LUXURY EXPENSE POLICY

This policy fulfills the requirements under the American Recovery and Reinvestment Act of 2009 (ARRA) enacted February 17, 2009. ARRA requires each recipient of funds under the Capital Purchase Program (CPP) of the Troubled Assets Relief Program (TARP) to have in place a company-wide policy regarding excessive or luxury expenditures, as identified by the Secretary of the Department of the U.S. Treasury.

The Company prohibits excessive expenditures on entertainment and events, office or facility renovations, aviation and other transportation services. The Company's policy is to authorize only reasonable expenses for conferences, staff development, performance incentives or other similar measures conducted in the normal course of business. Review: This policy shall be reviewed by the Company's Board of Directors on an annual basis. Any expenditure requiring pre-approval under this Policy will be reviewed with the Company's Board Compensation Committee on a quarterly basis.

Amendments: The Company's Board of Directors must approve any amendments to this policy.

CEO and CFO Certification: The Company's CEO and CFO shall certify that any expenditure requiring pre-approval under this policy was properly obtained.

Executive management is responsible for the effective implementation of this policy. To that end, executive management shall monitor expenditures addressed by this policy to ensure compliance with this policy; document and justify any exceptions to this policy and report exceptions to the Compensation Committee of the Board; and promptly recommend modifications of this policy to the Compensation Committee to ensure it remains compliant with the TARP Standards for Compensation and Corporate Governance as defined by the Department of the Treasury (31 CFR Part 30) as it may be amended.

1. Renovations: Renovations of facilities and office spaces should be relative to the approved current five year strategic plan, and tracked within the capital expenditure policy of the Company. An exception to this can be allowed if management must deal with an emergency situation, such as an act of nature, and the expenditure is necessary to make the facility operational for customer use. At no time should renovations be done that would have the appearance of being extraordinary, or excessive from a shareholder perspective.

2. Entertainment: Entertainment is defined as an activity that an Employee or Executive would use corporate funds for business development purposes relating to a current customer(s) or prospective customer(s) or to further enhance the Company's marketing efforts. Our expectation is that all expenses incurred to the Bank would be for company purposes, and used to drive business to the bank. Occasional events such as taking customers or prospects on trips, playing golf, eating dinner, taking them to other events the customer/prospect would find pleasurable is a necessary port of the Company's marketing efforts and is not deemed as "entertainment" or a violation of the Luxury Policy. These expenses should be documented and detailed as to the benefit derived by the Bank.

3. Conferences: We encourage our staff to attend conferences that are appropriate educational opportunities. These conferences should be related to the financial services industry and have a direct correlation to their job. At times it may be appropriate that a spouse would travel to these conferences with Company attendees. Typically these conferences are sponsored by vendors, banking associations, or other industry related entities. This Policy would EXCLUDE reward conferences whether paid for by the Company or other vendors as a violation of this policy if the purpose is meant to be a reward, or would have no value of education to the employee or executive.

4. Holiday Parties: We believe that holiday parties are part of an employee appreciation process. Holiday parties should be local in geographic nature, and should not cost the Company more than an average day's payroll per employee, on average. Events and parties focused on Customers for the purpose of attracting their business would not fall under this policy.

5. Board retreats are intended for educational and critical planning purposes for such areas as long-term strategy, budgets and expansion. It is also appropriate for such retreats to be used for director education to maximize the effectiveness of the Board's oversight and policy development roles.

6. Aviation and other Transportation Services: The Company encourages coach travel whenever possible. The Company may from time-to-time pay for first class travel when required for legitimate reasons such as seat availability, to accommodate a disability or special need, or to enable certain employees to remain productive during travel. Accommodations, meals, ground transportation and other expenses should be reasonable given such considerations as location, cost, availability, business conducted, and other appropriate factors.