Quarterly report 2012_2nd_quarter

Second Quarter Report 2012

SpareBank1 Østfold Akershus Second quarter report 2012

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Bank. Insurance. And you

SpareBank1 Østfold Akershus Second quarter report 2012

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All numbers regard the Group unless otherwise specified. POSITIVE DEVELOPMENT IN UNDERLYING OPERATIONS AND POSITIVE QUARTERLY RESULT Year to date:

• Profit before tax: NOK 104.8 million (40.8) • Profit after tax: NOK 80.2 million (31.6) • Core capital adequacy: 13.75% (13.10) • Return on equity: 11.36% (6.23%) • Net interest income: NOK 132.8 million (98.8) • Net interest income: 1.55% (1.45) • Net commission income and other income: NOK 93.2 million

(61.6) • Net return on financial instruments: NOK 51.8 million (4.7) • Profit per primary capital certificate, year to date: 7.96 (4.16) • Lending growth including transfers to SpareBank 1 Boligkreditt

AS: 31.11% (3.0) • Lending growth after transfers to SpareBank 1 Boligkreditt AS:

21.72% (-2.74) • Deposit growth: 38.20% (8.74) • Deposit coverage: 77.90% (68.61)

Second quarter:

• Profit before tax: NOK 58.0 million (28.2) • Positive development in net interest income • Positive development in commission income • Positive development in deposit coverage • Lending growth including transfer to SpareBank 1 Boligkreditt

in the quarter was 1.42% • Deposit growth in the quarter was 4.63%

(Result to date. Numbers in brackets shows numbers for the same period in 2011.) INCOME STATEMENT Rygge-Vaaler Sparebank and Halden Sparebank merged with effect from 1 November 2011. Rygge-Vaaler Sparebank was defined as the takeover party of the merger and the name of the merged bank was at the same time changed to SpareBank 1 Østfold Akershus. The accounts to date and for the second quarter 2012 make up SpareBank 1 Østfold Akershus. In comparison, the corresponding numbers for 2011 only contain numbers for the former Rygge-Vaaler Sparebank. In addition to the official quarterly report, a pro forma quarterly report indicating result and balance sheet as if the two banks were merged effectively from 1 January 2010 was prepared. The pro forma quarterly report is published at the same time as the official quarterly report.

Several of the corresponding figures in the official quarterly report are misleading. This is a consequence of the circumstances mentioned above. We recommend that the reader uses the pro forma quarterly report to get the full benefit of these corresponding figures. Second quarter Profit before tax for the quarter was NOK 58.0 million (28.2). Result on business activities was NOK 43.9 million (26.7). The performance was influenced by an increase in net interest income and growth in commission income compared with the first quarter of 2012. The return on equity estimated on total result after tax was 13.57% (8.77).

SpareBank 1 Østfold Akershus Second quarter report 2012

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Year to date Profit before tax was NOK 104.8 million (40.8). The performance is influenced by an improvement in underlying operations through a reduction in funding costs, increase in commission income, positive return on financial instruments and positive development in the performance in SpareBank 1 Gruppen. Profit from business activities was NOK 68.2 million (47.3) at the end of the second quarter of 2012. The return on equity estimated on total result after tax was 11.36% (6.23). The Parent bank’s profit before tax was NOK 115.3 million. Profit after tax was NOK 75.8 million and is significantly influenced by two conditions that together constitute a high tax liability. Previous write-downs in connection with companies in the Fasett Eiendom group have been entered as income of NOK 52.3 million. The write-down was previously set aside for deductions in taxable income – hence, this income is taxable to the same degree and influences the tax cost in its entirety. Furthermore, shares in Fasett Eiendom AS are written-down by NOK 48.0 million. This write-down is not tax deductible and will not influence the tax cost. Regarding the accounts, the Parent bank has the same write-down of the Fasett group as earlier. However, the write-down is now entered under shares, while earlier it was entered under lending. This problem is eliminated regarding Group. Net interest income Net interest income at the end of the second quarter 2012 was NOK 132.8 million (98.8). Net interest income amounted to 1.55% (1.45) of average total assets. Development in net interest income is influenced by transfer of loans to SpareBank 1 Boligkreditt AS. The increase in net interest income from the first quarter may mainly be contributed to reduced funding costs, which is a consequence of choosing to increase transfers of lending to SpareBank 1 Boligkreditt AS instead of acquiring new external funding. Hence, the external funding in the period was reduced. The general level of the market interest was reduced, but credit mark-up in the

market is still high and costs for long-term financing increased during the quarter. The bank’s financing cost in the money market is therefore still increasing through refinancing of money market financing. At year to date, lending in the balance sheet is reduced by NOK 972.2 million. At the end of the first quarter, the loan balance transferred to SpareBank 2 Boligkreditt AS was NOK 5,292.5 million (3,238.2). Earnings from these loans appear under the item net commission income and amounted to NOK 19.9 million (10.4) as of the second quarter 2012. Net commission income and other income Net commission income and other income amounted to NOK 93.2 million (61.6) at the end of the second quarter 2012. The increase from last year mainly consists of higher income on payment transfers of NOK 8.3 million, higher income from insurance of NOK 5.1 million, higher commission from SpareBank 1 Boligkreditt AS of NOK 9.5 million and higher income from real estate brokerage activities of NOK 2.9 million. Net return on financial instruments Net return on financial instruments, including profit share in associated companies and joint ventures, amounted to a profit of NOK 51.8 million (4.7) as of the second quarter. The bank’s share and bond portfolio has at year to date had a net profit on price of NOK 5.5 million. SpareBank 1 Østfold Akershus follows a highly conservative investment philosophy. The share portfolio is very small and the bond portfolio consists entirely of high quality bonds from solid issuers with low market volatility. Net profit from the bank’s fixed rate lending amounts to a total of NOK 11.9 million, net profit from the bank’s fixed rate debt as a consequence of Fair Value Option valuation amounts to NOK 13.4 million, while dividend and income from currency amounts to NOK 4.3 and 2.4 million respectively. The Group’s share of the profit from joint ventures amounted to a total of NOK 14.4


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million at the end of the second quarter. This was distributed on NOK 9.5 million (3.5) from Samarbeidende Sparebanker AS, NOK 2 million (2.5) from Samarbeidende Sparebanker Bankinvest AS and NOK 2.9 million (0.7 million) from Samarbeidende Sparebanker Bankinvest II AS. Total income at the end of the second quarter was NOK 277.8 million (165.1). Operating costs At the end of the second quarter of 2012, the Group’s costs were NOK 157.9 million (113.1), which was 1.84 per cent (1.66) of average total assets. The increase in operating costs from the same period last year is mainly due to a larger organisation after the merger. Losses and defaults

At the end of the second quarter of 2012, the Group's losses amounted to NOK 15.2 million (11.2). This amounted to 0.18% (0.17) of average total assets. Losses in per cent of gross lending amounted to 0.23% (0.20) at the end of the second quarter of 2012. Individual write-downs amounted to NOK 66.5 million (76) at the end of the second quarter of 2012. Group write-downs were NOK 25.9 million (18.4). Group write-downs in total amount to 0.68% (0.84) of gross lending. Profit on activities and fixed assets held for sale Profit on activity held for sale amounted to a profit of NOK 0.6 million after taxes and wholly relates to Fasett Eiendom AS. BALANCE SHEET Total assets including SpareBank 1 Boligkreditt AS amounted to NOK 22,338.8 million at the end of the first quarter, which is an increase of NOK 832.2 million since the turn of the year. Total assets after transfers were NOK 17,296.2 million and amounted to a reduction of NOK 387.5 million since the turn of the year. The collective reduction is mainly due to a reduction in lending. Large transfers to SpareBank 1 Boligkreditt AS were carried out in 2012.

Capital acquisition The European crisis was all-important regarding development in most markets in the second quarter. Insecurity was great through the period, but the risk situation was worsened further in June. However, liquidity in the Norwegian financing market was good, but the European crisis led to lower emission activities in Norway as well, at the same time as prices increased. Through the entire period, SpareBank 1 Østfold Akershus has had easy access to financing in the market and issued a bond loan in the amount of NOK 300 million which falls due in 2015 at the end of the quarter. In addition, the Group has chosen to take advantage of SpareBank 1 Boligkreditt to replace the bank’s borrowing maturity. In the second quarter, a further NOK 619 million was transferred to the housing credit company. As of 30 June 2012, loans amounted to a total of NOK 5,292 million (3,238) transferred to SpareBank 1 Boligkreditt The Group’s debt incurred from issuance of securities amounted to NOK 3,961 million (4,255.8) at the end of the second quarter. In addition, the Group has a subordinated loan of a total of NOK 255.7 million and a hybrid capital of a total of NOK 204.9 million. The bank has not issued new subordinated loan capital in the last quarter (note 10). The pricing level for borrowing in the Norwegian market has increased in this quarter and credit mark-up is significantly higher than credit mark-up traditionally was for Norwegian banks. This means that refinancing of the bank’s money market financing causes an increased cost of borrowing. The bank's liquidity risk has been reduced through spreading the borrowing over various markets, lenders, instruments and terms of maturity. The Group will further adapt to the new liquidity and capital demands that are expected to be introduced sometime in the next few years, for example through increasing the share of lending with longer lifetime.


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The bank's Executive Board has adopted a liquidity strategy which includes contingency plans and stress analyses. Deposit coverage developed in a positive manner and is at the end of the year 77.9% (68.61). The Board evaluates the liquidity situation as good, but the still demanding outlook for the European economy may quickly influence financing possibilities for Norwegian banks. As a consequence, the Board and the administration will be very attentive towards the area in the time to come as well. Lending Gross lending including the transfer to SpareBank 1 Boligkreditt AS amounted to NOK 18,863.8 million at the end of the second quarter 2012. This equals a 12 month lending growth of 31.11% (3.0), a growth so far this year of 1.33% and a lending growth in the last quarter of 1.42%. Looking back at a period of time where we have had inward focus due to the merger, the Group is now rigged and ready to utilise their exciting market potential. The last quarter is a positive confirmation of our potential. After the transfer to SpareBank 1 Boligkreditt AS, gross lending amounted to NOK 13,571.3 million, equalling an increase of 21.7% (-2.74) in the last 12 months. At year to date, lending, exclusive SpareBank 1 Boligkreditt AS was reduced by NOK 972.2 million. Deposits The Group's deposits from customers have increased by 38.20% (8.74) during the last 12 months, to NOK 10,572.4 million (7,650.2). Deposit coverage was 77.9% (68.61) at the end of the second quarter 2012. At year to date, deposits from customers have increased by NOK 346.9 million (3.39%) and in the last quarter, deposits increased by NOK 467.4 million (4.63%). Capital adequacy At the end of this quarter, the core capital adequacy was 13.75% (13.10) and capital adequacy was 14.24% (14.54). Pure core capital adequacy amounted to 11.61% (11.28) at the end of the second quarter

2012. The Board regards the capital adequacy and the solidity to be satisfactory. SUBSIDIARIES The SpareBank 1 Østfold Akershus Group consists of the Parent bank and the wholly owned subsidiaries Nekor Gårdselskap AS, EiendomsMegler 1 Østfold og Akershus AS, EiendomsMegler 1 Sarpsborg AS, as well as EiendomsMegler 1 Østfold AS, as well as Uden Holding Ltd. In addition, the wholly owned Fasett Eiendom AS is consolidated under activity and fixed assets classified for sale. Nekor Gårdselskap achieved a profit after tax of NOK 1.1 million (0.8) at the end of the second quarter of 2012. EiendomsMegler 1 Østfold og Akershus AS achieved a profit after tax of NOK 0.8 million (0.6), EiendomsMegler 1 Sarpsborg AS NOK 0.6 million and EiendomsMegler 1 Østfold AS NOK 0.5 million. Profit before tax for the subsidiaries was NOK 1.5 million, NOK 1.1 million, NOK 0.8 million and NOK 0.7 million respectively. SIGNIFICANT TRANSACTIONS WITH CLOSELY RELATED PARTNERS SpareBank 1 Østfold Akershus took over the shares of Fasett Eiendom AS in the fourth quarter of 2011. These shares have still not been sold, but we have implemented measures to secure an appropriate realisation in the time to come. The take-over is classified as assets held for sale in the consolidated accounts and amounts to NOK 94.7 million. SpareBank 1 Østfold Akershus is the regular bank service provider for all subsidiaries. Any significant transactions that may be mentioned, is that Nekor Gårdselskap AS has a loan of NOK 31.6 million in SpareBank 1 Østfold Akershus, while subsidiaries of Fasett Eiendom AS has a loan of NOK 115.0 million. Also, SpareBank 1 Østfold Akershus has guarantee liabilities of NOK 60.5 million regarding EiendomsMegler 1 Sarpsborg AS and EiendomsMegler 1 Østfold AS. DIVIDEND POLICY PARENT BANK Under consideration of the bank’s equity development and solidity, the bank may


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use up to 50% of this year’s profit as returns (cash dividend and endowments to publicly beneficial purposes). It is an objective for the bank to treat the bank’s two groups of owners equally in line with the intentions in current legislations. This involves that the bank will take measures to avoid unwanted dilution effects as a result of unequal treatment of the two groups of owners. RISK MANAGEMENT Credit risk and development of portfolio The Group is working to achieve unified risk management. The risk management process aims to reflect how the management conducts the Group's business. Each risk category / area of business is allocated to the responsible manager who is responsible for carrying out risk management in line with the Group's policy. The bank’s organisational structure supports the risk management policy and provides the framework for planning, execution, control and monitoring of strategies, measures and activities. Clearly defined areas of responsibility and practical chains of reporting are emphasised. We have established efficient routines to ensure good management, control and compliance. In order to achieve the Group’s adopted objectives and strategic developments, the Board and the daily management work actively with the Group’s risk situation, so that the Group can choose goal-oriented risk management strategies. The quality of the risk handling is followed up with continuous reporting to the management and the Board. The credit risk for the loan portfolio is the bank’s largest risk area. The risk situation for the lending portfolio is therefore closely followed up by using models that monitor and calculate any fluctuations. The Group’s moderate risk profile remains unchanged in the wake of the merger. The portfolio’s risk profile in Rygge-Vaaler Sparebank and Halden Sparebank were practically identical. A continuous low interest rate level contributes to stability. The quality of the retail market portfolio is very good, and a consequence of the

continued internal focus on risk management is that the solid credit quality in the Group's portfolio is maintained. Most of the portfolio has security in real estate. Coverage of security is good, which means that there is a limited potential for loss as long as the value of the security is not considerably diminished. The quality of the corporate market portfolio is also good. Development is positive and the portfolio’s risk profile was strengthened since the turn of the year. The average probability for default of the portfolio is developing in a positive direction, especially the share of commitments highly exposed to risk. Expected loss is stable and a significant share is secured in real estate. The Group's low share of the corporate market portfolio at 22% (incl. Boligkreditt) makes the total risk profile low as well. The Group’s largest concentration is in the industry involving buying, selling and operating real estate. Liquidity risk Liquidity risk is defined as the risk of the Group not being able to fulfil its obligations and/or finance increases in the assets without significant extra costs arising. The Board has adopted a strategy for controlling liquidity. It will be reviewed at least once a year. The strategy contains specific limits and governance parameters, diversification guidelines and reporting guidelines. The strategy also includes a liquidity contingency plan. We carry out quarterly stress test analyses for the liquidity risk. The Group reduces its liquidity risk through spreading its borrowing on various markets, lenders and due dates. Insecurities in the financial markets are still apparent and the bank will keep a high liquidity reserve in the time to come as well. Market risk Market risk is the risk of losses as a result of changes in market prices such as interest rates, exchange rates and securities listings.


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Market risk in the Group mainly arises from the Group's investments in bonds, certificates and shares, and as a result of activities carried out to support the banking operations, such as funding and interest and currency trading. The market risk management takes place through detailed limits to factors such as investments in shares, bonds and positions in interest rate and currency markets. The limits are continuously reviewed and adopted by the Executive Board at least once a year. The risk size is monitored continuously and followed up through periodic reports to the Board. The bank utilises a market leading securities system to manage and control the bank’s market risk. Interest risk mainly arises from fixed rate lending and funding in fixed rate securities. As part of the continuing liquidity management, SpareBank 1 Østfold Akershus must dispose of a reserve of securities that can be utilised in several ways to regulate the Group's need for liquidity and as basis for collateral pledged in Norges Bank. The bank only has bounds to own high quality bonds. The holding of securities was NOK 1,415.5 million (1,215.8) at the end of the second quarter and is reported at fair value in the balance sheet. The currency activities are mainly in connection with customers' trading. This means that limited currency positions must be held. The Group is not much involved in currency-related instruments and the bank’s aggregate foreign currency is significantly below the maximum limits. Operational risk Operational risk can be defined as the risk of loss as a result of: • Human failure and insufficient

expertise • ICT systems failure • Unclear policies, strategies or routines • Crime and internal fraud • Other internal causes Both in the long and short term, operational risk represents a threat which

can result in significant costs. The Group must therefore always utilise efficient risk management and monitoring to ensure that isolated incidents caused by operational risk cannot seriously harm the Group's position. The Group has a moderate operational risk profile, and is working continuously to implement risk-reducing measures. OUTLOOK

The crisis in Europe has developed in a negative direction in the second quarter and the main reason for this development was increased fear for political and economic chaos in Greece and great insecurity regarding the capitalization in Spanish banks. Despite the clarifications, SpareBank 1 Østfold Akershus expects that it will take a long time before the situation in the financial markets are normalised and we expect times of great uncertainty to come. Greece is facing the implementation of a very demanding programme – a programme that it is likely that they will have big problems living up to in practical life. The crisis in Spanish banks will probably roll over us in waves, and we can also expect some political insecurity as the election in Italy approaches. However, the financial situation in Norway, where Sparebank 1 Østfold Akershus carry out their activities, is very positive and prospects for the future are positive and stable. An important objective for the Board and the administration after the merger was to improve customer orientation in the Group. During this quarter, it has been confirmed on many occasions that we are on the right track through numerous attractive customers wishing to enter into a long-term collaboration with SpareBank 1 Østfold Akershus. Underlying development in banking operations is a good foundation for optimistic belief in the future. The bank is well-equipped to strengthen their market position in an attractive, growing geographical area. The competitive situation and developments in the funding market will


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continue to be important parameters for the bank’s profit developments. Collectively, SpareBank 1 Østfold Akershus expects that development in the Group is positive in the time to come. The Board's opinion is that the bank is well-equipped to meet the volatile markets we foresee in the near future.

Jan A. Sannem Øystein Falch Jørgen Cato BrochChair Nestleder

Tom Grip Randi Sæter Tormod Melnæs

Trond Anstensrud Tove Mangård Janne-Gerd KanebogEmployee rep.

Ivar ListerudCEO

The Board of Directors of SpareBank1 Østfold AkershusMoss, 14th August 2012


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Statement from the Board of Directors and Managing Director

The Board and Managing Director have today considered and decided the accounts for the second quarter, the summarised company accounts and the consolidated accounts for the second quarter for Sparebank 1 Østfold Akershus as of 30 June 2012, including summarised corresponding figures for 30 June 2011. The semi-annual report was submitted in accordance with the requirements of IAS 34 interim reporting as determined by the EU as well as further Norwegian requirements in the legislation on trading securities (verdipapirhandelloven). In accordance with the best intentions of the Board of Directors and the Managing Director, the semi-annual accounts for 2011 have been prepared in agreement with applicable accounting standards and

the information provides a correct image of the company’s and the Group’s assets, debts and financial position as a whole as of 30 June 2012 and 30 June 2011. The semi-annual report provides a correct overview of important events in the accounting period and their influence on the semi-annual accounts. The description of the most important risk factors and uncertainties that the enterprise faces in the next accounting period, as well as the descriptions of important transactions made by closely related parties, will provide a true overview.

Jan A. Sannem Øystein Falch Jørgen Cato BrochChair Nestleder

Tom Grip Randi Sæter Tormod Melnæs

Trond Anstensrud Tove Mangård Janne-Gerd KanebogEmployee rep.

Ivar ListerudCEO

The Board of Directors of SpareBank1 Østfold AkershusMoss, 14th August 2012

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List of contents for the quarterly accounts Key figures group ………………………………………………………………………………. 12 Income statement ……………………………………………………………………………… 13 Balance sheet ........................…………......................................... 14 Changes in equity..................................................................... 15 Equity certificates ratio.............................................................. 15 Cash flow statement.................................................................. 16 Results and key figures from group quarterly account.................... 17 Notes to the accounts Note 1 Accounting principles.................................................. 18 Note 2 Losses on loans and guaranties.................................... 18 Note 3 Deposits by sector and industry................................... 19 Note 4 Gross lending by sector and industry............................ 19 Note 5 Segment informations................................................ 20 Note 6 Derivatives parent bank/group .................................... 21 Note 7 Capital adequacy parent bank/group............................. 22 Note 8 Other assets.............................................................. 22 Note 9 Other liabilities and pension liabilities............................ 23 Note 10 Debt raised by issue of securities................................. 23 Note 11 Investments in bonds ................................................ 24 Note 12 Equity certificate holders and distribution of equity capital 24

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KEY FIGURES, GROUP MAIN FIGURES

(thousand NOK) % % %

Net interest income 132 794 1.55 98 814 1.45 204,409 1.44

Net commission income and other income 93 242 1.09 61 628 0.91 196,595 1.39Net return on financial instruments 51 776 0.60 4 700 0.07 10,137 0.07

Total income 277 812 3.24 165 142 2.43 411,142 2.90

Total operating expenses 157 855 1.84 113 132 1.66 252,313 1.78

Operating profit before losses 119 956 1.40 52 010 0.77 158,829 1.12

Loss on loans and guarantees 15 186 0.18 11 235 0.17 29,724 0.21

Profit before tax 104 771 1.22 40 775 0.60 129,104 0.91

Income tax expense 25 139 0.29 9 210 0.14 12,021 0.08

Income from continuing operations 79 631 0.93 31 565 0.46 117,083 0.83

Profit from operations held for sale, net of tax 600 0.01 0.00 -8,263 -0.06

Net profit 80 232 0.94 31 565 0.46 108,820 0.77

KEY FIGURES 31.12.2011

Profitability

Return on equity after tax 1)

11.36 % 6.23 % 9.85 %Return on equity (total comprehensive income) 11.19 % 6.17 % 9.11 %

Cost ratio 2)

56.82 % 68.51 % 61.37 %

Statement of Financial Position

Gross loans to customers 13 571 264 11 149 572 14 543 513

Gross loans to customers including SpareBank 1 Boligkreditt 18 863 793 14 387 736 18 616 353Deposits from customers 10 572 461 7 650 187 10 225 580

Deposit-to-loan ratio 77.90 % 68.61 % 70.31 %

Growth in loans last 12 months 21.72 % -2.74 % 27.61 %Growth in loans including SB 1 Boligkreditt last 12 months 31.11 % 3.00 % 30.20 %

Growth in deposits last 12 months 38.20 % 8.74 % 41.04 %

Average total assets 17 200 829 13 702 829 14 170 077Total assets 17 296 239 13 940 239 17 683 749

Total assets inkluding SpareBank 1 Boligkreditt 22 338 768 16 928 403 21 506 589

Losses and non-performing commitments

Impairment losses ratio 3)

0.23 % 0.20 % 0.20 %

Non-performing commitments as a percentage of gross loans 1.63 % 0.84 % 1.56 %Other doubtful commitments as a percentage of gross loans 0.90 % 2.25 % 0.61 %

Non-performing commitments as a % of loans incl. Sp.b. 1 Boligkreditt 1.17 % 0.65 % 1.22 %

Other doubtful commitments as a % loans incl. Sp.b.1 Boligkreditt 0.64 % 1.74 % 0.48 %

Solidity

Capital adequacy ratio 14.24 % 14.54 % 14.51 %Core capital ratio 13.75 % 13.10 % 13.67 %

Net equity and subordinated loan capital 1 264 026 1 040 038 1 333 529

Core capital 1 220 349 936 769 1 255 773

Branches and staff

Number of branches 13 11 13Number of employees (full-time equivalents, annualised) 227.6 160.8 221

Equity Certificates ratio 5) 30.06.2012 2011 2010 2009 2008

Equity Certificates ratio 92.10 % 92.08 % 20.37 % 20.42 % 21.60 %

Market price 63.00 77.50 74.00 90.00 137.00

Market value mill NOK 585 720 109 133 202

Book equity per EC 6) 135.60 139.02 128.78 122.57 125.03

Earnings per equity certificates (NOK) 4)

7.96 10.79 8.57 5.25 10.68

Dividend per equity certificates (NOK) 0.00 2.00 2.36 1.60 10.50Price/Earnings per EC - annualized 3.94 7.18 8.64 17.15 12.82

Price/Book equity 0.46 0.56 0.57 0.73 1.101) Profit as a percentage of average equity

2) Total operating expenses as a percentage of total operating income

3) Net losses expressed as a percentage of average gross loans year to date, annualized

4) Profit multiplied by the equity certificates percentage divided by the average number of certificates outstanding.

5) All figures except for the EC fraction is consolidated. Amended as of 2011, comparative figures have been restated.

6) Excl earnings so far this year

1/1-30/06-2012 1/1-30/06-2011

30.06.2012 30.06.2011

Year 2011

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INCOME STATEMENT

30.06.2012 30.06.2011 Q2 2012 Q2 2011 2011 Income statement 30.06.2012 30.06.2011 Q2 2012 Q2 2011 2011

385 983 295 431 187 385 147 506 637 411 Interest income 382 115 294 482 186 912 146 992 633 457

249 724 196 269 118 141 98 233 431 286 Interest expenses 249 321 195 667 118 192 97 901 429 048

136 259 99 162 69 244 49 273 206 125 Net interest income 132 794 98 814 68 720 49 091 204 409

73 425 49 915 38 510 25 475 105 663 Commission income 97 965 64 457 52 784 33 445 138 336 6 943 4 388 3 173 1 991 9 185 Commission costs 6 967 4 388 3 186 1 991 9 196 896 121 876 113 58 410 Other operating income 2 244 1 558 1 578 801 67 455

67 378 45 648 36 214 23 598 154 889 Net commission income and other income 93 242 61 628 51 175 32 255 196 595

4 265 10 729 793 10 710 10 731 Dividend 4 265 2 921 793 2 902 2 923 21 425 218 21 425 218 Income from ownership interests 14 395 6 638 4 071 4 125 17 286- 42 469 3 817 - 1 247 984 1 530 Net gain from securities trading 5 495 3 817 - 1 247 984 1 530

29 256 8 081 16 291 2 193 13 182

Net change in value on financial assets/liabilities

assessed at fair value: 29 256 8 081 16 291 2 193 13 749

- 1 634 - 16 757 1 411 - 2 773 - 25 351Net change in value on currency and financial derivatives assessed at fair value: - 1 634 - 16 757 1 411 - 2 773 - 25 351

10 842 6 087 38 674 11 114 310 Net return on financial instruments 51 776 4 700 21 319 7 432 10 137

214 479 150 897 144 132 83 985 361 324 Total income 277 812 165 142 141 214 88 778 411 142

70 688 47 806 32 478 22 100 105 565 Personnel expenses 84 364 56 331 39 585 26 521 125 694 32 948 22 326 15 951 11 413 56 152 Administration expenses 37 575 25 222 18 678 13 007 63 200 32 824 29 134 16 355 13 861 58 777 Other operating expenses 35 917 31 580 17 733 15 118 63 418

136 460 99 265 64 784 47 375 220 493 Total operating expenses 157 855 113 132 75 996 54 646 252 313

78 019 51 632 79 347 36 611 140 831 Operating profit before losses 119 956 52 010 65 218 34 132 158 829

- 37 296 11 235 7 171 5 954 29 724 Losses on loans and guarantees 15 186 11 235 7 171 5 954 29 724

115 315 40 397 72 177 30 656 111 107 Profit before tax 104 771 40 775 58 047 28 177 129 104

39 557 8 770 14 785 5 512 10 891 Income tax expenses 25 139 9 210 15 032 5 774 12 021 75 758 31 627 57 392 25 144 100 216 Income from continuing operations 79 631 31 565 48 190 22 403 117 083

Profit from operations held for sale, net of tax 600 - 8 263 75 758 31 627 57 392 25 144 100 216 Net profit 80 232 31 565 48 190 22 403 108 820

Comprehensive income statement

75 758 31 627 57 392 25 144 100 216 Net profit 80 232 31 565 48 190 22 403 108 820

Other comprehensive income

Changes in fair value of joint ventures - 27 - 27Changes in market value of financial assets

- 1 193 - 262 - 1 728 - 283 1 472 available-for-sale - 1 193 - 293 - 1 728 - 283 1 441 Income tax on comprehensive income

- 1 193 - 262 - 1 728 - 283 1 472 Other comprehensive income - 1 220 - 293 - 1 755 - 283 - 8 191

74 566 31 365 55 664 24 861 101 688 Total comprehensive income 79 012 31 272 46 436 22 120 100 629

Profil distribution:

Majority 78 905 99 956

Not controlling interest 107 673

PARENT BANK GROUP

30.06.2012 30.06.2011 Q2 2012 Q2 2011 2011 Income statement as a percentage of average assets 30.06.2012 30.06.2011 Q2 2012 Q2 2011 2011

1.60 1.47 1.64 1.46 1.51 Net interest income 1.55 1.45 1.62 1.45 1.48

0.79 0.68 0.86 0.70 1.13 Net commission income and other income 1.09 0.91 1.21 0.95 1.420.13 0.09 0.92 0.33 0.00 Net return on financial instruments 0.60 0.07 0.50 0.22 0.07

2.52 2.24 3.42 2.50 2.64 Total income 3.24 2.43 3.33 2.62 2.98

1.60 1.47 1.54 1.41 1.61 Total operating expenses 1.84 1.66 1.79 1.61 1.83

0.91 0.77 1.88 1.09 1.03 Operating profit before losses 1.40 0.77 1.54 1.01 1.15

-0.44 0.17 0.17 0.18 0.22 Losses on loans and guarantees 0.18 0.17 0.17 0.18 0.22

1.35 0.60 1.71 0.91 0.81 Profit before tax 1.22 0.60 1.37 0.83 0.93

0.46 0.13 0.35 0.16 0.08 Income tax expenses 0.29 0.14 0.35 0.17 0.09

0.89 0.47 1.36 0.75 0.73 Income from continuing operations 0.93 0.46 1.01 0.66 0.85

0.00 0.00 0.00 0.00 0.00 Profit from operations held for sale, net of tax 0.01 0.00 0.12 0.00 0.00

0.89 0.47 1.36 0.75 0.73 Net profit 0.92 0.46 0.89 0.66 0.85

PARENT BANK GROUP

- 14 -

BALANCE SHEET

30.06.2012 30.06.2011 31.12.2011 Balance sheet (thousands NOK) 30.06.2012 30.06.2011 31.12.2011

444 052 669 938 345 817 Cash and claims on central banks 444 054 669 938 345 824 731 797 361 822 425 161 Deposits with and loans to credit institutions 731 797 361 822 425 161

13 717 860 11 173 159 14 723 203 Gross loans to customers 13 571 264 11 149 572 14 543 513- 66 542 - 75 974 - 112 748 - individual write-downs - 66 542 - 75 974 - 71 726- 25 912 - 18 400 - 23 367 - write-downs on groups of issued loans - 25 912 - 18 400 - 23 367

13 625 406 11 078 785 14 587 088 Net loans to customers 13 478 810 11 055 198 14 448 420

1 415 548 1 222 307 1 404 036 Certificates and bonds with fixed return at actual value 1 415 548 1 222 307 1 404 036

112 175 87 766 76 677 Derivative 112 175 87 766 76 677

346 082 189 941 257 731 Shares, ownership interests and other equity interests 346 082 189 941 257 731

279 160 85 720 261 849 Investment in associates and joint ventures 346 774 157 425 333 543

30 249 16 800 25 344 Investment in group companies

Operations and assets held for sale 94 737 89 717

27 630 29 550 Intangible assets 27 630 29 550

105 072 58 733 108 377 Tangible fixed assets 187 700 129 838 191 598

Deferred tax asset 15 837 1 148 1 208

60 891 52 714 64 720 Other assets 95 095 64 853 80 284

17 178 062 13 824 528 17 586 350 Assets 17 296 239 13 940 239 17 683 749

606 864 533 571 854 787 Deposits from credit institutions 606 864 533 571 854 787

10 587 300 7 659 430 10 244 923 Deposits from and liabilities to customers 10 572 461 7 650 187 10 225 580

3 961 606 4 225 841 4 549 246 Liabilities incurred from the issuance of securities 3 961 606 4 225 841 4 549 246

15 632 4 025 26 574 Derivatives 15 632 4 025 26 574

31 883 36 360 8 077 Payable tax 33 298 36 836 9 194

23 685 3 287 14 288 Deferred tax 30 272 10 297 20 893

138 565 94 524 140 657 Other liabilities and pension liabilities 164 269 104 425 143 647

255 688 199 349 253 953 Subordinated loan capital 255 688 199 349 253 953

204 991 141 009 196 406 Fund bonds 204 991 196 406

15 826 213 12 897 396 16 288 912 Total liabilities 15 845 081 12 905 540 16 280 280

928 840 147 260 928 840 Equity certificates 928 840 147 260 928 840

- 2 350 - 2 350 Holding of own equity certificates - 2 350 - 2 350

147 575 5 249 147 575 Share premium reserve 147 575 5 249 147 575

93 279 20 142 93 279 Equalisation reserve 93 279 20 142 93 279

18 577 Allocated dividend 18 577

100 382 656 846 100 382 Primary capital 100 382 656 846 100 382

42 899 1 578 Endowment fund 42 899 1 578

8 226 5 020 9 418 Fund for unrealised gains 25 895 22 786 27 089

139 18 089 139 Other equity 77 305 107 951 87 173 75 758 31 627 Result for the period 80 232 31 565

Minority interests 1 326

1 351 849 927 132 1 297 439 Total equity 1 451 158 1 034 699 1 403 469

17 178 062 13 824 528 17 586 350 Liabilities and equity 17 296 239 13 940 239 17 683 749

PARENT BANK GROUP

- 15 -

CHANGES IN EQUITY CHANGES IN PARENT BANK EQUITY

Holding of Share Fund for

Equity own equity premium Equalisation Primary Endowment unrealised Other Allocation Total

(thousand NOK) certificates certificates reserve reserve capital fund gains funds to dividends equity

Equity as of 31 Dec 2010 147 260 5 249 20 143 656 845 46 579 7 336 17 035 10 794 911 240

Korreksjoner mot FUG hiå

Conversion of primary capital to PCC capital 489 647 89 165 - 578 811 Increase of capital on merger with Halden Sparebank 291 933 53 161 - 345 094 Increase in equity at merger 345 094 345 094Reclassification to primary capital 16 035 - 16 035 Acquisition of own primary capital certificates - 2 350 138 - 2 212

Corrections against FUG Dividends disbursed through equity certificates in 2010 - 10 794 - 10 794

Allocation to endowments for 2010 - 1 000 - 1 000Disbursed endowments from the endowment fund in 2011 - 46 579 - 46 579Shares at fair value with changes against equity Unallocated total comprehensive income 73 137 6 313 1 578 2 082 18 577 101 688

Equity as of 31 Dec 2011 928 840 - 2 350 147 575 93 280 100 382 1 578 9 419 139 18 577 1 297 439

Corrections against FUG Dividends disbursed through equity certificates in 2012 - 18 577 - 18 577Disbursed endowments from the endowment fund in 2012 - 1 578 - 1 578

Unallocated total comprehensive income - 1 193 75 758 74 565

Equity as of 30 June 2012 928 840 - 2 350 147 575 93 280 100 382 8 226 75 897 1 351 849

147 260 5 249 20 142 656 846 42 899 22 786 139 517 1 034 699- 781 580 2 350 - 142 326 - 73 137 556 464 42 899 14 560 63 620 - 317 150

CHANGES IN GROUP EQUITY

Holding of Share Fund for

Equity own equity premium Equalisation Primary Endowment unrealised Other Allocation Minority Total

(thousand NOK) certificates certificates reserve reserve capital fund gains funds to dividends interests equity

Equity as of 31 Dec 2010 147 260 5 249 20 142 656 846 46 578 24 599 106 413 10 794 1 017 881

Conversion of primary capital to PCC capital 489 647 89 165 - 578 811 Increase of capital on merger with Halden Sparebank 291 933 53 161 - 345 094 Increase in equity at merger 345 094 345 094Reclassification to primary capital 16 035 - 16 035 Corrections against FUG in conn. with take-over Acquisition of own primary capital certificates - 2 350 138 - 2 212Minority - 653 653

Corrections against FUG 569 - 121 448Dividends disbursed through equity certificates in 2010 - 10 794 - 10 794Allocation to endowments for 2010 - 1 000 - 1 000Disbursed endowments from the endowment fund in 2011 - 46 579 - 46 579Shares at fair value with changes against equity Shares in joint ventures - impl. Unallocated total comprehensive income 73 137 6 313 1 578 1 922 - 1 569 18 577 673 100 631

Equity as of 31 Dec 2011 928 840 - 2 350 147 575 93 279 100 382 1 578 27 090 87 173 18 577 1 326 1 403 469

Adjustments relating to discontinued operations - 7 587 - 7 587Dividends disbursed through equity certificates in 2012 - 18 577 - 18 577Disbursed endowments from the endowment fund in 2012 - 1 578 - 1 578Redemption of non-controlling interests - 2 253 - 1 326 - 3 579Unallocated total comprehensive income - 1 193 80 205 79 012

Equity as of 30 June 2012 928 840 - 2 350 147 575 93 279 100 382 25 895 157 538 1 451 158

EQUITY CAPITAL RATIO PERCENTAGE

(thousands NOK) 30.06.12 31.12.11 01.11.11 01.01.11 31.12.10

Equity certificates 928 840 928 840 928 840 147 260 147 260

Share premium reserve 93 279 58 403 20 142 20 142 9 343

Equalisation reserve 147 575 147 575 147 575 5 249 5 249

7 573 7 851 7 851 1 471 1 471

Part of Unrealised gains reserve 128 124

A. The equity certificate owners' capital 1 177 396 1 142 793 1 103 306 174 122 163 323

Primary capital 100 382 97 342 94 069 656 846 614 437

Endowment fund 39 580 46 578 5 169

Other equity 11 15 139 16 035 16 035

Part of Unrealised gains reserve 652 1 024 823 5 865 5 865

B. The savings bank reserve 101 046 98 381 134 612 725 323 641 506

Unrealised gains reserve

Equity exclusive dividend 1 278 441 1 241 174 1 237 918 899 446 804 829

Equity certificates ratio (A/(A+B)) 92.10 % 92.07 % 89.13 % 19.36 % 20.29 %

- 16 -

CASH-FLOW STATEMENT

30.06.2012 30.06.2011 31.12.2011 Cash flow statement (thousands NOK) 30.06.2012 30.06.2011 31.12.2011

115 315 40 397 111 107 Profit before tax and minority interests 119 065 40 775 129 104- 37 296 11 235 29 724 Loan losses 15 186 11 235 29 724

7 795 4 572 10 152 Depreciation etc. of tangible fixed assets 9 168 5 373 12 602

- 57 576 Recognition of negative goodwill - 64 034 - 3 795 - 33 619 Payable taxes - 840 - 4 105 - 34 749

85 814 52 409 59 788 Net operating cash flow 142 578 53 277 72 647

998 979 236 403 495 408 Change net lending and repossessed assets 954 424 236 403 506 120- 11 512 70 524 42 433 Change certificates and bonds - 11 512 70 524 42 433

2 508 - 2 441 - 9 410 Change other claims (prepaid costs) 2 299 - 3 240 - 9 543

- 34 177 - 57 828 35 186 Change other assets - 52 607 - 60 509 28 415

342 377 397 521 117 675 Change customer deposits 346 881 399 915 109 970- 247 923 - 43 351 - 49 Change credit institution deposits - 247 923 - 43 351 667

- 33 332 4 794 9 200 Change other liabilities 57 676 5 783 17 254

- 700 10 295 Change provisions for accrued costs and liabilities - 704 - 2 485 - 3 932

1 102 033 605 623 760 526 Net cash flow from current financial activities 1 191 112 603 040 764 030

- 4 490 - 1 617 - 7 649 Change tangible fixed assets - 5 270 - 1 984 - 21 782

- 111 760 - 23 083 - 38 634 Change in shares not part of trading activities - 200 064 - 21 002 - 27 998

- 114 330 - 24 700 228 224 Net cash flow from investments - 203 414 - 22 986 224 727

- 587 641 - 276 910 - 803 766 Change borrowing on securities - 587 641 - 276 910 - 803 766

Payments made at the issuing of primary capital 10 320 7 252 1 331 Subordinated loan capital 10 320 7 252 1 331

- 5 512 - 15 473 - 58 372 Disbursement of dividend / endowments - 5 512 - 15 473 - 58 372

- 582 833 - 285 131 - 860 808 Net cash flow from financing activities - 582 833 - 285 131 - 860 807

404 870 348 201 127 942 Net change liquidity 404 866 348 201 127 950

770 978 683 559 643 036 Liquidity holdings OB 770 985 683 559 643 035

1 175 848 1 031 760 770 978 Liquidity holdings CB 1 175 851 1 031 760 770 985

GROUP PARENT BANK

- 17 -

PERFORMANCE FROM QUARTERLY ACCOUNTS FOR THE GROUP RESULTS Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2

(thousand NOK) 2012 2012 2011 2011 2011 2011 2010 2010 2010

Interest income 186 912 195 203 184 869 154 106 146 992 147 490 157 719 156 661 150 466Interest expenses 118 192 131 130 128 689 104 692 97 901 97 766 99 894 102 176 94 920

Net interest income 68 720 64 074 56 181 49 414 49 091 49 724 57 826 54 485 55 547

Commission income 52 784 45 181 38 830 35 049 33 445 31 013 32 818 34 604 34 707Commission costs 3 186 3 781 2 598 2 211 1 991 2 397 2 274 2 637 2 504Other operating income 1 578 666 65 307 590 801 757 1 179 604 605

Net commission income and other income 51 175 42 067 101 539 33 428 32 255 29 373 31 723 32 572 32 808

Dividend 793 3 472 2 2 902 18 2 2 1 174Income from ownership interests 4 071 10 324 8 690 1 958 4 125 2 513 5 400 5 315 3 696Net gain from securities trading - 1 247 6 743 1 166 - 3 453 984 2 833 2 912 3 810 6 695

value: 16 291 12 964 6 387 - 719 2 193 5 888 4 622 1 134 1 887Net change in value of currency and financial derivatives assessed at actual value: 1 411 - 3 045 - 15 035 6 442 - 2 773 - 13 984 - 3 305 - 4 562 5 866

Net return on financial investments 21 319 30 457 1 208 4 229 7 432 - 2 732 9 631 5 699 19 319

Total income 141 214 136 598 158 928 87 072 88 778 76 365 99 179 92 755 107 673

Personnel costs 39 585 44 779 39 888 29 476 26 521 29 810 38 361 28 060 28 788Administration costs 18 678 18 897 19 754 18 223 13 007 12 215 14 739 10 233 12 354Other operating expenses 17 733 18 183 24 772 7 067 15 118 16 461 20 955 12 463 12 590

Total operating expenses 75 996 81 859 84 414 54 766 54 646 58 486 74 055 50 756 53 733

Operating profit before loss 65 218 54 738 74 513 32 305 34 132 17 878 25 125 41 999 53 941

Loss on loans and guarantees 7 171 8 015 6 506 11 984 5 954 5 280 4 653 629 6 234

Profit before tax 58 047 46 724 68 008 20 321 28 177 12 598 20 471 41 370 47 707

Income tax expense 15 032 10 108 - 2 835 5 646 5 774 3 436 578 13 330 11 922

Income from continuing operations 73 079 56 831 65 172 14 675 22 403 9 163 19 893 28 039 35 785

Profit from operations held for sale, net of tax 5 175 - 4 574 - 8 263

Net profit 48 190 32 042 62 580 14 675 22 403 9 163 19 893 28 039 35 785

Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2

(thousand NOK) 2012 2012 2011 2011 2011 2011 2010 2010 2010

KEY FIGURES

Profitability

Return on equity after tax 1) 13.57 % 9.15 % 20.20 % 5.59 % 8.77 % 3.66 % 7.81 % 11.22 % 14.92 %Return on equity (total comprehensive income) 13.54 % 9.30 % 20.22 % 5.83 % 9.02 % 3.65 % 8.21 % 10.67 % 13.90 %Cost ratio 53.82 % 59.93 % 53.11 % 62.90 % 61.55 % 76.59 % 74.67 % 54.72 % 49.90 %

Statement and financial Position

Gross loans to customers 13 571 264 13 926 418 13 895 419 11 019 370 11 149 572 11 466 990 11 396 696 11 349 793 11 463 228Gross loans to customers including SpareBank 1 Boligkreditt 18 863 793 18 599 506 17 968 259 14 548 915 14 387 736 14 248 338 14 298 288 14 116 251 13 968 496Customer deposits 10 572 461 10 105 013 10 110 794 7 472 206 7 650 187 7 216 286 7 250 272 7 009 672 7 035 210Deposit-to-loan ratio 77.90 % 72.56 % 72.76 % 67.81 % 68.61 % 62.93 % 63.62 % 61.76 % 61.37 %Growth in loans last 12 months 21.72 % 24.91 % 21.92 % -2.91 % -2.74 % 0.23 % 0.77 % -1.83 % -1.63 %Growth in loans including SB 1 Boligkreditt last 12 months 31.11 % 29.27 % 25.67 % 3.06 % 3.00 % 3.14 % 4.41 % 3.42 % 4.13 %Growth in deposits last 12 months 38.20 % 44.16 % 44.24 % 6.21 % 13.20 % 6.78 % 8.82 % 8.71 % 8.69 %

Average total assets 17 000 494 17 224 223 15 484 303 13 774 287 13 612 374 13 795 130 13 716 020 13 968 296 13 815 380Total assets 17 296 239 17 096 276 17 683 749 13 317 620 13 940 239 13 502 174 13 830 087 13 553 846 14 069 784Total assets including SpareBank 1 Boligkreditt 22 338 768 21 519 364 21 506 589 16 597 166 16 928 403 16 033 523 16 481 679 16 070 304 16 325 052

Losses and non-performing commitments

Impairment losses ratio 3) 0.11 % 0.23 % 0.19 % 0.43 % 0.21 % 0.19 % 0.16 % 0.02 % 0.22 %Non-performing commitments as percentage of gross loans 1.63 % 1.62 % 1.63 % 0.98 % 0.84 % 0.65 % 0.61 % 1.97 % 1.47 %Other doubtful commitments as percentage of gross loans 0.90 % 0.98 % 0.64 % 2.31 % 2.25 % 2.13 % 2.16 % 0.94 % 2.33 %

Solidity

Capital adequacy ratio 14.24 % 14.61 % 14.51 % 14.46 % 14.54 % 14.75 % 14.63 % 13.75 % 13.78 %Core capital ratio 13.75 % 14.01 % 13.67 % 13.01 % 13.10 % 13.17 % 13.05 % 12.04 % 12.01 %Net equity and subordinated loan capital 1 264 026 1 298 183 1 333 529 1 040 529 1 040 038 1 060 341 1 063 042 1 005 060 1 017 856Core capital 1 220 349 1 244 308 1 255 773 936 055 936 769 947 144 948 646 880 336 887 143

Branches and staff

Number of branches 13 13 13 11 11 11 11 11 11Number of employees (full-time equivalents, annualised) 227.6 224.6 220.5 158.2 160.8 161.5 161.6 165.7 165.9

PRIMARY CAPITAL CERTIFICATES 5)

Market price 63.00 73.50 77.50 85.50 107.00 102.50 101.00 92.00 92.00Number of issued certificates 9 288 399 9 288 399 9 288 399 1 472 600 1 472 600 1 472 600 1 472 600 1 472 600 1 472 600Book equity per PCC 135.60 136.38 133.27 132.15 132.05 133.43 138.70 115.73 115.54Earnings per primary capital certificate per quarter (NOK) 4) 4.78 3.18 -0.13 1.95 2.95 1.20 2.95 3.81 5.17Price/Earnings per PCC - annualized 3.28 5.77 12.98 10.47 12.77 21.02 7.00 6.00 5.96

Price/book equity 0.46 0.54 0.58 0.65 0.81 0.77 0.73

1) Profit as a percentage of average equity

2) Total operating expences as percentage of total operating income

3) Net losses expressed as a percentage of gross lending year to date, annualized

4) Group profit per quarter multiplied by the equity certificate percentage divided by the average number og certificates outstanding

5) All figures except earnng per equity certificate is consolidated. Changed from 2011, comparative figures have been restated.

6) Eksl resultat hittil i år

- 18 -

Note 1 Accounting policies The consolidated accounts and the parent bank accounts for SpareBank 1 Østfold Akershus have been prepared in accordance with international standards for financial reporting (IFRS). The foundation for the quarterly report is IAS 34 Interim Financial Reporting. We have followed the same principles for reporting and calculation in this quarterly report as in the previous annual accounts. The quarterly report was not revised. Note 2 Loan losses, guarantees, etc.

Loss costs for the period 30.06.12 30.06.11 31.12.11 (thousand NOK) 30.06.12 30.06.11 31.12.11

- 56 543 6 173 8 480 Change in individual write-downs in the period - 4 061 6 173 8 480

2 545 - 1 300 - 4 325 Change in group write-downs in the period 2 545 - 1 300 - 4 325 2 517 1 417 3 908 Change in amortisation effects 2 517 1 417 3 908

13 754 6 314 14 104 Actual losses in the period where loss provisions had previously been made 13 754 6 314 14 104

2 740 1 543 10 295 Actual losses in the period where loss provisions had not previously been made 2 740 1 543 10 295

- 2 309 - 2 911 - 2 737 Additions to previous actual losses in the period - 2 309 - 2 911 - 2 737

- 37 296 11 235 29 724 Loss costs for the period 15 186 11 235 29 724

Individual write-downs30.06.12 30.06.11 31.12.11 (thousand NOK) 30.06.12 30.06.11 31.12.11

124 308 81 361 81 361 individual write-downs at the beginning of the period 71 826 81 361 81 361

32 794 + Increase in write-downs as a cpmsequence of merging of enterprices - 19 688 - Actual losses on lending, guarantees etc in the period, where

- 13 753 - 6 314 - 14 104 individual write-downs have previously been made - 13 753 - 6 314 - 14 104

- 60 598 - 5 126 - 10 206 - reversal of write-downs made in previous years - 8 116 - 5 126 - 10 206

8 800 6 580 9 018 + loss provisions on commitments where loss provisions had not previously been made 8 800 6 580 9 018

+ increase in write-downs on commitments where individual 9 008 10 326 23 772 write-downs had previously been made 9 008 10 326 23 772

- 1 222 707 1 673 amortisation effects - 1 222 707 1 673

66 542 87 534 124 308 individual write-downs at the end of the period *) 66 542 87 534 71 826

Group write-downs30.06.12 30.06.11 31.12.11 (thousand NOK) 30.06.12 30.06.11 31.12.11

23 367 19 700 19 700 Group write-downs to cover loan losses, losses on guarantees, etc. OB 23 367 19 700 19 700

7 992 + Increase in write-downs as a cpmsequence of merging of enterprices 7 992

2 545 - 1 300 - 4 325 + Group write-down for the period to cover loan losses, losses on guarantees, etc. 2 545 - 1 300 - 4 325 25 912 18 400 23 367 Group write-downs to cover loan losses, losses on guarantees, etc. CB 25 912 18 400 23 367

Defaulted loans30.06.12 30.06.11 31.12.11 (thousand NOK) 30.06.12 30.06.11 31.12.11

221 319 93 957 356 710 Gross defaulted loans 221 319 93 957 226 710- 33 390 - 7 759 - 78 510 Individual write-downs - 33 390 - 7 759 - 40 977

187 930 86 198 278 200 Net defaulted loans 187 930 86 198 185 733

15 % 8 % 13 % Provision rate 15 % 8 % 13 %

Other doubtful commitments30.06.12 30.06.11 31.12.11 (thousand NOK) 30.06.12 30.06.11 31.12.11

121 523 250 589 101 003 Other doubtful commitments 121 523 250 589 88 549

- 33 153 - 68 082 - 34 238 Individual write-downs - 33 153 - 68 082 - 30 749

88 370 182 508 66 766 Net doubtful commitments 88 370 182 508 57 801

27 % 27 % 29 % Provision rate 27 % 27 % 29 %

Parent bank Group

Parent bank Group

Parent bank Group

*) induvidual write-downs on guarantees are recordet in the balance as debt under "Other liabilities" and is as of 31.03.2012 mNOK 0 (mNOK 7.2 in 2011) for

parent bank and the Group. As of 31.12.2011 the write-downs were mNOK 11.6 for the parent bank and mNOK0.1 for the Group

Parent bank Group

Parent bank Group

- 19 -

Note 3 Deposits distributed on sector and industry

30.06.12 30.06.11 31.12.11 (thousand NOK) 30.06.12 30.06.11 31.12.11 367 595 946 048 382 704 Public sector 367 595 946 048 382 704 231 666 259 131 384 447 Credit instituions 231 666 259 131 384 447 131 793 123 067 122 966 The primary industries 131 793 123 067 122 966

105 783 92 763 118 122 Industry 105 783 92 763 118 122 244 710 123 126 269 872 The building and construction industry 244 710 123 126 269 872 244 866 249 509 259 258 Retail 244 866 249 509 259 258 26 437 18 108 22 166 Hotels and restaurants 26 437 18 108 22 166 50 147 44 940 63 653 Transport 50 147 44 940 63 653

547 647 483 306 516 687 Sale/operation of properties 532 808 474 063 497 344 279 301 278 962 319 507 Business services 279 301 278 962 319 507 376 844 250 635 374 723 Social and private services 376 844 250 635 374 7232 606 791 2 869 595 2 834 105 Total industry 2 591 952 2 860 352 2 814 7627 840 584 4 769 556 7 400 805 Wage earners etc. 7 840 584 4 769 556 7 400 805

139 925 20 279 10 012 Accrued interest 139 925 20 279 10 01210 587 300 7 659 430 10 244 923 Total 10 572 461 7 650 187 10 225 580

Parent bank Group

Note 4 Gross lending distributed on sector and industry

30.06.12 30.06.11 31.12.11 (thousand NOK) 30.06.12 30.06.11 31.12.11

159 372 126 530 158 469 Public sector 159 372 126 530 158 469

40 461 38 153 55 061 Credit institutions 40 461 38 153 55 061

347 252 306 337 339 789 The primary industries 347 252 306 337 339 789

86 589 48 671 98 975 Industry 86 589 48 671 98 975 557 955 367 608 549 870 The building and construction industry 557 955 367 608 549 870

279 148 177 954 274 994 Retail 279 148 177 954 274 994 32 910 16 019 31 740 Hotels and restaurants 32 910 16 019 31 740

78 517 60 702 72 039 Transport 78 517 60 702 72 0392 027 794 1 615 566 2 059 606 Sale/operation of properties 1 881 198 1 591 979 1 879 916

211 754 149 752 252 840 Business services 211 754 149 752 252 840 123 101 103 155 121 217 Social and private services 123 101 103 155 121 217

3 944 852 3 010 445 4 014 600 Total industry 3 798 256 2 986 858 3 834 9109 730 813 8 138 680 10 666 634 Wage earners etc. 9 730 813 8 138 680 10 666 634

42 196 24 034 41 969 Accrued interest 42 196 24 034 41 96913 717 860 11 173 159 14 723 203 Total 13 571 264 11 149 572 14 543 513

GroupParent bank

- 20 -

Note 5 Segment information

Information regarding segments is defined as areas of operation or geographical markets. We do not consider that there

are substantial differences in risk and return on products and services in the markets defined as the bank’s main

markets. In addition to banking operations, the Parent bank has five wholly owned subsidiaries – Nekor Gårdselskap AS,

EiendomsMegler1 Østfold og Akershus AS, EiendomsMegler1 Sarpsborg AS, EiendomsMegler1 Østfold AS and Uden

Holding Ltd.

Nekor Gårdselskap AS is a pure real estate management company, with the overall objective of managing its own and

the Parent bank's real estate. The company’s primary market areas are the municipalities where the Group SpareBank 1

Østfold Akershus has operations. EiendomsMegler 1 Østfold og Akershus AS is engaged in real estate brokerage in

Vestby, Drøbak, Askim, Moss and Fredrikstad. EiendomsMegler1 Sarpsborg AS has its office in Sarpsborg and

EiendomsMelger1 Østfold AS has its office in Halden. Uden Holding Ltd is registered as owner of the bank’s apartment in

Spain. The company’s head office is on Gibraltar.

(thousand NOK) RM CM EM1 3)

Nekor

Not

allocated Group

Income Statement

Net interest income 1) 72 994 67 692 252 - 726 - 7 418 132 794

Net commission income 51 914 7 719 24 577 6 789 90 998

Other operating income 6 663 - 4 419 2 244

Net return on financial invest. 51 776 51 776

Operating expenses 45 863 7 775 22 260 4 451 77 507 157 855Operating profit/loss before loss per segment 79 045 67 636 2 569 1 486 - 30 779 119 956

Loss on lending and guarantees - 894 16 079 15 186

Profit/loss before tax per segment 79 939 51 556 2 569 1 486 - 30 779 104 771

Balance sheet

Customer loans 9 730 813 3 798 256 42 196 13 571 264Individual write-downs lending - 8 715 - 57 828 - 66 542

Group write-downs lending - 9 916 - 15 996 - 25 912

Other assets 44 737 58 643 3 714 049 3 817 428Total assets per segment 9 712 182 3 724 432 44 737 58 643 3 756 245 17 296 238

Deposits from and liabilities to customers 7 840 584 2 591 952 139 925 10 572 461Other liabilities 25 780 32 997 5 213 843 5 272 619

Total liabilities per segment 7 840 584 2 591 952 25 780 32 997 5 353 767 15 845 081

Equity 1 451 158 1 451 158Total liabilities and equity per segment 7 840 584 2 591 952 25 780 32 997 6 804 925 17 296 239

(thousand NOK) RM CM EM1 2)

Nekor

Not

allocated Group

Income Statement

Net interest income 1) 86 201 97 095 776 - 1 106 21 444 204 409

Net commission income 54 653 7 419 32 727 34 342 129 140

Other operating income 11 575 55 880 67 455Net return on financial invest. 10 137 10 137

Operating expenses 74 105 12 562 32 338 7 922 125 385 252 313

Operating profit/loss before loss per segment 66 748 91 951 1 164 2 547 - 3 583 158 829Loss on lending and guarantees 1 371 28 354 29 724

Profit/loss before tax per segment 65 378 63 597 1 164 2 547 - 3 583 129 104

Balance sheet

Customer loans 10 666 634 3 834 910 41 969 14 543 513Individual write-downs lending - 37 552 - 75 196 41 022 - 71 726

Group write-downs lending - 10 257 - 13 110 - 23 367

Other assets 30 145 62 217 3 142 967 3 235 329

Total assets per segment 10 618 825 3 746 604 30 145 62 217 3 225 958 17 683 750

Deposits from and liabilities to customers 7 400 805 2 814 762 10 012 10 225 580

Other liabilities 13 041 37 641 6 004 019 6 054 700Total liabilities per segment 7 400 805 2 814 762 13 041 37 641 6 014 031 16 280 280

Equity 1 403 469 1 403 469

Total liabilities and equity per segment 7 400 805 2 814 762 13 041 37 641 7 417 500 17 683 749

1) The funding cost is divided into in relation to the gap between the average loans and the average deposits.

2) As of 31.12.2011 EM1 Østfold Akershus is included 12 months and EM1 Halden/EM1 Sarpsborg 2 months.3) In 2011 all companies are fully included

30.06.2012

31.12.2011

- 21 -

Note 6 Derivatives At actual value over the result

(thousand NOK) Contract amount Contract amount

Currency instruments Assets Liabilities Assets LiabilitiesForward currency exchange contracts 1 185 16 17 929 259 0Forward currency exchange contracts 1 187 14 15 178 0 223

Total currency instruments 16 14 259 223

Interest swaps

Interest swaps fixed interest lending 37 350 3 285 39 150 1 910 Interest swaps fixed interest lending 598 050 9 443 374 150 486 2 147

Interest swaps fixed interest bond loans 1 272 000 20 889 1 272 000 29 194 863Currency interest swaps bonds 51 449 9 444 4 809 27 114 7 374 1 573Interest swaps structured products Options structured products Options structured products Accrued interest swaps 65 436 884 51 653 183

Total interest instruments 99 053 15 136 90 617 4 766

Hedging instrumentes

Interest swaps - net 410 000 13 105 482 130 000 - 3 109 - 964

Total hedging instruments 13 105 482 - 3 109 - 964

Total currency and interest instruments

Total currency instruments 16 14 259 223Total interest instruments 112 159 15 618 87 508 3 801

Total currency and interest instruments 112 175 15 632 87 766 4 025

The parent bank figures and the group figures are completely identical as only the parent bank has derivatives.

30.06.2011

Actual value Actual value30.06.2012

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Note 7 Capital adequacy

30.06.12 30.06.11 31.12.11 (thousand NOK) 30.06.12 30.06.11 31.12.11

100 382 656 846 100 382 Savings Bank's Fund 100 382 656 846 100 382

926 491 147 260 926 490 Primary capital 926 491 147 260 926 490

147 575 5 249 147 575 Share premium reserve 147 575 5 249 147 575

93 279 20 142 93 279 Equalisation reserve 93 279 20 142 93 279

42 899 Endowment fund 42 899

139 18 089 20 294 Other approved funds 77 306 35 690 108 654

8 226 5 019 9 418 Fund for unrealised gains 25 895 22 786 27 089

1 276 092 895 504 1 297 439 Total book equity 1 370 928 1 003 133 1 403 469

4 140 1 500 4 140 Part of member deposits 4 140 1 500 4 140

Fund for valuation variances - 71 675 - 72 261 - 77 613

Deferred tax asset - 15 837 - 1 148 - 1 208

- 19 894 - 21 276 Other intangible assets - 19 894 - 21 276

- 20 155 Deductions for dividend and endowements - 20 155

- 89 860 - 72 293 - 61 618 Share of non-amortised estimate deviations set to zero - 226 688 - 27 694 - 192 314

578 505 578 Depreciation on added value 3 351 3 196 3 351

7 718 7 702 6 545 Unrealised valuation changes - 13 976 - 13 651 - 15 149

190 000 130 000 190 000 Fund bonds 190 000 130 000 190 000

1 368 775 962 918 1 395 653 Total core capital 1 220 349 936 769 1 273 245

256 807 203 923 257 343 Supplementary capital 270 366 217 269 270 902

- 89 860 - 72 293 - 61 618 Deductions for supplementary capital - 226 688 - 114 000 - 192 314

1 535 722 1 094 548 1 591 378 Net equity and subordinatet loan capital 1 264 026 1 040 038 1 351 832

9 272 575 7 133 925 9 366 138 Basis for calculation 8 877 863 7 153 421 9 058 488

14.76 % 13.50 % 14.90 % Core capital ratio 13.75 % 13.10 % 14.06 %

16.56 % 15.34 % 16.99 % Capital adequacy ratio 14.24 % 14.54 % 14.92 %

Parent bank Group

Note 8 Other assets

30.06.12 30.06.11 31.12.11 (thousand NOK) 30.06.12 30.06.11 31.12.11

14 823 10 362 17 330 Prepaid not accrued costs and earned not received income 15 580 11 576 17 879

Overfinancing of pension liabilities 46 069 42 352 47 389 Other assets 79 514 53 278 62 405 60 891 52 714 64 720 Total 95 095 64 853 80 284

Parent bank Group

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Note 9 Other debts and pension liabilities

30.06.12 30.06.11 31.12.11 (thousand NOK) 30.06.12 30.06.11 31.12.11

23 602 22 484 22 668 Accrued costs and received not accrued income 27 761 25 670 27 161

27 076 15 380 27 076 Pension liabilities 30 483 18 563 30 483

87 887 56 660 90 913 Other liabilities 106 026 60 192 86 003

138 565 94 524 140 657 Total 164 269 104 425 143 647

Parent bank Group

Note 10 Securities debt and subordinated loan capital Securities - liabilites

(thousands NOK) 30.06.12 31.12.11

Bonds, nominal value 3 877 000 4 454 878

Adjustments actual value 35 730 52 287

Accrued interests 48 876 42 081

Total liabilites securities 3 961 605 4 549 246

Change in security liabilites

(thousands NOK) 30.06.12 Issued 2012

Due/

redeemed

Other

changes 31.12.11

Certificates, nominal value 0 0

Bonds, nominal value 3 877 000 - 577 878 4 454 878

Adjustments actual value 35 730 - 16 557 52 287

Accrued interests 48 876 6 794 42 081

Total liabilites securities 3 961 606 - 577 878 - 9 763 4 549 246

Subordinated loan capital

(thousands NOK) 30.06.12 Issued 2012

Due/

redeemed

Other

changes 31.12.11

Subordinated loan capital 250 000 - 2 085 252,085

Fund bonds 190 000 - 1 304 191,304

Adjustments actual value 3 554 3 203 352

Accrued interests 17 125 10 506 6 618

Total liabilites securities 460 679 - 187 450 359

The major parts of the bank’s fixed interest bond debt (NOK 1,682.0 million) are evaluated according to fair value option (FVO).

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Note 11 Securities Certificates and bonds

(thousands NOK) 30.06.12 30.06.11 31.12.11

Bonds 1 033 219 897 095 1 046 880Certificates 277 437 228 216 262 844Subordinated loan 98 244 89 906 90 915Accrued interest 4 688 3 513 4 665Adjustments actual value 1 960 3 578 - 1 268

Total certificates and bonds 1 415 548 1 222 307 1 404 036

Fair value option has been utilised on the bond portfolio, apart from bonds with priority of NOK 250 million which are valued as loans and claims. Note 12 Primary capital certificate holders and distribution of primary capital certificates

Number

% of the total

number of

equity

certificates

1 SPAREBANKSTIFTELSEN ØSTFOLD AKERSH 4 896 465 52.72 %

2 SPAREBANKSTIFTELSEN HALDEN 2 919 334 31.43 %

3 OVIDIA INVEST AS 130 000 1.40 %4 SPAREBANK 1 RINGERIKE HADELAND 52 800 0.57 %

5 TERRA UTBYTTE 51 600 0.56 %

6 MP PENSJON PK 42 300 0.46 %

7 HASLUM INDUSTRI A/S 37 800 0.41 %

8 ARGO SECURITIES AS 35 734 0.38 %

9 FRAMO DEVELOPMENTS AS 35 100 0.38 %

10 BYGG HJEM OG HOBBY AS 34 300 0.37 %

11 OTKRITIE SECURITIES LIMITED 31 963 0.34 %

12 WIKBORG TORD GEIR 27 600 0.30 %

13 SPAREBANK 1 SR-BANK PENSJONSKASSE 26 907 0.29 %

14 SPARESKILLINGSBANKEN 25 000 0.27 %

15 FORSVARETS PERSONELLSERVICE 24 700 0.27 %16 SPAREBANK 1 ØSTFOLD AKERSHUS 23 500 0.25 %

17 SPAREBANKEN VESTFOLD 21 777 0.23 %

18 SANNVEST AS / JAN A SANNEM 19 000 0.20 %

19 ALLUMGÅRDEN 18 074 0.19 %

20 NÆSS JUST BIRGER 17 500 0.19 %

Total 20 largest 8 471 454 91.20 %

Other equity certificates holders 816 945 8.80 %

Total number of equity certificates

(nominal value NOK. 100) 9 288 399 100 %

As of 30 June 2012, there were 992 equity certificates

holders. The largest were:

Equity holdings of own primary capital certificates amounts to 23,500 certificates which corresponds to 0.25% of the total number of certificates.

- 25 -

Offices of the bank

SpareBank 1 Moss Postboks 130, 1501 Moss Kongensgate 21, 1530 Moss Telephone: +045 05700 SpareBank 1 Fredrikstad K G Meldahlsv 9, 1671 Kråkerøy Telephone: +045 05700 SpareBank 1 Fredrikstad

dep. Seljeveien Seljeveien 3,1661 Fredrikstad Telephone: +47 05700 SpareBank 1 Drøbak Storgaten 18, 1440 Drøbak Telephone: +47 05700

SpareBank 1 Halden Wiels Plass 2, 1771 Halden Telephone: : +47 05700

SpareBank 1 Rygge,

dep. Halmstad Ryggeveien 353, 1580 Rygge Telephone: +045 05700

SpareBank 1 Rygge,

dep. Varnaveien Midtveien 1, 1526 Moss Telephone: +47 05700

SpareBank 1 Råde Sarpsborgveien 2, 1640 Råde Telephone: +47 05700

SpareBank 1 Sarpsborg Torggt. 12, 1707 Sarpsborg Telephone: +47 05700 SpareBank 1 Soon Storgata 22, 1555 Son Telephone: +47 05700 Sparebank 1 Vestby Mølleveien 4, 1540 Vestby Telephone: +47 05700 SpareBank 1 Våler Vestlia 1, 1592 Våler Telephone: +47 05700

Sparebank 1 Askim Skolegata 6, 1830 Askim Telephone: +47 05700

The SPAREBANK 1 ØSTFP O Box 130, 1501 Moss

Kongensgate 21, 1530 MossTelephone +47 05700

Telefax +47 69 24 57 10E-mail:

- 26 -

The SPAREBANK 1 ØSTFOLD AKERSHUS Group P O Box 130, 1501 Moss

Kongensgate 21, 1530 Moss Telephone +47 05700

Telefax +47 69 24 57 10 mail: [email protected]

Technology

Quarterly report 2012_2nd_quarter