Time to reap synergies

Time to reap synergies Fondsfinans Research Sparebank 1 Østfold-Akershus - 4Q14 Update Recommendation: BUY Target NOK 180 16 February 2015 Prepared by Analyst: Geir Kristiansen, Fondsfinans AS, tel: 23 11 30 11, e-mail: gk@fondsfinans.no This report was prepared by an analyst engaged by Fondsfinans AS, the Norwegian affiliate of Fondsfinans Inc., who is not registered as a research analyst with FINRA or subject to FINRA rules governing research. See page 8 of this report for Important Disclosure Information. 1

Deep value and earning growth INVESTMENT CASE SpareBank 1 Østfold-Akershus (SOAG) reported in line with expectations and our estimates are marginally increased. We recommend BUY with an unchanged NOK 180 target price. This values the ECC at P/B 1.0x 2014 4Q14 in line - NII and net commissions in line - Marginally lower opex and loan losses - One-off (NOK -4m) and net financials (NOK -3m) Increased estimates - We have increased estimates by 2% in 2015 and 4% in 2016 - Lower funding costs - Somewhat lower loan losses. Value case - Valued at 0.7x last reported book equity - Cost cutting will increase RoE 1,0 x book is fair - We expect dividend to increase in 2016; dividend yield up from 4% to 10% 2

Estimates marginally up due to higher NIM in 2016 and lower loan loss estimates ESTIMATES Deviation table Key figures (NOKm) Actual FF est. Cons. Dev. Net interest income 78 78 0.6 % Other op.revenues 72 75-3.8 % Total revenues 150 152 150-1.6 % Total OPEX 85 86-0.7 % Personnel expense 50 49 1.8 % Pre-provision profit (PPP) 65 67-2.7 % Loan losses 9 11-17.3 % Pre-tax profit (PTP) 56 56 55 0.1 % Tax expense 10 14-28.5 % Net profit 44 42 42 4.9 % EPS 4.4 4.2 4.1 5.7 % Dividend 4.4 5.0 5.2-12.0 % Source: Fondsfinans research, Bloomberg, company data Changes in estimates Estimate changes Curr. Prev. Curr. Prev. Change (%) NOKm 2015E 2015E 2016E 2016E 2015E 2016E Net interest income 310 311 359 346-0.3 % 3.8 % Non-interest income 333 329 355 358 1.2 % -0.9 % Total revenues 643 640 714 704 0.4 % 1.4 % OPEX -326-322 -313-309 1.3 % 1.2 % Personnel expense -173-171 -160-158 1.1 % 1.1 % Pre-provision profit 317 318 401 395-0.5 % 1.6 % Loan losses -46-52 -61-67 -12.2 % -9.1 % Pre-tax profit (PTP) 271 266 340 328 1.8 % 3.7 % Tax expense -68-67 -85-82 1.8 % 3.7 % Net profit 203 200 255 246 1.8 % 3.7 % EPS (NOK) 19.5 19.8 24.6 24.5-1.4 % 0.5 % Dividende 4.9 5.0 12.3 12.2-2.0 % 0.6 % 3

A future yield case valued 30% below book VALUATION SHARE PRICE NOK Key figures Key figures (NOKm) 2012 2013 2014 2015E 2016E 3Q14 4Q14 Net interest income (NII) 252 283 291 310 359 74 78 Other op.revenues 286 302 350 333 355 117 72 Total operating revenues 538 585 641 643 714 191 150 Operating costs -319-325 -351-326 -313-96 -85 Pre-provision profit (PPP) 219 260 290 317 401 95 65 Loan losses -31-49 -40-46 -61-8 -9 Pre-tax profit (PTP) 188 211 249 271 340 87 55 Taxes -45-51 -45-68 -85-9 -10 Net profit 142 160 204 203 255 78 45 EPEC 13.6 16.1 19.4 19.5 24.6 7.7 4.1 BPS 151.3 166.2 177.6 191.7 207.3 178.1 177.6 DPS 4.1 3.6 4.4 4.9 12.3 Net interest income 1.44 % 1.60 % 1.61 % 1.69 % 1.88 % 1.61 % 1.71 % Loan losses (%) 0.22 % 0.34 % 0.28 % 0.31 % 0.39 % 0.22 % 0.26 % Core equity capital ratio (CET 1) 12.5 % 13.1 % 15.6 % 1.6 % 2.7 % 16.2 % 15.6 % Yield 5.6 % 4.3 % 3.4 % 3.8 % 9.6 % P/E 5.4 5.1 6.6 6.5 5.2 P/B 0.49 0.50 0.72 0.67 0.62 ROE 9.4 % 10.1 % 11.4 % 10.6 % 12.3 % 17.5 % 9.3 % Source: Fondsfinans research 4

Full year and quarterly estimates ESTIMATES INCOME STATEMENT 2013 2014 2015E 2016E 4Q14 1Q15E 2Q15E 3Q15E 4Q15E 1Q16E 2Q16E Net interest income 283 291 310 359 78 74 77 79 80 84 90 Net commission income 236 256 246 262 62 60 61 62 62 63 65 Other income 13-2 -3 Total core income 532 545 556 621 137 134 138 141 143 147 154 Total expenses -325-351 -326-313 -85-82 -81-76 -87-80 -78 Pre-provision profit (core items) 207 193 230 308 52 52 57 65 55 67 76 Loan loss provision -49-40 -46-61 -9-10 -11-12 -13-14 -15 Pre-tax profit (core items) 158 153 184 247 42 42 46 53 43 54 61 Total financial income 52 96 87 93 13 19 29 19 20 21 31 Pre-tax profit 211 249 271 340 55 62 75 72 62 74 92 Net profit (reported) 162 201 203 255 42 46 56 54 47 56 69 Adjusted net profit 181 160 202 260 50 46 48 57 51 61 133 EPEC (rep.) 16.1 19.4 19.5 24.6 4.1 4.5 5.4 5.2 4.5 5.4 6.6 BALANCE SHEET 2013 2014 2015E 2016E 4Q14 1Q15E 2Q15E 3Q15E 4Q15E 1Q16E 2Q16E Net lending to customers 14197 14320 14827 15568 14320 14306 14579 14929 14827 15241 15495 Total assets 18156 17987 18627 19559 17987 17972 18316 18756 18627 19147 19466 Total equity 1676 1842 1993 2149 1842 1836 1892 1946 1993 2003 2107 KEY FIGURES 2013 2014 2015E 2016E 4Q14 1Q15E 2Q15E 3Q15E 4Q15E 1Q16E 2Q16E ROE 10.13 % 11.45 % 10.60 % 12.32 % 9.27 % 10.05 % 12.02 % 11.31 % 9.50 % 11.17 % 13.43 % ROE (core banking) 6.85 % 5.97 % 6.04 % 7.84 % 9.86 % 8.70 % 10.68 % 9.98 % 8.19 % 9.87 % 12.14 % ROA 0.92 % 1.11 % 1.11 % 1.33 % 0.93 % 1.04 % 1.24 % 1.16 % 0.99 % 1.19 % 1.43 % RORWA 1.68 % 2.13 % 2.07 % 2.47 % 1.77 % 1.98 % 2.33 % 2.18 % 1.89 % 2.22 % 2.70 % RORWA (core banking) 1.54 % 1.47 % 1.69 % 2.15 % 1.86 % 1.69 % 2.09 % 1.96 % 1.64 % 1.98 % 2.46 % C/I 48 % 47 % 54 % 47 % 57 % 53 % 48 % 47 % 54 % 47 % 42 % C/I adj. 61 % 65 % 59 % 50 % 56 % 56 % 50 % 49 % 56 % 49 % 44 % Costs in % of total assets 1.84 % 1.94 % 1.78 % 1.64 % 1.88 % 1.82 % 1.78 % 1.65 % 1.87 % 1.69 % 1.63 % Loan loss ratio (gross loans) 0.34 % 0.28 % 0.31 % 0.39 % 0.26 % 0.28 % 0.30 % 0.32 % 0.34 % 0.36 % 0.38 % Net interest margin (normalised) 1.60 % 1.61 % 1.69 % 1.88 % 1.71 % 1.67 % 1.70 % 1.68 % 1.71 % 1.79 % 1.86 % Deposit-to-loan ratio 0.77 0.81 0.81 0.80 0.81 0.79 0.82 0.80 0.81 0.76 0.79 Net Loans/Equity 8.5 7.8 7.4 7.2 7.8 7.8 7.7 7.7 7.4 7.6 7.4 CET 1 ratio (transition rule) 13.1 % 15.6 % 1.6 % 2.7 % 15.6 % 0.4 % 0.8 % 1.2 % 1.6 % 1.8 % 2.1 % Tier 1 ratio (transition rule) 16.7 % 16.5 % 4.7 % 5.7 % 16.5 % 3.6 % 4.0 % 4.3 % 4.7 % 4.9 % 5.1 % Tier 2 ratio (transition rule) 16.7 % 16.5 % 4.7 % 5.7 % 16.5 % 3.6 % 4.0 % 4.3 % 4.7 % 4.9 % 5.1 % Source: Fondsfinans research 5

We rate SpareBank 1 Østfold-Akershus MEDIUM risk RISK ASSESSMENT Low oil price may trigger a recession and higher loan losses SpareBank 1 Østfold-Akershus has substantial exposure to real estate activities. Higher interest rates and/or lower activity level may trigger loan losses in this sector The ECC has low liquidity. A position may be difficult to liquidate in rough market conditions 6

Share information SPAREBANK 1 ØSTFOLD-AKERSHUS Share data Shareholders Share data Sector Banks Bloomberg SOAG NO Equity Risk rating Low Outstanding shares (million) 9.3 Market cap (NOK billion) 1.2 Total assets (NOK billion) 18.0 Net lending (NOK billion) 13.9 Free float 16 % Average volume (1000s last 12m) 1.4 High/low 52w 128.0/ 90.0 Weight PCC index 1.16 % Rel. Perf 3/6/12 4/ 22/ 18 Abs. Perf. 3/6/12 7/ 25/ 33 Source: Bloomberg, Fondsfinans research Major shareholders as of 03.11.2014 Ostfold Akersh Spare 52.70 % 4,896 Halden Sparebank 31.40 % 2,919 Ovidia Invest As 1.40 % 130 Broch Joergen Cato 1.40 % 130 Terra Fondsforvaltni 1.20 % 113 Pareto As 0.70 % 69 Harald Espedal As 0.50 % 47 Mp Pension 0.50 % 42 Wimoh Invest As 0.40 % 35 Merrill Lynch Prof C 0.30 % 31 Sole Invest As 0.30 % 30 Wikborg Tord Geir 0.30 % 28 Total number of EC shares 91.20 % 9,288 7

Definitions of ratings Buy Low risk: with a potential of min 5%. Medium risk: with a potential of min 10%. High risk: with a potential of min 20%. Neutral Low risk: -5% to +5%. Medium risk: -10% to +10%. High risk: -20% to +20%. Sell Low risk: min 5%. Medium risk: min 10%. High risk: min 20%. Risk ratings are based on price volatility, fundamental criteria and perceived risk. Ratings are: Low (L), Medium (M) and High (H). Target: Our valuation as of today. Time frame of target: Target is what we value the share as of today. Recommendation distribution as of 13.02.15: Companies in each recommendation category that have been investment banking clients over the past 12 months: Recommendation No Percent Recommendation No Percent Buy 33 70 % Buy 2 6 % Neutral 13 28 % Neutral 1 8 % Sell 1 2 % Sell 0 0 % Total 47 100 % Total 3 Our intention is to issue preview and update research on a quarterly basis. Our investment recommendation is elaborated in accordance with The Norwegian Securities Dealers Associations standards. This report has not been sent to the company for correction of any factual errors. Fondsfinans is organized with Chinese walls between the Corporate Department and the Research/Broking Department. In addition, Fondsfinans has internal instructions and guidelines for handling sensitive information. The analyst receives compensation that is impacted by overall firm profitability, including investment banking activities. Fondsfinans is under supervision of The Financial Supervisory Authority of Norway. The recommendation has not been changed from BUY. The previous recommendation was issued 21.01.15. Ownership per 04.02.15 in Sparebank 1 Østfold-Akershus: Analyst (including his/her closely related persons or companies): 0, corresponding to 0% of the company share capital Employees (including their respective closely related persons or companies): 1.000, corresponding to 0% of the company share capital Group Fondsfinans (including the holdings of its Chairman, his spouse and their closely related companies, Erik Must AS and its 100% controlled subsidiaries): 0, corresponding to 0.0% of the company share capital Fondsfinans may hold shares in Sparebank 1 Østefold-Akershus as result of daily trading/market making. Information on such holdings is not given when of non-significant value. Fondsfinans do not act as market maker in Sparebank 1 Østfold-Akerhus. Fondsfinans has not acted as corporate adviser, lead manager in IPO etc. during the past 12 months. This report was issued and distributed 16.02.15. Disclaimer Our research and general presentations, also available at our website www.fondsfinans.no, are provided for information purposes only. They should not be used or considered as an offer to sell or a solicitation of an offer to buy any financial instruments. Any opinion expressed are subject to change without prior notice. Our research and presentations are based on information from various sources believed to be reliable. Although all reasonable care has been taken to ensure that the information herein is not misleading Fondsfinans AS makes no representation or warranty expressed or implied as to its accuracy or completeness. Neither Fondsfinans AS, its partners and employees, nor any other person connected with our research and presentations, accept any liability whatsoever for any direct or consequential loss of any kind arising out of the use or reliance on the information given. They do not take into account the specific investment objectives and financial situation of any recipient. Investors seeking to buy or sell any financial instruments discussed or recommended in our research or in separate presentations, should seek independent financial advice relating thereto. Our research and materials from separate presentations may not be distributed, quoted from or reproduced for any purpose without written approval by Fondsfinans AS. Disclosure of interests Fondsfinans AS is constantly seeking investment-banking mandates, and may at any time perform investment banking or other services or solicit investment banking or other mandates from companies covered in our analysis and presentations. Fondsfinans AS may from time to time as part of its investment services hold positions in securities covered in our research and presentations. In order to avoid any conflict of interests Fondsfinans AS and its employees will always follow very strictly all internal regulations, recommendations from the Norwegian securities dealers association and relevant legislation and regulations from the supervisory official authorities. Internal holdings will be specified as part of shareholder information. Distribution in the United States Research reports are prepared by Fondsfinans AS for information purposes only. Fondsfinans AS and its employees are not subject to the rules of the Financial Industry Regulatory Authority (FINRA) governing research analyst conflicts. The research reports are intended for distribution in the United States solely to major U.S. institutional investors as defined in rule 15a-6 under the United States securities exchange act of 1934, as amended and may not be furnished to any other person in the United States. Each major U.S. institutional investor that receives a copy of a Fondsfinans AS research report by its acceptance thereof represents and agrees that it shall not distribute or provide copies to any other person. Reports are prepared by Fondsfinans AS and distributed to major U.S. institutional investors under rule 15a-6(a)(2). These research reports are prepared by Fondsfinans AS and distributed in the United States by Fondsfinans Inc. Under rule 15a-6(a)(2). any U.S. Person receiving these reports that desires to effect transactions in any securities discussed within the report should call or write Fondsfinans Inc., a member of FINRA. 8