Untitled

ANNUAL REPORT 2024

BEST YEAR IN THE HISTORY OF THE BANK

CORE EARNINGS

NET INTEREST AND FEE IN-

COME

IMPAIRMENT

LENDING

CAPITAL

DIVIDENDS

Core earnings increased by 6.5% and amounted to

DKK 357.6 million, compared with DKK 335.9 million

in 2023

Net interest and fee income increased by 7.0% to

DKK 635.0 million

Impairment of DKK 18.2 million and a main-

tained management estimate of DKK 100.00

million

Lending increased by 3.5% and amounts to DKK 6,963

million and deposits increased by 7.4% and amount to DKK

8,893

Capital ratio of 24.6% and individual solvency re-

quirements of 9.9%

Proposal of DKK 7 per share, corresponding to DKK

67.5 million or 24.6% of prot after tax for the year

EXPECTATIONS FOR 2023

Prot before tax for 2025 is expected to be in the

range of DKK 280 – 310 million

PROFIT BEFORE TAX

Prot before tax increased by 6.0% to DKK

364.6 million, compared to DKK 344.1 million in

2023

RETURN IN EQUITY Equity yielded interest of 22.0 % before tax

VALUE ADJUSTMENTS

Exchange rate adjustments of DKK 38.0 million

compared with DKK 47.2 million in 2023

Content

Management’s nancial report for 2024 .................................................. 4

Endorsement of the Annual Report by the Management ..................................... 36

Prot and loss account ............................................................... 37

Statement of comprehensive income .................................................... 37

Proposal for distribution of prot ........................................................ 37

Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Information on changes in equity ....................................................... 40

Notes ............................................................................. 41

5 years in summary .................................................................. 79

5 years nancial ratios ................................................................ 80

Financial Calendar 2025 ............................................................... 81

Committee of representatives .......................................................... 82

List of board members’ managerial ofces ................................................ 83

Management’s nancial report for 2024

A profit before tax of DKK 364.6 million, which indicates progress in all important areas, is very satisfactory.

Profit has been positively affected by increases in net interest and fee income, including dividends, which in-

creased by DKK 41.5 million or 7.0%. There are realised positive exchange rate adjustments of DKK 38.0 milli-

on in 2024 compared to DKK 47.2 million in 2023. Staff and administration expenses etc. increased by 9.8%

to DKK 280.5, while impairment was reduced by DKK 9.5 million to DKK 18.2 million.

Equity yielded a very satisfactory interest of 22.0% before tax and 16.5% after tax.

The positive development in profit over the year, with increasing interest and fee income as well as positive

exchange rate adjustments, has resulted in three upward adjustments and was most recently specified in

the range of DKK 350 – 360 million before tax on 17 December 2024. The realised profit thus marginally ex-

ceeds expectations by DKK 4.6 million. The expectation for core earnings was maintained in the range of

DKK 340 - 360 million and was realised at DKK 357.6 million.

The solid development in business volume is expected to continue in 2025, but due to the expected continu-

ed declining interest rates and strong competition, a lower profit range for 2025 of DKK 280 – 310 million be-

fore tax and a core earnings in the range of DKK 290 – 310 million has been announced.

In light of the achieved profit, expectations for future earnings and the capital coverage, it is recommended

to the Annual General Meeting that dividends of 24.6% of the profit after tax for the year, corresponding to

DKK 7 per share or a total of DKK 67.5 million, be distributed. The distribution is proposed to be distributed

as DKK 33,740 thousand in dividends and DKK 33,740 thousand as a buy-back program. See further descripti-

on on page 16. The distribution is considered justified in light of the highly strengthened earning capacity,

which in the coming years will also increase the capital base significantly, despite a continued expectation of

a solid and capital-consuming growth in lending.

The Bank’s development is very satisfactory in all areas and the main economic performance goals in the

Bank’s strategic plan for 2025 have been realised at a satisfactory level. The most important factors in the

strategy are high employee satisfaction, high customer satisfaction and earnings at the top of the sector. All

three factors are absolutely key to maintaining the Bank’s status as a solid and independent local bank that

makes a difference for all the Bank’s stakeholders.

Customer satisfaction is measured in an independent study conducted by Finanssektorens Uddannelsescen-

ter. In the survey, 85% respond that they are very satisfied with being a customer of the Bank and nearly 9

out of 10 would recommend the Bank to others. We are both proud and humbled by this. Customer satisfac-

tion is thus extremely satisfactory and at the very top of the sector.

Employee satisfaction is measured through an anonymous and independent employee satisfaction survey

every year. The satisfaction has been extremely high for many years, and the measurement in 2024 was no

exception. The satisfaction and pride in being an employee of the Bank amounted to 95.2%, which is very

satisfactory.

The Bank’s earnings in the form of return on equity and earnings per cost ratio are 22.0% and 2.16 respecti-

vely, and are expected to be at the very top once the financial institutions’ annual reports for 2024 have been

published.

In the Bank’s strategic plan for 2025, the primary focus areas remain unchanged: maintaining the high

employee satisfaction, high customer satisfaction and earnings at the top of the sector. In addition, a num-

ber of objectives have also been set in the ESG area, amongst other things.

The Bank’s credit provision increased in 2024. Lending increased by DKK 236.2 million or 3.5%. After a very

high growth in recent years, the lending growth in 2024 is, as expected, lower, but still satisfactory. The len-

ding growth has been realised with good credit quality and the distribution of the growth, primarily with

growth in the private segment, which provides further risk diversification.

The provision of mortgage loans from Totalkredit and DLR Kredit are respectively DKK 14.9 billion and DKK

5.4 billion in total. The customers’ participation in pool schemes has increased by DKK 400 million and

amounts to DKK 2.0 billion and deposits have increased by DKK 609 million or 7.4%. The development in all

areas is very satisfactory.

There is an increase in activity and high customer traffic in all 10 branches of the Bank: 6 in South/West Jut-

land and 4 in the Copenhagen Metropolitan Area. All branches are very well run and contribute to increasing

activity and customer numbers. There is still great potential in all of the Bank’s branches, so no branch ope-

nings are planned in 2025.

The Bank’s solid development in growth in earnings and business volume, combined with a generally positi-

ve outlook on bank shares, has contributed to a satisfactory development of the price of the Bank’s shares in

2024. At the beginning of the year, the rate was 143.5 and at the end of the year the rate was 210.0, mea-

ning an increase of 66.5 percentage points, corresponding to 46.3%.

The interest rate level at Danmarks Nationalbank was reduced by a total of 1 percentage points in 4 steps

during the second half of 2024. This has led to declining earnings on the Bank’s liquidity reserves, but has

also led to a declining average interest rate on the Bank’s total lending portfolio at the end of 2024. Overall,

however, interest income on loans remains very satisfactory and has increased by DKK 53.4 million or 14.3%

compared to 2023, while the interest in Danmarks Nationalbank has been realised at DKK 80.1 million com-

pared to DKK 69.6 million in 2023.

Interest expenses for deposits have increased to DKK 92.8 million, compared with DKK 50.8 million in 2023.

The other interest expenses are at the same level as in 2023.

Net interest income increased by a satisfactory DKK 18.8 million to DKK 422.1 million, corresponding to an

increase of 4.7%.

Fee income increased by DKK 13.3 million or 7.1%. The progress is due to a very large increase in the num-

ber of customers and a generally high activity level in all areas. Loan processing fees have increased by DKK

3.5 million as a result of an increase in the number of loan cases in connection with housing purchases and

conversion of credit union loans. This increase affects both the loan processing fees and earnings on bond

trades. Fees for securities trading and custody accounts increased by DKK 1.3 million. The income from pay-

ment services increased by DKK 1.8 million, guarantee commission by DKK 0.6 million, and other fees and

commissions by DKK 6.1 million. The Bank has significantly increased the number of customers in recent

years and in the coming years we will also have a strong focus on the non-interest-based income, including

through increased activity in the housing, securities, pension and insurance areas.

As in 2023, the fee income’s share of the total net interest and fee income is at 31%, which is lower than

the Bank’s target for this, but which is still considered satisfactory in light of the high increase in net interest

income.

Received dividends were realised at DKK 16.5 million, compared with DKK 5.6 million in 2023. The increase

is due to dividends of DKK 9.4 million from the sector company DLR-Kredit A/S, which paid dividends for the

first time in 2024.

Total net interest and fee income increased by DKK 41.5 million or 7.0%.

Staff and administration expenses etc. increased by DKK 24.9 million, corresponding to 9.8%, from DKK

255.5 million compared with DKK 280.5 million. The increase essentially follows the expectations and is due

to a strategic decision to increase the activity level in all branches. The number of employees has increased

marginally more than budgeted in 2024, primary as a result of the arrival of skilled employees in the line de-

partments, an arrangement that is expected to further increase the activity level in the coming years.

Staff costs have increased by DKK 11.5 million as a result of a net of 9 new employees and general collective

bargaining increases. Hirings have largely been in customer-oriented positions, where the Bank is well equip-

ped to handle the strong influx of customers, but internal positions have also been reinforced to ensure ma-

nagement of the continued complicated and highly resource-intensive sets of rules in the sector. The Bank’s

administrative expenses have increased by DKK 11.7 million, which is primarily due to higher other admini-

strative expenses, partly through furnishing of new branches, marketing, etc.

IT expenses have increased by 15% as a result of both ordinary increases in expenses for the Bank’s primary

IT supplier Bankdata and a large increase in the number of customers and employees. In 2024, the Bank has

also had a strong focus on supporting the Bank’s customers and employees with relevant digital platforms.

The Bank collaborates with and develops IT solutions with Bankdata, which is one of Denmark’s most impor-

tant technology companies, for example, an entirely new and well-functioning platform for the Bank’s websi-

te has been developed as well as the development of the Bank’s mobile bank, Min Skjern Bank, which has

achieved a rating of 4.7 out of 5 in the customers’ assessment and thus the Bank has one of Denmark’s best

mobile banks.

The Bank has developed a wide range of automated processes that enable employees to provide better ad-

vice on a daily basis.

Data and Business Intelligence are becoming increasingly important in the financial sector – including in the

Bank, where we continuously have a strong focus on creating value from the large amount of data that the

bank has at its disposal. Much of this data is included in the aforementioned automated processes and thus

forms the basis for better, more efficient and more targeted advice for the benefit and value of both the

customers and the Bank.

In addition, the Bank has initiated processes to implement AI (Artificial Intelligence), which can help the

Bank’s employees better meet customers’ needs and goals and help solve tasks within, for example, comba-

ting money laundering.

Impairment has decreased by DKK 9.5 million to DKK 18.2 million, corresponding to 0.2% of the Bank’s lo-

ans and guarantees. The management estimate to address the uncertainty around war in Europe and tensi-

ons in the world, ESG risks in selected industries and potentially challenged economic prospects in general,

as well as the uncertainty with the introduction of a carbon tax on agriculture, has been maintained at DKK

100.0 million at the end of 2024.

The Bank has only identified limited impairment and economic challenges with customers in 2024. However,

there are customers, especially within the construction sector, who have had to face that continued operati-

on is no longer possible. However, the Bank’s business customers are generally doing well and are financial-

ly well cushioned, enough to withstand a potential upcoming crisis.

In 2024, no industries have accounted for a larger share of write-downs in isolation. The agricultural industry

has generally performed satisfactorily through 2024. Both the price of piglets and milk have enabled positive

operating results in the industry in 2024, while the finishing pig price remains challenged.

The Bank’s private customers have been doing well and are characterised by strong creditworthiness. The

proportion of private customers facing financial challenges in 2025 is expected to increase marginally, which

has been taken into account in the budget for 2025 and in the management estimate.

The expectations for profit before tax for the year have increased over the course of the year and the profit

before tax was realised at DKK 364.6 million, which is an improvement of DKK 20.5 million or 5.9% compa-

red to 2023.

The expectation for core earnings has also increased over the course of the year and the core earnings were

realised at DKK 357.6 million, which is an increase of DKK 21.7 million or 6.5% compared to 2023. Both the

achieved core earnings and the profit before tax are considered very satisfactory.

The capital ratio is calculated at 24.6% and the core capital ratio at 23.2%. The capital coverage over the cou-

rse of 2024 increased compared with the end of 2023, primarily as a result of recognised profit after tax and

distribution. Net profit for the year has been recognised, and the capital plan shows a satisfactory develop-

ment in the capital coverage in the coming years.

The surplus coverage relative to the individual solvency requirements are at 14.7 percentage points compa-

red with 12.7 points in 2023. With the deduction of the capital conservation buffer of 2.5 percentage points

and NEP supplement of 5.5 percentage points and the 7% requirement on the real estate segment amoun-

ting to 0.5 percentage points, the capital coverage at the end of 2024 amounted to 3.7 percentage points,

compared with 3.0% at the end of 2023.

The Bank has a goal of a surplus compared to the capital requirement of min. 4 percentage points, which

thus has not been met, but which is accepted in light of the budgeted results in the coming year.

The capital base increased by DKK 204.7 million to DKK 1,718.9 million. The increase is due to a profit after

tax of DKK 274.1 million less interest on hybrid loans of DKK 5.3 million and proposed distribution of DKK

67.5 million. Deductions for sector shares have been reduced by DKK 13.8 million as a result of increasing

Common Equity Tier 1 capital and a minor increase in the market price of the Bank’s sectoral shares, prima-

rily as a result of distribution of dividends from DLR Kredit A/S.

Despite the capital base having increased by DKK 204.7 million, the capital ratio alone increased by DKK 1.8

percentage points compared to the end of 2023. This is due to the risk-weighted assets having increased by

DKK 333.0 million, of which exposures with operational risk increased by DKK 171.2 million as a result of a

high increase in the Bank’s income over the last three financial years. The solvency requirements have been

calculated at 9.9% and overall the Bank’s capital base is considered satisfactory.

With regards to the bank’s capital position in general, refer to note 28.

FUTURE CAPITAL RESERVES

In the coming years, the following regulatory capital buffers will be phased in:

• The NEP supplement of 5.5 percentage points as of 31 December 2024 shall be increased to

5.7 points on 1 January 2025 (the NEP supplement can be a maximum of 6.0 percentage points).

2024)

Upon full phasing-in of all known capital requirements, with a solvency requirement of 9.9% and a systemic

buffer in the real estate segment of 0.5 percentage points, the Bank’s capital requirement will amount to

21.1% at the end of 2025, compared with 20.9% at the end of 2024.

The preliminary calculations of the increase in risk-weighted assets as a result of the implementation of CR-

RIII show an increase of around DKK 150 million in 2025.

The Bank expects that the budgeted and expected results in the coming years will mean that the rest of the

known capital requirements can be phased in via consolidation from operating earnings, but will continually

weigh the need to possibly raise Tier III capital to partially cover the NEP requirement.

EXPECTATIONS FOR 2025

The Bank has had a completely satisfactory 2024, where expectations for all areas have been met and ex-

ceeded.

A core earnings is expected in 2025 that is approximately 13-18% lower than the historically high level in

2024. The growth in ordinary operations in 2024 and the expectations for continued growth in activity mean

that despite declining interest income from both lending and liquidity reserves, a very satisfactory result is

still expected.

Profit before tax is expected to be in the range of DKK 280 – 310 million and core earnings are expected to

be in the range of DKK 290 – 310 million.

In light of the satisfactory customer growth, based on referrals and relations to the Bank, the management

is very confident in terms of continuing to attract new customers and increasing business volume with the

many existing and loyal customers. The focus is on maintaining the Bank’s earnings at a satisfactory level

and increasing capital and liquidity provisioning, partly via retention of satisfied customers and employees.

This will secure our position as the independent and local financial institution, which makes a difference in

the areas where the Bank’s branches are, as well in the long term.

We are proud to note that private customers continue to have a good economy, which is further improved by

declining interest rates and inflation as well as rising real wages for many. In recent years, the Bank has

experienced high growth in the number of and business volume with private customers. The Bank expects

that growth in lending will be reduced in 2024, but that the total business volume will continue to increase,

as the Bank still continues to be chosen by a large number of private customers.

The Bank still has close ties to the agricultural industry, which represents a significant and valuable customer

group.

Easily the largest of the Bank’s customer groups in agriculture is milk producers, who have generally had re-

asonable profitability in 2024, which is expected to continue in 2025. For piglet producers, 2024 has been

characterised by good terms of trade, while finishing pig producers have had poorer terms of trade. The Bank

expects that 2025 will provide satisfactory terms of trade and thus better market conditions, primarily for fi-

nishing pig producers, while marginally weaker terms of trade are expected for piglet producers, but still

with good opportunities for achieving satisfactory operating profit. The introduction of the carbon tax is asso-

ciated with some uncertainty, but it is assessed that this risk can be contained within the management esti-

mate provided.

Lending and guarantees to agriculture account for 8.2% of the total lending and guarantees, where the di-

stribution is 3.8% to cattle farming, 2.5% to pig farming, 1.2% to crop farming, 0.6% to other forms of pro-

duction and 0.1% to mink production.

The number of customers in the agricultural segment increased in 2024 and the influx of well-run and

well-capitalised agricultural customers is expected to continue in 2025.

The real estate segment amounted to 7.4% and the exposure was reduced by DKK 32.4 million in 2024. The

exposure in real estate is primarily within rental for residential purposes. The general rule for project finan-

cing is that sales are documented before the start of the construction and there is adequate equity invest-

ment.

The other business segments are generally considered to be in good development both in terms of volume

and the development of credit quality at the industry level.

The Bank’s liquidity continues to be solid, and there will be an unchanged focus on maintaining a satisfactory

liquidity reserve, primarily via a balanced relationship between the total deposit and lending volumes. In the

future, the Bank wants to base essentially all of its liquidity provision on customer deposits.

ACTIVITIES AND BUSINESS VOLUME

The Bank’s branches in Hørsholm and Bramming were fully renovated during 2024 and the branches were

moved to their new premises. The Bank does not plan to expand the branch network in the coming year.

Skjern Bank Leasing offers financial leasing of most types of assets to the Bank’s business customers. The

administrative management of this is outsourced to a well-established player in the industry. The business

volume in Skjern Bank Leasing is still increasing, and at the end of 2024 there is a volume of approximately

DKK 250 million, compared with just over DKK 250 million at the end of 2023. An increase in volume is expe-

cted in 2025.

The level of activity in all branches of the Bank has also been very high and increasing in 2024. The net in-

flow of customers is very satisfactory and the volume of business with existing customers is increasing.

The Bank wants to be close to its customers and make a difference in the Bank’s market areas. All custo-

mers have a permanent adviser and we aim for positive and trusting cooperation in all customer relations-

hips. An important element here is the Bank’s objective of unsolicited customer contact and individual ad-

vice. It is a high priority that all customers at appropriate intervals are invited to an advisory meeting, where

advice is given in all relevant areas based on the individual customer’s needs and finances. The customers’

evaluation of this is positive, which is why this advisory concept will also have a major focus in 2025 and

beyond.

Overall, 2025 is expected to bring strong earnings, based on a moderate increase in overall business volu-

me.

PRODUCT RANGE

The Bank offers a simple and flexible product range, which is used to provide an individual and flexible soluti-

on for the individual customer’s needs. No two customers have the same needs, which is why the Bank will

not offer its customers “package solutions”. The product range is continuously developed to be competitive

at all times.

The product range on the deposit side is always composed based on the Bank’s goal of maintaining and at-

tracting stable deposits.

STRONG DEVELOPMENT IN BUSINESS VOLUME

The Bank’s business model and credit policy were essentially unchanged in 2024. The focus is, and will con-

tinue to be, to be ready to participate in the customers’ goals for financing etc. when this can be done in a

prudent and risk-acceptable manner.

In total, lending volume increased by DKK 236.2 million, or 3.5%, to DKK 6,963 million. Deposits from custo-

mers increased by DKK 608.9 million or 7.4% to DKK 8,893 million. The total guarantees for customers de-

creased by DKK 41.1 to DKK 1,816 million.

CAPITAL RATIO AND DIVIDEND POLICY

The management will have the utmost focus on ensuring that the Bank has a solid capital base to support

the continued development of the Bank’s activities and implementation of current and future regulatory capi-

tal requirements.

The capital base will continue to be primarily based on actual core capital, but raising foreign capital may also

be included in the future capital structure.

The Bank has a marginally lower capital coverage at the end of 2024 than the management’s goal for this,

though this is still accepted in light of the budgeted results in the coming years and the capital plan’s projec-

tion of the future capital coverage. The greatly expanded business volume in all areas forms the basis for sa-

tisfactory future earnings at a high level, despite declining interest income, and this will improve future capi-

tal coverage. It is the management’s assessment that in light of this, there is solid basis for rewarding the

Bank’s many shareholders through an appropriate percentage of the realised profit in dividends.

The Danish Financial Supervisory Authority’s recommendations and the management’s expectations for fu-

ture growth and earnings have been taken into account in the assessing the sufficient capital coverage.

The Bank has completed an application process with the Danish Financial Supervisory Authority for approval

of a share buy-back program. The Bank proposes to the Annual General Meeting to distribute DKK 7 per sha-

re or DKK 67.5 million, which amounts to 24.6% of the realized profit after tax, which is DKK 19.3 million hig-

her than in 2023, which is included in the current distribution policy.

It is proposed to distribute cash dividends of DKK 3.5 per share, and to initiate a share buy-back program of

DKK 3.5 per share. The share buy-back program shall be implemented under the ”Safe harbour” regulation

with the aim of cancelling the repurchased shares at a later annual general meeting. The share buy-back pro-

gram amounts to a total of DKK 33.7 million, and a maximum of 350,000 shares for execution during the pe-

riod 7 March 2025 – 5 February 2026.

The implementation of the share buy-back program is dependent on the Annual General Meeting authorising

the Board of Directors to acquire treasury shares.

The Bank’s management has decided to maintain the following capital goals and distribution policy:

CAPITAL GOALS

It is the Bank’s goal to be well capitalised to meet strategic goals and to accommodate regulatory

requirements in future recessions. The management will continuously assess the adequacy of the

capital base, including the distribution between equity and foreign capital, to ensure the optimal

distribution between returns to shareholders and sufficient increase of the Bank’s actual core capital.

DIVIDEND POLICIES

With regard to its capital goal, the Bank wants to be stable in distributions. The goal is for distributions,

either as share buy-backs or cash dividends, to amount to 30-50% of the annual profit after tax, which

exceeds a return on equity of 6%.

It is believed that the capital goal and distribution policy meet the long-term interests of shareholders

and the Bank optimally. The shareholders achieve a reasonable distribution and the Bank’s capital

foundation is strengthened by consolidation.

Distribution may consist of cash dividends and share buy-backs or a combination thereof.

THE BANK’S IMPORTANT STAKEHOLDERS

The Bank’s management considers the cooperation with and involvement of the Bank’s many stakeholders

and the running of a well-functioning local Bank to be equally important.

The focus has always been on creating value for the Bank’s stakeholders, which in 2024 is also considered

to have been the most important factor in the solid business development.

The Bank’s strategic objective is primarily a controlled organic growth based on long-term relations with all

stakeholders. When the customers choose the way the Bank is run, it increases the profits to the benefit of

the shareholders. The local community benefits from this in the form of the Bank’s local backing as well as

product distribution to local businesses and private customers. The employees benefit from this in the form

of job retention and an exciting job where they can develop. The customers clearly express that it is valuable

to have a local bank that knows their needs and where they have an adviser who knows them and who back

the local community’s activities.

SHAREHOLDERS

The management recognises the importance of a stable and loyal shareholder community and aims to give

them competitive returns. The shareholders’ loyalty and continued backing, from small shareholders to major

professional investors, is extremely important to the continued development of the Bank.

CUSTOMERS

It is highly satisfactory that the private customer business is growing rapidly and that the Bank is being cho-

sen by new customers from most of the country, primarily on the recommendation of existing customers.

The corporate client business is also in solid development with a focus on small and medium-sized business

customers in the Bank’s local areas.

In the annual customer satisfaction surveys, the Bank’s customers unanimously declare that it is the close

personal relationships they enjoy with their advisers that are key to their choice of bank. This combined with

good product solutions and solid advice, as well as the electronic options, such as online meetings and mo-

bile banking, make daily operations smooth and flexible.

The annual unbiased survey of the customers’ satisfaction, which is crucial to the Bank, is conducted by

Finanssektorens Uddannelsescenter and for a number of years has clearly shown that the Bank’s customers

are very satisfied with the Bank on all parameters, which we are very proud of and humbled by.

It is very gratifying to note that customer satisfaction with the Bank is extremely high and in particular that

nearly 9 out of 10 of the Bank’s customers would recommend the Bank to others. The Bank is very grateful

and humbled by the trust shown by the customers as they refer their business contacts, family and

acquaintances to the Bank in large numbers.

EMPLOYEES

As of 31 December 2024, the Bank employs 219 employees, which is an increase of 9 over the year. All

employees are offered employment terms that conform to the market as well as relevant training and conti-

nuing education in order to always ensure a high level of professionalism.

Employee job satisfaction is important to the Bank, and annual job satisfaction surveys are conducted. The

latest survey from September 2024 showed that 95.2% of the Bank’s employees consider the Bank to be a

very good place to work and that they are also proud to work at the Bank. It is a strategic goal to have

employees who find the Bank to be a good workplace, which is considered crucial to the low staff turnover

and significant interest from qualified applicants for vacant positions.

LOCAL COMMUNITIES

The goal is to play an important role in all of the Bank’s local communities, both as a partner for the business

owners, but of course also for the local population in general. It is important for the Bank to back local initiati-

ves and the Bank assists a great number of businesses – entrepreneurs and existing customers - with coun-

selling and financing, so that ideas and investment goals have the best chance of being realised.

The Bank is also a partner for many local community associations and organisations and supports both

sports and culture and associations in general. The commitment to and support for local communities is lar-

gely based on reciprocity and in expectation and under the assumption that the Bank will be rewarded with

customer referrals and a generally positive attitude towards the Bank.

The foundation of the Bank is the many shareholders, customers, employees and the local communities of

the Bank’s market areas. The Bank is aware that all stakeholders play an important role both now and in the

future and the Bank views it as an important community role to encourage the many stakeholders to work

together for the benefit of both the stakeholders and the Bank.

SUSTAINABLE DEVELOPMENT

The financial sector has a key role in ensuring that society develops in a more sustainable direction. The

Bank is aware of this responsibility and fully supports the points from the Forum for Sustainable Finance (Fo-

rum for Bæredygtig Finans), which the Bank is actively working to comply with.

In the Bank’s ESG report for 2024, the Bank’s status on compliance with the points is presented, and the

goals for the future work are described.

From the 2025 Annual Report, the Bank will be covered by the upcoming requirement for sustainability re-

porting, cf. the EU reporting directive, CSRD, and the Bank has begun the preparations for this.

In the Bank, the focus on sustainability can generally be divided into two main tracks:

- The Bank’s influence on stakeholders, especially customers.

- The Bank as a company.

The influence on customers must take place via positive customer dialogue, which must also include a dia-

logue on opportunities and threats related to sustainability to a greater extent.

Private customers must be presented with relevant opportunities, such as: making their properties more

energy efficient, getting attractive financing for electric cars and placing investments to influence sustainable

development in line with the customer’s sustainability preferences. Business customers must be made

aware of issues relating to the concept of sustainability (ESG), which concerns: Environmental conditions (E

– Environment), Social conditions (S – Social) and Management conditions (G – Governance).

For several years, the Bank has worked to reduce electricity consumption through energy reduction measu-

res. In the summer of 2023, the Bank installed solar cells at its head office in Skjern, which in 2024 led to

the Bank’s purchase of electricity from the grid being reduced by about one third compared to before the in-

stallation of the solar cells. The Bank also compensates for the rest of the power consumption via purchase

of certificates of origin for power from Danish wind turbines. The bank also supports climate measures in

third world countries via its electric bill.

The ESG report can be read in full on the Bank’s website. The ESG report can also be physically delivered by

contacting one of the Bank’s branches.

NET INTEREST INCOME

Net interest income amounts to DKK 422.1 million, which is an increase of 4.7% compared to last year,

when net interest income was DKK 403.3 million.

The interest income on net customer loans has increased by DKK 53.6 million. to DKK 420.1 million, which

is very satisfactory and due to both increased lending and an interest rate level that was increasing in 2023,

but that in the second half of 2024 has begun to decline as a result of the interest rate reductions in Dan-

marks Nationalbank. The lending rates on the Bank’s proportion of lending where there was impairment, but

where interest still continues to be accrued, decreased and amounts to DKK 7.7 million in 2024 compared

with DKK 7.9 million in 2023. Interest income on the Bank’s deposits in Danmarks Nationalbank were at DKK

10.6 million in 2024 and amount to DKK 80.1 million. Bond interest income decreased by DKK 0.6 million,

while there has been a decrease of DKK 2.4 million on derivative financial instruments. Overall, interest in-

come has thus increased by DKK 61.2 million compared to last year.

The interest expenses have increased by DKK 42.4 million to DKK 101.2 million as a result of the increasing

interest level on the Bank’s deposits.

FEE INCOME

Income from fees and commissions has increased by 7.1% to DKK 201.9 million.

Borrowing fees have increased by DKK 3.5 million to a total of DKK 81.9 million and guarantee provisions are

at the same level as last year at DKK 28.4 million. Payment services, income from securities trading and

other fees increased by DKK 9.2 million to a total of DKK 91.5 million. The customer-driven activity in the loan

area has increased in 2024 as a result of a slightly increasing number of housing transactions, while the

number of mortgage financing conversions has been largely at the same level as in 2023. The number of

customers has increased satisfactorily in recent years, and it is expected that this will lead to increasing fee

income in 2025.

DIVIDENDS

In 2024, dividends from shareholdings increased by DKK 10.8 million and amounted to DKK 16.5 million,

compared with DKK 5.6 million in 2023. The primary reason for the increase is due to received dividends of

DKK 9.4 million from the Bank’s shareholdings in DLR Kredit.

NET INTEREST AND FEE INCOME

Net interest and fee income including dividends increased by 7.0% to DKK 635.0 million, which is very satis-

factory.

EXCHANGE RATE ADJUSTMENTS

The securities markets in 2023 have been characterised by decreasing interest rates, with increasing bond

prices as a result, and increasing share prices.

A capital gain of DKK 16.5 million has been realised on the share portfolio, compared with DKK 22.8 million

in 2023, however, this gain should be viewed in conjunction with the dividends received from DLR Kredit

A/S. The Bank wants a continued low share price exposure and the treasury portfolio of shares is thus still of

a modest size.

Exchange rate adjustments on bond portfolios have been positive by DKK 8.7 million in 2024. The Bank conti-

nues to have a cautious investment policy for bonds, which promises a short maturity and low interest risk

and the total bond holdings in 2024 were reduced by DKK 140.0 million to DKK 612.0 million.

The total exchange rate adjustments amount to DKK 38.0 million and, in addition to the exchange rate adjust-

ments on bonds and shares, consist of earnings on currency and financial instruments of a satisfactory DKK

12.8 million.

EXPENSES

Staff and administration expenses increased by 9.8% and amount to DKK 280.5 million, compared with DKK

255.5 million in 2023. Staff expenses have increased by DKK 11.5 million, corresponding to 7.7% and other

administrative fees have increased in 2024 by DKK 11.7 million to DKK 111.2 million.

The increase in staff costs is due to an increased number of customer advisers primarily for the newest

branches and increasing costs for marketing and IT. Marketing expenses have increased as the bank now

has 10 branches, where partnerships with local associations etc. contributes to the Bank being rooted in the

local communities.

DEPRECIATION AND WRITE-DOWNS

In 2024, there was depreciation and impairment on tangible fixed assets of DKK 13.9 million, compared with

DKK 15.3 million in 2023. The increase is due to impairment on the Bank’s owner-occupied properties in

Bramming and Hørsholm, which were both undergoing renovation, but which are now renovated.

IMPAIRMENT

Impairment on loans and customer receivables etc. amounted to 0.2% of the total loans and guarantees,

corresponding to DKK 18.2 million, compared with DKK 27.6 million in 2023.

The management estimate for 2024 has been maintained at DKK 100.0 million.

Reversal of impairment from previous accounting years amounted to DKK 164.8 million, while recorded los-

ses amounted to DKK 29.5 million, of which DKK 27.4 million had not been previously written down. In total,

the Bank has provisioned DKK 324.9 million to accommodate future losses, which corresponds to 3.6% of

the Bank’s total lending and guarantees.

CORE EARNINGS

At the beginning of 2024, the Bank expected a core earnings in the range of DKK 310 – 330 million. The pro-

fit expectations have been adjusted upwards twice in the course of the year, the most recent upwards adju-

stment of the core earnings was on 4 September 2024, which the expectation was adjusted upwards to the

range of DKK 340 – 360 million. The realised core earnings amount to DKK 357.6 million, compared with DKK

335.9 million in 2023, and are the highest core earnings in the Bank’s history, which is considered very satis-

factory. The growth is due to increased net interest and fee income, which is increasing significantly more

than expenses on personnel and administration.

PROFIT BEFORE TAX

The expectations for profit before tax for 2024 was in the range of DKK 270 – 300 million at the beginning of

the year, and were adjusted upwards three times by the end of 2024, most recently on 17 December 2024,

where the expectations were announced in the range of DKK 350 – 360 million. The Bank realised a margi-

nally higher profit before tax of DKK 364.6 million compared to DKK 344.1 million in 2023.

The profit is considered very satisfactory.

CAPITAL

The capital base, which consists of equity and supplemental borrowing, amounted to DKK 1,718.9 million at

the end of 2024 and the total risk exposure amounted to DKK 6,974.6 million. The capital ratio is calculated

at 24.6% and the core capital at 23.2%. The solvency requirement amounted to 9.9%, whereby there is a

satisfactory coverage in relation to the solvency requirement of 14.7 percentage points, corresponding to

DKK 1,029 million.

At the end of 2024, in addition to the solvency requirement, the Bank must add a capital conservation buffer

of 2.5 percentage points, a business-cycle buffer of 2.5 percentage points, a NEP supplement of 5.5 percen-

tage points and a systemic buffer of 7% the Bank’s real estate exposure, calculated at a premium of 0.5 per-

centage points as of 31 December 2024. Including this capital requirement, the solvency coverage relative

to the total capital requirements amounts to 3.7 percentage points, corresponding to DKK 262.0 million.

The solvency requirements, which are calculated according to the Danish Financial Supervisory Authority’s

credit reservation method, are recognised at DKK 558.0 million, corresponding to 8.0% for the Column 1 re-

quirement (Søjle 1-kravet). Lending growth has fallen below 10% and is also expected to be in 2025, elimina-

ting previous reservations for high lending growth, which is the primary reason why the solvency require-

ment is reduced from 10.1 to 9.9 percentage points. DKK 91.5 million has been set aside in credit risks, in-

cluding “NPE backstopper”, where DKK 19.6 million is reserved. The interest risk amounted to DKK 7.8 milli-

on, while the credit spread risk amounted to 7.8 million, which in total is DKK 15.5 million under the market

risk and DKK 25.0 million for reservations under the operational risk. Overall, the Bank thus has a solvency

requirement of DKK 690.0 million.

The Bank’s internal goal for capital coverage relative to the calculated solvency requirements plus the current

phased-in capital requirements is a minimum of 4 percentage points. In the coming years, the capital requi-

rements will be further increased by 0.2 percentage points in NEP requirements. At the same time, the

Bank has a goal of organic growth in business volume at a level of 3-5% in the coming years, which increa-

ses the requirements for the capital base. It is expected that the excess coverage will increase in the

coming years based on budgeted results.

Requirements for liabilities eligible for impairment (NEP requirements)

The Danish Financial Supervisory Authority and the Danish Financial Stability Authority have, in accordance

with the Danish Financial Business Act, prepared plans for the resolution of distressed banks. In connection

with these plans, the authorities must set a requirement for liabilities eligible for impairment (NEP require-

ment) for all banks in accordance with the resolution principle that the authorities have determined for the in-

dividual institution.

The general resolution principle for small and medium-sized banks, which the Bank follows, requires a con-

trolled resolution of the bank, where part of the bank is sold and a part which is not immediately deemed ca-

pable of being sold is recapitalised. The NEP requirement consists of a loss absorption amount correspon-

ding to the solvency need and a NEP supplement in the form of a recapitalisation amount.

The Danish Financial Supervisory Authority recalculates and sets the NEP requirement once a year, which is

why the NEP requirement changes from year to year. In the period 1 January 2024 – 31 December 2024, the

Bank’s NEP requirement represented 5.5% of the total risk exposure amount, while the most recently esta-

blished NEP requirement applicable from 1 January 2025 represents 5.7% of the total risk exposure

amount.

The NEP supplement, i.e. the recapitalisation amount, shall be met with capital base instruments or with Se-

nior Non-Preferred instruments that are subordinated to simple creditors, thus shielding the simple creditors

in a resolution situation.

The Bank’s objective is to cover the NEP supplement with Common Equity Tier 1 capital on an ongoing ba-

sis, but is considering the appropriateness of supplementing with Senior Non-Preferred instruments.

The management assesses that the Bank has a solid capital base. The excess coverage in relation to all pha-

sed-in capital requirements of 3.7 percentage points is considered reasonable in a period when the cyclical

buffer has been fully phased in by 2.5 percentage points. The Bank will also continue to focus on having an

appropriate capital structure and excess coverage at all times to ensure that the expected growth in busi-

ness volume can be safely realised while maintaining the excess capital.

For more information on capital and solvency requirements, please refer to the Bank’s website: www.skjern-

bank.dk/banken/investor/solvensbehov

LIQUIDITY

The Bank’s goal is to maintain liquidity reserves at a continued solid level based on deposits from the Bank’s

customers. In 2024, the goal on deposit growth was met by increasing the total deposits to a total of DKK

8.893 million. The Bank’s lending has increased less than the deposits, which has increased the excess

liquidity coverage, which is expected to be maintained at a high and very satisfactory level in 2025.

The bank’s liquidity reserves are solid. The LCR (Liquidity Coverage Ratio) of DKK 2.537 million exceeds both

the regulatory requirements and the stricter liquidity goals established by the Bank’s Board of Directors. The

liquidity coverage ratio shows how the bank is able to meet its payment obligations for an upcoming 30-day

period without access to market funding. The ratio is calculated by comparing the Bank’s cash reserves and

liquid assets with the Bank’s payment obligations for the next 30 days calculated according to certain rules.

The Bank has established an internal limit for the minimum liquidity reserves of 175%, which exceeds the

minimum requirements of 100% from the Danish Financial Supervisory Authority. The Bank achieved the

goal and as of 31 December 2024 has an LCR financial ratio of 360%.

The liquidity reserve ratio measured according to NSFR (Net Stable Funding Ratio) is 137%, while the Bank’s

internal limit for this is set to 120%, and the minimum requirement from the Danish Financial Supervisory

Authority is 100%. The ratio indicates the required amount of stable funding that the Bank must hold at the

current liquidity profile for the assets it finances and the potential liquidity withdrawals that may arise from

credit commitments and other off-balance sheet items.

MAJOR SHAREHOLDERS

As of 31 December 2024, the Bank has four major shareholders, all of whom have 5% of the voting rights:

Investeringsselskabet af 15. maj (AP Pension Livsforsikringsaktieselskab, Copenhagen Ø.), which as of the

most recent ownership report held 20.75% of the share capital, EURO STEEL 1988 APS, which as of the

most recent ownership report held 5.15% of the share capital, Kim Pedersen, who as of the most recent

ownership report both personally and via their wholly-owned company Immoinvest.dk ApS held 5.0% of the

share capital, and Heine Delbing, who personally and via their wholly-owned companies Olalde Holding ApS,

Evostate Invest ApS and Storegade ApS held 5.0% of the share capital as of the most recent ownership re-

port.

LIQUIDATION RESERVE

n connection with establishing the statutory liquidation reserve, the Bank has prepared business procedures

and implemented tests to ensure compliance with the special requirements resulting from the legislation.

This has been done in cooperation with the Bank’s data centre, and it is the management’s assessment that

the Bank is in compliance with the requirements.

SIGNIFICANT AGREEMENTS

If control of the Bank is changed, a number of agreements will cease or terms will be changed. The withdra-

wal of the data centre Bankdata may result in a severance payment equivalent to 2.5 times last year’s invoi-

cing. All other agreements are assessed to be immaterial.

EVENTS AFTER 31 DECEMBER 2024

No events have occurred after 31 December 2024 that significantly affect the Bank’s circumstances.

RISKS AND RISK MANAGAMENT

Banking activities are associated with various types of risks. The purpose of the Bank’s risk management po-

licies is to minimise the losses that may occur as a result of e.g. an unpredictable development on the finan-

cial markets, changes in economic trends or political interventions. The types of risk may be divided into:

credit risk, market risk, liquidity risk and operational risk.

Credit risk expresses the risk that one party to a loan transaction or financial transaction may inflict a loss on

the other party as a consequence of the failure to meet an obligation.

Market risk expresses the risk that the market value of the Bank’s assets and equity and liabilities may chan-

ge as a consequence of changes in the market conditions.

Liquidity risk expresses the risk that the Bank’s payment obligations cannot be observed by the cash resour-

ces established by the Bank.

Operational risk is defined as the risk of financial losses inflicted on the Bank directly or indirectly as a conse-

quence of errors in internal processes, human mistakes, system errors or losses as a consequence of exter-

nal events.

The Bank continuously develops tools for the identification and management of the risks that affect the Bank

on a daily basis. The Board of Directors will determine the overall framework and principles for the risk and

capital management and receive current reports on the development in risks and the utilisation of the risk

framework allocated.

The risk management work is based on the three pillars defined by the Basel II Accord:

• Pillar 1: Quantitative assessment of credit risks, market risks and operational risks.

• Pillar 2: Qualitative assessment of the same risks as well as a number of other risks.

• Pillar 3: Prescribes a number of requirements for disclosure about the nature and scope of risks.

The risk management work is essentially based on the guidelines, which the Bank’s industry association –

Lokale Pengeinstitutter (The Association of Local Banks, Savings Banks and Cooperative Banks in Denmark)

– has drawn up. In general, the Bank’s risk-weighted items are assessed in accordance with the so-called

standard method, while the advanced method is being used to assess the amount of the exposure, taking

into account any financial security. The operational risks are determined in accordance with the basic method

and market risks are determined in accordance with the simple method.

In addition to the information presented in this annual report, an overview of the Bank’s risk information is

available on the Bank’s website www.skjernbank.dk/banken/investor/risikooplysninger.

The following is a more detailed description of the different types of risk.

Credit risk

The largest asset item on the balance sheet is customer lending, and therefore the most significant risks are

inherently related to credit risk. The Bank’s risk management policies have been planned to ensure that its

transactions with customers and credit institutions at all times remain within the frameworks defined by the

Board of Directors.

Financial contracts are limited to those concluded with credit institutions with a high credit rating. Policies

have been adopted that limit the size of agreements that can be concluded with other credit institutions.

The Bank classifies customers in groups according to their financial strength and merit according to the

guidance given by the Danish Financial Supervisory Authority. For private customers, the classification is

made on the basis of actual assets, liquidity, leverage and availability, while business customers are classi-

fied on the basis of earnings, equity and solvency.

No significant changes were made to the credit policy in 2024. There is an unchanged focus on safe work

procedures and routines regarding credit assessments.

The exposure in the real estate sector has been calculated at 7.4% of total loans and guarantees. A signifi-

cant part of this consists of financing residential rental properties where the investors have contributed signi-

ficant equity and where the rental income can service the debt in the properties. The Bank’s exposure to

the real estate sector amounted to DKK 676.1 million and was reduced by DKK 32.4 million compared to the

end of 2023.

The agricultural segment, which accounts for 8.2% of the Bank’s total loans and guarantees, compared with

10.4% at the end of 2023, has generally done well in 2024. The Bank closely monitors fluctuations in the

terms of trade in the individual segments of the industry and is in constructive dialogue with all customers.

The Bank has received several good agricultural commitments with good creditworthiness and operation on

its books in 2024 and this trend is expected to continue in 2025.

The Bank has a very limited loan to the mink industry amounting to 0.1% of its portfolio, despite the fact

that the industry still has no final settlement for production equipment etc. The Bank has no risk on this cust-

omer group.

The Bank wants to continue to finance renewable energy, primarily wind turbines and solar energy. However,

the volume currently accounts for less than 1% of the Bank’s loans and guarantees.

Private customers generally have a solid economy, and there is an emerging trend for the weakest credit

customers to be positively affected by declining interest rates and generally lower inflation.

In response to the increased credit risk seen against the background of war in Europe, the risk of a future

economic slowdown in society and the uncertainty surrounding the consequences of the introduction of the

carbon tax on agriculture, the management estimate has been maintained at DKK 100.0 million at the end of

2024. There is still no significant need for write-downs in the loan portfolio, but the uncertainty has increased

and there is therefore no reason to reduce the management estimate.

For a statement of credit risks regarding other loans, please refer to note 31.

Market risk

The Bank’s market risk is managed on a daily basis through fixed limits for a large number of risk targets.

Management of the Bank’s excess liquidity involves investing in the share, bond and foreign exchange mar-

ket in order to optimise the return on the liquid assets.

The Bank’s Board of Directors has established clear guidelines for the risks the Bank accepts in terms of cur-

rency, interest rate, shares, bonds etc.

The main features are as follows:

Currency risk

The foreign currency risk is an expression of how changes to foreign exchange rates may affect the fair value

of the Bank’s currency positions. The Bank has a very modest risk, as the balance in foreign currencies is

covered continually.

The day-to-day management and monitoring of the Bank’s currency positions is conducted by the internatio-

nal department. The Board of Directors and the Executive Board receive reports on an ongoing basis. At the

end of 2024, the Bank’s foreign exchange risk was calculated at 0%.

Interest risk

The interest rate risk is a measurement of how changes to current interest rate levels may affect the fair va-

lue of the Bank’s fixed-rate assets. The interest rate risk primarily occurs around the Bank’s bond portfolio

and fixed-rate borrowing and lending.

The day-to-day management and monitoring of the Bank’s interest rate risk is carried out by the financial de-

partment, while the Bank’s finance department manages the compliance with limitations for assumption of

interest rate risk. The Board of Directors and the Executive Board receive reports on an ongoing basis.

The Bank’s overall interest rate risk is positive, primarily due to a lower share of fixed-rate deposits compared

to previous years. The Bank has maintained a low interest rate risk for a number of years, which is in agree-

ment with the Bank’s policy for this type of risk.

Share price exposure

The share price exposure is a measurement how changes to share prices may affect the fair value of the

Bank’s shareholdings. The share price exposure is a consequence of the composition of the Bank’s exposure

to shares where the investments are spread over a large number of primarily Danish shares.

In common with other banks, the Bank is co-owner of a number of sector companies such as DLR Kredit

A/S, Letpension A/S, PRAS, SparInvest Holdings SE etc. The ownership interests in sector companies are

considered to pose limited equity risk. The proportion of shares that constitute more than 10% of the Bank’s

core capital is deducted from the Bank’s capital base. In addition, the Bank has invested in listed shares to a

limited extent.

The day-to-day management and monitoring of the Bank’s shareholdings is carried out by the financial de-

partment, while the Bank’s administrative department manages the compliance with the fixed limits etc. The

Board of Directors and the Executive Board receive reports on an ongoing basis.

The Bank’s shareholdings may be specified as follows:

Sector shares ...................................................................................... DKK 261.2 million

Listed shares etc. .................................................................................DKK 36.6 million

A further specification of the Bank’s shareholding may be seen in note 14.

Property price risk

The Bank owns and in principle only wants to own properties that are used for daily banking operations (do-

micile properties), which in one case also contains residential rental apartments.

Liquidity risk

The Bank’s liquidity is managed according to defined strategies and policies adapted to the current situation.

This means that the Bank’s liquidity is subjected to stress testing in different scenarios on an ongoing basis.

The Bank’s liquidity strategy dictates that the Bank may at no point be solely dependent on the short money

market, just as the Bank must at any time be able to withstand lack of access to the money market for a mi-

nimum of 3 months. Additionally, the Bank’s strategic requirements for minimum cash resources have been

increased.

OPERATIONAL RISK

In order to reduce losses due to operational risks, Skjern Bank has developed policies and business procedu-

res in the most important areas, and the controlling department checks compliance with the most important

areas. A key part of the policies in this area is the IT security policy, which places requirements on IT and

personnel as well as on handling sensitive information. IT emergency procedures have also been prepared in

order to limit losses in the case of IT operations being down and other similar crisis situations.

Due to its size, the Bank is dependent on certain key employees. In order to reduce dependence on these,

written workflows have been developed in all important areas, and efforts have been made to ensure that

employees can take over these areas immediately. The Bank conducts ongoing assessments of whether bu-

siness procedures, etc. are optimal or whether they can be improved with a view to minimising the operatio-

nal risks. Business procedures are also controlled and assessed by the Bank’s internal and external auditing.

The controlling department is responsible for checking compliance with internal procedures, including in the

areas of credit, money laundering and funds.

The compliance and risk function is responsible for verifying that the Bank complies with legislation and in-

ternal policies at all times.

The operational risk is calculated based on the so-called basis indicator method (Basel II), meaning that the

Bank calculates the average of the net income based on the earnings from the past three years, which, in

the form of a quantified amount, is added to the total risk exposure to cover the Bank’s operational risks. As

of 31 December 2024, this amount was DKK1,097.5 million, an increase of DKK 171.2 million compared to 31

December 2023.

DATA ETHICS AND IT SECURITY

IT security is monitored and assessed on an ongoing basis. The most important partner in the IT area is

Bankdata, to which most of the operations and development activities are outsourced. IT operations have

been outsourced to JN Data. The division of responsibilities and tasks between Bankdata and the Bank is

clearly defined and described, and an ongoing evaluation is made of whether Bankdata complies with the

Bank’s IT security policy and IT risk management. The Bank’s contingency plans include an ongoing updating

and testing of procedures and contingency plans in the IT area, and the Bank’s security policy is continuously

updated.

As it is important for the Bank that customers and the outside world have confidence in the processing and

storage of data, the Bank has developed a policy on data ethics.

This crucial confidentiality between the customers and the bank is not new, as the bank has always protec-

ted the customers’ data, as is clear from the privacy policy and business procedures in the GDPR area. The

Bank’s full report on the data ethics policy can be found on the Bank’s website

www.skjernbank.dk/aarsrapport2024/dataetik, where the essential elements are set out below:

• Personal sensitive customer data is only received and stored when there is a factual reason for doing so.

• The data is deleted when it no longer serves the purpose for which it was collected.

• The Bank’s customers can, upon request, be informed of what data the Bank processes on the customer

in question.

• Data is disclosed with the consent of the customers to relevant business partners, e.g. to Totalkredit in

connection with the acquisition of mortgage financing.

THE SUPERVISORY DIAMOND

The Danish Financial Supervisory Authority’s mandatory Supervisory Diamond specifies four indicators for

banking activities with increased risk. The Bank has complied with all limit values in all previous years.

At the end of 2024, the Bank did not exceed any benchmarks, but at the end of 2023 and at the beginning of

2024 it exceeded the benchmark for lending growth of a maximum of 20%. The prepared report submitted

to the Danish Financial Supervisory Authority on this matter has been complied with as expected. It is expe-

cted that in 2025 all benchmarks will be met, as they have always been in the past.

CAPITAL ADEQUACY RULES

Adjusted for regulatory deductions, of which deductions for the holding of sector shares are the most signifi-

cant deduction, the following items constitute the Bank’s capital base of DKK 1,718.9 million, corresponding

to a capital ratio of 24.6%. The main elements here are:

• Equity of DKK 1,745 million

• Hybrid core capital of a nominal DKK 60 million.

• Subordinated loan capital of a nominal DKK 100 million.

INDIVIDUAL SOLVENCY REQUIREMENT

The individual solvency requirement plus phased-in capital requirement is an expression of the capital that

the Bank could be satisfied with without any excess coverage.

In accordance with the Basel rules, the Bank must at all times maintain a sufficient capital base to cover any

deficit that might arise if a number of negative events defined by the Danish Financial Supervisory Authority

should occur simultaneously.

The basis for the Bank’s solvency requirement is the Danish Financial Supervisory Authority’s credit reserva-

tion method (8+ model), where the solvency requirement is built up from 8%, plus any additional charges for

additional risks in a number of different areas.

The areas to be assessed are: Weak earnings, high lending growth, additional credit risks, additional market

risks including interest rate risks, equity risks and foreign exchange risks, liquidity risks, operational risks, le-

verage risks, downsizing risks on capital instrument and other supplements due to regulatory requirements.

The required solvency requirement is calculated according to the credit reservation method at DKK 690.0

million, corresponding to an individual solvency requirement of 9.9%. The solvency requirement has been re-

duced by 0.2 percentage points compared to the end of 2023, primarily as a result of the discontinuation of

a premium due to high lending growth, which is below 10% and is expected to be below 10% in 2025.

UNCERTAINTY ON RECOGNITION AND MEASUREMENT

The main uncertainties relating to recognition and measurement are related to loan impairment, provisions

for guarantees and valuation of financial instruments. The management believes that the uncertainty is at a

level which is reasonable in terms of fair presentation of the financial statements. We refer to the description

on this in note 1 Accounting policies.

MANAGEMENT

FINANCIAL REPORTING PROCESS

The Board of Directors, Audit Committee and Executive Board have overall responsibility for the satisfactory

functioning of the Bank’s controls and risk management in connection with the financial reporting process,

including compliance with relevant legislation and other regulations related to financial reporting.

The process is designed to ensure that the interim reports and the annual report are presented in accordan-

ce with statutory requirements and that the annual report is presented without material misstatements,

whether due to fraud or error.

The financial reporting process is also designed so that the Bank’s finance department, in cooperation with

the Bank’s Executive Board and other relevant departments, is responsible for the preparation of the Bank’s

annual report. The Board of Directors and Executive Board assess risks in connection with the financial re-

porting. The Executive Board and Financial Department regularly monitors relevant legislation and other regu-

lations and provisions in connection with financial reporting and continually reports to the Board of Directors

and Audit Committee.

INTANGIBLE KEY RESOURCES

The Bank’s business model is based on the following key intangible resources: a good reputation as a mo-

dern financial services company, as well as skilled, loyal and customer-focused employees.

The Bank’s reputation is characterised by being a credible and competent partner who is ready when the

Bank’s stakeholders need it. The Bank’s good reputation largely depends on the personal relationships of its

customers to its employees and the Bank’s credibility. The Bank’s brand therefore represents a significant

intangible key resource.

The Bank is characterised by focusing on the key values of customer focus, presence, drive and decency,

which aim for long-term relationships and are used in attracting and retaining customers and employees.

The employees are an intangible key resource that help the bank maintain its reputation as the local indepen-

dent bank, making a difference to customers and the local areas from which the bank operates. Employees’

loyalty to the bank is therefore also an intangible key resource.

REMUNERATION POLICY

The Bank’s Remuneration Committee and the Management Committee have, in full compliance with the

Bank’s remuneration policy, which essentially states that no employee of the Bank is remunerated with vari-

able components of remuneration. It is the assessment that the Bank’s interests are best served in the short

and long term with fixed remuneration to the individual employee.

The remuneration policy for the Board of Directors and Executive Board in the Bank is such that the manage-

ment receives a fixed payment, so there is no form of incentive payment or variable payment features in the

remuneration. The remuneration shall conform to the market rate and reflect the efforts made by manage-

ment on behalf of the Bank.

Remuneration to management is further described in the Financial Statement, note 6 and in the remunerati-

on report. The Bank’s remuneration policy can be found on the Bank’s website: www.skjernbank.dk/aarsrap-

port2024/vederlagsrapport

THE BOARD OF DIRECTORS’ DUTIES

The Board of Directors ensures that the management complies with objectives, strategies and business pro-

cesses determined by the Board of Directors. Orientation from the Executive Board occurs both at meetings

and through written and oral reports. The Board of Directors meets approximately every 3 weeks, more of-

ten as needed. The attendance rate at board meetings is usually 100%.

The Board of Directors conducts an annual self-evaluation in accordance with the Danish Financial Supervi-

sory Authority’s regulations. The Board of Directors also lays down requirements for its own development

and training to ensure that it constantly has the necessary competence and ability to handle the work of the

board as efficiently as possible for the benefit of the Bank.

COMPOSITION OF THE BOARD OF DIRECTORS

The Annual General Meeting elects the members of the Committee of Shareholders, after which the Com-

mittee of Shareholders elects the Bank’s Board of Directors. The members of the Board of Directors are ele-

cted for a term of 2 years, with the exception of the members elected by the employees, who are elected

for a term of 4 years.

TARGETS AND POLICIES FOR THE UNDER-REPRESENTED SEX IN MANAGEMENT

The Bank has set the following target figures for the proportion of the under-represented sex on the Board of

Directors and at other management levels.

The Bank has adopted this policy in order to increase the proportion of underrepresented groups at other

management levels. The other management levels (hereinafter referred to as management) mean the regi-

stered Board or persons who are organisationally at the same level of management as the Board as well as

persons responsible for personnel who report directly to one of these. These include the CEO, Bank Direc-

tor, department heads and managers responsible for personnel.

Target figures and policies have been set and prepared in accordance with the rules on target figures and po-

licy for the under-represented sex in Section 79a of the Danish Financial Business Act and Section 139a of

the Danish Companies Act.

Target figures for the proportion of the under-represented sex on the Board of Directors

The Bank wants a more balanced distribution of women and men at the board level. The Board of Directors

has set a target to have a minimum proportion of women of 1/6 by the end of 2025, and by the end of 2030

the target is a minimum of 2/6 out of the total number of board members elected by the Committee of Sha-

reholders. The target figure for 2025 of 17% was met in the financial year 2024, which has not changed in re-

lation to the financial year 2023. The target figure has now been raised to 2/6, which is hoped to be achieved

by the end of 2030.

The Board of Directors will work toward achieving the target of a proportion of women of 2/6 before 2030,

but has set the year 2030 based on a concrete assessment of the current Board members’ ambitions to con-

tinue on the Board of Directors.

Achievement of goals for the under-represented sex on the Board of Directors

When selecting and nominating candidates for the Board of Directors, the Bank has organised a formal, tho-

rough and transparent process that includes, amongst other things, the need to continuously increase the

proportion of the under-represented sex on the Board of Directors, including meeting the set target figure. In

this way, target figures and policy for the gender composition of the Board are taken into account.

In the current financial year, there have been new elections to the Board of Directors, with one woman elec-

ted, and the target figure for 2025 has thus been met.

Target figures for the proportion of the under-represented sex in management

The Bank wants a more balanced distribution of women and men in management. The Board of Directors

has set a target to have a minimum proportion of women of 1/4 by the end of 2025, and by the end of 2030

the target is a minimum of 2/5 in management. The management consists of 19 members, of which the un-

der-represented sex is 16%. The target figure is 25% in 2025.

The Bank’s efforts to increase the proportion of the under-represented sex in the Bank’s management

In order to achieve the target figure for the proportion of women in management and to improve the gender

composition, the bank has launched a number of measures and initiatives in the areas where this is neces-

sary.

The Bank focuses on efforts both in connection with recruiting new employees and in providing broader sup-

port for existing employees’ development.

The Bank has the following measures and initiatives:

-an employee handbook that promotes equal career and management opportunities for women and men, so

that there is equal access for men and women to management positions

-clear and transparent recruitment and hiring procedures that contribute to highlighting leadership talents

from both sexes, so that there are both female and male candidates in internal and external recruitment. In

addition, the bank hires managers on the premise that the most suitable person is always hired/appointed,

regardless of sex.

-increase transparency on the opportunities for flexibility for the benefit of both men and women, as it must

be possible to draw on flexibility during periods of working life

-focus on career development plans that contribute to the visibility of leadership talents from both sexes and

where employees, regardless of sex, will find that they have the same opportunities for careers and equal

access to management positions

-employees are offered the opportunity to develop professional and personal skills through participation in

courses, networks, personal development courses and mentoring schemes. Women and men have the op-

portunity to participate equally in these offerings and it is the Bank’s goal that women and men generally par-

ticipate equally in these offerings

The above-mentioned concrete measures and initiatives to increase the proportion of the under-represented

sex in management are supported by making them clear and transparent, so that each employee can be in-

spired to become part of the Bank’s management regardless of sex. These measures and initiatives are for

the financial year. There is also an open and unbiased culture in the Bank, where each employee can use

their skills to best effect regardless of gender. In addition, the bank is obliged to ensure equal pay regardless

of sex for work of the same kind or work of equal value.

In the current financial year, there have been new appointments in management, which is why the proporti-

on of the under-represented sex in management has changed from 11% to 16%. Two managers were

employed during the financial year, one of whom is of the under-represented sex. These were the best quali-

fied candidates for the position, which resulted in the Bank achieving an improved gender composition in

management.

STATEMENT ON DIVERSITY POLICY

At the Bank, we believe that a diverse workplace and an inclusive working environment are an asset for our

workplace. The Bank recognises the diversity of its employees and believes that diverse teams, including

management groups, work more innovatively, make better decisions and contribute to new thinking, while

promoting inclusiveness and tolerance among employees.

The Bank wants and strives to be a responsible workplace that recruits, promotes and develops employees

based on their competencies and in a way that supports diversity. Thus, the Bank strives to ensure that re-

cruitment, terms of employment, promotions and possible dismissals are carried out without distinction to

gender, sexual orientation, age, nationality, physical abilities, disability, political standing, ethnicity, family sta-

tus, religious beliefs or other ideologies.

How we work with diversity in the bank

The Bank continuously works to ensure diversity both in management layers and in all other employee

groups based on the following principles:

-The Bank is an equal opportunity workplace in a safe and non-discriminatory working environment

-The Bank strives for a more equal distribution of men and women in management, and we therefore focus

on equal conditions and on identifying candidates of both sexes when recruiting new managers

-The Bank complies with Danish and international standards regarding human rights and gender equality

laws and offers fair and equal terms in employment and working conditions, regardless of gender, ethnic ori-

gin, religion or other personal circumstances

-The Bank does not tolerate bullying, sexual harassment, discrimination, abusive behaviour or threats

-The Bank strives for a staff composition consisting of a combination of young and experienced employees

who can jointly inspire and contribute to development

-As needed, and at least once a year, the Board reviews the diversity policy and possibly makes revisions.

Diversity in the Bank’s management, targets and results 1 January – 31 December 2024

Board of Directors The Bank wants a composition based on diversity in skills and backgrounds, with par-

ticular emphasis on the need for diversity in relation to, amongst other things, differences in professional

skills, work experience, gender and age. Diversity is seen as a strength that can contribute positively to the

Bank’s development, risk management, robustness, success and growth.

Through diversity, the Bank wishes to increase the quality of its work and interaction on the Board of Direc-

tors, including through a diverse approach to management tasks. The Board of Directors finds it important

that all issues are adequately addressed by the Board.

In order to promote a sufficient diversity of qualifications and skills amongst the members of the Board of

Directors and to ensure optimal benefit from the work with diversity on the Board of Directors, the Board of

Directors wants to focus on competencies, gender composition and employee representation.

For the Board of Directors elected by the Committee of Shareholders, the Bank wants a representation of

the under-represented sex of a minimum of 1/6 by the end of 2025. By the end of 2030, the target is a mini-

mum of 1/3. The target for the gender composition of the Board of Directors was achieved in 2024, as a Bo-

ard Member elected by the Board of Directors is female.

Executive Board and other management levels The Executive Board of the Bank consists of two male

members. The Bank has chosen not to define goals for diversity in the Executive Board, as the bank prioriti-

ses insight, experience and competencies. In the other management levels, which currently only consist of

members with Danish nationality, the Bank wants a more equal distribution of women and men. The Board

of Directors has set a target to have a minimum proportion of women of 25% by the end of 2025, and by

the end of 2030 the target is a minimum of 40% in management. As of 31 December 2024, the figure is

16%.

SUPPLEMENTARY INFORMATION ON THE MEMBERS OF THE MANAGEMENT, INCLUDING OTHER

MANAGERIAL POSTS

Reference is made to paged 53-54, 62-63 and 82-85 of these Financial Statements for supplementary infor-

mation on the members of the management of the Bank, including information on their other managerial

posts.

THE BOARD’S PROPOSAL FOR DIVIDENDS

Based on a satisfactory profit and solid capital coverage, the Board of Directors has decided to propose a di-

vidend for the financial year 2024 of DKK 7 per share, equivalent to DKK 67.5 million

AUDIT COMMITTEE

The Bank’s Board of Directors has established an Audit Committee, the Chair of which is an independent and

qualified Member of the Board. The Committee’s tasks include:

• monitoring of financial reporting

• monitoring whether the Bank’s internal control system, internal auditing and risk

management systems function effectively,

• monitoring the statutory audit of the financial statements etc. and

• monitoring and checking the auditor’s independence.

The Audit Committee consists of two Board Members elected by the Committee of Shareholders and one

employee-elected Board Member.

RISK COMMITTEE

In accordance with Section 80 of the Danish Financial Business Act, the board of directors has established a

Risk Committee.

The purpose of the Committee shall be to:

• advise the Board of Directors on the Bank’s risk profile and ongoing risk management

• prepare the work of the Board of Directors in order to ensure that the Board of Directors is aware of

risks when business decisions are made by the Board of Directors

The members of the Risk Committee are found amongst the Bank’s board members and consist of two sha-

reholder-elected members and one employee-elected member.

NOMINATION AND REMUNERATION COMMITTEE

The Bank’s Board of Directors has established a Nomination and Remuneration Committee, whose tasks are

in accordance with the requirements of the Recommendations on Corporate Governance and the Danish Fi-

nancial Business Act.

The Committee’s tasks include, amongst others:

• Proposing candidates for election to the Board of Directors, including a description of the functions and

qualifications required for the particular post and an indication of the expected time to be allocated to it.

• The Remuneration Committee shall be responsible for the preparatory work for the Board of Directors’

decisions regarding remuneration, including remuneration policy and other decisions relating thereto that

may have an impact on the Bank’s risk management.

The Nomination and Remuneration Committee consists of two Board Members elected by the Committee

of Shareholders and one employee-elected Board Member

Please also refer to the Bank’s website, where the members of the individual committees can be seen.

INVESTOR RELATIONS

The Bank places a strong emphasis on communication and dialogue with its shareholders and other stake-

holders within the rules that apply to a listed company. In 2024, the Bank continued to maintain a high level

of communication, which, in the Bank’s assessment, has strengthened relations with all sides.

The Bank’s way of communicating with its stakeholders is based on Skjern Bank’s

values, and we strive to ensure that the Bank’s key values – customer focus, presence, drive and decency –

are actively used in all communication. The overall aim of our communication strategy is to strengthen the

Bank’s position on the market and at the same time minimise the risks to its reputation – i.e. the risk that in-

correct information or misinformation, rumours or gossip negatively affect the Bank’s reputation.

In crisis situations, the aim of the communication strategy is to come across as a professional and decisive

organisation, where the Bank, via an open and proactive approach to problems, will be prepared to minimise

the extent of the crisis and its short and long-term effects on the Bank, the shareholders, customers and

employees.

ANNUAL GENERAL MEETING

The Bank holds the annual general meeting with a clear focus on IR and Corporate Governance commit-

ments – i.e. by focusing entirely on the Bank’s financial and business development and the way the Board of

Directors manages the Bank as well as various elections.

SKJERN BANK SHARES

At the end of 2024, the bank was owned by 14,462 shareholders. The Bank’s share price increased during

2024 from 143.5 to 210.0. The Bank’s market value has thus increased by 46.3% and amounted to DKK

2,024.4 million at the end of the year. When measured in comparison with the Bank’s intrinsic value, the pri-

ce is 1.16 at the end of the year.

STATUTORY CORPORATE GOVERNANCE REPORT

CORPORATE GOVERNANCE

The Bank’s Board of Directors and management seek to ensure that the management structure and control

systems are adequate and function satisfactorily. The management regularly discusses developments in cor-

porate governance.

The basis for the scheduling of the management’s tasks include the Danish Financial Business Act, the Da-

nish Securities Act, OMX Nordic Exchange Copenhagen’s rules and recommendations for issuers, the Bank’s

Articles of Association and best practice for financial institutions. Based on this, a framework of internal pro-

cedures is developed and maintained on an ongoing basis in order to ensure an active, safe and profitable

management of the Bank.

Information on Corporate Governance for the Bank is collected in a report on Corporate Governance which is

published on the Bank’s website.

To ensure a clear structure, the Bank has used the structure based on the recommendations from the Com-

mittee on Corporate Governance including the issued revised recommendations for 2020 in the presentation

of information on corporate governance.

As a listed company, the Bank must either follow these recommendations or explain why the recommendati-

ons are not fully or partially followed. The Bank’s management generally follows the recommendations, but

in a few areas it has chosen either not to follow the recommendations or only to follow them in part.

STATUTORY REPORTING ON SOCIAL RESPONSIBILITY

The Bank’s ESG report also constitutes the Bank’s statutory social responsibility report. In addition to the

above-mentioned matters on page 18, the ESG report describes the Bank’s position and efforts in the areas

of human rights, the environment, anti-corruption and bribery, money laundering and terrorist financing, IT

and data security, employment, whistleblower schemes and social conditions in general, including the local

communities around the Bank’s departments.

The Bank strives to comply with all guidelines in every respect and places great emphasis on fairness in all

matters. The Bank does not have policies in all areas, for example in the area of human rights, it is conside-

red a matter of course that the Bank abide by these agreements, including those in force, since it considers

compliance with them to be fundamental to a fair and secure society.

The ESG report also contains a compilation of the carbon footprint from the Bank’s lending, a compilation of

the carbon footprint from the customers’ investments and ESG key figures prepared in accordance with the

FSR – Danish auditors, the Danish Finance Society / CFA Society Denmark and the Nasdaq Copenhagen

ESG report containing the statutory statement of social responsibility can be read in full on the Bank’s webs-

ite.

INFORMATION FOR LISTED COMPANIES

In accordance with the Executive Order on Financial Reports for Credit Institutions etc. Section 133a states

the following:

The Bank’s share capital as of 31 December 2024 amounted to DKK 192.8 million, divided into 9,640,000

shares at nominal value. 20 DKK.

The Bank has one share class and the entire share capital, and thus all shares, are admitted for listing on

NASDAQ OMX Copenhagen. No shareholder may acquire more than 10% of the share capital without the

consent of the bank and the Danish Financial Supervisory Authority. In addition, no restrictions apply to the

negotiability of the shares.

The Bank’s Board of Directors shall not be empowered to issue shares.

The following applies to the exercise of voting rights: Each share amount up to and including a nominal

DKK 1,000 grants 1 vote, after which each DKK 1,000 share grants an additional vote etc. No shareholder

may vote for more than 5% of the nominal share capital at any given time. Any shareholder shall be entitled

to attend the annual general meeting if the person in question has requested an admittance card no later

than three days prior to the meeting. Any shareholder who is entitled to attend the annual general meeting

and whose shares have been registered in the Bank’s register of shareholders shall have a right to vote at

the annual general meeting.

The shareholder-elected members of the Bank’s Board of Directors are elected by and from among the

members of the Bank’s committee of shareholders.

The following shall be applicable for changes to the Bank’s articles of association: Decisions to amend

the articles of association are only valid if at least 1/3 of the share capital is represented at the annual gene-

ral meeting and if the motion is adopted by a minimum of 2/3 of both the votes cast and of the share capital

holding voting rights represented at the annual general meeting.

The limit for how many treasury shares a bank may own is 3%. Following an application to the Danish Finan-

cial Supervisory Authority, the Bank has been granted permission to hold treasury shares of 0.25% of the

Bank’s issued shares. As of 31 December 2024, the Bank owned 0.08% of the Bank’s own shares.

AUDIT

The Danish version of the Annual Report for 2024 is equipped with internal audit statements and indepen-

dent auditors’ statement. The statements are without reservations and complementary information.

Endorsement of the Annual Report

by the Management

We have today discussed and approved the annual report for the period 1 January – 31 December 2024 for Skjern Bank

A/S.

The annual report has been prepared in accordance with the Danish legislation on nancial activities, including executive

order on nancial reports for credit institutes and stock broker companies, etc. Furthermore, the annual report has been

prepared in accordance with accordance with the Danish Financial Business Act. The Financial Statements have been pre-

pared in accordance with Danish legal requirements for listed nancial companies.

It is also our opinion that the annual report has been prepared in accordance with the ESEF regulation in all material respe-

cts.

We consider the accounting practice chosen to be appropriate so that the annual report gives a correct impression of the

bank’s assets, liabilities, nancial position as at the 31st December 2024 and of the result of the bank’s activities for the

accounting year 1 January – 31 December 2024.

The management report includes a correct presentation of the development of the bank’s activities and nancial conditions

together with a description of the material risks and uncertainties by which the bank may be affected.

The annual report is recommended for approval by the General Meeting.

Skjern, the 6 February 2025

The management of Skjern Bank A/S

Per Munck Thomas Baun

CEO Bank director

The board of Skjern Bank A/S

Hans Ladekjær Jeppesen Bjørn Jepsen

Chairman Vice-chairman

Niels Erik Kjærgaard Finn Erik Kristiansen Ole Strandbygaard Merete Lundøe Hilmann

Lars Skov Hansen Carsten Jensen Michael Tang Nielsen

Prot and loss account

Note DKK 1,000

2024 2023

2 Interest receivable 523.365 462.134

3 Interest payable 101.217 58.828

Net income from interest 422.148 403.306

Dividend on shares and other holdings 16.452 5.603

4 Charges and commission receivable 201.931 188.614

Charges and commission payable 5.513 3.989

Net income from interest and charges 635.018 593.534

5 Value adjustments 38.034 47.178

Other ordinary income 4.785 2.525

6 Staff costs and administrative expenses 280.467 255.532

Depreciation and write-downs on intangible and tangible assets 13.885 15.333

Other operating expenses 665 623

9 Write-downs 18.176 27.638

Result before tax 364.644 344.111

10 Tax 90.532 86.132

Net-result for the financial year 274.112 257.979

Of which are holders of shares of hybrid core capital instruments etc. 5.287 5.287

PROPOSAL FOR DISTRIBUTION OF PROFIT

Dividends 33.740 48.200

Holders of hybrid core capital instruments 5.287 5.287

Transferred to/from retained earnings 235.085 204.492

Total distribution of the amount available 274.112 257.979

STATEMENT OF COMPREHENSIVE INCOME

Profit for the financial year 274.112 257.979

Total comprehensive income 274.112 257.979

Note DKK 1,000

2024 2023

ASSETS

Cash in hand and demand deposits with central banks 3.082.942 2.345.718

11 Receivables at credit institutions and central banks 79.480 60.630

12 Loans and other receivables at amortised cost 6.962.528 6.726.329

13 Bonds at fair value 612.087 752.038

14 Shares etc. 297.765 283.275

15 Shares associated with pool schemes 1.992.993 1.592.836

16 Holdings in associated enterprises and group enterprises 81.045 77.553

Investment properties 3.085 3.019

Owner-occupied properties 60.334 55.250

Owner-occupied properties, leasing 17.626 19.284

17 Other tangible assets 7.555 6.532

Current tax assets 14.818 7.486

Other assets 118.418 113.926

Prepayments 136 588

Total assets 13.249.767 11.966.911

Balance Sheet

Note DKK 1,000

2024 2023

LIABILITIES

DEBT

18 Debt to credit institutions and central banks 2.977 2.385

19 Deposits and other debts 8.893.150 8.284.256

Deposits in pooled schemes 1.992.993 1.592.836

Other liabilities 437.774 382.890

Prepayments 327 297

Total debt 11.327.221 10.262.664

PROVISIONS

20 Provisions for deferred tax 4.524 5.430

12 Provisions for loss on guarantees 11.514 13.416

Total provisions 16.038 18.846

SUBORDINATED DEBT

21 Subordinated loan capital 99.836 99.335

Total subordinated debt 99.836 99.335

EQUITY

22 Share capital 192.800 192.800

Retained earnings 1.518.851 1.283.918

Proposed dividend 33.740 48.200

Capital owners share of equity 1.745.391 1.524.918

23 Holders of hybrid capital 61.281 61.148

Total equity 1.806.672 1.586.066

Total liabilities 13.249.767 11.966.911

Information on changes in equity

Share capital

Proposed

dividends

Hybrid

capital

Retained

earnings Total

Equity 01.01.2023 192.800 28.920 61.014 1.080.627 1.363.361

24 Purchase of own funds

-1.219 -1.219

Dividend own shares 18 18

Dividends proposed 2022 -28.920 -28.920

Amortization hybrid capital -131 -131

Paid interest hybrid capita1 -5.022 -5.022

Profit or loss 48.200 5.287 204.492 257.979

Equity 31.12.2023 192.800 48.200 61.148 1.283.918 1.586.066

Purchase of own funds

-155 -155

Dividend own shares 3 3

Dividends paid 2023 -48.200 -48.200

Amortization hybrid capital -131 -131

Paid interest hybrid capital -5.023 -5.023

Prot or loss 33.740 5.287 235.085 274.112

Equity 31.12.2024 192.800 33.740 61.281 1.518.851 1.806.672

Notes

1 Accounting policies ............................................................... 42

2 Interest income .................................................................. 52

3 Interest expenses................................................................. 52

4 Fees and commission income ....................................................... 52

5 Value adjustments ................................................................ 52

6 Staff costs and administrative expenses ............................................... 53

7 Incentive and bonus schemes ....................................................... 54

8 Audit fee........................................................................ 54

9 Write-downs on loans and receivables ................................................ 54

10 Tax ............................................................................ 55

11 Receivables at credit institutions and central banks....................................... 55

12 Loans and other debtors at amortised cost price......................................... 56

13 Bonds at fair value ................................................................ 58

14 Shares etc. ...................................................................... 58

15 Shares associated with pool scheme.................................................. 58

16 Land and buildings ................................................................ 58

17 Other tangible assets .............................................................. 59

18 Debt to credit institutions and central banks ............................................ 59

19 Deposits and other debts ........................................................... 59

20 Deferred taxation ................................................................. 59

21 Subordinated debt ................................................................ 60

22 Share capital ..................................................................... 60

23 Holders of hybrid capital............................................................ 60

24 Own capital shares................................................................ 61

25 Contingent liabilities ............................................................... 61

26 Lawsuits etc. .................................................................... 62

27 Related parties ................................................................... 62

28 Capital requirement ............................................................... 63

29 Current value of nancial instruments ................................................. 64

30 Risks and risk management ......................................................... 65

31 Credit Risk ...................................................................... 66

32 Sensitivity information ............................................................. 77

33 Derivate nancial instruments ....................................................... 77

34 5 years in summary ............................................................... 79

35 5 years of nancial ratio ............................................................ 80

1. ACCOUNTING POLICIES

The Financial Statements have been prepared in accordance with the Danish Financial Business Act and the

Executive Order on nancial reports for credit institutions and investment companies, etc.

The Financial Statements have been prepared in accordance with additional Danish legal requirements for Fi-

nancial Statements for listed nancial companies.

The Financial Statements are presented in DKK and rounded to the nearest DKK 1,000.

General information on recognition and measurement

Assets are recognised in the statement of nancial position when it is probable that future economic benets

will ow to the Bank and the asset’s value can be measured reliably.

Liabilities are recognised in the statement of nancial position when they are likely and can be measured re-

liably.

Assets and liabilities are initially recognised at fair value. However, tangible assets are measured at cost at the

time of initial recognition. Measurement after initial recognition occurs as described for each item below.

Foreseeable risks and losses which may arise before the Financial Statements are reported and which conrm

or invalidate conditions existing on the balance date are taken into account in recognition and measurement.

Income is recognised in the statement of prot or loss and other comprehensive income as it is earned, while

expenses are recognised at the amounts which relate to the nancial year.

Purchases and sales of nancial instruments are recognised on the transaction date and are no longer recog-

nised when the right to receive/deliver cash to or from the nancial asset or liability has expired or, if it is trans-

ferred, the Bank has transferred all signicant risks and rewards of ownership. The bank has not used the rules

for reclassication of certain nancial assets at fair value to amortised cost.

Determination of fair value

The fair value is the amount to which an asset can be converted or at which a liability can be settled in a transa-

ction under normal conditions between knowledgeable, willing and independent parties.

The fair value of nancial instruments for which there is an active market is usually determined as the closing

price on the Balance Sheet date or, if not available, another published price considered to best correspond to

this.

For nancial instruments for which there is an active market, fair value is established using generally accepted

valuation techniques which are based on relevant observable market data.

Accounting estimates

When determining the carrying amount of certain assets and liabilities, discretion is used as to how future

events will affect the value of the assets and liabilities on the balance date.

The estimates used are based on assumptions which the management considers to be reasonable, but which

are associated with some uncertainty.

Therefore, the actual nal results may differ from the estimates used, because the Bank is affected by risk and

uncertainty, which can affect this.

The areas which involve a greater degree of assessments/assumptions and estimates are impairment of loans

and receivables, determination of fair value of unlisted nancial instruments, corporate and investment proper-

ties and provisions.

Although the carrying amounts are calculated in accordance with the Danish Executive Order on the Presen-

tation of Financial Statements, particularly including appendices 9 and 10 and related guidelines, there is un-

certainty and estimates associated with these carrying amounts, as they are based on a number of assumpti-

ons. If these assumptions change, the nancial reporting may be affected and the impact may be signicant.

Changes may occur through a change in practice or interpretation by the authorities and amended principles

from the management - for example, the value of collateral may entail changes to the calculations.

Foreign currency

Assets and liabilities in foreign currencies are recognised on the balance date at the National Bank of Denmark’s

listed rates. Foreign currency spot transactions are adjusted on the balance date based on the spot rate. Cur-

rency translation adjustments are recognised on an ongoing basis in the statement of prot or loss and other

comprehensive income.

General

When determining the carrying amount of certain assets and liabilities, discretion is used as to how future

events will affect the value of the assets and liabilities in question on the balance date.

The estimates used are based on assumptions which the management considers to be reasonable, but which

are uncertain and unpredictable. Therefore, the actual nal results may differ from the estimates used, becau-

se the Bank is affected by risk and uncertainty, which can affect this.

Model uncertainty

In addition to establishing expectations for the future, write-downs in stages 1 and 2 are also subject to uncer-

tainty because the model does not account for all relevant circumstances. As there is still limited historical data

as a basis for the models, it has been necessary to supplement the model’s calculations with management

estimates. Assessment of the effect of the long-term probability of default on customers and segments th-

rough improved and deteriorated outcomes of macroeconomic scenarios is associated with estimates. Please

refer to the more detailed description in note 31.

Statement of collateral values

To reduce the risk on the individual exposures in the Bank, collaterals have been received, primarily in the form

of mortgages on physical assets (of which mortgages on real estate are the most signicant form), securities

etc. Signicant management estimates are included in the valuation of the collateral. For a more detailed de-

scription of matters relating to collateral, see also note 31.

Fair values of owner-occupied properties

The return method is used to measure owner-occupied properties at fair value. Future cash ows are based on

the Bank’s best estimate of future ordinary prot and required rate of return for each property, taking into ac-

count factors such as location and maintenance. A number of these assumptions and estimates have a signi-

cant impact on the calculations. Changes in these parameters as a result of a change in market conditions

affect the expected returns and thus the owner-occupied properties’ fair value. Also refer to the discussion in

note 1 “Accounting policies used etc.” under the section “Land and buildings” and note 16 “Land and buildings”.

Practice for writing off nancial assets from the statement of nancial position

Financial assets that are measured at amortised cost are wholly or partially written off from the statement of

nancial position if the Bank no longer has reasonable expectations that the outstanding amount will be whol-

ly or partially covered. Recognition ceases based on specic, individual assessment of each exposure. For pri-

vate and corporate customers, the Bank will typically write off losses when the pledged collateral is realised

and the residual receivable is unsustainable. When a nancial asset is written off from the statement of nan-

cial position in whole or in part, the impairment on the nancial asset is removed from the calculation of accumu-

lated impairment, cf. note 9.

The bank continues its collection efforts after the assets have been written off, with the measures depending

on the specic situation. The bank essentially tries to enter a voluntary agreement with the customer, including

renegotiation of terms or reconstruction of a business, such that debt collection or bankruptcy proceedings are

only put to use when other measures have been tried.

STATEMENT OF PROFIT OR LOSS

Interest, fees and commissions, etc.

Interest income and expenses are recognised in the statement of prot or loss and other comprehensive in-

come in the period to which they relate.

Interest income from deposits and interest expense to central banks are presented separately in the statement

of prot or loss.

Received interest on credit-impaired loans on which impairment has occurred are passed to the impaired part

of the loan in question under the item “Impairment of loans and receivables” and are thus offset in impairment

for the year.

Commissions and fees which are an integral part of the effective interest rate of a loan are recognised as part

of the amortised cost and are therefore part of interest income under loans.

Commissions and fees which are part of an ongoing service are accrued over the loan period.

Other fees and commissions and dividends are recognised in the statement of prot or loss and other com-

prehensive income when the rights to them are acquired.

Staff and administration expenses

Staff and administration expenses include wages and salaries, social costs, pensions, IT costs and administra-

tive and marketing costs.

Pension schemes

The bank has entered into dened contribution schemes with the employees. In dened contribution schemes,

xed contributions are paid to an independent pension fund. The bank has no obligation to make further con-

tributions.

Ta x

Tax for the year, which consists of current tax for the year and movements in deferred tax, is recognised in the

statement of prot or loss and other comprehensive income as the portion which is attributable to the net pro-

t for the year and directly in equity as the portion which is attributable to items in equity.

Current tax liabilities and current tax receivables are recognised in the Balance Sheet as tax calculated on ta-

xable income for the year adjusted for tax paid on account.

Deferred tax is recognised on all temporary differences between carrying values and tax values of assets and

liabilities.

Any deferred tax assets, including the tax value of tax loss carry forwards, are recognised in the statement of

nancial position at the value at which the asset is expected to be realised, either against deferred tax liabiliti-

es or as net assets.

STATEMENT OF FINANCIAL POSITION

Classication and measurement

According to the IFRS 9-compatible accounting regulations, classication and measurement of nancial assets

is done based on the business model for the nancial assets and the contractual cash ows relating to the -

nancial assets. This means that nancial assets must be classied into one of the following two categories:

• Financial assets that are held to generate the contractual payments, and where the contractual payments

exclusively consist of interest and repayments on the outstanding amount, are measured at amortised cost

after the date of rst recognition. This category includes loans at amortised cost and receivables from credit

institutions.

• Financial assets that do not meet the above criteria for the business model or where the contractual cash

ows do not exclusively consist of interest and repayments on the outstanding amount are initially recognised

at fair value through the statement of prot or loss.

Skjern Bank does not have nancial assets that are included in the measurement category for recognition of

nancial assets at fair value through other comprehensive income. Instead, the Bank’s bond portfolio is mea-

sured at fair value through the statement of prot or loss because they are included in a trading portfolio.

Cash holdings and demand deposits with central banks

Cash holdings and demand deposits with central banks are initially recognised at fair value and then at amor-

tised cost.

Receivables from credit institutions and central banks

Receivables from credit institutions and central banks include receivables from other credit institutions. Initial-

ly recognised at fair value plus transaction costs and minus origination fees, etc. and subsequently measured

at amortised cost.

Loans

The accounting item consists of loans disbursed directly to the borrower. Loans are measured at amortised

cost, which usually corresponds to the nominal value minus origination fees etc. and minus provisions for los-

ses expected but not yet realised.

Model for impairment for expected credit losses

In accordance with the IFRS 9-compatible impairment rules, impairment is done for expected credit losses on

all nancial assets that are recognised at amortised cost and provisions are made according to the same rules

for expected credit losses on unused credit lines, loan commitments and nancial guarantees. The impairment

rules are based on an expectation-based model.

For nancial assets recognised at amortised cost, impairment for expected credit losses is recognised in the

statement of prot or loss and the value of the asset is reduced in the statement of nancial position. Provisi-

ons for losses on unused credit lines, loan commitments and nancial guarantees are recognised as a reserved

liability. (See also under contingent liabilities).

Stages of development in credit risk

The expectation-based impairment rules means that a nancial asset etc. at the time of rst recognition is im-

paired by an amount corresponding to the expected credit loss over 12 months (stage 1). If there is subse-

quently a signicant increase in the credit risk compared to the time of rst recognition, the nancial asset is

impaired by the amount corresponding to the expected credit loss in the asset’s remaining life (stage 2). If

impaired credit (stage 3) is discovered for the instrument, the asset is written down by an amount correspon-

ding to the expected credit loss in the asset’s remaining life, and interest income is recognised in the statement

of prot or loss according to the effective interest method based on the impaired amount.

Financial assets where the customer has signicant nancial difculties or where the Bank has offered easier

terms due to the customer’s nancial difculties are kept at stage 2 if losses are not expected in the most li-

kely scenario.

Placement in stages and calculation of the expected loss is based on the Bank’s rating models, which were

developed by the data centre Bankdata and the Bank’s internal credit management.

Assessment of signicant increase in credit risk

In the assessment of the development of credit risk, it is assumed that a signicant increase in credit risk has

occurred in relation to the time of initial recognition when a downwards adjustment of the Bank’s internal ra-

ting of the debtor corresponds to one rating class in the Danish Financial Supervisory Authority’s rating classi-

cation guidelines.

If the credit risk on the nancial asset is considered to be low on the reporting date, the asset is kept at stage

1, where a signicant increase in credit risk has not occurred. Skjern Bank considers the credit risk to be low

when the Bank’s internal rating of the customer corresponds to 2a or better, though an overdraft for more than

30 days for a customer with an internal rating of 2a will lead to a signicantly impaired credit risk. The catego-

ry of assets with low credit risk also includes lending and receivables that meet the rating criterion, as well as

receivables from Danish credit institutions. New customers are always placed in stage 1 unless they are credit

impaired.

Denition of credit impairment and default

An exposure is dened as being impaired and as being in default if it meets at least one of the following crite-

ria:

• The borrower is experiencing signicant nancial difculties, and the Bank assesses that the borrower will

not be able to honour their obligations as agreed.

• The borrower has committed a breach of contract, such as in the form of non-compliance with payment ob-

ligations for principal and interest or repeated overdrafts.

• The bank has granted the borrower easier terms than it would have granted were it not for the borrower’s

nancial difculties.

• It is likely that the borrower will go bankrupt or be subject to other nancial reorganisation.

• The exposure has been in arrears/overdrawn for more than 90 days by an amount that is considered signi-

cant.

The denition of credit impairment and default that the Bank uses when measuring the expected credit loss

and for transfer to stage 3 is in line with the denition used for internal risk management purposes.

Calculation of expected loss

The calculation of impairment on exposures in stages 1 and 2, except for the weakest exposures in stage 2,

are made on a portfolio-based calculation model, while the impairment on the rest of the exposures are made

through a manual, individual assessment based on three scenarios (basic scenario, a more positive scenario

and a more negative scenario) with the associated likelihood that the scenarios will occur.

The portfolio model calculation is based on the Bank’s division of customers into different rating classes and

an assessment of the risk of loss in each rating class. The calculation occurs in a setup that is developed and

maintained in Bankdata, supplemented with a predictive macroeconomic module, which is developed and

maintained by LOPI, and which forms the basis for the incorporation of management’s expectations for the

future.

The macroeconomic module is based on a series of regression models that establish the historical correlation

between impairment for the year within a number of sectors and industries and a number of explanatory ma-

croeconomic variables.

Estimates are then applied to the regression models for the macroeconomic variables based on forecasts from

consistent sources such as Det Økonomiske Råd [The Danish Economic Council], Danmarks Nationalbank etc.

where the forecasts are generally for two years in the future and include variables such as increase in public

consumption, increase in GDP, interest rates etc. The expected impairment is thereby calculated for up to two

years in the future for each sector and industry. For maturities longer than two years and up to year 10, a pro-

jection of the impairment percentage is made such that it converges towards a normal level in year 10. Matu-

rities longer than 10 years are given the same impairment percentage as in year 10. Finally, the calculated im-

pairment percentages are converted into adjustment factors that correct the data centre’s estimates in the

individual sectors and industries. The Bank makes adjustments to these based on its own expectations for the

future and based on the loan composition.

Changes in write-downs are adjusted in the statement of prot or loss and other comprehensive income under

the item “Impairment of loans and receivables etc”.

Bonds and shares, etc.

Bonds and shares traded on a listed stock exchange are measured at fair value. Fair value is usually determined

as the ofcial closing price on the balance date.

Unlisted securities and other equity investments (including level 3 assets) are also recognised at fair value,

calculated based on what the transaction price would be in a trade between independent parties. If there is

no current market data, the fair value is determined based on the published nancial reports or on a return

model which is based on cash ows and other available information.

Value adjustments on bonds and shares, etc. are recognised on an ongoing basis in the statement of prot or

loss and other comprehensive income under the item “Exchange rate adjustments”.

Pool activities

All pool assets and deposits are recognised in separate balance sheet items. Returns on pool assets and di-

stributions to pool participants are entered under the item “exchange rate adjustments”.

Land and buildings

Land and buildings include

• “Owner-occupied properties”, which consist of the properties from which the bank conducts banking activi-

ties

• “Leased company domiciles”, which consist of the leased properties from which the Bank conducts

• “Investment properties”, which consist of all other properties the bank owns and possess in order to obtain

rental income.

Owner-occupied properties are measured in the statement of nancial position at revalued amount, which is

the fair value determined based on the return method with a rate of return in the range of 5.6 - 7 % less accumu-

lated depreciation and any impairment loss. Depreciation is recognised in the statement of prot or loss and

revaluation is done so frequently that there are no signicant differences in fair value. Increases in the ow-

ner-occupied properties’ revalued amount are recognised under revaluation reserve in equity. If an increase in

the revalued amount corresponds to an earlier case and is thus recognised in the statement of prot or loss in

a previous year, the increase is recognised in the statement of prot or loss. A decrease in the revalued amount

is recognised in the statement of prot or loss and other comprehensive income, unless there is a reversal of

previous revaluations. Owner-occupied properties are depreciated linearly over 50 years based on the cost ad-

justed for any value adjustments where residual values are not used.

Leased company domiciles All lease agreements must be recognised by the lessee in the form of a leasing

asset that represents the value of the right of use. The asset is initially recognised at present value of the lea-

se liability including costs and any prepayments. After initial recognition, lease contracts for domicile properti-

es are measured in the same way as other domicile properties.

At the same time, the present value of the agreed lease payments are recognised as a liability. Assets leased

on short-term contracts and leased assets of low value are excluded from the requirement for recognition of

a lease asset.

In calculating the properties’ value, an internal interest rate in the range of 5 % - 7 % was used.

Investment properties are measured in the statement of nancial position at fair value determined based on

the return method. Ongoing changes in fair value of investment properties are recognised in the statement of

prot or loss and other comprehensive income.

Establishment of the revalued amount of owner-occupied properties and the fair value of investment properti-

es are associated with signicant estimates. The estimates particularly relate to the establishment of required

rate of return.

Other tangible xed assets

Other tangible xed assets, including plant and machinery, are recognised at the acquisition at cost. Then, other

tangible assets and conversion of rented premises are recognised at cost minus accumulated depreciation. A

linear amortisation is done over 3-5 years based on the cost and amortisations and impairment losses recog-

nised in the statement of prot or loss.

Other assets

Other assets include interest receivable and provisions and positive market value of derivative nancial instru-

ments.

Prepayments and accrued income

Prepayments and accrued income recognised under assets include costs relating to subsequent nancial years.

Prepayments and accrued income recognised under liabilities include prepaid interest and guarantee provisions

relating to subsequent nancial years.

Liabilities to credit institutions and central banks

Items are measured at amortised cost.

Deposits and other payables

Items are measured at amortised cost.

Subordinated debt

Items are measured at amortised cost.

Hybrid core capital under equity

Hybrid core capital that meets the rules in CRR to be classied as additional tier I capital with indenite matu-

rity and where the payment of interest is voluntary is classied as equity.

Interest on hybrid core capital is deducted from equity.

The tax effect of the interest is recognised under current tax in the statement of prot or loss.

Other liabilities

Other liabilities include interest payable and provisions and negative market value of derivative nancial instru-

ments and debt to Danmarks Nationalbank.

Provisions

Assurances, guarantees and other liabilities which are uncertain in terms of size or time of settlement are re-

cognised as provisions when it is probable that the liability will result in nancial resources owing out from

the bank and the liability can be measured reliably. The liability is calculated at the present value of the costs

required to settle the liability.

Treasury shares

Acquisition and disposal and dividends from treasury shares are recognised directly under equity.

Derivative nancial instruments

All derivative nancial instruments, including forward contracts, futures and options in bonds, shares or cur-

rency, as well as interest and currency swaps, are measured at fair value on the balance date.

Exchange rate adjustments are included in the statement of prot or loss and other comprehensive income.

Positive market values are recognised under other assets, while negative market values are recognised under

other liabilities.

Contingent liabilities

The bank’s outstanding guarantees are disclosed in the notes under the item “Contingent liabilities”. The liabi-

lity relating to outstanding guarantees which are assessed to lead to a loss for the bank is provisioned under

the item “provisions for loss on guarantees”. The liability is expensed in the statement of prot or loss under

“Impairment of loans and receivables etc”. Non-nancial guarantees, cf. IFRS 9, are not included in stages 1

and 2.

Financial highlights

Key gures and ratios are presented in accordance with the requirements in the Danish Executive Order on

the Presentation of Financial Statements.

Note DKK 1,000

2024 2023

2 INTEREST INCOME

Centralbanks 80.144 69.572

Loans and other receivables 427.806 374.407

Loans (interest conc. the written-down part of loans) -7.699 -7.933

Bonds 19.494 20.130

Other derivative nancial instruments, total of which 3.549 5.948

Interest-rate contracts -358 -192

Currency contracts 3.907 6.140

Other interest income 71 10

Total 523.365 462.134

3 INTEREST EXPENSES

Deposits 92.792 50.848

Subordinated debt 6.583 6.592

Other interest expenses 1.842 1.388

Total

101.217 58.828

No income or expenses are entered from genuine purchase or repurchase contracts in notes 2 and 3.

4 FEES AND COMMISSION INCOME

Securities trading and custody accounts 24.887 23.609

Payment services 19.114 17.286

Loan fees 81.927 78.394

Guarantee commission 28.458 27.872

Other fees and commission 47.545 41.453

Total 201.931 188.614

5 VALUE ADJUSTMENTS

Bonds 8.736 13.049

Total shares 16.476 22.833

- Shares in sectorcompanies etc 13.095 18.100

- Other shares 3.381 4.733

Foreign currency 12.820 11.320

Other financial instruments 2 -24

Assets linked to pooled schemes -273.029 -100.970

Deposits in pooled shemes 273.029 100.970

Total 38.034 47.178

As the bank essentially operates deposits and lending activity in its local areas, the division of market areas is not specified for notes 2-5.

Notes

Note DKK 1,000

2024 2023

6 STAFF COSTS AND ADMINISTRATIVE EXPENSES

Salaries and remuneration of audit committee, managers etc.

Management incl. pensioncontribution*) 5.629 4.904

Of which fixed remuneration incl. pensioncontribution 5.629 4.904

Management board (8 members) 2.303 1.477

Audit Committee (3 members from the management board) 140 96

Risk Committee (3 members from the management board) 140 80

Nomination Committee (3 members from the management board) 40 0

Committee of representatives 182 183

Total salaries and remuneration of board etc 8.434 6.740

*) In the period 1/1 2023 - 30/6 2023 there is only one member of the management. From 1/7 2023 - 31/12 2023

there are two members of the management.

Both members have a company car.

Staff costs

Wages and salaries 126.485 114.919

Pensions

14.749 13.329

Social security costs 1.898 1.839

Payroll tax 17.735 19.232

Total staff costs 160.867 149.319

Salary to management and special risk takers (11 persons in 2023, 11 persons in 2024) 13.132 11.962

Pensions to management and special risk takers (11 persons in 2023, 11 persons in 2024) 1.141 1.036

The bank has no employees with variable salary shares.

Other administrative expenses

IT expenses 60.056 52.177

Rent, electricity, heating etc 2.207 3.392

Postage, telephony etc

1.139 1.027

Other administrative expenses 47.764 42.877

Total other administrative expenses 111.166 99.473

Total staff costs and administrative expenses 280.467 255.532

Note DKK 1,000

2024 2023

Pension and severance terms for the executive board

Managing Director:

Pension is not paid.

In the event of resignation as a result of retirement, Skjern Bank pays a severance payment equivalent to 6 months of salary. Skjern Bank’s notice

of termination to the Managing Director is 12 months, but up to 48 months in the event of a change in ownership. The Managing Director’s notice

period to the bank is 6 months.

Bank Director:

11.65 % is paid in annual pension, which is contribution-based through a pension company in which the payments are expensed continually.

Skjern Bank’s notice of termination to the Bank Manager is 12 months, but up to 24 months in the event of a change of ownership. The Bank

Director’s notice period to the bank is 6 months.

The Board’s pension terms

No pension is paid to the Board

Special risk takers’ pension terms

The special risk takers receive 11,25 % of their respective salary grades in annual pension, which is contributionbased through a pension com-

pany in which the payments are expensed continually.

Average number of employees during the financial year converted into full-time employees

Employed in credit institution business 199 190

Total 199 190

7 INCENTIVE AND BONUS SCHEMES

The bank does not have any incentive or bonus schemes.

8 AUDIT FEE

Total remuneration to the auditors appointed by the Annual General Meeting who perform the statutory

audit

1.064 630

Honorariums for statutory audits of nancial statements 74 8 475

Honorariums for assurance services 106 55

Honorariums for tax advice 0 0

Honorariums for other services 210 100

Honorariums for other declarations of certainty concerning statutory declarations to public authorities and Nets. Honorariums for tax advice concerning advice on

tax matters. Other services relating to review in connection with the recognition of current profits in the capital base and accounting advice.

9 WRITE-DOWNS ON LOANS AND RECEIVABLES

Write-downs and provisions during the year 194.040 139.865

Reversal of write-downs made in previous years -164.851 -110.100

Finally lost, not previously written down 2.072 7.206

Interest on the written-down portion of loans -7.699 -7.933

Recoveries of previously written off debt -5.386 -1.400

Total 18.176 27.638

Note DKK 1,000

2024 2023

10 TAX

Calculated tax of income of the year 94.343 84.722

Adjustment of deferred tax -906 1.000

Adjustment of tax calculated in previous years -2.905 410

Total 90.532 86.132

Tax paid during the year 98.514 85.160

EFFECTIVE TAX RATE (%) (Pct.) (Pct.)

Current corporate tax in Denmark 22,00 22,00

Special tax for nanciel companies in Denmark 4,00 3,20

Non deductable costs and not taxable income -0,50 -0,41

Adjustment of tax calculated for previous years 0,00 0,12

Other adjustments 0,12 0,12

Effective tax rate 25,62 25,02

11 RECEIVABLES AT CREDIT INSTITUTIONS AND CENTRAL BANKS

Receivables at credit institutions 79.480 60.630

Total 79.480 60.630

Remaining period

Demand 79.480 60.630

Total 79.480 60.630

No assets related to genuine purchase and resale transactions included.

Note DKK 1,000

2024 2023

12 LOANS AND OTHER DEBTORS AT AMORTISED COST PRICE

Remaining period

Claims at call 2.472.854 2.621.799

Up to 3 months 175.201 141.872

Over 3 months and up to 1 year 812.515 686.260

Over 1 year and up to 5 years 1.342.608 1.165.872

Over 5 years 2.159.350 2.110.526

Total loans and other debtors at amortised cost price 6.962.528 6.726.329

DEVELOPMENT IN WRITE-DOWNS AND PROVISIONS RELATING TO FINANCIAL ASSETS AT AMORTIZED COST

AND OTHER CREDIT RISKS

STAGE 1 IMPAIRMENT CHARGES

Stage 1 impairment charges at the end of the previous financial year 44.907 18.030

Stage 1 impairment charges / value adjustment during the period 11.174 39.593

Stage 1 impairment reversed during the period -36.320 -12.716

Cummulative stage 1 impairment total 19.761 44.907

STAGE 2 IMPAIRMENT CHARGES

Stage 2 impairment charges at the end of the previous financial year 117.214 149.203

Stage 2 impairment charges / value adjustment during the period 84.345 35.758

Stage 2 impairment reversed during the period -77.641 -67.747

Cummulative stage 2 impairment total 123.918 117.214

STAGE 3 IMPAIRMENT CHARGES*

Stage 3 impairment charges at the end of the previous financial year 147.647 123.522

Stage 3 and impairment charges / value adjustment during the period 94.614 60.910

Reversal of stage 3 impairment charges during the period -45.081 -27.733

Recognised as a loss, covered by stage 3 impairment charges -27.382 -9.052

Cummulative stage 3 impairment total 169.798 147.647

Total cumulative impairment charges IFRS9 313.477 309.768

Note DKK 1,000

2024 2023

PROVISIONS

Provisions beginning of the year 13.416 11.716

Provisions during the year 3.907 3.604

Reversal af provisions -5.809 -1.904

Provisions for losses 0 0

Guarantees end of year 11.514 13.416

Total cumulative impairment charges IFRS9 and guarantees 324.991 323.184

Stage 1 Stage 2 Stage 3

Beginning

Impairment 44.907 117.213 147.648

- in % of total impairment 14% 38% 48%

Maximum credit risk 12.432.169 1.337.371 349.054

- in % of maximum credit risk 88% 9% 2%

Rating, weighted average 2,6 6,5 10,0

End

Impairment 19.761 123.917 169.798

- in % of total impairment 6% 40% 54%

Maximum credit risk 13.442.037 1.318.561 367.200

- in % of maximum credit risk 89% 9% 2%

Rating, weighted average 2,3 6,3 10,0

Crises around the world have created renewed uncertainty in the Danish and global economy. Amongst other things, the war in Ukraine, which

began in February 2022, and the Gaza War, which broke out in October 2023, where there is still a risk of escalation despite a peace agreement

signed in January 2025.

In autumn 2024, the Danish government introduced a carbon tax for agriculture, which will be phased in until 2030, a mileage tax for the transport

industry from 1 January 2025, and more taxes related to the environment/ESG area can be expected, which overall is estimated to have some

impact on the Bank’s business customers.

As an overall risk assessment of the above, the Bank has maintained a management estimate of DKK 100 million as of 31 December 2024.

The Bank made an estimate of increased impairment rates for the private, business and agriculture segments in the event of an economic down-

turn, which amongst other things means the Bank has updated macro-factors, benchmark calculations etc.

The total management estimate of DKK 100 million is divided by DKK 10.0 in stage 1 (2023: DKK 34.5 million), by DKK 70.0 million in stage 2

(2023: DKK 52.1 million) and by DKK 20.0 in stage 3 (2023: DKK 13.4 million).

Refer to note 31 for a description of ratings.

Loans etc. with suspended calculation of interest 53.480 79.762

Note DKK 1,000

2024 2023

13 BONDS AT FAIR VALUE

Treasuries 600.525 740.509

Mortgage credit bonds 0 0

Other bonds 11.562 11.529

Total bonds at fair value 612.087 752.038

The bank has no held-to-maturity assets

14 SHARES ETC

Quoted on Nasdaq OMX Copenhagen A/S 18.410 19.511

Quoted on other stock exchanges 18.161 15.688

Sectorshares recorded at fair value 261.194 248.076

Total shares etc 297.765 283.275

15 SHARES ASSOCIATED WITH POOL SCHEMES

Investment units 1.989.717 1.590.630

Cash deposits etc. 3.276 2.206

I alt 1.992.993 1.592.836

16 LAND AND BUILDINGS

Investment properties

Fair value - end of previous nancial year 3.019 3.019

Acquisitions during the year incl. improvementsr 67 0

Fair value end-of-year 3.086 3.019

Owner occupied properties

Reassessed value - end of previous nancial year 55.250 47.868

Acquisitions during the year incl. improvements 11.805 17.770

Depreciations -1.815 -1.677

Value changes recognized in the income statement -4.906 -8.711

Reassessed value end-of-year 60.334 55.250

External experts have not been involved by measurement of investment- and owner-occupied properties. Return method is used for measurement

of investment and owner-occupied properties where used required rate of return between 5.6-7 %.

Owner-occupied properties (leasing)

Beginning of the year 19.284 16.317

Acquisitions during the year incl. improvements 0 5.616

Depreciations -1.658 -2.649

End of the year 17.626 19.284

Note DKK 1,000

2024 2023

17 OTHER TANGIBLE ASSETS

Total cost price beginning-of-year 27.653 24.506

Acquisitions during the year incl. Improvements 4.295 3.453

Reduction during the year 0 -306

Total cost price beginning-of-year 31.948 27.653

Total write-ups/downs and depreciations beginning-of-year 21.121 19.131

Depreciations during the year 3.272 2.296

Reversal of depreciations 0 -306

Total write-ups/downs and depreciations end-of-year 24.393 21.121

Book value end-of-year 7.555 6.532

18 DEBT TO CREDIT INSTITUTIONS AND CENTRAL BANKS

Debt to credit institutions 2.977 2.385

Total debt to credit institutions and central banks 2.977 2.385

Term to maturity

Demand 2.977 2.385

Total debt to credit institutions and central banks 2.977 2.385

No liabilities related to genuine sale and repurchase transactions included

19 DEPOSITS AND OTHER DEBTS

Demand 7.026.220 7.015.907

At notice 15.627 16.365

Time deposits 1.225.393 611.866

Special types of deposits 625.910 640.118

Total deposits and other debts 8.893.150 8.284.256

Term to maturity

Demand 7.049.876 7.036.192

Desposits redeemable at notice:

Up to 3 months 425.141 303.414

Over 3 months and up to 1 year 906.618 402.991

Over 1 year and up to 5 years 61.376 65.748

Over 5 years 450.139 475.911

Total deposits and other debts 8.893.150 8.284.256

No liabilities related to genuine sale and repurchase transactions included.

20 DEFERRED TAXATION

(Tax amount)

Tangible assets 10.168 10.533

Loans and other receivables -5.745 -5.368

Other 101 265

Total deferred taxation 4.524 5.430

Note DKK 1,000

2024 2023

21 SUBORDINATED DEBT

Supplementary capital DKK 100 mio 99.335 99.335

Rate 6,4573% 6,4573%

Due date 20.05.2030 20.05.2030

The loan may be paid early with the Danish Financial Supervisory Authority’s approval

starting on 20 May 2025 and then on each interest payment date.

The interest rate is determined as the 6-year swap rate plus a premium of 6.3 percentage points, valid for 6 years

from date of issue.

Subordinated debt total 99.836 99.335

Subordinated debt that may be included in the capital base 99.836 99.335

Interest on subordinated liabilities recognised in income 6.583 6.592

22 SHARE CAPITAL 192.800 192.800

Number of shares is 9,640,000 at DKK 20 each

The bank has pr. 31. December 2023 14,474 registered shareholders. 96,12 % of the share capital

are registered on name

23 HOLDERS OF HYBRID CAPITAL

Hybrid core capital 61.281 61.148

Rate 8,6632% 8,6632%

Due date No date No date

The hybrid core capital has an innite maturity and payment of interest is voluntary, which is why it is treated as equity for accounting purposes.

The loan can be repaid early on 14 September 2026 with the approval of the Danish Financial Supervisory Authority.

As of 14 September 2026, the interest rate will be changed to a half-year variable coupon rate corresponding to the CIBOR rate published by

Nasdaq OMX for a term of 6 months with the addition of 8.80 % annually.

Note DKK 1,000

2024 2023

24 OWN CAPITAL SHARES

Purchase and sales of own shares

Holdings beginning of the year

Number of own shares 6.461 4.713

Nominal value of holding of own shares (DKK 1,000) 129 94

Own shares proportion of share capital 0,07 0,05

Addition

Number of own shares 71.300 82.400

Nominal value of holding of own shares (DKK 1,000) 1.426 1.648

Own shares proportion of share capital 0,74 0,85

Purchase price (DKK 1,000) 12.729 11. 0 01

Disposal

Number of own shares 70.175 80.652

Nominal value of holding of own shares (DKK 1,000) 1.404 1.613

Own shares proportion of share capital 0,73 0,84

Sale price (DKK 1,000) 12.608 12.650

Holdings end of the year

Number of own shares 7.586 6.461

Nominal value of holding of own shares (DKK 1,000) 152 129

Own shares proportion of share capital 0,08 0,07

At the Annual General Meeting, the bank requests that shareholders be allowed to acquire up to a total nominal value of 3% of the bank’s share

capital, cf. the provisions in the Danish Budget Act (nansloven), Section 13, paragraph 3. The bank has asked the Danish Financial Supervisory

Authority for a framework for holding of treasury shares of 0.25% of the bank’s total share capital. The bank wants this authorisation in order to

always be able to meet customers’ and investors’ demand for purchasing and selling Skjern Bank shares and the net acquisitions in 2024 are a

consequence of this.

25 CONTINGENT LIABILITIES

Guarantees

Finance guarantees 864.294 384.934

Guarantees against losses on mortgage credit loans 216.545 753.010

Registration and conversion guarantees 563.192 562.309

Other contingent liabilities 172.319 157.165

Total 1.816.350 1.857.418

Other binding engagements

Irrevocable credit-undertakings 350.510 437.263

Total 350.510 437.263

Note DKK 1,000

2024 2023

Assets pledged as collateral

The bank has pledged cash for a total of DKK 10 million.

Contract Legal obligations

If the control of the bank changes, there will be a number of agreements that will end or the terms will be changed. Withdrawal from the data

center Bankdata, where, depending on the given change, a severance allowance corresponding to 5 times the last year’s bill for Bankdata may be

applied. All other agreements are considered to be immaterial.

Like other Danish nancial institutions, Skjern Bank is liable for loss sustained by the Deposit Guarantee Fund.

The most recent calculation of Skjern Bank’s share of the industry’s assurances to the Deposit Guarantee Fund is

DKK 26,5 million, which is 0,83 %.

In 2024, Skjern Bank paid 0,6 mio DKK to Afviklingsformuen (Settlement Assets).

The Bank is a tenant in one leases, which can be terminated with 12 months’ notice, the yearly lease is 178 TDKK.

26 LAWSUITS ETC.

As part of ordinary operations, the bank is involved in disputes and lawsuits. The bank´s risk in these cases are evaluated by the bank´s soliciters

and management on an ongoing basis, and provisions are made on the basis of an evaluation of the risk of loss.

27 RELATED PARTIES

Loans and warranties provided to members of the bank’s management board, board of directors and committee of representatives are on

marked-based terms.

Transactions with related parties

There have during the year not been transactions with related parties, apart from wages and salaries, etc. and loans and similar.

Wages and considerations to the bank’s management board, board of directors, audit commitee and committee of

representatves can be found in note no. 6.

There are no related with control of the bank.

Amount of loans, mortgages, guarantees, with accompanying security for members of the management and related parties mentioned below:

Management:

2024 2023

Loans 2.064 1.486

Bid Bond 400 1. 10 0

Rate of interest 5,65 - 6,81% 5,9 - 7,06%

Board of directors:

Loans 3.398 4.039

Bid Bond 1.749 2.683

Rate of interest 2,9 - 7,90% 3,9 - 7,95%

Note DKK 1,000

2024 2023

Holding of shares in Skjern Bank:

The board of managers 34.659 33.878

Per Munck 10.854 9.526

Thomas Baun

The board of directors

Hans Ladekjær Jeppesen 11.115 11. 115

Bjørn Jepsen 5.286 5.286

Niels Erik Kjærgaard 300 300

Finn Erik Kristiansen 1.941 1.941

Ole Strandbygaard 22.735 24.964

Merete Lundøe Hilmann 110 24.964

Lars Skov Hansen 74 4 74 4

Carsten Jensen 2.630 2.549

Michael Tang Nielsen 1.941 1.088

28 CAPITAL REQUIREMENT

Equity 1.801.515 1.580.909

Proposed dividend -33.740 -48.200

Share buyback framework -33.740 0

Holders of hybrid capital -61.281 -61.148

Deduction for the sum of equity investments etc. above 10 % -91.432 -105.241

NPE -17.576 -7.470

CVA deduction -913 -1.038

Deduction of trading framework for own sharers -5.061 -3.458

Core tier 1 capital 1.557.772 1.354.354

Holders of hybrid capital 61.148 61.148

Tier 1 capital 1.619.053 1.415.502

Deduction for the sum of equity investments etc. above 10 % 99.335 99.335

Subordinated loan capital 0 -629

Capital base 1.718.889 1.514.208

Weighted items

Credit risk 5.637.100 5.496.142

Market risk 239.999 219.126

Operational risk 1.097.530 926.343

Weigthed items total 6.974.629 6.641.611

Core tier 1 capital ratio (excl. hybrid core capital) 22,3 20,4

Tier 1 capital ratio 23,2 21,3

Solvency ratio - Tier 2 24,6 22,8

Note

29 CURRENT VALUE OF FINANCIAL INSTRUMENTS

Financial instruments are measured in the statement of nancial position at either fair value or at cost.

Fair value is the price which would be received from the sale of an asset or which will be paid to transfer a liability in a normal transaction between

market participants on the measurement date. For nancial assets and liabilities valued on active markets, the fair value is calculated based on ob-

servable market prices on the market date. For nancial instruments valued on active markets, the fair value is calculated based on generally ac-

cepted valuation methods.

Shares, etc. and derivative nancial instruments are measured in the accounts at fair value so that recognised values correspond to fair value. Lo-

ans are recorded in the bank’s statement of nancial position at amortised cost. The difference to fair value is calculated as fees and commissions

received, expenses incurred through lending transactions, interest receivable which is rst due for payment after the end of the nancial year and

for xed-rate loans, also the variable interest rate, which is calculated by comparing the current market rate with the loans’ nominal interest rate.

The fair value of receivables from credit institutions and central banks is determined by the same method as for loans, since the bank does not

currently recognise impairments on receivables from credit institutions and central banks.

Bonds issued and subordinated liabilities are measured at amortised cost. The difference between the carrying amount and fair value is calculated

based on rates in the market of its own listed emissions.

For oating rate nancial liabilities in the form of lending and payables to credit institutions measured at amortised cost, the difference fair value is

estimated to be interest payable which is rst due for payment after the end of the nancial year.

For xed-rate nancial liabilities in the form of lending and payables to credit institutions measured at amortised cost, the difference to fair value is

estimated to be interest payable which is rst due for payment after the end of the nancial year and the variable interest rate.

DKK 1,000

2024 2023

Book value Fair value Book value Fair value

Financial assets

Cash in hand+claims at call on central banks 3.082.942 3.082.942 2.345.718 2.345.718

Claims on credit institutes and central banks 1) 79.480 86.029 60.630 66.829

Loans and other debtors at amort. costprice 1) 6.962.528 6.974.960 6.726.792 6.740.185

Total nancial assets 10.124.950 10.143.931 9.133.140 9.152.732

Financial liabilities

Debt to credit institutions and central banks 1) 2.977 2.977 2.385 2.385

Deposits and other debts 1) 8.893.150 8.882.896 8.281.555 8.281.542

Subordinated debt 1) 2) 102.948 102.948 102.514 102.514

Total nancial liabilities 8.999.075 8.988.821 8.386.454 8.386.441

1) The entry includes calculated interest on the balance sheet date, which is included in ”Other assets” and ”Other liabilities”.

2) Applied the latest quoted trading price at the balance sheet date

Note DKK 1,000

30 RISKS AND RISK MANAGEMENT

Skjern Bank is exposed to various types of risks which are controlled at various levels within the organisation.

Skjern Bank’s nancial risks consist of:

Credit risk:

Risk of losses due to debtors’ or counterparties’ default on payment obligations.

Market risk:

Risk of losses resulting from the fair value of nancial instruments and derivative nancial instruments uctuating due to changes in market

prices. Skjern Bank classies three types of risk for the market risk area:

Interest rate risk, equity risk and currency risk.

Liquidity risk:

Risk of losses due to nancing costs rising disproportionately, the risk that Skjern Bank is prevented from maintaining the adopted business

model due to a lack of nancing/funding or ultimately, the risk that Skjern Bank cannot honour incoming payment obligations when due as a result

of a lack of nancing/funding.

Evaluation of securities:

The bank is exposed to the sectors agriculture and real-estate. The Bank has in the assessment of collateral in agricultural exposures used acres

of arable land prices in the range of 125 TDKK - 165 TDKK. In the real-estate sector is used return requirement in the range 5% - 10%. Valuations

in both agricultural exposures as real-estate exposures are made in accordance with the FSA’s current guidance. The Bank notes that estimating

the value of collateral is generally associated with uncertainty.

The following notes to the annual report contain some additional information and a more detailed description of the bank’s credit- and market

risks.

Note Figures in pct.

2024 2023

31 CREDIT RISKS

Loans and guarantees distributed on sectors

Public authorities 0,0 0,0

Business:

Agriculture, hunting, forestry & shing 8,2 10,4

- Plant production 1,2 2,0

- Cattle farming 3,8 5,4

- Pig farming 2,5 2,1

- Mink production 0,1 0,2

- Other agriculture 0,6 0,8

Industry and mining 5,8 3,9

Energy 0,8 1,1

Building and constructions 5,4 6,0

Wholesale 6,7 7, 4

Transport, hotels and restaurants 2,9 0,7

Information and communication 0,5 0,1

Financial and insurance business 3,2 6,5

Real-esate 7, 4 8,0

Other business 2,3 2,4

Total business 43,2 46,4

Private persons 56,8 53,6

Total 100,0 100,0

The industry breakdown is based on Danmarks Statistik’s industry codes etc.

Furthermore, an individual assessment is made of the individual exposures, which has resulted in some adjustment.

Earmarked credit limit divided by exposure, guarantees and credit commitments

2024 2024 2024

(DKK 1,000) (DKK 1,000) (DKK 1,000)

Exposure Guarantees

Credit-under-

takings

Public authorities 0 0 0

Business - agriculture 993.866 55.288 42.000

Business - other 4.051.547 389.110 248.715

Private persons 5.267.703 1.371.952 59.795

Total 10.313.116 1.816.350 350.510

Which recognized in the balance after deduction of depreciation 6.962.528

Note

2023 2023 2023

(DKK 1,000) (DKK 1,000) (DKK 1,000)

Exposure Guarantees

Credit-under-

takings

Public authorities 0 0 0

Business - agriculture 1.058.214 157.200 0

Business - other 4.009.403 454.358 366.670

Private persons 4.897.638 1.245.861 70.593

Total 9.965.255 1.857.419 437.263

Which recognized in the balance after deduction of depreciation 6.726.329

Description of collateral

2024 2024 2024

Security distributed by type (DKK 1,000)

Business,

agriculture

Business,

other

Private

Securities 24.358 134.405 140.067

Real property 649.013 1.273.675 2.953.880

Chattels, vehicles and rolling stock 33.372 954.280 796.776

Guarantees 2.093 39.297 2.254

Other forms of security 125.894 564.429 645.839

Total 834.730 2.966.086 4.538.816

2023 2023 2023

Security distributed by type (DKK 1,000)

Business,

agriculture

Business,

other

Private

Securities 34.097 128.463 114.499

Real property 653.685 1.286.753 2.696.517

Chattels, vehicles and rolling stock 27.701 920.248 720.706

Guarantees 4.389 64.375 481

Other forms of security 190.988 567.115 925.669

Total 910.860 2.966.954 4.457.872

As a general rule, the bank receives security in the funded asset. In addition, security is taken in the form of guarantees and mortgagesin parts and

shares. The above list reects the loan value attributable to the individual exposures.

The loan value reects the fair value calculated in accordance with the bank’s business process with a security margin of 10 - 60%,though less by

government bonds.

The bank strives to reduce the calculated balance (maximum credit exposure excluding credit commitments less value of collateral andtotal wri-

te-downs) across the entire customer portfolio.

In 2024, this resulted in a blank of DKK 3.479 million. This is a rise of DKK 302,1 million compared to 2023.

Note DKK 1,000

31.12.2024

Financial assets, loan commitments and nancial guarantees. Instruments without signicant increase in credit risk (stage 1)

Rating classication 1 2 3 4 5 6 7 8 9 10 Total

Industry group

Public authorities 1.750 0 0 0 0 0 0 0 0 0 1.750

Agriculture 162.433 285.964 65.555 234.675 199.830 4.498 7.139 150 1.870 0 962.115

Property 304.276 155.945 128.500 107.959 87.544 30.543 3.379 1.020 1.575 0 820.742

Other 1.251.146 459.608 786.603 228.333 238.150 76.209 20.139 85.737 17.197 0 3.163.122

Private 2.079.730 1.239.095 498.103 816.931 867.813 50.423 22.934 46.842 57.248 0 5.679.120

Deposits at Danmarks Nation-

albank 2.991.876 0 0 0 0 0 0 0 0 0 2.991.876

Accounts with other banks 1.184 60.000 113.921 4.000 0 0 0 0 0 0 179.104

Instruments without signicant

increase in credit risk (stage 2) 6.792.395 2.200.612 1.592.682 1.391.899 1.393.337 161.673 53.591 133.750 77.890 0 13.797.829

Instruments for which impairment has been recognised corresponding to expected credit losses in their lifetime (stages 2 and 3)

Rating classication 1 2 3 4 5 6 7 8 9 10 Total

Industry group

Agriculture 0 0 750 42.011 2.116 7.690 33.072 4.736 2.297 0 92.673

Property 0 0 0 14.976 8.670 17.897 2.000 1.777 12.771 0 58.090

Other 0 0 0 148.277 152.509 65.050 14.953 12.036 56.025 0 448.850

Private 606 50 2.400 164.958 191.442 30.063 6.860 9.820 77.189 0 483.388

Deposits at Danmarks Nation-

albank 0 0 0 0 0 0 0 0 0 0 0

Accounts with other banks 0 0 0 250 3.000 429 0 0 0 0 3.679

Instruments with signicant

increase in credit risk (stage 2) 606 50 3.150 370.471 357.737 121.129 56.885 28.370 148.281 0 1.086.679

Industry group

Agriculture 0 0 0 0 0 0 0 0 0 68.711 68.711

Property 0 0 0 0 0 0 0 0 0 135.418 135.418

Estate agents and other property

administration 0 0 0 0 0 0 0 0 0 2.866 2.866

Other 0 0 0 0 0 0 0 0 211.262 211.262

Private 0 0 0 0 0 0 0 0 0 174.042 174.042

Credit-impaired instruments

(stages 3 and 2 weak) 0 0 0 0 0 0 0 0 0 592.300 592.300

Instruments for which impair-

ment has been recognised cor-

responding to expected credit

losses in their lifetime) 606 50 3.150 370.471 357.737 121.129 56.885 28.370 148.281 592.300 1.678.979

Total nancial assets, loan

commitments and nancial

guarantees. 6.793.001 2.200.662 1.595.833 1.762.370 1.751.074 282.801 110.476 162.119 226.171 592.300 15.476.808

Work guarantees etc. not covered by IFRS9

Rating classication 1 2 3 4 5 6 7 8 9 10 Total

Total 189.775 217.341 102.718 96.127 65.709 3.329 0 4.103 1.850 11.400 692.353

Total 6.982.777 2.418.003 1.698.551 1.858.498 1.816.783 286.130 110.476 166.222 228.021 603.700 16.169.161

Note DKK 1,000

31.12.2023

Financial assets, loan commitments and nancial guarantees. Instruments without signicant increase in credit risk (stage 1)

Rating classication 1 2 3 4 5 6 7 8 9 10 Total

Industry group 2.000 0 0 0 0 0 0 0 0 0 2.000

Agriculture 154.698 226.766 150.359 162.083 331.220 8.786 7.443 23.768 27.307 0 1.092.431

Property 217.657 275.874 201.012 75.218 63.668 15.719 5.794 1.878 10.175 0 866.996

Other 1.114.684 472.097 675.956 400.918 355.285 132.719 34.245 91.086 36.620 0 3.313.610

Private 1.787.300 1.122.821 377.885 760.305 976.557 45.557 33.364 47.138 54.587 0 5.205.514

Deposits at Danmarks Nation-

albank 2.233.180 0 0 0 0 0 0 0 0 0 2.233.180

Accounts with other banks 0 60.000 95.700 0 0 0 0 0 0 0 155.700

Instruments without signicant

increase in credit risk (stage 2) 5.509.519 2.157.558 1.500.913 1.398.524 1.726.731 202.782 80.847 163.869 128.688 0 12.869.432

Instruments for which impairment has been recognised corresponding to expected credit losses in their lifetime (stages 2 and 3)

Rating classication 1 2 3 4 5 6 7 8 9 10 Total

Industry group

Agriculture 0 0 0 12.175 27.741 8.545 14.811 4.327 7.871 0 75.470

Property 0 0 0 10.703 5.714 35.633 3.395 1.493 19.689 0 76.627

Other 0 0 2 108.741 82.094 95.652 14.578 20.244 24.846 0 346.157

Private 0 50 27 190.479 223.830 46.844 6.422 12.739 58.101 0 538.492

Accounts with other banks 0 0 0 2.750 3.000 420 0 0 0 0 6.170

Instruments with signicant

increase in credit risk (stage 2) 0 50 29 324.848 342.378 187.094 39.206 38.803 110.507 0 1.042.915

Industry group

Agriculture 0 0 0 0 0 0 0 0 0 125.787 125.787

Property 0 0 0 0 0 0 0 0 0 100.379 100.379

Estate agents and other property

administration 0 0 0 0 0 0 0 0 0 8.377 8.377

Other 0 0 0 0 0 0 0 0 258.949 258.949

Private 0 0 0 0 0 0 0 0 0 150.019 150.019

Credit-impaired instruments

(stages 3 and 2 weak) 0 0 0 0 0 0 0 0 0 643.511 643.511

Instruments for which impair-

ment has been recognised cor-

responding to expected credit

losses in their lifetime) 0 50 29 324.848 342.378 187.094 39.206 38.803 110.507 643.511 1.686.426

Total nancial assets, loan

commitments and nancial

guarantees. 5.509.519 2.157.608 1.500.941 1.723.372 2.069.109 389.875 120.053 202.673 239.195 643.511 14.555.857

Work guarantees etc. not covered by IFRS9

Rating classication 1 2 3 4 5 6 7 8 9 10 Total

Total 148.214 167.901 62.140 133.070 111.450 15.675 6.565 3.315 6.378 23.727 678.436

Total 5.657.733 2.325.509 1.563.082 1.856.442 2.180.560 405.551 126.618 205.988 245.574 667.237 15.234.293

Note

Credit-quality on loans which are neither in arrears not written down *

*) Calculated based on the guidelines for accounting reports for credit institutions and investment companies, etc. regarding thresholds for repor-

ting credit quality classes. Where high credit quality is the classes 3 and 2a, medium credit quality is class 2b and low credit quality is class 2c.

Reasons for individual write-downs and provisions incl stage 2 weak

2024 2024 2024

Exposure

before

write-down Write-downs Securities

Signicant nancial difculties 392.167 158.944 263.272

Breach of contract 3.436 3.142 751

Reductions in terms 4.321 3.113 1.206

Probability of bankruptcy 49.546 32.053 28.913

Total 449.470 197.252 294.142

2023 2023 2023

Exposure

before

write-down Write-downs Securities

Signicant nancial difculties 399.691 120.010 306.733

Breach of contract 4.045 3.435 1.089

Reductions in terms 3.864 2.308 1.043

Probability of bankruptcy 78.418 52.635 57.052

Total 486.018 178.388 365.917

5.102

3.290

191

4.479

3.616

220

1.000

2.000

3.000

4.000

5.000

6.000

High Medium Low Not classified

Mio kr.

Credit quality

Credit-quality on loans whivh are neither in arrears not written down*

2024 2023

Note DKK 1,000

2024 2023

The calculation of securities does not include the value of guarantees and transports. Collateral is calculated at the customer level.

The collateral value of securities in the above table reects the fair value calculated in accordance with the Bank’s business process with a securi-

ty margin of 10 - 60 %. In connection with the calculation of expected loss, other haircuts are used for security values that reect the estimated

fair value at the time the security is expected to be sold, depending on the type of security. There will thus be differences between the collateral

value of securities and the valuation of securities when calculating expected loss. Management estimates are not included in the calculation of

impairment losses.

Arrears amount for loans, which have not been written down

0-90 days 16.315 27.386

>90 days 191 2.017

Total 16.506 29.403

Loans and arrears amount for loans, which have not been written down

0-90 days 165.458 226.246

>90 days 1.315 2.438

Total 166.773 228.684

Practice for managing credit risk

The bank’s credit risk is managed by debtors and other counterparties being rated based on various models that are mainly based on the debtor’s/

counterparty’s nancial capacity.

In addition to the models, a number of checks are made to ensure a correct rating. The ratings, both in the models and the checks, are largely ba-

sed on the Danish Financial Supervisory Authority’s guidelines on risk classication.

However, the bank uses a 10-step rating scale that can be compared with the Danish Financial Supervisory Authority’s scale in the following way:

The bank’s rating class 1 2 3 4 5 6 7 8 9 10

The Danish Financial

Supervisory Authority’s

risk class

3/2A 3/2A 3/2A 2B 2B 2B 2B 2B 2C 1

Rating 1 is assets with very good credit quality, while rating 10 is impaired assets.

The credit risk is assessed to have increased signicantly if the rating has deteriorated since initial recognition corresponding to one step on the

Danish Financial Supervisory Authority’s risk scale.

However, this does not apply to assets with low credit risk, which are dened as the Danish Financial Supervisory Authority’s risk classes 3 and

2A.

Whether or not it is an asset with a low credit risk, the credit risk is considered to have increased signicantly if the asset is overdrawn for more

than 30 days, though arrears on loans are essentially considered an impairment.

Examples of assets with and without signicantly impaired credit risk:

Example 1 Example 2 Example 3

Starting risk class 3 2A 2A

Current risk class 2A 2A 2B

Overdrawn for 30 days No Ye s No

Signicantly impaired credit risk No Ye s Ye s

Note

The bank’s exposures are grouped by industry in the following groups based on DS industries:

Industry

Government Agencies

Agriculture etc.

Industry and raw materials

Energy

Building and construction

Transport

Information and communication

Financing

Property etc.

PI and mortgage

Other industries

Private

At least once a year, all assets with a rating of 9 (the Danish Financial Supervisory Authority’s risk class 2C) are reviewed to assess whether the

asset is impaired. In addition to this, a sample is taken from the other rating classes once a year for the same purpose.

All loan options that are handled in the Credit Department by the bank’s Executive Board or Board of Directors are also assessed for any

impairment. A nancial asset is considered impaired if one or more events have occurred that have a negative impact on the expected cash ows

from the asset.

Common to the assets is that the following factors are included in the assessment:

• Arrears, overdrafts and/or the bank has discontinued repayment for the asset

• Other creditors have granted a deferment or other easier terms

• The customer is only in this nancial context due to a variable-interest loan or repayment freedom, or because the loan has otherwise been

offered on easier terms

• The customer is in RKI (Ribers Credit Information), has signicant tax debt or distraint has been levied

• The customer is associated with other customers who have impaired credit

When assessing business customers, the following factors are included:

• Negative or fragile equity ratio

• Negative or decreasing consolidation

• Tight liquidity

• Uncertain/negative future

• The customer applies for reconstruction or an agreement to avert bankruptcy

• The customer is bankrupt

When assessing private customers, the following factors are included:

• Negative assets and/or small available amount

• Uncertain future e.g. due to unemployment, divorce or illness

• The customer takes out loans to cover expenditures

• The customer applies for debt relief or an agreement to avert bankruptcy

Note

Information base, assumptions and assessment methods in assessing expected credit loss

Assets with or without signicant increase in credit risk

The bank’s credit losses are measured based on the following formula:

ECL = PD x LGD x EAD

Where:

• PD is the probability that the asset will impaired

• LGD is the expected loss, provided the asset is impaired

• EAD is the expected exposure in terms of loss

The probability that the asset will be impaired (PD) is composed of several factors:

• PD at 12 months of credit loss = PD - 12 months x macro factors

• PD in the asset’s lifetime = PD - 12 months x macro factors x extension factors

Calculation of 12 months of credit loss or credit loss in the asset’s lifetime is determined as described in ”Practice for managing credit risk”. Three

factors are used for this: Starting risk class, current risk class and overdraft for 30 days.

Information base, assumptions and assessment methods for each factor are described in the overview below.

Factor Information base Assumptions Assessment methods

PD - 12 months The bank's statistics on cus-tomers

for 01.01.2017 - 30.06.2024 distrib-

uted by rating class and private and

business by DS industry codes

The proportion of custom-ers

with impaired credit during the

period and the selected groups are

repre-sentative of the upcoming

12 months. However, see "Macro

factors".

PD is the proportionate num-ber

of customers in the men-tioned

groups who have impaired credit

during the period.

Extension factors Calculated extension factors from

BankData

The factors are representa-tive of

the bank's custom-ers. The bank

has provided data for the calcula-

tions.

Calculated based on histori-cal PD

gures from 6 small nancial institu-

tions in the years 2010-2016.

The asset's lifetime Settlement agreements for assets,

as well as calculated average matur-

ities from BankData

Loans are settled as agreed (other-

wise the loan is impaired). Credits

with renegotiation typically run

longer than the initial negotiation.

A loan with a calculated residual

maturity of 8 years will have loss

estimated for 8 years, with the

balance ex-pected for each year.

A credit with renegotiation of 10

months will be calculated with the

size of the credit on the reporting

date in 5 years.

Note

Factor Information base Assumptions Assessment methods

Macro factors Factors calculated with Lokale

Pengeinstitutter's (The Association

of Local Banks, Savings Banks and

Coopera-tive Banks in Denmark)

mac-ro-tools based on forecasts.

The factors are representa-tive of

the bank's custom-ers in the near

future. The factors were phased out

of the model over 10 years, as the

extension factors are considered to

contain suf-cient cyclical balancing.

The two variables that must be

entered in the tool were selected

based on the bank’s historical loss

data in the years 2013-2023.

Factor 1 will limit the increase in the

macro from year to year. Factor 1

was chosen based on the greatest

increase experienced during the

period, so there is not actually a

limitation.

Factor 2 is a conversion factor

between the bank’s impairment

and realised loss. Factor 2 is set to

100, as there are indications, but

not documentation, that the bank’s

impairment have historically been

greater than the realised loss. Both

are thus determined based on a

principle of caution.

LGD The bank's statistics for realised loss

on assets that were impaired during

the period 1/1/2012 to 30/06/2024.

The loss rates are divided into private

and business according to DS indus-

try codes.

The loss rate is representa-tive of the

future loss in the mentioned groups.

The loss rate is the realised loss in

relation to EAD. To the degree possi-

ble, EAD is cal-culated based on the

expo-sure one year before the asset

was found to be im-paired, and the

value of the collateral is not deduct-

ed so that it is consistent with the

application of the loss calculation.

EAD EAD is calculated based on expo-

sures divided by type. Each type is

multiplied by a Credit Conversion

Factor, which is determined based

on the principles of article 11 of CRR.

The value of collat-eral is not deduct-

ed when calculating expected loss.

EAD in relation to the expo-sure's

size divided by type of asset is

expected to remain unchanged in

the future

For example, EAD for a credit will be

calculated as:

Used part x 100% + unused part x

20%.

All exposures except for non-nan-

cial guarantees are included in the

calculation of EAD.

Note

Factor Information base Assumptions Assessment methods

Starting risk class The as the asset’s initial recognition

date is the exposure’s establish-

ment date or the date the exposure

is subsequently extended by 50%

or more. Since June 2017, assets

have been labelled with a starting

rating. To the degree possible,

previous labels are entered based

on the bank’s methods for rating on

the date of initial recognition.

The return on the asset reects the

risk on the date of establishment

(and when there are major increas-

es).

Ratings over time are care-fully

converted to the current 10-step

scale. If there is no initial rating, the

loss is recognised in the asset's

lifetime, except for assets with low

risk (Rating class 1-3)

Current risk class The customer's rating class on the

reporting date

The rating reects the credit risk See "Practice for managing credit

risk"

Overdrawn for 30 days The facility's balance and credit

facility

If the facility is overdrawn for more

than 30 days, the credit risk has

increased signicantly

There is no minimum thresh-old

for overdrafts or offset-ting of any

deposits on the customer's other

facilities

When using the mentioned macro factors, predictive information is taken into account.

No changes to important assumptions and assessment methods have occurred during the accounting period.

Assets that are impaired

See “Practice for managing credit risk” regarding assessment of whether the asset is impaired.

When calculating the credit loss, the available existing information on the reporting date is used, as well as expectations for future development.

The credit loss on impaired exposures is calculated based on the following criteria:

Exposure in thousands of

DKK

Industry Calculation

0-150 Everyone The entire exposure is written off as a credit loss

150 - Private The credit loss is calculated weighted based on a minimum of

3 scenarios determined by the cause of the credit impairment

150- Industries except agriculture The credit loss is calculated weighted based on a minimum of

3 scenarios determined by the cause of the credit impairment

150- Agriculture The credit loss is calculated weighted based on a minimum of

3 scenarios

The calculations include the following parameters:

Cause of credit impairment, scenario weight, EAD, value of collateral, expected settlement ability/dividends.

Information base, assumptions and assessment methods for each parameter are described in the overview below.

Note

Factor Information base Assumptions Assessment methods

Cause of credit impairment The cause of the customer's credit

impairment registered by the bank

The probability of each scenario is

the same for each cause:

Probability of bankruptcy, breach of

contract, easier terms and signi-

cant nancial difculties

When stating the reason the

guidelines in Appendix 10 of the

Executive Order are followed

Scenario weight Exposures that have impaired

credit during the period 1/1/2014

– 30/06/2024 where the case has

been closed

The historical distribution of scenar-

ios is representative of the credit

loss on customers with similar

causes and industries.

The number of zero-losses uctu-

ates with the economic trend.

The distribution of exposures by

percentage is calculated based on a

placement in one of the three sce-

narios: Zero-loss, Sale and Collapse.

The percentage of zero-losses is

then reduced in relation to a cyclical

factor calculated based on the

bank’s impairment and provisions

during the period 2007-2023.

EAD Exposure on the reporting date See under EAD in the table above See under EAD in the table above

Value of collateral Current assessments less costs

and expected reductions. There

are generally greater reductions

for a collapse scenario than a sales

scenario.

The actual assessment is the clos-

est we can get to a real selling price

until the sale is nal. Less reduc-

tions are expected if the customer

cooper-ates with a sale than if it is a

forced sale

For agriculture, reductions are used

based on histori-cal documentation.

There are little experience with oth-

er exposures. Reduc-tions are thus

estimated based on a precautionary

principle.

Expected settlement abil-

ity/dividends

Availability calculations for private

customers, operating prot and

budgets/periodic results for busi-

ness custom-ers, dividend state-

ments from bankruptcies

The basis indicates something

about the ability to settle the

expo-sure

Great caution is taken with recog-

nition. If the customer is no longer

cooperating with the bank, the

settlement ability is generally not

recognised

When using the cyclical factors under “Scenario weight”, predictive information is taken into account.

32 MARKET RISKS AND SENSITIVITY INFORMATION

In connection with Skjern Bank’s monitoring of market risk, a number of sensitivity calculations, which include market

risk variables, have been carried out.

Interest rate risk

In the event of a general increase in interest rates by 1 percentage point in the form of a parallel shift of the yield curve,

equity is affected as shown below

Note DKK 1,000

2024 2023

32 Interest rate risk on debt instruments etc - total 8.571 6.531

Interest rate risk in pct of core capital after deductions 0,5 0,5

Interest rate risk split in currencies with highest risk:

DKK 8.722 6.677

EUR -10 0 - 118

CHF -3 -22

JPY 0 0

USD - 74 -19

Other 26 13

Total 8.571 6.531

Foreign currency risk

Total assets in foreign currency 195.420 166.524

Total liabilities in foreign currency 127.428 145.441

In the event of a general change in exchange rates of 10%, and in the euro of 2.25%,

Currency Indicator 1 will also be increased 1.162 1.295

Currency indicator 1 in pct of core capital after deductions 0,1 0,1

In the event of a general change in exchange rates of 10%, and in the euro of 2.25%,

Currency Indicator 2 will also be increased 18 14

Currency indicator 2 in pct of core capital after deductions 0,0 0,0

Currency Indicator 1 represents the sum of the respective positions in the currencies in which the bank has a net asset position, and currencies

where the bank has net debt.

Currency Indicator 2 expresses the bank’s currency risk more accurately than

indicator 1, as it takes into account the different currencies’ volatility and covariation.

A value of indicator 2 of TDKK 25 means that as long as the bank does not change its currency positions in the following 10 days, there is a 1%

chance that the institution will get a capital loss greater than TDKK 25, which will affect the bank’s prot and equity.

Equity Risk

If stock prices change by 10 percentage points, equity is affected as shown below:

Quoted on Nasdaq OMX Copenhagen A/S 1.841 1.951

Quoted on other stock exchanges 1.816 1.569

Unquoted shares recorded at fair value 26.119 24.808

Total shares etc. 29.777 28.328

33 DERIVATE FINANCIAL INSTRUMENTS

Derivatives are used solely to hedge the bank’s risks. Currency and interest rate contracts are used to hedge the bank’s currency and interest rate

risks. Cover may not be matched 100%, so the bank has own risk. However, this risk is minor.

Note DKK 1,000

2024 2024 2024 2024 2023 2023 2023 2023

Net Market- Market- Net Market- Market-

Nominal market- value- value- Nominal market- value- value-

value value positive negative value value positive negative

Currency-contracts

Up to 3 months 219.490 79 146 67 267.226 59 131 72

Over 3 months and up to 1 year 198.948 -75 0 75 142.390 -93 0 93

Average market value 1.229 1.322 1.874 1.776

Interest-rate contracts

Up to 3 months 293.706 -262 78 340 208.691 -222 1.072 1.294

Over 3 months and up to 1 year 3.012 3 15 12 28.910 -35 235 270

Average market value 809 1.124 1.089 1.382

Shares contracts

Up to 3 months 0 0 0 0 0 0 0 0

Average market value 0 0 0 0

DKK 1,000

2024 2023

Credit risk on derivative nancial instruments

Positive market value, counterparty with risk weighting of 20 % 2.441 3.370

Positive market value, counterparty with risk weighting of 50% 2.021 772

Positive market value, counterparty with risk weighting of 75% 855 1.031

Positive market value, counterparty with risk weighting of 100% 1.645 3.735

Positive market value, counterparty with risk weighting of 150% 2 5

Total 6.964 8.913

Unsettled spot transactions Market- Market- Market-

Nominal value- value- value-

value positive negative net

Foreign-exchange transactions, purchase 610 2 - 2

Foreign-exchange transactions, sale 698 3 - 3

Interest-rate transactions, purchase 14.305 8 3 5

Interest-rate transactions, sale 12.555 20 3 17

Share transactions, purchase 3.736 24 103 -79

Share transactions, sale 3.736 107 26 81

Total 2024 35.640 164 135 29

Total 2023 66.887 276 221 55

Note DKK 1,000

2024 2023 2022 2021 2020

34 5 YEARS IN SUMMARY

Prot and loss account

Net income from interest 422.148 403.306 254.324 205.575 190.244

Dividend on shares 16.452 5.603 4.485 2.657 2.089

Charges and commission, net 196.418 184.625 204.914 172.738 155.181

Income from core business 635.018 593.534 463.723 380.970 347.514

Value adjustments 38.034 47.178 -30.830 20.181 26.513

Other ordinary income 4.785 2.525 2.078 3.487 1.977

Staff cost and admin. expenses 280.467 255.532 234.038 207.517 193.929

Depreciation of intangible and tangible assets 13.885 15.333 6.620 7.337 5.195

Other operating expenses 665 623 477 480 234

Write-downs on loans etc. (net) 18.176 27.638 2.703 -15.227 32.874

Operating result 364.644 344.111 191.133 204.531 143.772

Taxes 90.532 86.132 40.894 41.230 28.131

Prot for the year 274.112 257.979 150.239 163.301 115.641

Of which are holders of shares of hybrid

core capital instruments etc. 5.287 5.287 5.287 5.289 6.487

Balance as per 31st December

Summary

Total assets 13.249.767 11.966.911 11.228.493 9.978.498 8.974.467

Loans and other receivables 6.962.528 6.726.329 5.464.400 4.719.737 4.224.773

Guarantees etc 1.816.350 1.857.418 2.024.207 2.690.680 2.630.139

Bonds 612.087 752.038 861.733 941.900 959.506

Shares etc 297.765 283.275 231.757 208.217 201.220

Deposits and other debts 8.893.150 8.284.256 7.840.474 7.027.670 6.463.735

Subordinated debt 99.836 99.335 98.835 98.334 97.834

Total equity 1.806.672 1.586.066 1.363.361 1.247.077 1.108.059

- of which proposed dividend 33.740 48.200 28.920 28.920 19.280

Capital Base 1.718.889 1.514.208 1.342.842 1.262.458 1.135.869

Weighted items 6.974.629 6.641.611 5.802.754 5.683.653 5.370.562

Note

2024 2023 2022 2021 2020

35 FINANCIAL RATIO (FIGURES IN PCT.)

Solvency ratio 24,6 22,8 23,1 22,2 21,2

Core capital ratio 23,3 21,3 21,5 20,5 19,3

Return on equity before tax* 22,0 24,0 15,0 1 7, 9 13,7

Return on equity after tax* 16,5 17, 9 11,7 14,2 10,9

Return on assets 2,1 2,2 1,3 1,6 1,3

Earning/expense ratio in DKK 2,16 2,15 1,78 2,02 1,62

Interest rate risk 0,5 0,5 0,9 1,1 1,3

Foreign currency position 0,1 0,1 0,1 0,1 0,1

Foreign currency risk 0,0 0,0 0,0 0,0 0,0

Loans etc. against deposits

Statutory liquidity surplus 66,8 71,2 60,8 60,0 60,9

NSFR 1,37 1,24 1,35 1,42 -

LCR 360,0 331 352 353 351

Total large commitments 118,2 120,6 106,9 114,4 118,3

Loans and debtors at reduced interest 0,6 0,9 0,6 0,6 0,9

Accumulated impairment ratio 3,6 3,6 3,8 3,8 4,9

Impairment ratio for the year 0,2 0,4 0,1 -0,2 0,4

Increase in loans etc. for the year 3,5 23,1 15,8 11,7 -2,3

Ratio between loans etc. and capital funds 3,9 4,2 4,0 3,8 3,8

(value per share 100 DKK)

Earnings per share* 139,5 131,1 75,3 103,4 56,8

Book value per share* 906 791 676 616 544

Rate on Copenhagen Stock Exchange 1.050 718 610 518 352

Dividend per share 1 7, 5 25 15 15 10

Market value/net income per share 7, 5 5,5 8,1 5,0 6,2

Market value/book value* 1,16 0,91 0,90 0,84 0,65

(value per share 20 DKK)

Earnings per share* 27,9 26,2 15,1 20,7 11,4

Book value per share* 181 158 135 123 109

Rate on Copenhagen Stock Exchange 210,0 143,5 122,0 103,5 70,4

*) Key ratios are calculated as if the hybrid core capital is accounted for as an obligation with which the key gures are calculated based on the

shareholders’ share of earnings and equity. Shareholders’ share of earnings and equity is stated in the equity statement.

FINANCIAL CALENDER 2025

17 January Deadline for submission of items for the agenda for the Annual General Meeting

6 February Announcement of Annual Report 2024

3 March General Meeting – Ringkøbing-Skjern Kulturcenter

8 May Announcement of quarterly report 1st quarter 2025

14 August Announcement of half-yearly report 2025

30 Ocotober Announcement of quarterly report 3rd quarter 2025

COMMITTEE OF REPRESENTATIVES

Name Jobposition City Elected Born

Hans L. Jeppesen (board chairman)* Lawyer Skjern 2011 1964

Ole Strandbygaard (board vice-chairman)* Printer Ringkøbing 2008 1972

Jørgen Søndergaard Axelsen Real estate agent Skjern 2002 1960

Ebbe Storgaard Bendixen Manager Bramming 2020 1981

Britta Boel Manager Varde 2022 1976

Heine Delbing Manager Odense 2019 1953

Poul Frandsen Manager Herning 2012 1967

Peter Sehested Glargaard Manage Skjern 2023 1971

Bjarke Hansen Manager Ringkøbing 2020 1977

Ole Blach Hansen Manager Gørding 2021 1971

Merete Lundøe Hillmann* Vice President Vedbæk 2023 1969

Tom Jacobsen Manager Tarm 2010 1970

Mike Jensen Bookseller Skjern 2005 1966

Bjørn Jepsen* Farmer Borris 2011 1963

Niels Erik Kjærgaard* Former city manager Skjern 2002 1954

Birgitte Kloster Nordic logisticdirector Ribe 2018 1966

Dorte H. Knudsen Nurse Hviding 2006 1956

Finn Erik Kristiansen* Manager Varde 2020 1969

Karsten Larsen Manager Dejbjerg 2020 1979

Niels Larsen Farmer Ribe 2024 1983

Tommy Noer Technical teacher Esbjerg 2005 1954

Torben Ohlsen Manager Esbjerg 2020 1965

Kim Pedersen Manager Regstrup 2024 1956

Niels Christian Poulsen Mink farmer No 2006 1963

Jesper Ramskov Manager Esbjerg 2005 1964

Dina Reffstrup Sales Manager Esbjerg 2022 1973

Bente Tang Farmer Hanning 2006 1969

Birte Bruun Thomsen Manager Esbjerg 2014 1966

Poul Thomsen Former trader Skjern 1993 1952

Torben Tobiasen Manager Videbæk 2020 1977

*Members of the board of directors

Hans Ladekjær Jeppesen, lawyer, Skjern

Board chairman

Born 11th September 1964

Elected on the board in 2011

Current term expires in 2025

Other management duties:

Manager of KLA 2010 ApS

Board chariman of Ide Huse A/S

Board chariman of Grey Holding 2 A/S

Board chariman of Grønbjerg Grundinvest A/S

Board chariman of LHI Invest A/S

Board chariman of PE Trading A/S

Board chariman of Roslev Trælasthandel A/S

Board chariman of Specialfabrikken Vinderup A/S

Board chariman of Kjeld Andreas Ingvardsens Familiefond

Board chariman of Elin Marie Ingvardsens Familiefond

Board member of Advokatpartnerselskabet

Kirk Larsen & Ascanius

Board member of Carl C A/S

Board member of Carl C Ejendomme ApS

Board member of Gråkjær A/S

Board member of Gråkjær Holding A/S

Board member of Gråkjær Aqua A/S

Board member of GråkjærA/S

Board member of Gråkjær Landbrug A/S

Board member of Gråkjær Erhverv A/S

Board member of Grønbjerg Ejendomsselskab A/S

Board member of IFN Denmark ApS

Board member of Kastrup A/S

Board member of Kastrup Ejendomme ApS

Board member of Skanva Group A/S

Board member of Skjern Håndbold A/S

Board member of Vinduesgrossisten ApS

BOARD OF DIRECTORS

Bjørn Jepsen, farmer, Borris

Vice board chariman

Born 17 October 1963

Elected on the board in 2012

Current term expires in 2026

Other management duties:

Vice board chairman of Mejeriforeningen Danish Dairy Bo-

ard

Board member of Arla Foods AmbA

Board member of Kvægafgiftsfonden

Board member of Mælkeafgiftsfonden

Board member of Landbrug & Fødevarer, kvæg

Niels Erik Kjærgaard, former city manager, Skjern

Born on 3 July 1954

Elected on the board in 2019

Current term expires in 2026

Other management duties:

Board chairman of Investeringsselskabet Lionek A/S

Board chairman of Iværksætterselskabet K&S ApS

Board member of Ejendomsselskabet Husumparken A/S

Board member of Ejendomsselskabet Husumparken af

2000 A/S

Board member of Fonden Remisen

Finn Erik Kristiansen

Born 23 April 1969

Elected on the board 2020

Current term expires 2025

Other management duties:

Manager of ProVarde S/I

Manager of i Bordin Holding ApS

Board chairman of Bog & Idé Aalborg Storcenter ApS

Board chairman of Kristiansen Bog & Idé A/S

BOARD OF DIRECTORS

Ole Strandbygaard

Born 21 February 1972

Elected on the board 2022

Current term expires 2026

Other management duties:

Manager of Strandbygaard A/S

Board member of Strandbygaard A/S

Board member of MOGIS A/S

Board member of OSBH Invest ApS

Board member of SH Invest, Skjern A/S

Board member of SH 1ApS

Board member of SH 2 ApS

Board member of SH 3 ApS

Board member of Lokalvækst

Board member of PrinfoDenmark A/S

Board member of Prinfo Holding A/S

Board member of Dejbjerglund Efterskole

Board member of KOSS Ejendomme ApS

Merete Lundøe Hilmann, Vice President, Vedbæk

Born 23 September 1969

Elected on the board i 2024

Current term expires 2026

Other management duties:

Board member in DenmarkBridge

Lars Skov Hansen, advisor, Esbjerg

Employee-selected

Born 17 May 1973

Elected on the board in 2011

Current term expires in 2027

Michael Tang Nielsen, finance manager, Velling

Employee-selected

Born 17 December 1977

Elected on the board in 2019

Current term expires in 2027

BOARD OF DIRECTORS

Carsten Jensen, advisor, Skjern

Employee-selected

Born 29 April 1980

Elected on the board in 2015

Current term expires in 2027

Per Munck, CEO, Skjern

Born 12 November 1954

Hired 1 November 1999

Other management duties:

Boardmember of

Foreningen Bankdata

Boardmember of

Forvaltningsinstituttet for Lokale

Pengeinstitutter

Boardmember of Fonden Remisen

MANAGEMENT

Thomas Baun, bank director, Varde

Born 12 May 1976

Hired 15 August 2009

Joined the executive board 1 July 2023

AUDIT COMMITTEE SKJERN BANK

Name Jobposition City

Niels Erik Kjærgaard Former city manager Skjern

(Chairman)

Finn Erik Kristiansen Manager Varde

Lars Skov Hansen Advisor Esbjerg

RISK COMMITTEE SKJERN BANK

Name Jobposition City

Bjørn Jepsen Farmer Borris

(Chairman)

Ole Strandbygaard Printer RKB

Michael Tang Nielsen Finance manager Velling

NOMINATION COMMITTEE SKJERN BANK

Name Jobposition City

Hans L. Jeppesen Lawyer Skjern

(Formand)

Merete Lundøe Hilmann Vice President Vedbæk

Carsten Jensen Advisor Skjern

SKJERN ESBJERG RIBE VIRUM ØLGOD

Banktorvet 3 Kongensgade 58 J. Lauritzens Plads 1 Kongevejen 159 Storegade 16-18

6900 Skjern 6700 Esbjerg 6760 Ribe 2830 Virum 6870 Ølgod

Tlf. 9682 1333 Tlf. 9682 1500 Tlf. 9682 1600 Tlf. 9682 1480 Tlf. 9682 1540

VARDE BRAMMING HELLERUP HØRSHOLM CARLSBERGBYEN

Bøgevej 2 Storegade 20 Strandvejen 143 Lyngsø Allé 3 Ny Carlsbergvej 14

6800 Varde 6740 Bramming 2900 Hellerup 2970 Hørsholm 1799 København V

Tlf. 9682 1640 Tlf. 9682 1580 Tlf. 9682 1450 Tlf. 9682 1420 Tlf. 9682 1680