BAYLAKE BANK CODE OF ETHICS
December 16, 2003

It is in the best interest of the bank, our shareholders, and the public that we conduct our business consistent with the following Core Values.

INTEGRITY. Baylake expects that its officers, directors, and employees will demonstrate integrity in all dealings.  In making moral choices, the high road is the only road.  We expect absolute honesty in the handling of customer property, accounts, and information entrusted to the bank.

CARING.  Employment at Baylake should reflect both a personal commitment to your job and to the bank. We expect personnel to work towards improving bank performance on a personal as well as a professional level with respect and concern for others, whether fellow employees or customers.

FAIRNESS.  Bank personnel shall maintain a sense of individual respect for human dignity, openness, and understanding. 

            RESPONSIBILITY.  Baylake demands a dedicated commitment to engender trust, faith and confidence from others.  Included in this is a strict conduct in accordance with the bank’s core values, adherence to standards of confidentiality, and avoidance of any conflicts of interest where possible or transparent disclosure where not.

PROFESSIONAL CONDUCT

CHARGES AND PRICING.  The fees and charges for bank products and services, including rates on deposits and loans will be determined by the best interest of Baylake and its customers.   Costs are intended to be profitable to the bank as well as competitive for the customer. It is important when dealing with customers that no comments or actions by Baylake employees be misinterpreted as an agreement to cooperate with competitors contrary to the interests of our customers.  Except where a transaction requires the participation of another financial institution, the bank’s pricing process shall absolutely exclude any agreements or understandings with any other financial institutions in following a common course of action as to rates of interest, the terms on which products and services are offered, or the prices and fees charged to customers.

COMPETITION.  The purpose of competition in general is the positive delivery of a little "extra something" at Baylake that is reflected in the attitude of its staff as well as the quality of its products and services.  It should be uppermost in our minds that the bank’s reputation and prestige depend substantially on our conduct.  Concerning the matter of competition between our company and any other financial institution, personnel must always be positive.  Quality service and personal attention to customers are much more effective than the criticism of a competitor. Such criticism is not in keeping with the character of Baylake.

UNDESIRABLE BUSINESS.  Bank personnel at every level shall avoid any appearance of discrimination in the consideration and acceptance of business brought to us by reputable persons. However, it should be understood that customer relationships may not be in the best interest of the bank where such business involves persons with values or practices contrary to the bank and this Code.  Such relationships leave open the risk of loss or embarrassment for the bank and should be brought to the attention of the bank for careful consideration.  

ILLEGAL ACTIVITY.  The bank, including its officers, directors, and employees, shall abide by all federal, state, and local laws, regulations and rules applicable to the bank and the conduct of its business activities.  All bank personnel are expected to report the existence or suspicion of any violation of any law, regulation, or rule.  Any personnel discovered to be engaged, directly or indirectly, in any illegal conduct or activity or who knowing fail to report the existence of such conduct or activity will be subject to immediate disciplinary action and possible termination of employment.  Examples of illegal activity include, but are not limited to: embezzlement, unauthorized sale of information, frauds such as forgery, counterfeiting and check kiting, and unauthorized use of funds, abuse of expense, asset, and liability accounts, as well as any intentional filing or recording of false information that materially relates to any banking activity or affects the reliability or accuracy of any bank reporting obligation.

CONFIDENTIALITY.  The confidential nature of customer records and bank information in general is a basic rule.  It is important we are aware of the importance of protecting that information from improper or unlawful disclosure.  Customer information is intended solely for the benefit of the actual customers and the bank and should not be released to any third party without express consent or legal process.  Bank information, relating to its operations, performance, value, and other areas of internal activity is solely for the benefit of the bank and its shareholders, to be used for proper banking purposes and not, at any time, for the personal benefit of any individual or organization. On an individual customer level, the bank is subject to stringent requirements for the protection of customer information and violations of these regulations can result in regulatory sanction or civil actions for damages.  At the company level, bank personnel must be cautious in discussing the corporate affairs of Baylake with outsiders, due to the potential harm to the company and its shareholders.  In addition, with regard to the trading of bank stock, confidential information could be considered as "insider information" under Federal and State Security laws.  Disclosure or use of such information for personal gain or to avoid of personal loss could result in substantial civil and criminal penalties to those who disclose or use this information.

PERSONAL MATTERS 

MORALITY AND REPUTATION. Loyalty, fidelity, and good morals are qualities expected of those who represent Baylake. It is imperative that individuals conduct themselves so as to reflect credit on this institution and its staff members. Baylake employees must remain above reproach.

INDIVIDUAL PERFORMANCE.  Policies and procedures are developed within Baylake to ensure consistency in ongoing operations throughout the company and they should be followed even if the individual is not in complete agreement with them. Policies and procedures are reviewed and modified as often as necessary to keep pace with changing conditions and Baylake encourages its employees to suggest changes through recommendations and discussions with supervisors.
 

CONFLICT OF INTEREST/OUTSIDE INTERESTS.  Baylake employees should avoid situations which could result in a conflict of interest.  Personal interests which affect the proper exercise of judgment should be avoided. If a potential conflict arises, the individual in question should disqualify him or herself and permit others to step in.  If that is not possible, then he or she should make a complete and transparent disclosure of the circumstance.  Membership on outside boards also involves possibilities of conflicts of interest. Employees are encouraged to participate in civic, charitable, or religious organizations, but situations that might be create a conflict should be cleared with Human Resources.

GIFTS AND ENTERTAINMENT.  No officer, employee, director or member of his or her immediate family should give or accept cash, gifts, special accommodations, or other favors from anyone doing business with the bank.  Employees may not accept personal fees, commissions or payment for any transaction or business involving Baylake.  However, entertainment or hospitality of a reasonable value, or gifts of nominal value are excluded from this restriction. Whenever possible, Baylake should pay the employee's expenses.  The acceptance of gifts of more than a nominal value could be considered as an attempt at bribery and could subject both the giver and the recipient to felony charges as well as the penalties prescribed under the Bank Bribery Act, 18 USC 215.  Any question or doubt as to the appropriateness of their receipt should be referred to and resolved by the Human Resources Department.

OUTSIDE ACTIVITIES.  Employees are encouraged to participate in relevant community activities and local government.  However, as an institution, Baylake cannot and should not engage in politics.  Community and political activities by Baylake employees are permitted, provided that participation does not interfere with work performance, is not deemed divisive to the community, and the employees involvement is accomplished in a manner that clearly indicates that the employee does not speak or represent the interests of Baylake.  Before becoming involved in political matters, employees should assure themselves that their participation must in no way reflect unfavorably on the company and make contact with Human Resources for approval.  Fund-raising efforts for any purpose that include the involvement of Baylake should be avoided if there is any possibility of an adverse effect on the reputation of Baylake.

TRADING IN BAYLAKE STOCK.  Baylake employees are encouraged to participate and maintain an ownership in Baylake Corp. stock.  However, all employees are cautioned that the Securities and Exchange Commission has stringent rules and regulations related to trading securities while in the possession of material, non-public information.  There may be occasions when, in the course of your normal duties, you become aware of certain facts related to the company such as earnings, expansion plans, potential acquisition, or other information which may reasonably be expected to be important to the investing public. Until such information is disseminated to the general public through a press release or other public announcement, employees are prohibited from either purchasing or selling Baylake stock. Violation of this policy could subject employees to possible action by the Securities and Exchange Commission, the result of which may include fines and/or imprisonment. Should any employee desire to acquire or sell Baylake stock while knowledgeable of information which has not been released to the public, inquiries for advice should be made to Senior Vice President - Accounting.  Purchases of stock of Baylake Corp. may be made on a regular basis through the Dividend Reinvestment and Stock Purchase Plan. Participation in the plan is voluntary and provides employees with a simple and convenient method of purchasing stock of Baylake without incurring a fee.