	1 5	8	1 8	2 2	1 3
Estate agency	105	125	94	100	107
Accountancy services	115	167	156	114	114
Securities	57	198	124	158	110
Other commissions	1 2	9	1 4	1 7	7
Commissions ex. Bolig/Næringskreditt	473	664	549	565	497
Commissions Boligkreditt (cov. bonds)	63	77	84	102	123
Commissions Næringskreditt (cov. bonds)	4	4	4	3	3
Total commission income	540	745	637	671	623

Costs

The reduction in Group costs in Q3 are mainly due to lower variable remunerations in SpareBank 1 Markets

Year-on-year cost growth in SpareBank 1 Regnskapshuset SMN due to acquisitions

The cost increase in the parent bank is mainly related to effects from wage settlements and new hires

Total quarterly costs (NOKm)

Low losses

Offshore is continuing to improve

The credit quality in the corporate portfolio is acceptable, though the risk has increased due to high inflation and increased interest rates

No increase in bankruptcy rates in Mid-Norway through 2022

93 per cent (193.5 NOKbn) of the loan portfolio is in stage 1

Loan losses (NOKm)

1

Retail area (bank)

Retail area (SB1 Finans)

Corporate area (bank)

Corporate area (SB1 Finans)

Distribution of losses Q3 22 (NOKm) Distribution of loans Q3 22 (NOKbn)

Strong solidity

CET1

CET1 ratio of 19.2% (18.1) as at 30. September 2022

FSA announced on 30. April 2022 that SpareBank 1 SMN is to have a temporary 0.7 per cent in additional Pillar 2-requirement and Pillar 2 guidance of 1.25 per cent in addition to CET1-requirements.

Following this, the groups long term CET1 target is 17.2 per cent

CET1 ratio increased in Q3 following:

• Strong retained earnings
• Basis swap effects from SB 1 Boligkreditt
• Moderate growth in RWA

Leverage ratio

Goals

SpareBank 1 SMN aims to be the leading finance house in Central Norway and among the best performers in the Nordic region

< 2%

↓ 50%

Profitable

Return on equity 12%

Solid

CET1 ratio 17.2% Payout ratio approx. 50%

Efficient

Annual growth in group costs limited to 2% within existing business

Responsible

Net zero emissions by 2050 Halve the group's climate footprint by 2030

Markets and credit

Housing market slowdown

House sales in Mid-Norway

• Unsold houses in Mid-Norway

• % deviation between asking price and sales price

• It appears the housing market is slowing down more houses for sale, fewer prospective buyers on showings and slower sales within the new and used housing market alike

• Credit growth (C2) is decreasing expect to see a pass-through effect from higher interest rates in the economy, and that purchasing power and consumption among households decreases
• A moderate increase in loan relief applications more customers will be looking for flexible solutions and advise about their personal finances going forward
• Long credit default from the private market is stable, but increased volatility in the short defaults compared to last year
• 95 % of the exposure in the mortgage portfolio is within 85 % LTV - seeing no signs of increased losses or cases sent to debt collection

Regional macro outlook impacted by higher interest rates, taxes as well as high inflation

Growth outlook is uncertain and outlook is downgraded for multiple industries

Robust loan portfolio

Lending per 30.9.22 and change YoY (NOKbn)

The portfolio is dominated by mortgages, and the corporate portfolio reflects the composition of Mid-Norway's business sector

High share of lending to wage-earners

• Low unemployment and a substantial share of customers employed in the public sector
• Sound mortgage portfolio with low default rates

Commercial real estate will be impacted by higher interest rates and inflation

• Due to economic uncertainty, higher interest rates and yields, the situation is carefully monitored
• Commercial real estate prices in Trondheim have increased substantially less compared to the largest cities in Norway (especially Oslo) since the financial crisis
• SMNs portfolio is dominated by sqm within retail, industry, storage and offices
• The majority of tenants have a low-risk classification according to the bank's models
• 50% of the tenants have lease agreements over five years and close to 65% of total sqm was built or rehabilitated after 2010
• Stress test completed in Q1 shows a robust portfolio

Improvement within the offshore segment

• Small part of the portfolio and improved outlook

Commercial property

SMN has a smaller share of the portfolio exposed to commercial properties relative to other banks

* Numbers for Norway from Financial Stability Report 2021. Numbers for the individual banks are based on reports per Q4 2021

SMNs commercial real estate portfolio in sqm is dominated retail, industry, storage and offices

3%

Medium risk

Low risk

High risk

Highest risk

1% 3% 0%

Not classified Vacant Lowest

6% 6%

risk

Potential problem loans

• Decrease in Q2 2022 following lower exposure related to offshore
• Problem loans are based on conservative assessments

Loans to customers in stage 3

Lending to customers in stage 3 % of gross lending

SpareBank 1 SMN

CEO Jan-Frode Janson Tel +47 909 75 183 E-mail jan-frode.janson@smn.no

CFO Trond Søraas Tel +47 922 36 803 E-mail trond.soraas@smn.no

SpareBank 1 SMN Tel +47 915 07 300

www.smn.no

Appendix

Third quarter 2022

Commission income

mill NOK	2022	2021	Change	Q3 22	Q2 22	Q1 22	Q4 21	Q3 21
transmission income Payment	215	167	48	83	72	60	72	61
Credit cards	47	41	6	6 1	1 5	6 1	1 4	1 4
Commissions savings and asset mgmt	2 9	45	-17	9	0 1	9	3 1	1 7
Commissions insurance	176	159	1 7	60	59	57	55	54
commissions Guarantee	42	42	0	1 5	8	8 1	2 2	3 1
Estate agency	324	341	-17	105	125	94	100	107
services Accountancy	437	416	2 2	115	167	156	114	114
Securities	379	566	-187	57	198	124	158	110
commissions Other	36	2 6	0 1	2 1	9	1 4	1 7	7
Commissions Bolig/Næringskreditt ex	685 1	803 1	-118	473	664	549	565	497
Commissions Boligkreditt bonds) (cov	224	348	-124	63	77	84	102	123
Commissions Næringskreditt (cov bonds)	2 1	1 1	1	4	4	4	3	3
commission income Total	921 1	2 161	-240	540	745	637	671	623

Product companies in the SpareBank 1-alliance

Profit share after tax

NOK mill, SMN's share in parentheses	2022	2021	Change	Q3 22	Q2 22	Q1 22	Q4 21	Q3 21
SpareBank 1 Gruppen (19.5%)	46	298	-251	17	16	13	173	83
SpareBank 1 Boligkreditt (20.9%)	2	18	-16	10	-4	-5	-2	11
SpareBank 1 Næringskreditt (14.9%)	2	6	-5	0	2	0	0	-1
BN Bank (35.0%)	149	122	2 7	53	47	49	42	40
SpareBank 1 Kreditt (18.7%)	0	0	0	3	3	3	2	10
SpareBank 1 Betaling (21.5%)	-9	-6	-3	-3	0	-5	-9	0
SpareBank 1 Forvaltning (19.6%)	2 8	2 0	8	10	11	8	12	13
Other companies	2 0	49	-28	19	2	-1	-32	2 3
Sum associated companies	248	519	-271	109	77	62	186	179

Subsidiaries

Profit before tax

mill in share parentheses NOK SMN's ,	2022	2021	Change	Q3 22	Q2 22	Q1 22	Q4 21	Q3 21
EiendomsMegler Midt (87%) 1 -Norge	64	70	-6	1 2	38	1 4	1	8
SpareBank Regnskapshuset (89%) 1 SMN	76	82	-6	2 2	30	2 3	3	2 1
Finans Midt SpareBank (56 5%) 1 -Norge	141	151	-12	44	50	47	45	33
SpareBank Markets (67%) 1	119	203	-84	0	79	39	51	2 3
SpareBank SMN (100%) 1 Invest	73	190	-117	-30	-29	132	-4	61
companies Other	5	4	1	3	1	1	0	1
Subsidiaries	478	700	-224	0 5	170	257	97	147

Return on financial investments

1st half and quarterly

mill NOK	2022	2021	Change	Q3 22	Q2 22	Q1 22	Q4 21	Q3 21
gain/(loss) stocks Net on	36	161	-125	-66	-35	137	1 5	36
gain/(loss) financial instruments Net on	-51	30	-81	41	-82	-10	-9	1 4
gain/(loss) forex Net on	67	46	2 1	30	2 9	7	2 4	1 6
gain/(loss) derivatives stocks and stock Markets SB1 Net on	114	30	84	2 6	52	37	1	2
financial instruments Net return on	166	267	-100	31	-36	172	32	68

Equity certificate, key figures

figures Key	Q3 22	Q3 21	2021	2020	2019	2018
ratio ECC	64 0 %	64 0 %	64 0 %	64 0 %	64 0 %	64 0 %
Total issued (mill) ECCs	129 29	129 39	129 39	129 39	129 30	129 62
price ECC	111 40	129 80	149 00	97 60	100 20	84 20
Market value (NOKm)	14 402 ,	16 794 ,	19 279 ,	12 629 ,	12 956 ,	10 914 ,
equity capital Booked ECC per	107 19	103 57	103 48	94 71	90 75	83 87
earnings in ECC NOK Post-tax per ,	9 29	10 11	13 31	8 87	12 14	9 97
Dividend ECC per			50 7	40 4	6 50	10 5
P/E	9 00	8 50	19 11	01 11	8 26	8 44
Price equity capital / Booked	04 1	25 1	1 44	03 1	10 1	00 1

Balance sheet

	30 9 22	30 9 21	30 9 20
Funds available	47 7	38 6	32 1
loans Net	149 2	142 4	132 2
Securities	2 0	2 5	1 9
in companies related Investment	7 7	7 3	7 0
Goodwill	0 9	0 9	0 9
Other assets	6 11	8 4	12 8
Total Assets	218 9	200 1	186 9
Capital market funding	60 7	56 5	57 7
Deposits	120 6	109 7	95 4
liabilities Other	11 8	9 1	11 2
Subordinated debt	2 1	8 1	8 1
Equity hybrid bonds ex	22 6	21 8	19 6
Hybrid bonds	2 1	3 1	2 1
liabilities equity Total and	218 9	200 1	186 9
addition Boligkreditt Næringskreditt loans sold and In to	58 7	48 0	8 45

Development in CET1 capital and capital adequacy

Funding and liquidity

Uncertain growth and inflation prospects internationally have contributed to substantial fluctuations in financial markets and credit spreads have widened.

The bank has a conservative liquidity strategy. The LCR is 180 per cent as at September 30 2022 (190 per cent).

The bank's funding sources and products are well diversified. SpareBank 1 Boligkreditt and Næringskreditt are important funding sources. Loans totalling NOK 59bn (48bn) had been sold to these mortgage companies as at 30 September 2022

In Q3 SpareBank 1 SMN issued a senior green bond of EUR 0,5 bn with a five-year maturity and MREL funding of NOK 1.6bn.

As at 30. September 2022 SpareBank 1 SMN held NOK 7.1bn in senior non-preferred debt (MREL). SpareBank 1 SMN will meet the MREL requirements by the end of 2023.

Maturity structure as at September 30 2022 (NOKbn)