SPAREBANK 1 SMN Reference is made to the stock exchange notice published on20 June 2022 regarding the letter of intent for the merger ofSpareBank 1 SMN andSpareBank 1 Søre Sunnmøre. The banks' boards have today approved a plan for merging the banks (merger plan). The completion of the merger plan is conditional on the supervisory board and general meeting making the necessary resolutions at meetings in week 45 and authority approvals.SpareBank 1 SMN will be the legal and accounting acquiring bank, and will thus acquire all of SpareBank 1 Søre Sunnmøre's assets, rights and obligations at the completion of the merger. The merged bank will continue under the nameSpareBank 1 SMN . The overarching goal of the merged bank is to take its place as the leading banking player in Sunnmøre and in Fjordane. A merged bank makes for greater competitive power, enhanced presence and increased attractiveness to customers, employees and investors and shareholders alike. Based on figures from the accounts as of30 June 2022 ,SpareBank 1 SMN will after the merger have: o Management capital of approx.NOK 230 billion and total assets (including transfers to mortgage credit institutions) of approx.NOK 290 billion o Equity of approx.NOK 22,3 billion o CET1 capital of 18,8 per cent As regards background and objectives, composition of the merged bank's bodies and management, reference is made to theStock Exchange notice published on20 June 2022 . Merger consideration The merger consideration is set after negotiations between the banks and are based on a process that includes financial and legal due diligence of SpareBank 1 Søre Sunnmøre andSpareBank 1 SMN . Book value and adjusted shareholders' equity, a costing analysis based on historical key figures, along with normalized profit, regression analysis, return on equity and price/book ratios for comparable savings banks, as well as market pricing and target pricing, are also included in the basis for the consideration. As of30 June 2022 , book equity isNOK 20 840 inSpareBank 1 SMN andNOK 1 473 million in SpareBank 1 Søre Sunnmøre (excl. hybrid capital and minority interests). Based on review of the banks' balance sheets, with assessment of surplus and deficit values, result analysis (incl. adjustments for one-time effects), the banks agree on a 93,4 per cent exchange ratio toSpareBank 1 SMN and 6,6 per cent to SpareBank 1 Søre Sunnmøre. Both banks have a capital structure consisting of both equity capital and ownerless capital (grunnfondskapital). As of30 June 2022 , the equity capital certificate ratio is 63,8 per cent inSpareBank 1 SMN and 9,8 per cent in SpareBank 1 Søre Sunnmøre. The consideration for the acquisition of operations in SpareBank 1 Søre Sunnmøre will be provided in the form of equity certificates in the merged bank. The equity certificates will be issued to existing equity certificate holders in SpareBank 1 Søre Sunnmøre and to Sparebankstiftinga Søre Sunnmøre which is established in connection with the merger. The issue to Sparebankstiftinga Søre Sunnmøre takes place as a result of the primary capital in SpareBank 1 Søre Sunnmøre as of30 June 2022 ,NOK 1 329 million, is converted into equity certificate capital. The merged bank will then have an equity capital certificate ratio of about 66,8 per cent. Equity certificates inSpareBank 1 SMN issued as consideration, is issued at a rate corresponding to the latest calculated book value per equity certificate, at the time when the banks' boards approve completion of the merger. A total of 1 407 923 equity certificates will be issued to existing equity certificate holders in SpareBank 1 Søre Sunnmøre and 12 971 224 equity certificates will be issued to Sparebankstiftinga Søre Sunnmøre. This means that one equity certificate in SpareBank 1 Søre Sunnmøre is exchanged for 1,4079 equity certificates inSpareBank 1 SMN . This gives the following allocation of the equity certificate capital in the merged bank:Name # EC OwnershipSpareBank 1 SMN - Existing owners 129 836 443 90,03 % SpareBank 1 Søre Sunnmøre - Existing owners 1 407 923 0,98 % Sparebankstiftinga Søre Sunnmøre 12 971 224 8,99 % Total 144 215 590 100,0 % The banks have identified a realistic potential for income and cost synergies of approx.NOK 30 million per year. There is also a potential for large capital synergies, and an improved growth platform for the banks.SpareBank 1 SMN is thus expecting the transaction to have added value in terms of results. Timetable and prerequisites for implementation The boards of the two banks will now present the proposed merger to the supervisory board and the general meeting of the banks respectively. The completion of the merger is, among other things, conditional on the supervisory board/general meeting making the necessary resolutions at meetings on9 November 2022 , that theFinancial Supervisory Authority of Norway grants the necessary permission for completion and that theNorwegian Competition Authority does not impose conditions that significantly change the assumptions that the banks have assumed for the agreement. The aim is to complete the merger at the beginning of second quarter of 2023. Contact:SpareBank 1 SMN For investors and analysts: CFOTrond Søraas on +47 922 36 803 For the media: Executive Vice President Rolf Jarle Brøske on +47 911 12 475 SpareBank 1 Søre SunnmøreKjell Arvid Storeide , board chair, on +47 915 70 925Stig Brautaset , CEO, on +47 908 26 448 The above information is disclosable pursuant to Section 5-12 of the Norwegian Securities Trading Act. The above information is considered to be inside information pursuant to the Market Abuse Regulation (MAR). This notice is published on behalf ofSpareBank 1 SMN by [Rolf Jarle Brøske, executive director, Communications and Brand atSpareBank 1 SMN ], [19.30] hrs,3 October 2022 .
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