Max Bank and Skælskør Bank Agree on the Basis for a Merger

NASDAQall OMX Head office Nikolaj Plads 6 Femøvej 3, 4700 Næstved Phone + 45 55 78 01 11 1067 Copenhagen Central Business Registration No. 4017 2319 [email protected] 27 May 2010 Max Bank and Skælskør Bank agree on the basis for a merger Following targeted and constructive negotiations, the Supervisory Boards of Max Bank and Skælskør Bank have agreed to propose to the Annual General Meetings of the Banks to merge the two banks. The Danish State, being the principal shareholder of Skælskør Bank, has expressed its willingness to support the merger. The Bank will carry on under the name of Max Bank. The Bank will be deeply rooted in South and West Zealand with 13 private customer branches and 5 corporate customer divisions distributed throughout the entire market area. The head office will be located at Aquahuset near the Næstved harbour which Max Bank moved into about a year ago. Both banks envisage major synergy opportunities from this merger marketwise, costwise and earningswise. Max Bank is generally twice the size of Skælskør Bank. Combined, the two banks have today about 280 employees, and loans and advances, deposits and guarantees total approximately DKK 14.5bn. Both banks have long histories in their local market places. The roots of Skælskør Bank reach back to 1876 and Max Bank to 1901. They have both developed from being largely private customer banks to today also being strongly positioned in the corporate market area of Eastern Denmark. The branches of the banks are quite complementary to each other, with only Slagelse overlapping. Capital structure in place Over the last two years, both banks have made considerable write-downs for impairment - primarily of a few large corporate exposures. It has therefore been a key point that both banks should have a strong capital, liquidity and capital adequacy base prior to any merger. The capital base of Skælskør Bank fell into place through the conversion of approximately DKK 100m in hybrid core capital from the Danish State in March 2010. The new bank plans to increase its share capital by about DKK 100m in 2010 for the purpose of strengthening its financial resources. The Danish State has expressed its support of this share issue and will under certain conditions be prepared to seek the Danish Parliament’s endorsement of its proportional participation in the share issue. Stock Exchange Announcement No. 19/2010 Liquidity in place Liquidity too is in place. Max Bank has been given an individual state guarantee amounting to DKK 3.1bn, and Skælskør Bank has applied for a guarantee of DKK 1.4bn. The Danish State’s future role The Danish State holds an equity interest of 53.5% in Skælskør Bank and another 3.5% through Finansiel Stabilitet A/S (the Financial Stability Company). Expectations are that the Danish State’s total direct and indirect equity interest in the merged bank will be reduced by around 23%. The Danish State has expressed its support of the merger. Both banks have wanted to create the best foundation possible for the development of the merged bank. In view of this, the Danish State has indicated that, as part of the merger, it is ready to declare that it will not, without the approval of the Supervisory Board of the merged bank, sell its shares in the merged bank for a period up until 1 May 2012 as long as the merged bank has a capital adequacy ratio of 1.5 percentage units in excess of the capital adequacy needs and does not convert further state hybrid core capital. The Danish State does however want to reduce its equity interest and is therefore open to any purchase offers corresponding to the market value of the shares which can be approved by or have been designated by the new bank. The Danish State will as soon as possible request the Finance Committee of the Danish Parliament to endorse its participation in the merger. Exchange ratio for shareholders Based on the banks’ actual values and the Supervisory Boards' negotiations, the conversion ratio has been fixed so that 5.5 shares in Skælskør Bank will be converted into 1 share in Max Bank. Following this distribution, the shareholders in Skælskør Bank will hold 40.3% of the shares in the future bank, and Max Bank’s shareholders will hold 59.7% of the shares. Management and strategy The Supervisory Boards have agreed that the Executive Board of the merged bank will consist of Henrik Lund of Max Bank as chief executive officer and Henrik Borup Jeppesen of Skælskør Bank as executive officer. It has also been agreed that Hans Fossing Nielsen, current Chairman of the Supervisory Board of Max Bank, will take the seat as chairman of the supervisory board, and Peter Melchior, current Chairman of the Supervisory Board of Skælskør Bank, will be appointed vice-chairman. The plan is also to strengthen the merged bank in the market area by setting up local bank committees. Hans Verner Larsen, current member of Max Bank’s Executive Board, will be assigned with integrating the two banks and developing them into one entity in relation to the customers. The overall strategy of the merged bank will be the Stock Exchange Announcement No. 19/2010 branding platform rolled out by Max Bank over a number of years with very close customer relations, high availability and a unique setting of cafés. Shareholder value The new size will provide the bank with an opportunity to optimise many back-office functions, while at the same time enhancing competency levels. Many of the synergy effects will feed through as early as in 2011, and the Supervisory Boards estimate that a merger will improve core earnings already in the short term. The two Supervisory Boards recommend that the approximately 8,000 shareholders of Skælskør Bank and the approximately 16,000 shareholders of Max Bank vote in favour of the proposed merger. Perspective for further sector consolidation Following the merger and increase of share capital, the merged bank will be strongly positioned in relation to further consolidation with other financial institutions in the region. Schedule Subject to adoption at the general meetings of the two banks and the approval of the Danish Financial Supervisory Authority, the merger will become effective from 1 January 2010. The final merger plan is expected to be published in June. Expectations are that the merger will be carried through before the end of Q3 2010, and the share capital will be increased in immediate continuation thereof. Further information: Max Bank Hans Fossing Nielsen, Supervisory Board Chairman, mobile phone number +45 40 70 32 40, or Henrik Lund, Chief Executive Officer, mobile phone number +45 21 72 17 86. Skælskør Bank Peter Melchior, Supervisory Board Chairman, mobile phone number +45 40 55 11 42, or Henrik Borup Jeppesen, Chief Executive Officer, mobile phone number +45 61 56 60 00. Yours faithfully Hans Fossing Nielsen Peter Melchior Chairman of the Supervisory Board Chairman of the Supervisory Board of Max Bank of Skælskør Bank Stock Exchange Announcement No. 19/2010 Facts about the merged bank Name: Max Bank Head office: Næstved, Denmark Corporate customer divisions: Slagelse, Skælskør, Dalmose (agriculture), Næstved, Vordingborg Private customer branches: Kalundborg, Korsør, Skælskør, Dalmose, Sorø, Slagelse, Herlufmagle, Næstved City, Næstved Stor-Center, Haslev, Faxe, Vordingborg and Direct centre for remote customers Executive Board: Henrik Lund, Chief Executive Officer, and Henrik Borup Jeppesen, Executive Officer Chairmanship: Hans Fossing Nielsen, Engineer - Chairman Peter Melchior, Estate Owner - Vice-Chairman Loans and advances: DKK 6.4bn Deposits: DKK 6.5bn Guarantees: DKK 1.6bn Voting right restrictions: None Ownership restrictions: None This document is an unofficial translation of the Danish original. In the event of any inconsistencies the Danish version shall apply. Stock Exchange Announcement No. 19/2010 .

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