CODE OF ETHICS

Code of Business Ethics for Employees and Directors of CapSource Financial, Inc.

The Board of Directors of CapSource Financial, Inc. has adopted the following Code of Business Ethics for employees and directors of the Company. This Code is intended to focus the employees and each director on areas of ethical risk; provide guidance to employees and directors to help them recognize and deal with ethical issues; provide mechanisms to report unethical conduct; and help foster a culture of honesty and accountability.

Each employee and director must comply with the letter and spirit of this Code.

No code or policy can anticipate every situation that may arise or replace the thoughtful behavior of an ethical director. Employees and directors are encouraged to bring questions about particular circumstances that may implicate one or more of the provisions of this Code to the attention of the Chairman of the Board.

CONFLICT OF INTEREST

Employees and directors must avoid any conflicts of interest between the employee or director and the Company. Any situation that involves, or may reasonably be expected to involve, a conflict of interest with the Company, should be disclosed promptly to the Chairman of the Board. A "conflict of interest" can occur when:

• An employee's or director's personal interest is adverse to-or may appear to be adverse to-the interests of the Company as a whole.



• An employee or director, or a member of his or her immediate family as defined by the New York Stock Exchange receives improper personal benefits as a result of his or her position as an employee or director of the Company.

Some of the more common conflicts which directors should avoid are listed below:

• Relationship of Company with third-parties - Employees and directors may not receive a personal benefit from a person or firm which is seeking to do business or to retain business with the Company.



• Compensation from non-Company sources - Employees and directors may not accept compensation (in any form) for services performed for the Company from any source other than the Company.



• Gifts - Employees and directors may not offer, give or receive gifts from persons or entities who deal with the Company in those cases where any such gift is being made in order to influence the actions of the employee or director, or where acceptance of the gifts could create the appearance of a conflict of interest.



• Personal use of Company assets - Employees and directors may not use Company assets, labor or information for personal use unless approved by the Chairman of the Board, or as part of a compensation or expense reimbursement program.

CONFIDENTIALITY

Employees and directors must maintain the confidentiality of information entrusted to them by the Company and any other confidential information about the Company that comes to them, from whatever source, in their capacity as an employee or director, except when disclosure is authorized or legally mandated. For purposes of this Code, "confidential information" includes all non-public information relating to the Company.

COMPLIANCE WITH LAWS, RULES AND REGULATIONS; FAIR DEALING

Employees and directors must comply, and oversee compliance by subordinate employees, officers and other directors, with laws, rules and regulations applicable to the Company, including insider trading laws. Employees and directors must deal fairly, and must oversee fair dealing by subordinate employees, with the Company's customers, suppliers, competitors and employees.

ENCOURAGING THE REPORTING OF ANY ILLEGAL OR UNETHICAL BEHAVIOR

Management employees and directors should promote ethical behavior and take steps to ensure the Company:

• Encourages employees to talk to supervisors, managers and other appropriate personnel when in doubt about the best course of action in a particular situation



• Encourages employees to report violations of laws, rules, regulations or the Company's Code of Conduct to appropriate personnel



• Informs employees that the Company will not allow retaliation for reports made in good faith.

COMPLIANCE STANDARDS

Employees should communicate any suspected violations of this Code promptly to Company senior management, or to any Company Director. Directors should communicate any suspected violations of this Code promptly to the Chairman of the Board. Violations will be investigated by the board or by persons designated by the board, and appropriate action will be taken in the event of any violations of the Code.

WAIVER OF CODE OF BUSINESS ETHICS

Any waiver of this Code may be made only by the Board of Directors and must be promptly disclosed to the Company's shareholders.