SpareBank 1 SMN

Investor Presentation • Aug 11, 2022

Second quarter 2022

11th of August 2022

Trond Søraas CFO

Q2 2022 Solid results

• Solid Q2 results despite volatile financial markets growth, revenue increase and good profitability from the bank and subsidiaries, but lower return on financial investments this quarter. Solidity remains strong
• Net reversal of loan losses in Q2 due to reduction in stage 3 volume related to a large exposure and improved outlook within offshore. Strong credit quality in corporate and retail portfolio alike
• Policy rate raised to 1.25% in June, and SMN raised mortgage and deposit rates with effect from August 2022
• SMN strengthens its position as the leading finance services group in Trøndelag and Møre og Romsdal
• Agreement of intent to merge with SB 1 Søre Sunnmøre to increase the focus in Sunnmøre and in Fjordane
• SB1 Markets strengthens its position in the capital market and is joined by SpareBank 1 SR-bank and SpareBank 1 Nord-Norge

Q2 2022

Net profit NOK 702m (755)

Return on equity 12.9% (14.3)

CET1 ratio 18.8% (18.3)

Lending growth 2.8% (2.0) in Q2 and 8.7% (7.9) YoY

Deposit growth 8.6% (7.6) in Q2 and 12.4% (16.8) YoY

Loan losses NOK +48m (NOK -59m)

Book value per EC NOK 102.91 (100.18) Result per EC NOK 3.20 (3.51)

The Mid-Norwegian economy is robust facing international unrest

Record low unemployment

A strong labour market with labour shortage. Nordland and Trøndelag with the lowest unemployment

Wholly unemployed as a percentage of the labour force

Low housing supply and increased housing prices

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

Sources: NAV, SSB, NordPool and Brønnøysundregisteret

Relatively low electricity prices in Mid-Norway

Increased hydro reservoir levels and lower 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

Normalising number of bankruptcies

Bankruptcy rates remains lower than pre-pandemic levels. Construction and service industry have the most bankruptcies – SB 1 SMNs share of bankruptcies at 8.7% the last 12 months

Number of bankruptcies in Trøndelag and Møre og Romsdal

High activity reflected in all parts off the group

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

have entered an agreement of intent to merge

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

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 non-profit causes in Sunnmøre

7 Second quarter 2022 Second quarter 2022

7

SpareBank 1 Markets strengthens its position in the capital market – larger and more robust markets operation in Oslo, Trondheim, Tromsø and Stavanger

• SpareBank 1 SR-Bank and SpareBank 1 Nord-Norge are to transfer their markets business to SpareBank 1 Markets and are also buying into the company in the form of a cash payment
• SpareBank 1 Markets will become a more diversified and robust company with higher revenues and a strenghtened organisation with experienced and competent employees, greater proximity to customers and improved coordination with the SpareBank 1 banks

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 strenghtens 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

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

Profitable and solid

Return on equity

CET1 ratio

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

Profits 1st half and quarterly

NOK mill	2022	2021	Change	Q2 22	Q1 22	Q4 21	Q3 21	Q2 21
Net interest income	1,559	1,366	193	801	758	723	707	698
Commission income and other income	1,382	1,538	-156	745	637	671	623	748
Operating income	2,941	2,904	36	1,546	1,395	1,394	1,330	1,445
Total operating expenses	1,520	1,531	-11	758	762	765	698	735
Pre-loss result of core business	1,421	1,374	47	788	632	629	633	711
Losses on loans and guarantees	-48	98	-146	-48	0	3 2	3 1	3 9
Post-loss result of core business	1,469	1,276	193	836	632	597	601	672
Related companies	139	340	-201	7 7	62	186	179	212
Securities, foreign currency and derivates	141	220	-79	-33	173	3 3	69	5 9
Result before tax	1,748	1,836	-87	880	868	816	849	942
Tax	348	322	25	178	169	112	175	191
Result investment held for sale	-1	10	-10	0	-1	0	1	4
Net profit	1,400	1,523	-123	702	698	703	675	755
Return on equity	12.6 %	14.5 %		12.9 %	12.5 %	12.7 %	12.4 %	14.3 %

Lending and deposits

Lending growth RM 7.4 % (CAGR)

Lending growth CM 7.2 % (CAGR)

Lending

Total loans NOK 206bn, YoY growth of 8.7 per cent

Market growth in mortgages 4.5 per cent (C2) last 12 months (June 2022)

Deposits

Total deposits of NOK 124bn, growth of 12.4 per cent YOY

Deposit-to-loan ratio 60 per cent (58 per cent)

Deposit growth RM 9.1 % (CAGR) Deposit growth CM 13.1 % (CAGR)

Margins versus 3M NIBOR

Policy rate raised to 1.25% in june. Norges Bank revised its rate path upwards and are projecting a policy rate of 3.0% towards the summer of 2023

Repricing of mortgages with effect from mid-November 2021, February 2022 and May 2022. Further raise in August 2022

Deposit rates are increased as the key policy rate increases

Lending

CM RM

Robust income platform

Net interest income and other income Commission income

Commission income Boligkreditt and Næringskreditt Net interest income

NOK mill	Q2 22	Q1 22	Q4 21	Q3 21	Q2 21
Payment transmission income	72	60	72	61	56
Credit cards	1 5	1 6	1 4	1 4	1 3
Commissions savings and asset mgmt	1 0	9	1 3	1 7	1 4
Commissions insurance	59	57	55	54	53
Guarantee commissions	8	1 8	2 2	1 3	1 4
Estate agency	125	94	100	107	131
Accountancy services	167	156	114	114	154
Securities	198	124	158	110	182
Other commissions	9	1 4	1 7	7	1 4
Commissions ex. Bolig/Næringskreditt	664	549	565	497	631
Commissions Boligkreditt (cov. bonds)	77	84	102	123	113
Commissions Næringskreditt (cov. bonds)	4	4	3	3	4
Total commission income	745	637	671	623	748

Costs

Total costs around the same level as the previous quarter

Increased costs in SpareBank 1 Markets and EiendomsMegler 1 following a quarter with high activity and increased revenue

Reduced costs in the parent bank compared to Q1 mainly due to:

• Costs related to regulatory requirements
• Technology costs
• Adaptation of office premises

In addition, some costs have been booked earlier in 2022 than in 2021

Total quarterly costs (NOKm)

Reduced losses

Net reversal of loan losses in Q2 2022

Improved earnings and outlook in offshore, and 54 NOKm reversal of loan losses in Q2

The credit quality in the corporate portfolio remains solid

Low bankruptcy rates in Mid-Norway in 2021 and 2022

93 per cent (190.5 NOKbn) of the loan portfolio is in stage 1

Loan losses (NOKm)

Distribution of losses Q2 22 (NOKm) Distribution of loans 30.6.22 (NOKbn)

3

2

Robust loan portfolio

Lending per 30.6.22 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 (95% within 85% LTV)
• Low default rates

estate share of lending

Improvement within the offshore segment

• Increased activity in offshore service and subsea and increased investment spending within oil, gas and offshore wind
• Increase in rates and longer contracts within supply
• Seismic remains challenging, but there are new opportunities within carbon capture and offshore wind

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

• A well functioning transaction market in Trøndelag with record transaction volume in 2021. Expect that higher interest rates will increase debt burden and yields
• Increased uncertainty in housing projects due to access and costs of materials and labour as well as higher interest rates
• Offices, hotels, restaurants and retail trade transitioning towards post-pandemic normalisation. In general there are labour shortage challenges and uncertainty with regards to possible change in spending patterns

Strong solidity

CET1

FSA announced on 30. April 2020 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 Q2 following:

• Strong retained earnings
• Increased SME-discount
• Dividends from SpareBank 1 Gruppen
• A large exposure removed from probation

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

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

Commission income 1st half and quarterly

mill NOK	2022	2021	Change	Q2 22	Q1 22	Q4 21	Q3 21	Q2 21
transmission income Payment	132	105	2 7	72	60	72	61	56
Credit cards	30	2 7	3	1 5	6 1	1 4	1 4	3 1
Commissions savings and asset mgmt	9 1	2 9	-10	0 1	9	3 1	1 7	1 4
Commissions insurance	116	105	2 1	59	57	55	54	53
commissions Guarantee	2 7	2 9	-2	8	8 1	2 2	3 1	1 4
Estate agency	219	234	-15	125	94	100	107	131
services Accountancy	323	301	2 2	167	156	114	114	154
Securities	322	457	-134	198	124	158	110	182
commissions Other	2 4	9 1	5	9	1 4	1 7	7	1 4
Commissions Bolig/Næringskreditt ex	213 1 ,	306 1 ,	-93	664	549	565	497	631
Commissions Boligkreditt (cov bonds)	161	225	-64	77	84	102	123	113
Commissions Næringskreditt (cov bonds)	8	8	0	4	4	3	3	4
commission income Total	382 1 ,	538 1 ,	-156	745	637	671	623	748

Product companies in the SpareBank 1-alliance 1st half and quarterly

Profit share after tax

NOK mill, SMN's share in parentheses	2022	2021	Change	Q2 22	Q1 22	Q4 21	Q3 21	Q2 21
SpareBank 1 Gruppen (19.5%)	2 9	215	-186	16	13	173	83	148
SpareBank 1 Boligkreditt (20.9%)	-8	7	-15	-4	-5	-2	11	3
SpareBank 1 Næringskreditt (14.9%)	2	7	-6	2	0	0	-1	4
BN Bank (35.0%)	96	82	14	47	49	42	40	42
SpareBank 1 Kreditt (18.7%)	0	0	0	3	3	2	10	1
SpareBank 1 Betaling (21.5%)	-6	-6	0	0	-5	-9	0	-5
SpareBank 1 Forvaltning (19.6%)	18	8	11	11	8	12	13	8
Other companies	1	2 5	-24	2	-1	-32	-2	11
Sum associated companies	139	340	-201	77	62	186	179	212

Profit before tax

mill in share parentheses NOK SMN's ,	2022	2021	Change	Q2 22	Q1 22	Q4 21	Q3 21	Q2 21
EiendomsMegler Midt (87%) 1 -Norge	52	62	-10	38	1 4	1	8	41
SpareBank Regnskapshuset SMN (89%) 1	54	60	-6	30	2 3	3	2 1	33
Finans Midt SpareBank (56 5%) 1 -Norge	97	118	-22	50	47	45	35	63
SpareBank Markets (67%) 1	118	179	-61	79	39	51	2 3	62
SpareBank (100%) 1 SMN Invest	104	130	-26	-29	132	-4	61	2 1
companies Other	3	3	0	1	1	0	1	2
Subsidiaries	427	553	-125	170	257	97	149	223

Return on financial investments

1st half and quarterly

mill NOK	2022	2021	Change	Q2 22	Q1 22	Q4 21	Q3 21	Q2 21
gain/(loss) stocks Net on	102	125	-22	-35	137	1 5	36	2 3
gain/(loss) financial instruments Net on	-92	1 6	-108	-82	-10	-9	1 4	-4
gain/(loss) forex Net on	37	31	6	2 9	7	2 4	6 1	1 5
gain/(loss) stocks and stock derivatives Markets Net SB1 on	89	2 8	61	52	37	1	2	8
financial instruments Net return on	136	199	-63	-36	172	32	68	2 4

Equity certificate, key figures

figures Key	Q2 22	Q2 21	2021	2020	2019	2018
ratio ECC	64 0 %	64 0 %	64 0 %	64 0 %	64 0 %	64 0 %
issued (mill) Total ECCs	129 31	129 36	129 39	129 39	129 30	129 62
price ECC	80 115	119 20	149 00	97 60	100 20	84 20
Market value (NOKm)	14 974	15 420	19 279	12 629	12 956	10 914
Booked equity capital ECC per	102 91	100 18	103 48	94 71	90 75	83 87
earnings in Post-tax ECC NOK per ,	6 39	6 90	13 31	8 87	12 14	9 97
Dividend ECC per			7 50	4 40	6 50	5 10
P/E	9 06	8 50	11 19	11 01	8 26	8 44
Price equity capital / Booked	1 13	1 19	1 44	1 03	1 10	1 00

Balance sheet

	30/6/22	30/6/21	30/6/20
available Funds	49 7	41 7	38 3
loans Net	6 147	140 4	129 4
Securities	2 4	2 0	1 7
in companies related Investment	7 5	3 7	6 8
Goodwill	0 9	0 9	0 9
Other assets	9 4	8 1	13 4
Total Assets	217 5	200 4	190 5
Capital funding market	6 57	9 57	60 0
Deposits	123 8	110 1	94 3
liabilities Other	10 9	8 1	14 1
Subordinated debt	2 1	1 8	1 8
Equity hybrid bonds ex	21 7	21 1	19 1
Hybrid bonds	1 3	1 3	1 3
liabilities equity Total and	217 5	200 4	190 5
addition loans sold Boligkreditt and Næringskreditt In to	56 8	47 1	44 5

Potential problem loans

Loans to customers in stage 3

In per cent of gross loans Loans to customers in stage 3

Decrease in Q2 22 following a recovery in several exposures

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 ample liquidity and the markets for the bank's financial instruments are functioning satisfactorily.

The bank has a conservative liquidity strategy. The LCR is 204 per cent as at 30 June 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 57bn (47bn) had been sold to these mortgage companies as at 30 June 2022

In the second quarter SpareBank 1 SMN issued a senior bond of NOK 1.8bn with a five-year maturity and MREL funding of NOK 1.5bn.

As at 30 June 2022 SpareBank 1 SMN held NOK 5.5bn in senior non-preferred debt (MREL). SpareBank 1 SMN will meet the MREL requirements by the end of 2023.

Maturity structure as at June 30 2022 (NOKbn)