SpareBank 1 SMN is the leading savings bank of Mid-Norway (Trondelag), with retail + corporate banking, the scale of the SpareBank 1 alliance, and an unusually large capital-light associate/fee-income stream (SpareBank 1 Gruppen, real-estate brokerage) that makes it the least rate-dependent of the Norwegian banks. ROE is ~14.8% (LTM 15.3%; normalized ~13.5%), CET1 16.8%, credit losses near zero, residual income +NOK 1.3bn — clearly value-creative over a 10% cost of equity.
On bank primitives it trades at 1.39x book, 1.45x tangible and ~10x earnings, with a ~7.2% dividend yield (69% payout). On a normalized 13.5% ROE the Gordon fair P/B is ~1.50x -> ~NOK 203 (+8%); on the reported ROE the upside is larger. A high-quality regional bank at a modest discount to fair value with a fat yield. The main caveat is softer Q1 2026 momentum (ROE 11.3%, loss ratio ticking up).
Gordon fair P/B = (ROE-g)/(COE-g) with COE 10%, g 3%: a normalized 13.5% ROE gives ~1.50x -> ~NOK 203 (+8%); the reported 14.8% ROE implies more. Current 1.39x book, ~10x earnings, ~7.2% yield.
Base NOK 203 (normalized-ROE fair value); bull NOK 230 if ROE holds ~15% on associate income + rates; bear NOK 165 on NII/credit normalization + a de-rate toward ~1.2x book.
The operating reverse-DCF (NOPAT / invested capital / WACC) does not apply to a balance-sheet business — leverage is the raw material and "net debt" is not meaningful. The equity is valued on residual income: book equity plus the present value of returns above the cost of equity, discounted at Ke; the single-stage lens is the Gordon fair price-to-book, (ROE−g)/(Ke−g). The market prices in a sustainable ROE of 9.4% vs 14.1% currently earned; at a sustained 14.1% ROE the warranted P/B is 1.59× (NOK 329/sh, +75%).
| Scenario | 24m target | Impl. ROE | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | NOK 230 | 11% | +22% | 35% | ROE holds ~15% on associate income + rates |
| Base | NOK 203 | 10% | +8% | 45% | Normalized-ROE Gordon fair value |
| Bear | NOK 165 | 9% | -12% | 20% | NII/credit normalization; de-rate toward ~1.2x book |
| Prob-weighted | NOK 205 | — | +9% | 100% | Scenario-weighted expected value |
| Ke \ ROE | 10% | 14% | 18% | 22% | 26% | 30% | 34% |
|---|---|---|---|---|---|---|---|
| 8.50% | 263 | 413 | 563 | 713 | 863 | 1013 | 1163 |
| 9.25% | 231 | 363 | 495 | 627 | 760 | 892 | 1024 |
| 10.00% (base) | 206 | 324 | 442 | 560 | 678 | 796 | 914 |
| 10.75% | 186 | 293 | 399 | 506 | 613 | 719 | 826 |
| 11.50% | 170 | 267 | 364 | 461 | 558 | 656 | 753 |
Green = fair value above the current price of NOK 187.80. For a financial the surface is dominated by cost of equity and sustainable ROE — not unit growth.
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Large capital-light associate income makes SMN the least rate-dependent Norwegian bank.
Leading Mid-Norway franchise + alliance scale = stable high returns.
CET1 16.8%, near-zero loan losses.
~7.2% yield at 69% payout off surplus capital.
SpareBank 1 SMN is a high-quality, fortress-capitalised regional bank with a uniquely capital-light fee/associate income base, trading ~8% below a normalized-ROE Gordon fair value with a ~7.2% yield. BUY; base NOK 203.
Quality + a fat yield + a modest discount; the watch item is the Q1 momentum/credit trend.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Source reports archived locally.
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| Net interest income (FY2025, Group) | 5,343 | Income statement - Group p.230 / Note 17 | Core revenue line for a bank. FY2025 Group net interest NOK 5,343m (NOK 5,373m in 2024), down 0.6% on rate cuts and one fewer interest day. LTM 5,242 = Q1'26 1,220 + FY 5,343 - Q1'25 1,321. |
| Net commission income and other income (FY2025) | 2,602 | Income statement - Group p.230 / Note 18 | Fee/commission income incl. estate agency 566, accountancy 772, insurance 310, payments 336. Commission ex captive mortgage cos up 5.8%. Capital-light, diversifying income stream. |
| Net profit from ownership interests / associates (FY2025) | 1,017 | Income statement - Group p.230 (Income from investment in related companies) / Note 39 | Equity-method income from alliance/associate stakes (SpareBank 1 Gruppen, BN Bank, EiendomsMegler 1, etc.). NOK 1,017m FY2025 (1,254m in 2024, which included a NOK 452m Fremtind/Eika merger gain). Makes SMN the least rate-dependent bank in Norway. |
| Total income (FY2025, Group) | 9,068 | Income statement - Group p.230 | FY2025 Group total income NOK 9,068m (9,123m in 2024). LTM 8,979 = Q1'26 2,071 + FY 9,068 - Q1'25 2,160 (audited AR FY figure used; Q1 2026 report restates FY total income to 9,133 on a minor reclassification). |
| Result before tax (FY2025, Group) | 5,449 | Income statement - Group p.230 | Pre-tax profit NOK 5,449m FY2025 (5,647m in 2024), after operating expenses 3,479 and loan losses 140. LTM operating_profit 5,235 = Q1'26 1,055 + FY 5,449 - Q1'25 1,269. |
| Net profit for the year (FY2025, Group) | 4,367 | Income statement - Group p.230 | Group net profit NOK 4,367m FY2025 (4,591m in 2024). Of this, NOK 161m to AT1 holders, NOK 2,751m to EC holders, NOK 1,367m to the savings-bank reserve, NOK 88m to NCI. |
| Net profit attributable to EC holders (FY2025) | 2,751 | Income statement - Group p.230 (Attributable to Equity capital certificate holders) | The EC-holders' slice of group profit, NOK 2,751m FY2025 (= 66.8% EC ratio x owners' profit). Basis for per-EC EPS. LTM EC-holder profit 2,655 = Q1'26 527 + FY 2,751 - Q1'25 623; LTM EPS per EC 18.41. |
| Return on equity (FY2025) | 0.148 | Key figures - This is SpareBank 1 SMN p.7 | Bank headline return measure. Reported ROE 14.8% FY2025 (16.6% in 2024; 2024 ex the Fremtind/Eika gain was 15.0%). Computed as adjusted net profit 4,118 / average owners' equity. Used as headline; LTM computes to 15.3% (flattered). |
| Common equity Tier 1 capital ratio (CET1, FY2025) | 0.168 | Key figures (Solidity) p.8 | Regulatory capital strength. CET1 16.8% at 31 Dec 2025 (18.3% in 2024 - the drop reflects RWA inflation from the SME-factor change and model updates), rising to 17.1% at Q1 2026. Long-term target 15.9%; leverage ratio 7.0%; total capital ratio 20.8%. |
| Common equity Tier 1 capital ratio (Q1 2026) | 0.171 | Key figures (Solidity) - First Quarter 2026 p.5 | Latest reported CET1 17.1% (31 Mar 2026), ~1.2pp above the 15.9% long-term target. Tier 1 ratio 18.8%, total capital ratio 21.2%, leverage ratio 7.0%, LCR 172%, NSFR 124%. |
| Cost-income ratio (FY2025, Group) | 0.44 | Key figures (Profitability) p.7 | Group C/I 44% FY2025 (42% in 2024); parent-bank C/I 36% (target below 40% for the bank). Group ratio is structurally higher because the consolidated cost base includes the labour-heavy accounting and real-estate subsidiaries. |
| Impairment losses ratio (FY2025) | 0.001 | Key figures (Balance sheet) p.7 | Loan-loss ratio 0.06% of gross lending FY2025 (losses NOK 140m; 0.05% in 2024). Low cost of risk; net reversal on retail, modest corporate losses. Q1 2026 ratio rose to 0.15% (losses NOK 100m) - a watch item. |
| Equity certificate (EC) ratio / egenkapitalbevisbrok | 0.668 | Note 2 EC ratio reconciliation p.358 | EC ownership fraction A/(A+B) = EC owners' capital 14,608 / (14,608 + savings-bank reserve 7,272) = 66.8% (67% in the rounded key-figures table). The listed ECs own 66.8% of the bank; the remaining 33.2% is community capital, not listed. |
| Total equity (Group, 31 Mar 2026) | 29,760 | Balance sheet - Group, First Quarter 2026 | Latest-quarter group equity NOK 29,760m, incl. AT1 1,953 and NCI 712 -> common equity to owners 27,095. Down from 31,865 at 31 Dec 2025 on the dividend/gift earmark. Equity snapshot for the bank invested-capital base. |
| Total equity (Group, 31 Dec 2025) | 31,865 | Balance sheet - Group p.234 | Group equity NOK 31,865m at 31 Dec 2025 (incl. AT1 1,996, NCI 821). Owners' common equity 29,048. With 31 Dec 2024 owners' equity 27,663 gives FY2025 average owners' equity 28,356 for the audited 14.8% ROE. |
| Intangible assets (Group, goodwill + other) | 1,251 | Note 31 Intangible assets p.329 | Group intangibles NOK 1,251m (goodwill 1,135 + other intangibles 116), only ~4.6% of owners' equity - clean, tangible-heavy balance sheet. Deducted to reach tangible common equity to owners 25,844 for ROTCE / P-TBV. |
| Book value per EC (FY2025) | 135 | Key figures (Equity capital certificates) p.8 | Published book value per equity certificate NOK 135.06 at 31 Dec 2025 (incl. dividend; 128.09 in 2024). Used for P/B. Board report text cites NOK 138.30 on a slightly different (pre-distribution) basis; the audited key-figures table value 135.06 is used. Q1 2026 figure 125.45 after dividend deduction. |
| Profit per EC (FY2025) | 19.08 | Key figures (Equity capital certificates) p.8 / p.357 | Reported earnings per EC NOK 19.08 FY2025 (20.10 in 2024). LTM EPS per EC computes to 18.41 (EC-holder profit 2,655 / 144.191m ECs). Reported P/E (annualised) 10.80x at the year-end price 206.05. |
| Number of equity certificates outstanding | 144,191,372 | Note 2 / EC key figures p.357 | 144,191,372 equity certificates outstanding (adjusted for own holdings), broadly flat. Used for EPS per EC, P/B and market cap. Market cap = 187.80 x 144.191m = 27,079 NOK m. |
| Dividend per EC (FY2025) | 13.5 | Report of the Board of Directors - Proposed profit distribution p.219 | Proposed cash dividend NOK 13.50 per EC (12.50 in 2024), a 69% payout of group profit ex-hybrid interest, above the ~50% long-term policy. Yield 7.19% on NOK 187.80. Plus a NOK 968m community dividend not accruing to EC holders. |
| ROE Q1 2026 | 0.113 | Main figures / Report of the Board - First Quarter 2026 p.4 | Q1 2026 ROE 11.3% (14.0% in Q1 2025) - the weakest recent quarter on lower NII (rate cuts, fewer interest days), softer associate income and higher loan losses (NOK 100m). Net profit NOK 849m. Supports the 13.5% normalized through-cycle ROE rather than the 14.8% FY print. |
| EC quoted price (year-end 2025) and P/B | 206 | Key figures (Equity capital certificates) p.8 | Report's own 31 Dec 2025 EC close NOK 206.05 (P/B 1.49x then). Live verified price NOK 187.80 (8 Jun 2026) used for current multiples -> P/B 1.39x, below the year-end level and the Gordon anchors. |
How the mttssn view has evolved — each prior dated note is preserved.