SpareBank 1 Ringerike Hadeland is a small savings bank serving the Ringerike and Hadeland districts of Norway, part of the SpareBank 1 alliance, with the listed security an equity certificate (97.34% EC ratio). For its size the quality is high: a record 14.5% ROE in FY2025, CET1 18.1% (3.2pp above the requirement), a Moody's A2 rating and negative loan losses (-0.01%). It trades at 1.50x book / ~1.52x tangible and ~9.3x earnings.
Two things temper conviction. First, the earnings quality: the record 14.5% ROE was flattered by one-off SamSpar gains and recurring-but-volatile financial-investment income (~16% of total income), so the clean run-rate is closer to ~13.3-13.5%, and the cost/income ratio is rising (37.4% FY2025 -> 42.3% in Q1 2026). On a normalized 13.5% ROE the Gordon fair value is ~NOK 434 — essentially the ~434 price (~NOK 475 on the reported 14.5%). Second, practical caveats: the certificate is thinly traded, and only interim/preliminary FY2025 figures were available (the audited annual report was not resolvable). The headline ~10.1% dividend yield is inflated by an extraordinary distribution (ordinary ~6.1%) that requires Finanstilsynet approval. A quality micro-cap bank, fairly valued.
Gordon fair P/B = (ROE-g)/(COE-g) with COE 10%, g 3%: a normalized 13.5% ROE gives a fair value ~NOK 434 (~current); the reported 14.5% implies ~NOK 475. Current 1.50x book, ~9.3x earnings.
Base NOK 440 (~fair on normalized ROE); bull NOK 490 if the ~14.5% ROE proves durable and a re-rate follows; bear NOK 360 if one-offs fade, cost/income keeps rising and the multiple de-rates.
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 12.5% vs 14.7% currently earned; at a sustained 14.7% ROE the warranted P/B is 1.67× (NOK 533/sh, +23%).
| Scenario | 24m target | Impl. ROE | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | NOK 490 | 14% | +13% | 30% | ~14.5% ROE proves durable; re-rate |
| Base | NOK 440 | 13% | +1% | 45% | ~Fair on normalized ROE |
| Bear | NOK 360 | 11% | -17% | 25% | One-offs fade; C/I rises; multiple de-rates |
| Prob-weighted | NOK 435 | — | +0% | 100% | Scenario-weighted expected value |
| Ke \ ROE | 10% | 14% | 18% | 22% | 26% | 30% | 34% |
|---|---|---|---|---|---|---|---|
| 8.50% | 406 | 638 | 871 | 1103 | 1335 | 1567 | 1799 |
| 9.25% | 358 | 562 | 766 | 970 | 1175 | 1379 | 1583 |
| 10.00% (base) | 319 | 502 | 684 | 866 | 1049 | 1231 | 1414 |
| 10.75% | 288 | 453 | 618 | 783 | 947 | 1112 | 1277 |
| 11.50% | 263 | 413 | 563 | 714 | 864 | 1014 | 1164 |
Green = fair value above the current price of NOK 434.00. For a financial the surface is dominated by cost of equity and sustainable ROE — not unit growth.
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CET1 18.1% (+3.2pp over requirement), Moody's A2 — strong for a micro-cap bank.
Ordinary ~6.1% yield (headline ~10.1% incl. an extraordinary, approval-pending distribution).
Negative loan losses (-0.01%) — a low-risk regional book.
Entrenched relationships in the Ringerike/Hadeland districts.
SpareBank 1 Ringerike Hadeland is a high-quality, fortress-capitalised micro-cap Norwegian savings bank, but at 1.50x book it sits ~at a normalized-ROE Gordon fair value, with thin liquidity, limited disclosure and one-off-flattered earnings as real caveats. HOLD, low conviction; base NOK 440.
Own it for the capital strength and ordinary dividend; the rating is capped by valuation, liquidity and the quality of the headline ROE.
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 profit after tax (group, FY2025) | 734 | Board report / preliminary FY2025 result p.6 | Record full-year group profit after tax. NI to equity holders = 734 - 27 hybrid (AT1) coupons = 707, the basis for reported ROE excl. hybrid. |
| Net interest income (group, FY2025) | 807 | Result summary p.4 | Core bank revenue line. 807 reported; 885 including commissions from the SB1 Boligkreditt/Naeringskreditt covered-bond foundations. Down ~19m YoY on two Norges Bank rate cuts in 2025. |
| Total income (group, FY2025) | 1,445 | Result summary p.4 | Sum of net interest income 807 + net commission & other income 410 + net return on financial investments 228 = total operating income 1,445 for the year. |
| Pre-tax profit (group, FY2025) | 905 | Result summary p.4 | Operating profit proxy for a bank = profit before tax ('resultat for skatt'), after operating costs 545 and a net loan-loss reversal of -5. Tax expense 171. |
| Total equity (group, 31 Mar 2026) | 4,996 | Balance sheet - group, Q1 2026 p.21 | Latest-quarter equity snapshot is the bank invested-capital base. Down from 5,534 at 31.12.2025 because the NOK 688m FY2025 dividend was deducted in Q1. Includes hybrid (AT1) 343m; common equity ex-AT1 = 4,653m. |
| Hybrid (AT1) capital in equity | 343 | Balance sheet - group, Q1 2026 p.21 | AT1 'fondsobligasjon' of 343m (was 350m at YE) sits within IFRS equity but is excluded from common equity for ROE; the bank reports ROE 'excl. hybrid'. Coupons (27m FY2025) deducted from profit to owners. |
| ROE excl. hybrid (FY2025) | 0.145 | Board report p.6 | Bank return measure. Reported 14.5% (record); management's one-off-adjusted figure 13.3% (one-off financial gains 58m). Computed 14.0% on NI-to-owners 707 / avg common equity 5,057.5 cross-checks. |
| ROE adjusted for one-off effects (FY2025) | 0.133 | Board report p.6 | Management's own underlying ROE excluding one-off financial effects (NOK 58m gain on sale of SamSpar stakes). Used with reported 14.5% to set normalized through-cycle ROE 13.5% for the Gordon anchor. |
| CET1 ratio (Ren kjernekapital, FY2025) | 0.181 | Solidity & capital adequacy p.13 | Regulatory capital strength (proportionally consolidated). CET1 18.1% vs requirement 14.9% = +3.2pp margin; total capital ratio 21.9%. CRR3 (1 Apr 2025) added ~1.9pp. Q1 2026 CET1 18.0%. |
| Cost/income ratio (group, FY2025) | 0.374 | Board report / key figures p.5-6 | Group C/I 37.4% FY2025 (parent bank 32.2%), up from 32.1% on higher staff and IT/alliance costs and the high-activity estate-agency subsidiary. Q1 2026 rose to 42.3% (group) — a cost-efficiency watch item. |
| Loan-loss ratio incl. credit foundations (FY2025) | -0 | Board report p.6 | Net loan-loss REVERSAL of NOK 5m for the year (ratio -0.01%); model-based provisions cut on portfolio migration and model calibration. A NOK 12.5m macro-uncertainty overlay is retained. Stage-3 net non-performing 0.56% of gross loans. Q1 2026 a further -22m reversal. |
| Equity certificate count (par NOK 100) | 15,650,405 | Note 12 EC holders & distribution p.37 | 15,650,405 listed equity certificates at par NOK 100 (eierandelskapital 1,565m). Used for market cap, P/B, EPS/EC. Unchanged at 31.03.2026. |
| Equity certificate ratio (egenkapitalbevisbrok) | 0.973 | Note 12 / key figures p.5, 37 | EC holders own 97.34% of the bank's equity capital (A / (A+B)); the residual 2.66% is community-owned primary capital ('grunnfond'). Stable across years. Explains the gap between listed EC count and data-vendor 'share' counts. |
| Book value per EC (31 Mar 2026, post-dividend) | 289 | Key figures - EC, Q1 2026 p.5 | Post-dividend book value per equity certificate NOK 289 (down from 324 at 31.12.2025 after the 44.00 dividend). Used as the current P/B and Gordon fair-value denominator. |
| Dividend per EC (FY2025) | 44 | Profit distribution proposal p.16 | Total NOK 44.00/EC = ordinary 26.35 (412m) + extraordinary 17.65 (276m); 100.2% payout of EC holders' share of group profit. Extraordinary requires Finanstilsynet approval. Recurring ordinary yield ~6.1%. |
| EC price & P/B at 31 Mar 2026 | 1.55 | Key figures / board report, Q1 2026 p.5 | Bank's own P/B 1.55x at NOK 448 (31.03.2026). Current verified price NOK 434 (8 Jun 2026) gives P/B 1.50x on book/EC 289. Confirms the live multiple basis. |
| Moody's issuer rating | A2 | Rating section p.14 | Moody's A2 stable issuer rating, citing good credit quality, low losses, strong capitalisation and consistent performance. Supports a moderate (not punitive) cost of equity despite small size. |
How the mttssn view has evolved — each prior dated note is preserved.