1

1

SpareBank 1 Nord-Norge

Preliminary annual report and accounts 2010

2

SpareBank 1 Nord-Norge Group

Headoffice: Tromsø

Organization: 5 regionsRegional branches: Hammerfest

TromsøHarstadBodøMo i Rana

Local branches: 76 Number of man-yearsGroup: 788

3

SpareBank 1 Nord-NorgeFinancial Services Group

SpareBank 1 Nord-NorgeInvest ASA

Investment companyEquity stake 100 %

SpareBank 1 FinansLeasing/factoring

Equity stake 100 %

EiendomsMegler 1Nord-Norge AS

Real estate brokerageEquity stake 100 %

SpareBank 1 Gruppen ASFinancial Services Group

Equity stake 19,5 %

SpareBank 1 Boligkreditt ASCovered Bonds Company

Equity stake 15.74 %

SpareBank 1 Nord-Norge Forvaltning ASA

Asset ManagementEquity stake 100 %

- Tromsø

- Bodø

- Tromsø

- Bodø

- Alta

- Hammerfest

- Kirkenes

- Mo i Rana

- Harstad

- Sandnessjøen

- Finnsnes

SpareBank 1 Næringskreditt ASFinancing

Commercial propertyEquity stake 23.5 %

BN Bank ASABank

Equity stake 23.5 %

SpareBank 1 Utvikling DASystems developmentEquity stake 17.74 %

Bank 1 Oslo ASBank

Equity stake 19.5 %

Organisation of the financial services group

North-West 1 Alliance BankBank

Equity stake 75 %

4

North Norway: Status and possiblities

5

Northern Norway

3 counties, 88 municipalities465,600 inhabitants

North Norway is doing well

• North Norwegian industry is less hit by the economic downturn due to:– Resource industries like fisheries,

minerals and energy have maintained their activity and export

– Positive development in tourism, more foreign visitors

– Possible turning point in construction and building

– A substantial part of the region's production and sale is to the public sector

• Large public sector has a stabilizing effect on the economy

• Continued low unemployment rate; 2.3 % unemployment per January 2011

5

6

North Norway; resource base for new growth

• Marine resources• All important wild fish stocks are sustainable• Substantial unexploited potential for fish farming• New potential within marine bioprospecting

• Energy resources• Substantial potential for wind power (renewable)• Substantial potential for small-scale hydropower (renewable)• Substantial potential for discoveries of oil/gas in the Barents Sea and

in the northern part of the Norwegian Sea

• Minerals• Significant quantities of both known and unknown deposits of

commercially exploitable minerals ; iron, olivine, quartz, copper, gold, nepheline, etc.

• Culture and adventures• Coastal culture (the fisheries with its stories)• Native population (vibrant reindeer herding industry)

7

– Nature• Huge untouched areas • Mountains and fjords• The midnight sun• The Northern Light (Autora

Borealis)

– Climate and environment• Arctic climate• Research arena

– Borderland• Where the west meets the east • Open border, simple

procedures

– Geography• Northern coastal route shortens

the distance Europe/the East with one third

North Norway; resource base for new growth

8

SpareBank 1 Nord-Norge 2010 – Highlights

• Very good result: Profit before tax: NOK 1,002 million. Return onequity 15.3 %

• Higher market share – retail market lending

• Significant growth in deposits of 12.9 per cent. Good deposit-to-loanratio: 80.3 %.

• Loan losses reduced by half

• Higher level of activity – more customer meetings

• High customer acquisition rate

• Several large new public sector customers acquired

• Competence boost – stronger position as an adviser bank

• The Bank's strategy of beeing acashless bank in 2012 is beingimplemented

• Banking operations in Northwest Russia started in September 2010

9

• Core capital ratio: 11 per cent or higher

• SpareBank 1 Nord-Norge aims to emerge as an undisputedly solid bank.

• The capital adequacy goal is based on the group's internal capitaladequacy assessment process (ICAAP). The capital goal is expressed based on the current statutory regulation of capitaladequacy.

• The group's capital adequacy in a projected crisis scenario must have adequate buffers so that the core capital adequacy does not fall below 8 per cent.

Financial goals: New goals for group's capitaladequacy ratio

Adaptation to the goal of a capital adequacy ratio of 11 per cent willtake place over time. With the expected profit performance thegroup aims to achieve this goal by the end of 2013.

1010

Capital adequacy ratio - Group

Parent bank Group (Amounts in NOK million)

31.12.08 31.12.09 31.12.10 31.12.10 31.12.09 31.12.08

3 466 4 030 4 351 Core capital 5 334 4 846 4 167 488 831 549 Supplementary capital 515 929 551

3 954 4 861 4 900 Equity and related capital resources 5 849 5 775 4 718

Minimum requirements subordinated capital, Basel I I

1 619 1 818 1 954 Total credit risk IRB 1 840 1 762 1 619

553 487 607 Credit risk standardised approach 1 492 1 362 1 328

43 55 130 Debt risk 126 50 43

45 41 19 Equity risk 46 59 55

0 0 17 Currency risk 17 0 0

236 214 242 Operational risk 284 227 283

457 0 0 Transitional arrangements 226 257 354

- 88 - 69 -71 Deductions - 114 - 98 - 107

2 865 2 546 2 898 Minimum requirements subordinated capital 3 917 3 619 3 575

11.04 % 15.27 % 13.53 % Capital adequacy ratio 11.95 % 12.76 % 10.56 %

9.68 % 12.66 % 12.01 % Core capital ratio 10.89 % 10.71 % 9.32 %

1.36 % 2.61 % 1.52 % Supplementary capital ratio 1.05 % 2.05 % 1.23 %

1111

• Capital adequacy ratio

– Core-capital coverage:11 % or higher

• Profitability

– ROE shall be comparableto the performance ofcompeting banks in Norway. The targetedafter-tax return is minimum 6 percentagepoints above the yield on long-term government bonds

Financial targets

• Effectiveness

– The targeted cost ratio is maximum 50% of income and shall be comparable to the level of competing banks in Norway

• Top-line growth

– The growth in interestcontribution and provisions is targeted to be 2 percentagepoints above the growth in operating costs

1212

(Amounts in NOK million) 31.12.10 31.12.09

Net interest income 1 129 1 173

Net fee-, commision and other operating income513 462

Net income from financial investments404 524

Total net income 2 046 2 159

Total costs 957 972

Result before losses and write-downs1 089 1 187

Net losses and write-downs 87 185

Result before tax 1 002 1 002

Tax 186 143Minority interests 0 1Result for the period 816 858

Profit and loss account - Group

ROE15.3 %

1313

(Amounts in NOK million)4Q10 3Q10 2Q10 1Q10 4Q09

Net interest income 285 291 281 272 298Net fee-, commision and other operating income 128 131 133 121 124

Net income from financial investments 148 76 104 76 229Total net income 561 498 518 469 651Total costs 276 237 256 188 276Result before losses and write-downs 285 261 262 281 375

Net losses and write-downs43 1 22 21 44

Result before tax 242 260 240 260 331

Return on equity capital 15.33 % 15.56 % 15.57 % 15.90 % 26.25 %Cost/income 49.20 % 47.59 % 49.42 % 40.09 % 42.40 %

Quarterly Summary – Profit and loss account figures

1414

Result before tax

31.12.10 31.12.09SpareBank 1 Finans Nord-Norge AS 66 874 80 349SpareBank 1 Factoring AS 0 885SpareBank 1 Nord-Norge Invest AS 6 985 -67 464Eiendomsdrift AS 0 2 881EiendomsMegler 1 Nord-Norge AS 5 286 5 286SpareBank 1 Nord-Norge Forvaltning ASA 4 289 2 928North-West 1 Alliance Bank -1 350 0Total 82 084 24 865

Group companies

1515

Core banking activities

(Amounts in NOK million)

31.12.10 31.12.09 Change

Earnings before losses 685 663 22Net losses 87 185 -98

A non-recurring effect of recognising income from reduced pension commitments

60 0 60

Core banking activities after losses

538 478 60

1616

Compared to 2009, the reasons for the change in the pre-tax result are as follows:

• Reduction in net interest income - NOK 44 mill.

• Increase in net commission income + NOK 67 mill.

• Reduction in income from financial investments - NOK 120 mill.

• Reduction in other (non-interest) income - NOK 16 mill.

• Reduction in costs + NOK 15 mill.

• Reduction in net losses + NOK 98 mill.

Total + NOK 0 mill.

Results – Group

1717

Very good underlying banking operations -(excl. income from financial investments)

Group

(Amounts in NOK million)

4Q10 3Q10 2Q10 1Q10 4Q09

Net interest income 285 291 281 272 298Net fee- and commission income 125 128 132 120 121

Other operating income 3 3 1 1 3

Total costs 276 237 256 188 276

Income, core banking 137 185 158 205 146

Net losses and write-downs 43 1 22 21 44

Income, core banking after

losses and write-downs 94 184 136 184 102

1818

0

50

100

150

200

250

300

350

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q100.00 %

1.00 %

2.00 %

3.00 %

4.00 %

NOK Million - Boligkreditt Perc.of aver.tot.ass. Perc. incl. Boligkreditt

Net interest income - Group

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

NOK Million 349 302 279 294 298 272 281 291 285 - Boligkreditt 7 12 11 17 26 27 24 19 19 Perc.of aver.tot.ass. 2.21 % 1.87 % 1.70 % 1.77 % 1.85 % 1.70 % 1.73 % 1.74 % 1.66 %

Perc. incl. Boligkreditt 2.07 % 1.79 % 1.61 % 1.67 % 1.74 % 1.59 % 1.58 % 1.56 % 1.49 %

1919

Lending, Parent bank – corporate market

The interestmargin is defined as thedifferencebetween thecustomerlending(deposit) interest rate and the Bank'saveragecapitalmarkets funding rate.

14 000

15 000

16 000

17 000

18 000

19 000

20 000

21 000

22 000

23 000

dec.

08

mar

. 09

j un.

09

sep .

09

dec.

09

mar

. 10

jun.

10

sep.

10

dec.

10

NO

K

-

0.50

1.00

1.50

2.00

2.50

In

tere

st

co

ntr

ibu

tio

n

Loan volum corporate

Interest margin corporate

2020

The interestmargin is defined as thedifferencebetween thecustomerlending(deposit) interest rate and the Bank'saveragecapitalmarkets funding rate.

Lending, Parent bank – retail market

35 000

36 000

37 000

38 000

39 000

40 000

41 000

42 000

43 000

44 000

dec.

08

mar.

09

j un.

09

sep. 0

9

dec.

09

mar.

10

j un.

10

sep. 1

0

dec.

10

NO

K

-

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

In

tere

st

co

ntr

ibu

tio

n

Loan volum retail banking

Interest margin retail banking

2121

The interestmargin is defined as thedifferencebetween thecustomerlending(deposit) interest rate and the Bank'saveragecapitalmarkets funding rate.

Customer deposits, Parent bank – corporate market

12 000

13 000

14 000

15 000

16 000

17 000

18 000

19 000

20 000

21 000d e

c.0 8

mar

. 09

j un. 0

9

sep. 0

9

dec.

09

mar

.10

j un. 1

0

sep.1

0

dec.

10

NO

K

-

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

In

tere

st

co

ntr

ibu

tio

n

Deposit volum corporateInterest margin corporate

2222

The interestmargin is defined as thedifferencebetween thecustomerlending(deposit) interest rate and the Bank'saveragecapitalmarkets funding rate.

Customer deposits, Parent bank – retail market

13 000

14 000

15 000

16 000

17 000

18 000

19 000

20 000

21 000

22 000

d ec.

08

mar

. 09

j un.

09

sep.

09

dec.

0 9

mar

.10

j un.

10

sep.

10

dec.

10

NO

K

0.50

0.70

0.90

1.10

1.30

1.50

1.70

1.90

2.10

2.30

2.50

2.70

2.90

In

tere

st

co

ntr

ibu

tio

n

Deposit volum retail banking

Interest margin retail banking

2323

• Capital adequacy ratio

– Core-capital coverage:11 % or higher

• Profitability

– ROE shall be comparableto the performance ofcompeting banks in Norway. The targetedafter-tax return is minimum 6 percentagepoints above the yield on long-term government bonds

Financial targets

• Effectiveness

– The targeted cost ratio is maximum 50% of income and shall be comparable to the level of competing banks in Norway

• Top-line growth

– The growth in interestcontribution and provisions is targeted to be 2 percentagepoints above the growth in operating costs

2424

Group operating costs

(NOK Million)

31.12.10 31.12.09 Change

Wages and salaries 450 422 28Pension costs -16 42 -58Social costs 43 44 -1Total personnel costs 477 508 -31

Administration costs 281 284 -3

Total personnel- and general administration costs 758 792 -34

Depreciation and write-downs of fixed assets 45 49 -4

Total operating costs 154 131 23

Total costs 957 972 -15

2525

0

50

100

150

200

250

300

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

NO

K m

ill.

35 %

37 %

39 %

41 %

43 %

45 %

47 %

49 %

51 %

53 %

Group operating costs Cost/income

4Q

08

1Q

09

2Q

09

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

Group operating costs 247 243 226 227 276 188 256 237 276

Cost/income 51.57 % 50.10 % 50.79 % 39.27 % 42.40 % 40.09 % 49.42 % 47.59 % 49.20 %

Group operating costs

2626

Net commission and other income/totale income

23.6 %

24.6 %

23.1 %

23.7 %

25.0 %

27.5 %

26.9 %

26.1 %

23.7 %

26.6 %

20.0 %

21.0 %

22.0 %

23.0 %

24.0 %

25.0 %

26.0 %

27.0 %

28.0 %

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

100

200

300

400

500

600

Net

com

mis

sion

and o

ther

inco

me,

curr

ency

ex

chan

ge

gai

ns

in m

ill N

OK

2727

• The Bank's Supervisory Board adopted the establishment of theSavings Bank Foundation SpareBank 1 Nord-Norge in March 2010.

• The principal purpose of the foundation is to exercise a long-term, stable ownership of SpareBank 1 Nord-Norge, includingparticipation in future new equity issues by the bank.

• A total of NOK 30.5 million was set aside for this foundation in theyear-end allocations for 2009.

• The bank's Main Board of Directors proposes that an additionalNOK 124.1 million be set aside for the foundation in the year-endallocation for 2010.

Profit allocation for 2010 –The Savings Bank Foundation SpareBank 1 Nord-Norge

2828

• Proposed dividend: NOK 5.75 per EC.

Allocation of the result for the year

(Amounts in NOK million)

Parent Bank's profit after tax 597

Set aside for cash dividend 103Set aside for Dividend Equalisation Fund 103Total for EC-holders 34.54 % 206 206Pay-out ratio EC-holders 50.00 %

Set aside for Donations Fund 41Set aside for Savings Bank's Fund 195Allocated to dividends to the ownerless capital 154Total to bank's ownerless capital 65.46 % 470 391

Total allocations 597

2929

(Amounts in NOK million)

STATEMENT OF 31.12.10 31.12.09 Change Change %

Total assets 68 780 64 239 4 541 7.1%Gross lending 49 046 48 180 866 1.8%Loans and advances to customers including agency loans

63 334 59 061 4 273 7.2%

Deposits from customers 39 389 34 877 4 512 12.9%

Key figures balance sheet

3030

Volume according to markets 31.12.10

Deposits from customers

31 000

32 000

33 000

34 000

35 000

36 000

37 000

38 000

39 000

40 000

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

Corp.

30 %

Public

19 %

Retail

51 %

Good development of customer deposits

Deposit growth households

Deposit growth households. 12 mth. growth

0

2

4

6

8

10

12

2006

M01

2006

M07

2007

M01

2007

M07

2008

M01

2008

M07

2009

M01

2009

M07

2010

M01

2010

M07

%

SNN, Retail clients Households

Source: Statistisk Sentralbyrå, The money supply M2, January 2010 & SNN Bare, January 2010

Deposit growth corporates

Deposit growth corporates. 12 mth. growth

-10

-5

0

5

10

15

20

25

30

35

402006M

01

2006M

07

2007M

01

2007M

07

2008M

01

2008M

07

2009M

01

2009M

07

2010M

01

2010M

07

%

SNN, Corporate clients Corporates

Source: Statistisk Sentralbyrå, The money supply M2, January 2010 & SNN Bare, January 2010

3333

Retail

incl.

Bolig-

kreditt

70 %

Corp/

Pub

30 %

Corp/

Pub

39 %

Retail

excl.

Bolig-

kreditt

61 %

Volume according to markets 31.12.10

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

Boligkreditt

Loans and advancesto customers

Group lending portfolio according to markets

Volume incl. Boligkreditt

Volume excl. Boligkreditt

34

Credit growth households

0

2

4

6

8

10

12

14

16

18

2006

M01

2006

M07

2007

M01

2007

M07

2008

M01

2008

M07

2009

M01

2009

M07

2010

M01

2010

M07

%

SNN, Retail clients Households

Source: Statistisk Sentralbyrå, The credit indicator C2, January 2011 & SNN Bare, January 2011

35

Credit growth corporates

-2

0

2

4

6

8

10

12

14

16

18

20

22

24

2006

M01

2006

M07

2007

M01

2007

M07

2008

M01

2008

M07

2009

M01

2009

M07

2010

M01

2010

M07

%

SNN, Corporate clients Corporates

Source: Statistisk Sentralbyrå, The credit indicator C2, January 2010 & SNN Bare, January 2010

36

Credit area

• Quality• Portfolio• Migration, commitments in default and losses

37

• High quality in lending portfolio. Stable level of default - still at low levels.

• A cautious lending policy and growth in 2006 – 2009 and few corporate exposures in high risk industries has contributed to an overall low portfolio risk.

• The Group's total write-downs in 2010 is lower than the expected normalized level.

• The Group's corporate portfolio is well diversified• Exposure to certain sectors with high risk for the bank was reduced

last year− Property project

• Growth in portfolio in sectors with low/moderate risk− Building and construction− Retail trade− Power and water supply

• Positive migration developments in corporate portfolio

Portfolio

38

Portfolio- exposure as of 31.12.10

0

5.000

10.000

15.000

20.000

25.000

30.000

Low risk Medium risk High risk Default/impaired

NO

K m

ill

Retail market Corporate market SB1 Boligkreditt

39

Risk change- portfolio change Q4/09 - Q4/10

-2.000

-1.000

0

1.000

2.000

3.000

4.000

NO

K m

ill

SB1 Boligkreditt Retail market Corporate market

Low risk Medium risk High risk Default & impaired

40

Group lending by sector

(NOK million) 31.12.10 Share 31.12.09 Share Change Change in %Agriculture and forestry 903 2 % 817 2 % 86 10,5 %Fishing vessels 984 2 % 1.477 3 % -493 -33,4 %Fish farming 295 1 % 251 1 % 44 17,5 %Extraction of crude oil and natural gas 43 0 % 125 0 % -82 -65,6 %Mining 78 0 % 21 0 % 57 271,4 %Fishing industry 822 2 % 649 1 % 173 26,7 %Other industries 517 1 % 570 1 % -53 -9,3 %Power and water supply 1.619 3 % 1.276 3 % 343 26,9 %Building and construction 1.094 2 % 1.132 2 % -38 -3,4 %Retail trade 1.151 2 % 629 1 % 522 83,0 %Wholesale trade 346 1 % 368 1 % -22 -6,0 %Hotel and restaurant 397 1 % 358 1 % 39 10,9 %Intern. shipping and pipeline transport 599 1 % 419 1 % 180 43,0 %Transport and communication 1.615 3 % 1.795 4 % -180 -10,0 %Finance and insurance 414 1 % 374 1 % 40 10,7 %Property Housing cooperatives 1.607 3 % 1.523 3 % 84 5,5 % Property project 955 2 % 1.023 2 % -68 -6,6 % Property hiring out 3.784 8 % 3.621 8 % 163 4,5 % Real estate business 235 0 % 140 0 % 95 67,9 %Business services 642 1 % 639 1 % 3 0,5 %Other sectors 824 2 % 789 2 % 35 4,4 %Insurance, fund management and financial services 85 0 % 157 0 % -72 -45,9 %Central government- and social security administration - 0 % 1 0 % -1Counties and municipalities 157 0 % 170 0 % -13 -7,6 %Retail banking sector 29.880 61 % 29.856 62 % 24 0,1 %TOTAL 49.046 100 % 48.180 100 % 866 1,8 %

Loans transferred to SB1 Boligkreditt 14.288 10.283 4.005 39,0 %

41

Corporate property lending portfolio

• Lowest – Low risk, expected loss 0 % -0,50 %

• Medium risk, expected loss 0,50 -2,00 %

• High - Highest risk, expected loss over 2,00 %

The portfolio of corporate property lending represents the Group's highest single sector concentration

– Represents about 11 percent of total exposure (EAD)

The portfolio of corporate property lending is dominated by commitments with low risk

85,5 %

8,6 %5,9 %

0,0 %

10,0 %

20,0 %

30,0 %

40,0 %

50,0 %

60,0 %

70,0 %

80,0 %

90,0 %

Lowest - Low Medium High - Highest

42

Losses and commitments in default

• Normalized loss development. No new losses of essential character.

• High risk exposure within certain sectors was reduced last year– Property projects– Property hiring out

• Commitments in default and commitments in certain sectors are monitored very closely– Property projects– Property rentals – Housing co-operatives

43

Non-performing and impaired commitments

2,7 %

1,6 %

1,1 %

1,5 %

1,7 %1,8 %

0,9 %

0,6 %

0,4 %

0,3 %

0,4 %0,5 %

0,6 %

2,3 %

760

563

1005962

756

803

870

0,0 %

0,5 %

1,0 %

1,5 %

2,0 %

2,5 %

3,0 %

31.12.04 31.12.05 31.12.06 31.12.07 31.12.08 31.12.09 31.12.10

% of gross loans

0

200

400

600

800

1000

1200

MNOK

Non-performing and impaired commitments Individual write-down for impaired valueNon-performing and impaired commitments

44

-50

0

50

100

150

200

250

300

350

2004 2005 2006 2007 2008 2009 2010

NOK m

ill

-0.20 %

0.00 %

0.20 %

0.40 %

0.60 %

0.80 %

1.00 %

1.20 %

1.40 %

Net losses Net losses in % of gross lending incl.agency loans

2004 2005 2006 2007 2008 2009 31.12.10

Individual write-downs for impaired value 206 112 20 55 202 163 133

Collective write-downs imp. value -1 -25 -36 -13 40 36 -39

Recoveries, previously confirmed losses 35 22 27 25 59 14 7

Net losses 170 65 -43 17 183 185 87

Net losses in % of gross lending incl.agency loans 0.45 % 0.16 % -0.09 % 0.03 % 0.32 % 0.31 % 0.14 %

Losses on loans and guarantees - Group

45

Loan losses: The Group's write-downs in 2010

• The Group's total write-downs in 2010 is lower than the expected normalized level.

Write-downs

20104th quarter

2010 4th quarter

2009 2009

Individual write-downs Retail market 16 5 5 13

Corporate market 100 37 30 127

SpareBank 1 Finans Nord-Norge 7 1 5 11

Other group units 4 1 0 1

Total individual write-downs 127 44 40 152

Collective write downs and other value change items

-40 -1 4 33

Total write-down on loans and guarantees 87 43 44 185

46

Securities

4747

(Amounts in NOK million)

31.12.10 31.12.09Dividends 43 23

Income from joint ventures251 281

Gains/losses and net value changes on certificates and bonds 3 21Gains/losses and net value changes on shares 90 118

Gains/losses and net value changes on foreign exchange

32 49Gains/losses and net value changes on other financial derivatives -15 32Income from financial

investments 404 524

Income from financial investments

48

Equity certificate holders

49

49

SpareBank 1 Nord-Norge: Relative share priceperformance over 3 years

50

• The bank's Main Board of Directors proposes the transfer of NOK 300 million from the bank's equalisation reserve to the equitycertificate capital.

• This entails the issuance of 5,970,691 new equity certificates witha nominal value of NOK 50.-, with 3 old equity certificates givingentitlement to one new equity certificate.

• In addition, a split of the bank's equity certificates is proposed, i.e. each equity certificate will be split into two after the bonus issue. The new nominal value per equity certificate will then be NOK 25.

• The bonus issue and split will be reviewed by the Bank'sSupervisory Board on 29 and 30 March 2011. The practicalexecution will start as soon as possible thereafter.

The Bank's equity certificates: Bonus issue and split

51

SNN's equity certificates (ECCs): Bonus issue and split - new value

Theoretical value after bonus issue and split

Bonus issue

Number of old ECCs per new 3

Nominal value ex dividend 120,000 Number of ECCs before bonus issue 17 912 073 Total market value ECCs (mnok) 2 149 Number of ECCs after bonus issue 23 882 764 New theoretical value after bonus issue 90 Split 1:2 after bonus issue Number of ECCs after split (1 000) 47 765 528 New theoretical value after bonus issue and split 45

5252

Equity Certificates (EC) - holder structure

21.4

26.5

7.3

27.3

5.5

29.7

28.8

21.6

0

5

10

15

20

25

30

35

10 largest EquityCertificate holders

20 largest EquityCertificate holders

Holders residing inNorth Norway

Foreign Holders

%

31.12.09 31.12.10

5353

The 20 largest EC holders as at 31.12.10

Number of Share of totalEquity Certificate holders Equity Certificates Equity Certificate capitalPareto Aksjer Norge 1 057 473 5.90 %Pareto Aktiv 471 960 2.63 %MP Pensjon 418 279 2.34 %Frank Mohn AS 381 362 2.13 %Tonsenhagen Forretningssentrum AS 319 126 1.78 %Citibank N.A. 283 588 1.58 %Nordea Bank Norge ASA 280 000 1.56 %Framo Development AS 238 798 1.33 %Sparebanken Rogalands Pensjonskasse 220 081 1.23 %Pareto VPF 203 948 1.14 %Forsvarets Personellservice 174 334 0.97 %Karl Ditlefsen, Tromsø 154 359 0.86 %Sparebankstiftelsen 153 478 0.86 %Trond Mohn 143 279 0.80 %Fred Olsen & Co’s pensjonskasse 121 787 0.68 %Troms Kraft Invest AS, Tromsø 115 113 0.64 %Ringerike Sparebank 113 741 0.63 %Terra Utbytte Verdipapirfond 112 734 0.63 %Taj Holding AS, Finnsnes 100 000 0.56 %Tromstrygd, Tromsø 97 000 0.54 %SUM 5 160 440 28.81 %

5454

Liquidity/funding

55

0

1

2

3

4

5

6

7

8

9

10

dec.

11

jan.

11

feb.

11

mar

.11

apr.1

1

may

.11

jun.

11

jul.1

1

aug.

11

sep.

11

oct.1

1

nov.

11

dec.

11

jan.

12

feb.

12

mar

.12

apr.1

2

mai

.12

jun.

12

jul.1

2

aug.

12

Billion NOK

Liquidity buffer as per 31.12.10

• Liquidity buffer: Cash, drawing rights in Norges Bank, bond portfolio (not deposited in Norges Bank), equities and mortgage loans prepared for transfer to SpareBank 1 Boligkreditt.

• Assumption: No new capital markets funding and 7 % growth in both lending and deposits.

56

• Operating result before tax NOK 1 002 million (NOK 1 002 million).

•Return on equity capital after tax 15.3 per cent (18.2 per cent).

•Result per Equity Certificate (EC) (Parent Bank): NOK 15.59 (NOK 16.39).

• The underlying banking operations is good. Result from core operations before losses NOK 685 million (NOK 663 million).

• The total pre-tax result from subsidiaries is NOK 82 million (NOK 25 million).

• Net result from financial investments NOK 404 million (NOK 479 million);

•SpareBank 1 Gruppen AS' NOK 164 million

•Other joint ventures in the SpareBank 1 Alliance NOK 87 million

•Gains on the bank's share portfolio NOK 133 million

•Net gains interest-bearing portfolio NOK 3 mill

•FX and financial derivatives NOK 17 million

• Overall cost control under control. Cost income ratio: 46.8 % (45.0 %).

• Low loan losses: Net losses totalled NOK 87 million (NOK 185 million).

• Low loan losses: Net losses totalled NOK 87 million (NOK 185 million).

• Lending growth during the last 12 months (including loans transferred to SpareBank 1 Boligkreditt): 7.2 per cent (4.0 per cent).

• Retail banking market 8.4 per cent (including SpareBank 1 Boligkreditt)

• Corporate banking market 4.7 per cent

• Deposit growth last 12 months: 12.9 per cent (0.9 per cent).

• Retail market 6.7 per cent

• Corporate market 19.1 per cent

• Public market 22.3 per cent

• Overall deposit coverage ratio: 80.3 per cent (72.4 %).

• The Bank has good financial strength with the Group’s core capital adequacy ratio at 10.9 per cent.

• Continued satisfactory liquidity.

• Proposed payment of cash dividend: NOK 5.75 per Equity Certificate

• Bonus issue and split of the Bank's Equitycertificate

Very good result. The Bank’s financial strength remains strong .

Main features (figures and percentages in brackets refer to the same interim period in 2009):

SpareBank 1 Nord-Norge 4th quarter report 2010

5757

SpareBank 1 Nord-NorgeP O Box 68009298 Tromsø

Contact information

CEOHans Olav KardeTlph 901 51 981

Deputy CEOOddmund ÅsenTlph 906 72 757

CFORolf Eigil BygdnesTlph 905 19 774

Internet:

SNN home page and internet bank: www.snn.noHugin Online: www.huginonline.noEquity capital certificates in general: www.egenkapitalbevis.no

Q1 29. April Q2 10. August Q3 26. October

Financial calendar 2011

5858

Additional information - www.snn.no

5959

Enclosures

6060

Summary – key figures

GroupAmounts in NOK million 31.12.10 31.12.09 Change Change %RESULT

Result before tax 1 002 1 002 0 0.0%

STATEMENT OF FINANCIAL POSITION

Total assets 68 780 64 239 4 541 7.1%Gross lending 49 046 48 180 866 1.8%Deposits from customers 39 389 34 877 4 512 12.9%

KEY FIGURES 31.12.10 31.12.09 Change Change %Core capital adequacy ratio 10.9% 10.7% 0.2%After-tax return on equity capital 15.3% 18.2% -2.9%Cost/income 46.8% 45.0% 1.8%Manyear 788 778 10Parent bank

Result per Equity Certificate 11.51 13.85 -2.33

61

27,5 %

19,1 %

8,2 % 8,8 %

80,9 %

36,4 %

2,5 %1,3 %5,1 %

10,2 %

0,00 %

10,00 %

20,00 %

30,00 %

40,00 %

50,00 %

60,00 %

70,00 %

80,00 %

90,00 %

Within 60% 60-75% 75-90% 90-100% Over 100%

Exposure

Balance incl

Boligkreditt

Loan to value – LTV in % of collateral

The calculation is based on the market value of the collateral. By exposure the whole loan is included in the bucket while by balance, including Boligkreditt, the loan is distributed in the different intervals. The numbers include the Group's share of SB1 Boligkreditt-portfolio.

Exposure

Balance

incl Boligkreditt

62

Due to the positive migration, for the corporate market portfolio in particular, group write-downs were NOK 38 million lower in 2010. The level of write-downs is considered reasonable based on an assessment of the bank’s portfolio and external variables.

-50

-40

-30

-20

-10

0

10

20

30

40

2008 2009 2010

NO

K m

illion

Change in group write-downs

Group loan write-downs

63

Subord. debt,

Norway

1,9 %Fin. sector,

abroad

7,0 %

Cert.

10,3 %

Covered bonds

43,2 %

Fin. sector,

Norway

19,8 %

ABS

0,1 % CDO

1,3 %Industry,

Norway

5,1 %

Gov. cert.

7,9 %

Public bond

1,2 %

Gov. guar.

bonds

2,3 %

Interest-bearing portfolio

Total portfolio 11.541 mnok

64

Funding instruments/diversification as per 31.12.10

Category <1yr >1yr Total

Lower Tier 2, EUR 0 0 0

Lower Tier 2, NOK 0 1.000 1.000

EMTN, EUR 2.493 312 2.804

Tier 1, Perpetual, USD 0 349 349

BONDS, NOK 2.101 10.842 12.943

Government, NOK 0 1.000 1.000

Schuldschein, EUR 218 0 218

Cert's, NOK 0 0 0

Gov. swap arr., NOK 0 2.562 2.562

TOTAL, Short term funding 4.812TOTAL, Long term funding 16.065TOTAL, All funding 20.877

65

Funding and liquidity managementMaturity profile of capital markets funding as per 31.12.10

• Good liquidity

• Liquidity buffer NOK 7,9billion per 31.12.10

• Net refinancing need next12 months NOK 4,75 billion

Yearly funding maturity

0,000

1,000

2,000

3,000

4,000

5,000

6,000

2010 2011 2012 2013 2014 2015 2016 2017

Billion NOK

Funding maturity next 12 months

0,0000,2500,5000,7501,0001,2501,5001,7502,0002,2502,500

jan.

2011

feb.

2011

mar

.201

1ap

r.201

1m

ay.2

011

jun.

2011

jul.2

011

aug.

2011

sep.

2011

oct.2

011

nov.

2011

dec.

2011

Billion NOK

66

Exposure in Russia per 31.12.10

Bank Tavrichesky

• 10% stake, equivalent of NOK 82 mill• Subordinated loan EUR 4 mill NOK 32 mill

North-West 1 Alliance Bank

• Shares 75 % + assets NOK 34 mill• Issue 2011 RUR 150 mill NOK 30 mill• Funding agreement up to RUR 500 mill NOK 100 mill

– Drawn NOK 41 mill

• Subordinated loan EUR 1,5 mill NOK 12 mill

Costs for Norwegian staff in Russia is charged in the Parent bank's 2010 accounts.The profit share (75 % fra NW1AB) is -0,6 mnok

67

Total assets in Norway 31.12.09(NOK bn, parent banks)

•The SpareBank 1 Alliance’s objective is to ensure the individual bank’s independence and regional anchoring through strong competitiveness, profitability and solidity

•Key figures for the SpareBank 1 Alliance

– Founded in 1996

– 20 independent savings banks

– 1.6 million customers, 530,000 internet customers

– Total assets: NOK 628bn

– 2nd largest mortgage lender

– 2/3 in retail lending

– 352 branches, 6,300 employees

•Market surveys indicate that SpareBank 1 is the second most known brand name in the Norwegian financial industry

Description of the SpareBank1 Alliance

The SpareBank 1 Alliance has a nationwide distribution network

352 member branches

and distribution through

378 branches

Note: (1) For Scandinavian banks, gross lending in Norway is

used; (2) loans transferred to Boligkredit (Covered bond

company) are included

The SpareBank 1 AllianceSpareBank 1 Nord Norge: Co-founder and one of the key partners in the SpareBank 1 Alliance

Source: company reports

67

68

The SpareBank 1 Alliance Strategic platform for the Alliance

Pu

rp

ose

Co

rn

ersto

nes

Ensure the independence and regional foothold of the individual member banks by maximizing their:

- Competitiveness - Profitability - Capital strength

Efficiency Local Market Focus

As a group, the banks seek to increase their efficiency compared to competitors by:

- Economies of scale

- Mutually increasing critical core competencies

- Sharing development investments

Each bank continues to maintain its link with its local community by:

- Keeping its own name and legal identity

- Taking advantage of its proximity to the local market

ALLIANCE PROGRAMME SEPARATE LEGAL ENTITIES

COMMON SUPERBRAND

68

69

SpareBank 1 Alliance structureOwnership structure

Sparebank 1 SMN

(19.5%)

Sparebank 1 SR-Bank (19.5%)

Sparebank 1 Nord-Norge

(19.5%)

Samspar(19.5%)

SparebankenHedmark(12%)

LO (10%)

BN Bank Bank 1 Oslo

SpareBank 1Boligkreditt

SpareBank 1Corporate credit

SpareBank 1 Gruppen AS

SpareBank 1Life insurance (100%)

SpareBank 1Nonlife insurance (100%)

ODIN Asset management (100%)

Argo Securities (75%)

Actor Fordrings-forvaltning(90%)

SpareBank 1 Factoring (100%)

SpareBank 1 LTO (100%)

Spar

eBan

k 1 A

llian

ce c

ompan

ies

Mem

ber

s

Sales, loan portfoliosProducts, commissions

Banking Cooperation

69