Presentation Sparebanken Hedmark March 2009

Our Vision Creating together Photo: Liv Øverland Kornerud

Sparebanken Hedmark A modern savings bank with 160-year old roots Merger of 22 local savings banks in Hedmark Highest rated regional savings bank in Norway* *DnB Nor Markets Ratings

Has some 160,000 customers, meaning that more than half of Hedmark’s population has a customer relationship with the Bank Is the leading bank for commerce and industry in Hedmark, financing more than half of all business in the county Has some 550 employees including subsidiaries Member of the SpareBank1 Alliance Norway’s 6th largest savings bank Number 10 among all banks A self-owned institution - No Primary Capital Certificates issued All equity is retained earnings And; High equity capital more important than return on equity capital Sparebanken Hedmark

Rank Total Assets Total Assets in billion NOK DnBNOR 2.SpareBank 1 SR-Bank 3.Sparebanken Vest 4.SpareBank 1 SMN 5.SpareBank 1 SNN 6.Sparebanken Hedmark 7.Sparebanken Møre 8.Sparebanken Sør 9.Sandnes Sparebank 10.Sparebanken Øst

Sparebanken Hedmark

Hedmark – our Core Market Norway's 3rd largest county when it comes to area – km2 (8.5% of Norway's total area) inhabitants (4.2% of Norway's total population) Hamar – the capital of the county – is situated 130 km north of Oslo Business: –6% (2%) of the county's (Norway's) GDP comes from agriculture and forestry. –25% (37%) comes from industry. –70% (61%) from the service sector.

Strategic Goals Hedmark –Sparebanken Hedmark shall remain an independent and attractive partner for its customers and in that way contribute to growth and development within Hedmark High equity capital –Equity capital ratio more important than return on equity capital –Capital adequacy ratio at minimum 12% Return on equity –before taxes shall be at least equivalent to 6 percentage points above the yield on long-term government bonds

A True Multi Channel Strategy 31 offices within the county of Hedmark Branches in 20 out of 22 municipalities in Hedmark The first European bank with internet banking services (September 1996) Mobile bank services Customer service center open until late in the evening

Credit Policy; The Church Tower Principle Target customers: –Private individuals –Small and medium-sized enterprises –The public sector within Hedmark

Loan Portfolio

Our Customers

Information Siv Stenseth Chief Executive Officer Harry Konterud Operations and IT Dag-Arne Hoberg Risk Management Vidar Nordheim Corporate Market Nils Arne Nordheim Organization Economy Arne Grunt Finance Cathrine Mordal Organization and HR Eldar Kjendlie Investment centre Tor M. Nygård Retail Market Kari Elise Gisnås Tore Anstein Dobloug on leave until

The SpareBank 1 Alliance One of the largest providers of financial products and services in the Norwegian market The SpareBank 1 Alliance's main goal is to ensure the individual bank's independence and regional foundation through strong competitiveness, profitability and financial soundness The alliance comprises approximately 350 offices and branches all over Norway Figures as at 1st Quarter 2008 Total assets: NOK 440 billion No. of branches: 350 No. of employees: No. of Internet banking customers :

The SpareBank 1 Alliance SpareBank 1 Gruppen AS is a holding company owned by Sparebanken Hedmark (12%), SpareBank 1 Nord-Norge (19,5%), SpareBank 1 Midt- Norge (19,5%), SpareBank 1 SR-bank (19,5%), Samarbeidende Sparebanker AS (19,5%) and Norwegian Federation of Trade Unions (10%) SpareBank 1 Gruppen AS owns companies that provide general insurance, life insurance, fund management and other financial products and services to SpareBank 1 banks and their customers. Motivation for the investment: –Strengthen our leading position as an independent bank –Marketing and products –Cost synergies –Competence

Eiendoms- Megler 1 (Bank-owned) SpareBank 1 Bilplan (19.9 %) First Securities (24.5 %) SpareBank 1 Boligkreditt (Bank-owned) Actor Fordr. forv. (90 %) The SpareBank 1 Alliance SpareBank 1 Livsforsikring (100 %) SpareBank 1 Skadeforsikring (100 %) Bank 1 Oslo (100 %) ODIN Forvaltning (100 %) SpareBank 1 Gruppen AS SpareBank 1 Nord-Norge SpareBank 1 Midt-Norge SpareBank 1 SR-Bank Sparebanken Hedmark LO Samarbeidende Sparebanker 19.5 % 19.5 % 19.5 % 12 % 19.5 % 10 % Bank Co-operation Programme Centres of Excellence IT operations and development Internet and telephone banking Risk Management Credit Systems Competence building Payment - cards and services Brand building Industrial and structural matters

Balance Sheet (Group) as at (NOK) Assets Cash and Deposits with Central Bank 1,9 bn Lending to/deposits with Credit Institutions 0,3 bn Lending to Customers 34,5 bn Commercial Papers and Bonds 3,0 bn Shares (SB1, 0,45 bn) Fixed and intangible Assets Other assets 1,0 bn 0,4 bn 1,3 bn Total Assets42,4 bn Liabilities and Equity Loans and Deposits from Credit Institutions 4,8 bn Deposits from Customers Borrowing through the issue of Securities Other Liabilities Equity (retained earnings) Total Liabilities and Equity 22,4 bn 9,2 bn 1,6 bn 4,4 bn 42,4 bn

Profit and Loss Account as at – Group (NOK) IFRS Result before tax parent bank227 Net other operating income: SpareBank 1 Gruppen AS SpareBank 1 Østlandet Finans AS Hedmark Eiendom AS Badwill BN-Bank Others Dividend Group Result 2008 before tax Result as percent of total assets (avg.) Capital adequacy ratio (parent) 418 1,05 % 12,2 %

Profit and Loss Account – Parent Bank (NOK) IFRS 2006 IFRS 2007 IFRS 2008 Net interest income Other income Contribution margin Operating costs Res. before loan losses Net losses Result before tax

Loans - Controlled Growth :NGAAP, : IFRS

Deposits – Overall Coverage as at : 68,6% :NGAAP, : IFRS

Equity Capital* → More than 10% of Total Assets *Only retained earnings :NGAAP, : IFRS

Main Figures – Last 5 Years Parent Bank (NOK million) Result before taxes Result before taxes in %0,58%1,27%1,40%1,48%1,45% Return on equity5,9%13,1%14,2%14,3%13,4% Total assets Gross lending Growth in gross lending4,3%7,7%12,8%13,9%10,0% Deposits from customers Growth in deposits6,9%10,7%12,5%5,6%5,9% Equity Capital adequacy ratio12,2%13,9%13,1%15,2%15,5%

Result –The pre-tax result as at totals NOK 227 million, or 0,58% of average assets. –Pre-tax return on equity capital is 5,9%. Corresponding figures a year ago were NOK 464 million, 1,27% and 13,1%. Group Result –The result for the Group as a whole amounted to about NOK 418 million before tax. Net interest income of NOK 847 million, which was NOK 58 million up on the year before Interest margin –As at , the interest margin was 2,54% (7,52-4,98) , the margin was 2,60% (6,07-3,47). –Lending margin based on 3 months NIBOR was 1,22% (7,52-6,30). –Deposit margin was 1,32% (6,30-4,98). Result as at – Parent Bank

Other (non-interest) income totals NOK 20 million, down by NOK 233 million in last 12 months. Operating costs –As at , total operating costs was NOK 574 million, equivalent to 1,46% of average assets. –The corresponding figures for 2007 were NOK 562 million and 1,54% respectively. Losses on loans –Losses on loans and guarantees totally NOK 66 million. Individual losses amounted to NOK 48 million and collective write-downs totally NOK 18 million. Loans/deposits –During the last 12 months, loans grew by 4,3%, deposits by 6,9%. Result Parent Bank (cont.)

Risk exposure – Interest Bearing Securities Net return on interest bearing securities as at : -3,79 % (based on market values) Norwegian finance "not rated": senior debt in Norwegian savings banks Tier 1, Tier 2, Hybrid capital: NOK 85 million Foreign industry: GE ABS: EUR 17,6 million, AAA and AA (RMBS) AAAAAABBBIkke ratetSum Municipals 51 Norw. Finance Norw. Industry Foreign Finance Foreign Industry 88 SUM

Other Risk Exposure Gross FX position: NOK 65 million (1,48 % of equity) Interest risk with 1 % change in interest rates: NOK 19,8 million (0,5 % of equity) Total portfolio of listed shares and funds: NOK 115 million (2,9% of equity) No other credit exposure

Funding A conservative policy

Funding Strategy Deposits from customers minimum 60 % Minimum 6 months without external funding → Low refinancing risk. A long term and well diversified funding profile. Target 3 years (average life of long-term liabilities) The amount of long term funding maturing shall be approximately the same amount each year The Norwegian market will continue to be the main funding source, but a considerable share (20 %) of the bank's total funding will be done in foreign markets

Funding – low exposure to financial turmoil The overall deposit coverage ratio year end 2008 was approximately 69%. The average life of long-term liabilities as at was 3,6 years (included short term). External funding totalled about NOK 14 billion. –About NOK 9,5 billion long-term loans –About NOK 1,5 billion certificates –About NOK 3,0 billion in Euro-funding (no exchange risk) Drawing rights facilities of NOK 3,7 billion Liquidity portfolio of bonds and cash about NOK 3,0 billion Untapped potential in covered bonds Low refinancing risk –Long maturities for liabilities –A liquid securities portfolio –Drawing rights facilities –Covered bonds The Bank can continue its operations for more than 12 months without injection of liquidity.

Liquidity – strong position

Funding as at

Funding

Contact list Treasury & Finance Department: Cathrine Mordal, Acting Head of Treasury & Finance Department Phone: International Payments & Correspondent Banking: Paul Arild Tofastrud, Head of Team Phone: Mail:

Where to find us Visiting address: Strandgata 15, Hamar Mailing address: P.O. Box 203, N-2302 Hamar Telephone: Web-site: