SPM Savings Bank has been working on a financial restructuring plan since it became clear that a proposed agreement with Kaupthing Bank hf. would not be completed after the collapse of the Icelandic banks. In November 2008 New Kaupthing Bank hf. and the municipality of Borgarbyggð reached an agreement whereby the bank would acquire the entire share capital of SPM. This deal is subject to an agreement being reached with the creditors on the financial restructuring of SPM and also to the approval of the Icelandic Financial Supervisory Authority and the Competition Authority. On 27 January 2009 SPM signed an agreement with all of its main domestic and international creditors whereby the creditors agreed not to accelerate SPM's loans before 2 March 2009. This standstill period will be used to negotiate with the creditors on their involvement in the financial restructuring of SPM. The principal amount of the loans will not be paid during the period, nor will interest on subordinated loans and bonds, including bond series 05/01 in the amount of ISK 279,349,000 maturing in 2015 and admitted to trading on NASDAQ OMX Iceland hf. SPM will, however, pay interest on the senior ranking loans and bonds, as applicable, during the standstill period and the agreement does not affect the position of depositors or trade creditors. Owners of bonds admitted to trading on the securities exchange are not party to this agreement but it is hoped that they will participate in the financial restructuring of SPM. As mentioned above, SPM has been involved in discussions with its creditors for some time and the CEO and board of SPM are optimistic that an agreement on financial restructuring can be reached and welcome the standstill agreement as a positive step towards securing the interest of SPM's depositors and other stakeholders. For further information, please contact: Bernhard Þór Bernhardsson CEO Tel: + 354 430 7500 E-mail: bernhard@spm.is