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                                                                    EXHIBIT 99.3

INTRODUCTION      This Code of Conduct governs the personal conduct, actions and
                  work relationships of all employees of Hawthorne Financial
                  Corporation and its subsidiaries/affiliates (the "Company")
                  with its customers, fellow employees, competitors,
                  governmental officials and vendors. This includes situations,
                  both official and unofficial, whereby employees may reasonably
                  be perceived by others as acting as representatives of the
                  Company. The term "employee" applies to all directors,
                  officers and employees of the Company.

                  The reputation and successful business operation of the
                  Company is built upon its basic philosophy of integrity and
                  the ethical conduct of its employees. Preservation of that
                  trust and the Company's reputation for excellence requires
                  careful observance of the spirit and intent of all applicable
                  laws/regulations and internal Company policies as well as
                  scrupulous regard for the high standards of conduct and
                  personal integrity set forth in the policy statements that
                  follow.

                  The Company does not intend to unduly inhibit the personal
                  activities of employees. However, the Company is concerned
                  with the personal conduct of all employees of the Company
                  since their personal conduct may reflect either directly or
                  indirectly on the organization. In general, the use of good
                  judgment coupled with high ethical standards will guide
                  employees along the lines of acceptable conduct.

AUTHORITY; LAW    Sarbanes-Oxley Act of 2002
                  Bank Bribery Amendments Act of 1985
                  The Financial Institutions Regulatory and Interest Rate
                  Control Act of 1978

POLICY            Hawthorne Financial Corporation intends to conduct its
                  business in accordance with the highest ethical standards and
                  to comply with all laws and regulations applicable to its
                  business. The Company expects its employees to conduct their
                  personal and business dealings in accordance with the letter,
                  spirit and intent of all relevant laws and to avoid doing any
                  form of illegal, dishonest or unethical activities.

SCOPE OF POLICY   This policy applies to all directors, officers and employees
                  of the Company and its subsidiaries.

COMPLIANCE WITH   Compliance with the Code of Conduct is the responsibility of
CODE OF CONDUCT   every employee. This document is intended to provide guidance
                  to employees for the proper conduct of their own affairs as
                  representatives of the Company and procedures for reporting
                  any possible breach of appropriate conduct of which they may
                  become aware.

                  In many situations involving moral or ethical judgment, it may
                  be difficult for an employee to determine the proper course of
                  action. In such instances, unless specified otherwise in this
                  Code of Conduct, the employee must not rely solely on his/her
                  own judgment but must report


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                  the facts to the Ethics Committee of the Company. Good
                  judgment and common sense to avoid even the appearance of
                  impropriety must guide the practical application of the Code
                  of Conduct and the Ethics Committee has been established to
                  provide this guidance.

                  The examples provided do not purport to be exhaustive and
                  there may be facts present in actual circumstances that would
                  necessitate a different conclusion. In such cases, the Ethics
                  Committee may provide guidance.

                  It must be noted that employees who violate or fail to comply
                  with provisions of the Code of Conduct may be subject to
                  disciplinary action, up to and including termination of
                  employment. In addition, such employees may be subject to
                  prosecution under applicable laws. This policy applies to all
                  directors, officers and employees of the Company and its
                  subsidiaries.

ACCOUNTING        A fundamental precondition to sound corporate governance is
INFORMATION       the reliability of accounting information and records
                  throughout the Company. To provide assurance of the integrity
                  of such information:

                  o     Employees will act in good faith, responsibly, with due
                        care, competence and diligence, without intentionally
                        misrepresenting material facts or allowing one's
                        independent judgment to be subordinated.

                  o     All employees who prepare accounting entries, records or
                        reports are responsible to assure that such information
                        is accurate, complete, objective, relevant, timely and
                        understandable.

                  o     Intentionally false or artificial entries may not be
                        made in any books or records of the Company and
                        employees may not engage in any arrangements that result
                        in such entries.

                  o     Payment on behalf of the Company may not be approved nor
                        any transaction made with the intention or understanding
                        that all or part of such payment will be used for any
                        purpose other than that described by the documents that
                        support it.

                  o     Under no circumstance may funds, assets or liabilities
                        of the Company be concealed or hidden.

                  o     Funds or assets of the Company may not be used for any
                        unlawful or improper purpose.

                  o     Company records must reflect accurately and describe
                        properly the true nature, purpose and amount of the
                        transactions recorded. Documentation must provide an
                        appropriate audit trail, as may be necessary to
                        reconstruct the transaction(s) at a later date.


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                  o     Full cooperation with the Company's audit and risk
                        management procedures is imperative. Intentionally false
                        or misleading statements to auditors are considered to
                        constitute a falsification of records and are grounds
                        for disciplinary action, up to and including termination
                        of employment.

                  o     The Board of Directors of the Company, through its Audit
                        Committee, has the ultimate responsibility for the audit
                        process. No employee of the Company may intentionally
                        interfere with this process, including attempting to
                        unduly influence, coerce, manipulate or mislead the
                        auditors with the purpose of rendering the financial
                        statements materially misleading.

                  o     Careful observance of expense account regulations and
                        guidelines is imperative. Falsification of an expense
                        account is a misappropriation of Company funds and
                        constitutes grounds for disciplinary action, termination
                        of employment and/or prosecution.

                  o     Falsification of any Company document (such as payroll
                        time sheets, loan documentation, General Ledger entries,
                        etc.) may be grounds for disciplinary action,
                        termination of employment and/or prosecution.

                  o     Any employee having information or knowledge of any
                        prohibited act or activity should promptly report such
                        activity to the Ethics Committee.


CONFIDENTIALITY   By the very nature of our business, many Company employees are
OF CUSTOMER       privy to customers' business plans, forecasts, decisions and
INFORMATION       financial problems. Hawthorne Financial Corporation's policy
                  is that confidential information with respect to the Company's
                  customers and vendors, acquired by an employee through his/her
                  employment, is considered to be privileged and must be held in
                  the strictest confidence. Such information is to be used
                  solely for Company purposes and not as a basis for personal
                  gain by an employee. In no case should such information be
                  transmitted to persons outside of the Company, including
                  family, relatives and associates, or to other employees of the
                  Company who do not need to know such information in the normal
                  discharge of their duties.

                  Each employee is responsible to learn and understand and
                  comply with the guidance of the Company's Information Security
                  Policy, Insider Trading Policy, Privacy Policies and any other
                  Company policies that provide guidance regarding the
                  confidentiality and protection of customer information.
                  Employees are expected to make every effort to avoid a
                  violation of any customer's confidence in us that we will
                  maintain the privacy of their financial information. This
                  includes any unintentional as well as intentional disclosure.
                  Additionally, Company employees may not make use of the
                  Company's credit reporting systems to secure their own or any
                  other person's credit report for purposes not


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                  specifically authorized by the policies and procedures of the
                  Company.

                  On those occasions when Company employees find it necessary to
                  carry sensitive information outside of the secure premises of
                  the Company, employees must exercise due care to protect the
                  security of the information. Employees should avoid displaying
                  documents in an indiscriminate manner. Electronic data and
                  media must be secured and protected from unauthorized access.
                  Employees should be especially cautious when discussing
                  private or sensitive information in public places (such as in
                  restaurants, elevators, hallways or rest rooms) to assure that
                  sensitive information is not casually disclosed.

CONFIDENTIALITY   Confidentiality is also required with respect to corporate
OF INFORMATION    information regarding Hawthorne Financial Corporation and it
RELATING TO       subsidiaries and affiliates. Employees must adhere to the same
THE COMPANY       high standard of care that is afforded to private customer
                  information. Additionally, all media inquiries regarding the
                  financial status of the Company or its business/strategic plan
                  (particularly in emergencies or regarding a highly
                  controversial or sensitive issue) must be directed to the
                  Office of the President of Hawthorne Financial Corporation. If
                  the President/CEO is not immediately available, the Office of
                  the President will call upon an appropriate Executive Officer
                  for assistance.

NONPUBLIC         Unauthorized use or disclosure of "material nonpublic
INFORMATION -     information" would subject the Company and its employees, and
NATURE OF         persons outside of the Company to whom the information is
"MATERIAL         communicated, to severe liabilities under state and federal
NONPUBLIC         securities laws. Information is "material" when a significant
INFORMATION"      likelihood exists that a reasonable investor would consider
                  the information important when making an investment decision.
                  Information is "nonpublic" when it has not been publicly
                  disseminated. Even though information has been released to the
                  media, information is still considered "nonpublic" until there
                  has been sufficient time for the general dissemination of the
                  information. Anyone in possession of material nonpublic
                  information must not trade in or recommend the purchase or
                  sale of the related securities until the information is
                  properly disclosed and disseminated.

                  Whenever an employee of the Company receives material
                  nonpublic information, the recipient must not use the
                  information for the employee's own or his/her family's
                  benefit, nor may it be disclosed to anyone.

                  In addition, employees are responsible to read and comply with
                  the detailed guidance of the Company's Insider Trading Policy
                  regarding nonpublic information.

GENERAL           A conflict of interest may be defined as an employee's
DEFINITION        involvement in outside interests which:


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                  o     conflicts with the employee's duty to the Company, or

                  o     may adversely affect the employee's judgment in the
                        performance of his/her work responsibilities, or

                  o     may adversely affect the Company's relationship with a
                        customer, borrower, vendor or competitor.

                  An example of a conflict of interest is an employee or a
                  member of his/her immediate family having a direct or indirect
                  financial interest in a customer, borrower, vendor or
                  competitor of the Company.

DISCLOSURE OF     Employees of the Company should avoid situations whereby their
CONFLICTS OF      personal interests conflict with, or appear to conflict with,
INTEREST          the interests of the Company. Hawthorne Financial Corporation
                  does not intend to unduly inhibit the personal conduct of its
                  employees, but the Company's business is heavily dependent
                  upon the public's continued trust and confidence. It is
                  important to recognize that in some instances the appearance
                  of a conflict may be just as damaging to the Company's
                  reputation as a real conflict. Some situations present a
                  potential conflict of interest and others present a situation
                  where the conflict of interest exists but the Company can
                  permit the conflict to exist, provided that there has been
                  full and appropriate disclosure. It is the employee's
                  obligation promptly to disclose to the Company all actual and
                  potential conflicts of interest.

                  All employees are encouraged periodically to review their
                  actions and objectively attempt to determine whether a
                  disinterested observer would have reasonable grounds to
                  believe that a conflict of interest may exist. Should an
                  employee be uncertain, the employee should promptly make a
                  full written disclosure to the Ethics Committee of the
                  Company. The Ethics Committee is responsible to consider the
                  facts of the disclosure and make a decision as to whether a
                  particular situation or action presents an unreasonable
                  conflict of interest and, if so, to determine the action
                  necessary to resolve the matter.

GIFTS, PAYMENTS   Hawthorne Financial Corporation expects Company employees to
AND PREFERENTIAL  render "extreme service" to its customers at all times without
TREATMENT         expectation of reward other than their employment compensation
                  received from the Company.

                  This Company policy is generally guided by intent to comply
                  with the Bank Bribery Act. This federal law states that it is
                  a criminal offense for any director, officer or employee of a
                  federally insured financial institution to "corruptly" give or
                  accept, either directly or indirectly, anything of value in
                  connection with any business or transaction of the financial
                  institution. No employee may solicit, receive or participate
                  in any arrangement leading to the personal receipt of money or
                  any gifts from a customer (to include payment/consideration to
                  any family member, relative, friend, or to any business in
                  which the employee has an interest).

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                  Gifts that create a feeling of obligation between an employee
                  and a customer or vendor should neither be given nor accepted.
                  In this context, the term "gift" includes, but is not limited
                  to, substantial favors, money, credit, special discounts on
                  goods or services, free services, transportation tickets,
                  reimbursement for travel and subsistence, loans of goods or
                  money, expensive tickets to entertainment events, trips, hotel
                  expenses, excessive entertainment, food or beverages. The
                  foregoing is not an exhaustive list and should be expanded on
                  a case-by-case basis. Gifts or benefits that serve no
                  demonstrable business purpose must be refused or returned. The
                  receipt of cash gifts by employees is absolutely prohibited.
                  Any gifts to any employee's immediate family should be
                  included in this policy.

                  Situations may arise when it would be acceptable for an
                  employee to accept a benefit, such as:

                  o     Gifts of nominal value (not in excess of $100) given at
                        Christmas or other holidays, or special occasions which
                        represent expressions of friendship, if the gifts are
                        entirely voluntary and are not sought or suggested;

                  o     Reasonable entertainment at events, luncheons, dinners
                        or business meetings with present or prospective
                        customers or vendors, when the expenditure is likely to
                        be reciprocated and can be properly charged as a
                        business expense;

                  o     Unsolicited advertising or promotional material (such as
                        pens, calendars, etc.) of a nominal value;

                  o     Tickets of normal value to entertainment events;

                  o     Awards given by charitable, educational, civic or
                        religious organization for meritorious contributions of
                        service; and

                  o     Gifts or bequests based upon family or close personal
                        relationships that existed prior to any customer or
                        business relationship with the Company.

                  Exceptions to the foregoing shall be submitted in writing to
                  the Ethics Committee for approval. If the circumstances
                  surrounding a gift of significant value are such that
                  rejection or return of the gift would cause embarrassment or
                  potentially damage friendly relations between a customer and
                  the Company, the Ethics Committee may require that the gift be
                  donated to charity.

                  Employee shall periodically report gifts and their estimated
                  dollar value in writing to the Ethics Committee on a Statement
                  of Personal Interest form. See Exhibit B


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GIFTS AND         Gifts or favors of nominal value (not in excess of $100 per
ENTERTAINMENT     person) expensed to the Company and given to current or
PROVIDED BY       prospective customers, borrowers or vendors are acceptable to
EMPLOYEES         the extent that each gift:

                  o     Is appropriate and suitable under the E circumstances,

                  o     Meets the standards of ethical business conduct, and

                  o     Involves no element of concealment.

                  Entertainment that is reasonable and appropriate for the
                  circumstances is an acceptable practice, to the extent that it
                  is both necessary and incidental to the business relationship
                  with the Company.

POLITICAL         State and federal election campaign laws prohibit Company
CONTRIBUTIONS     employees from making any direct or indirect contribution of
                  Company funds or property in connection with the election of a
                  candidate to a political office. Any use of Company facilities
                  and equipment for political activities would also be
                  considered to be a contribution. Company employees are not
                  allowed to make any political contribution of Company funds,
                  property, facilities or equipment. Employees may voluntarily
                  participate in and contribute personally to political action
                  committees or make personal contributions to candidates or
                  political parties of their choice. No pressure will be brought
                  to bear on any employee of the Company to make any personal
                  political contributions.

OUTSIDE           Employees are expected to devote their full attention and
ACTIVITIES/       ability to the interests of the Company during their regular
EMPLOYMENT        working hours, and any additional time as may be required by
                  their position. No employee should engage in outside
                  employment that interferes, competes or conflicts with the
                  interests of the Company, or which will encroach on normal
                  working time or necessitate such long hours as to impair the
                  employee's ability to meet their regular job responsibilities
                  with the Company. No employee is allowed to coerce or pressure
                  any employee under the color of the Company's authority to
                  solicit or participate in outside activities.

                  If, for compelling reasons, outside employment or
                  participation in other activities is sought, prior written
                  approval must be obtained from the Ethics Committee. If
                  written approval is granted, the Ethics Committee will advise
                  the requesting employee and a copy of the advice will also be
                  sent to the Director of Human Resources.

                  An employee may be required to withdraw from approved outside
                  activities at such a time as the Ethics Committee, in
                  consultation with appropriate executive management, determines
                  that it is in the best interest of the Company. Examples of
                  conflicts of interest arising from outside employment include:

                  o     Employment by a company or personally engaging in any
                        activity

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                        that is competitive with Hawthorne Financial Corporation
                        or one of its subsidiaries or affiliates.

                  o     Employment that involves the use of the Company's
                        equipment, facilities or supplies.

                  o     Employment that involves the preparation, audit, or
                        certification of statements/documents that the Company
                        may place reliance upon for lending or other purposes,
                        to include the preparation of tax returns.

                  o     Employment that involves providing investment, legal or
                        other advice, or exercising judgment that is predicated
                        upon information, reports or analysis that are
                        accessible primarily from or through employment with the
                        Company.

                  o     Employment that may reflect adversely on the employee as
                        a representative of the Company.

                  o     Employment under circumstances that might infer
                        sponsorship or support of the Company on behalf of the
                        outside employer or organization.

                  o     Outside employment as an insurance/securities broker,
                        agent or representative or financial advisor.

                  o     Employment as a real estate salesman, broker, agent or
                        contractor is not permitted without the prior written
                        approval of the Ethics Committee. (There are a number of
                        potential conflict of interest situations as well as
                        possible violations of banking law that must be
                        carefully evaluated in such a situation.)

                  If an employee is considering an outside employment
                  relationship or business venture involving a customer,
                  borrower or vendor of the Company, the employee shall obtain
                  prior written approval from the Ethics Committee prior to
                  entering into the situation.

                  Note: The Company's Credit Policy prohibits making loans to
                  any entity in which an employee has a financial interest,
                  whether as principal or investor. See also Prohibited Lending
                  Practices.

PARTICIPATION IN  Hawthorne Financial Corporation is interested in supporting
PUBLIC AFFAIRS    employees as they seek to contribute personally to their
                  communities. Individual effort and corporate help and support
                  will help to fulfill civic responsibilities and strengthen our
                  government. The Company encourages voluntary employee action
                  that will have a significant community impact. Normally,
                  voluntary efforts take place outside of regular business
                  hours. Voluntary efforts that require activity during the
                  hours of regular employment must be approved by the employee's
                  manager/supervisor within Company policy.

                  In all cases, employees seeking elective office or
                  participating in


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                  political activities do so as individuals and not as
                  representatives of the Company. Employees may not make use of
                  the Company name, address or letterhead and no material should
                  be mailed from the Company address, nor funds collected.
                  Employees should not refer to their employment with the
                  Company in any advertisements or literature, with exception of
                  reference in necessary biographical information.

OUTSIDE           Company employees may not serve as directors of profit-making
DIRECTORSHIPS     corporations without obtaining prior written approval from the
                  Ethics Committee. (This policy is not applicable to the
                  non-employee directors of Hawthorne Financial Corporation.)
                  Employees shall avoid both potential conflicts of interest and
                  excessive demands on their time.

SERVING AS A      Hawthorne Financial Corporation recognizes that relationships
TREASURER OF      with clubs and charitable organizations may enhance the
CLUBS,            employee's standing in the community and bring prestige to the
CHURCHES,         Company's reputation. However, care must be exercised to
LODGES, ETC.      assure that funds belonging to such organizations are not
                  commingled with the employee's personal funds. Such funds must
                  be maintained in a separate account clearly identified as the
                  property of the organization. Additionally, employees may not
                  serve as a treasurer of a club, church, united funds, lodge,
                  or similar non-profit organization which has any business
                  relationship with the Company, without first sending a written
                  notice to the Ethics Committee.

PERSONAL TRADING  Employees of the Company should not enter into investment
OR INVESTING      transactions that would create or give the appearance of
                  creating a conflict of interest between the employee and the
                  Company, or between the Company and any customer, borrower,
                  vendor or competitor. Employees must comply with the
                  requirements of the Company Insider Trading Policy. This
                  policy should be observed by the employee for his/her personal
                  investments, as well as the investments of members of his/her
                  immediate family and adults living in the same household.
                  Questionable situations should be promptly referred to the
                  Ethics Committee for review.

LENDING           The lending services of the Company are available to serve the
PRACTICES -       legitimate and deserving credit needs of customers on an
GRANTING OF       equitable basis. Any interest rate concessions will be based
PREFERENTIAL      solely upon a borrower's credit worthiness and overall
RATES             customer relationship with the Company.

LOANS TO          Loans to executive officers and directors, principal
EXECUTIVE         shareholders and affiliates of Hawthorne Financial Corporation
OFFICERS AND      are subject to the restrictions and limitations of the Federal
DIRECTORS         Reserve Board's Regulation O. These restrictions and
                  limitations are fully identified in the policies and
                  procedures of the Company.

PROHIBITED        Federal law prohibits any director, officer or employee of the
LENDING           Company from granting any loan or gratuity to any public bank
PRACTICES         examiner who


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                  examines or has the authority to examine Hawthorne Financial
                  Corporation or one of its subsidiaries or affiliates.

                  Lending officers are prohibited from negotiating or approving
                  any loan or other transaction between the Company and any
                  outside organization with which the lending officers are
                  affiliated, whether as a representative of the Company or the
                  outside organization.

                  Lending officers must not extend credit to a customer if any
                  of the proceeds are to be given or loaned to the lending
                  officer, or to a member of the lending officer's immediate
                  family, or used to pay a debt owed by the lending officer, or
                  by his/her immediate family, to the customer.

                  A lending officer may not extend credit to a customer to
                  enable the customer to purchase real or personal property from
                  the lending officer or a member of the lending officer's
                  immediate family.

                  Lending officers may not extend credit to a company in which
                  the officer has an interest as a director, officer,
                  controlling person or partner, or in which a member of the
                  lending officer's immediate family has such an interest.

                  When a lending officer or any other Company employee has any
                  responsibility for the Company's relationship with a customer,
                  borrower, or vendor, the employee may not personally loan
                  funds to the customer, borrower, or vendor.

                  Lending officers are not permitted to extend credit or to
                  participate in any decision to extend credit regarding an
                  applicant/borrower from the lending officer's immediate
                  family, or any relative, or any entities in which the lending
                  officer has an interest as a director, officer, controlling
                  person or partner, or any financial interest, whether as
                  principal or investor, or in which a member of the lending
                  officer's immediate family or relatives has such an interest.

                  All employees must always maintain the integrity of the credit
                  approval process. All documentation regarding a
                  customer/applicant must accurately and fairly reflect the
                  financial position of the customer/applicant without any
                  material omissions. Any subsequent knowledge of a material
                  fact/omission regarding a customer/applicant must be promptly
                  reported to the employee's manager/supervisor and to the Chief
                  Credit Officer. Any violation of a lending officer's loan
                  authority or deviation from an approved credit arrangement may
                  be grounds for disciplinary action, termination of employment
                  and/or prosecution.


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PERSONAL          Imprudent personal financial management and its consequent
FINANCIAL         hardships may affect job performance and occasionally lead to
RESPONSIBILITY    more serious consequences for employees in positions of trust.
                  The Company desires to assist its employees with the
                  resolution of personal financial difficulties to the extent
                  that it can reasonably do so. However, employees are not
                  permitted to enter into lending relationships between
                  themselves. Employees who have financial problems are strongly
                  encouraged to consult with their manager/supervisor or with
                  the Director of Human Resources.

BORROWING         Employees should not borrower from customers, borrowers or
FROM OTHERS       vendors of the Company, nor from any entity owned or
                  controlled by a customer, borrower or vendor, except those
                  that engage in lending in the usual course of their business
                  and then, only on terms offered to others in similar
                  circumstances. Such borrowing must occur without special
                  treatment as to interest rates, repayment terms, security or
                  other significant provisions. (This provision does not
                  preclude an employee borrowing from an individual who is
                  related to the employee by blood or marriage.)

                  The Financial Institutions Regulatory and Interest Rate
                  Control Act of 1978 (FIRA) requires that executive officers
                  and directors of commercial banks who have loans outstanding
                  from a correspondent financial institution report annually to
                  the Board of Directors of the Company the amount and terms of
                  the indebtedness. The Legal Department will individually
                  advise executive officers and directors covered by the
                  provisions of FIRA.

SIGNING ON        Employees must not sign on the accounts of customers or act as
CUSTOMER          deputy or co-tenant on safe deposit contracts, nor otherwise
ACCOUNTS          represent customers. (This provision does not include
                  customers related to the employee by blood or marriage.)

COMPANY           Employees may not act as principal for either themselves or
PROPERTY OR       their immediate families in any purchase by or sale to the
SERVICES          Company of goods or services without full disclosure to the
                  Ethics Committee resulting in a written preapproval of the
                  disclosed activity in accordance with the procedures of the
                  Ethics Committee.

                  No employee may derive personal gain from transactions
                  involving the Company or make use of the services of other
                  employees for personal purposes. This would include
                  transactions such as the purchase of foreclosed real estate
                  from the Company unless through a commercially reasonable
                  bidding process.

EXPRESSION OF     Employees should not use Company letterhead or materials to
PERSONAL          give personal letters, testimonials, letters of recommendation
OPINIONS          or to express personal opinions. Employees should not use
                  Company stationery for


                                       11
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                  either personal correspondence or other non-work related
                  purposes.

GIVING ADVICE     Legal Advice - Employees may occasionally be asked by
TO CUSTOMERS      customers to make statements relating to the legality of
                  particular transactions. Company employees should exercise a
                  great deal of care and caution in discussions with customers
                  and nothing should be said that might be interpreted as the
                  giving of legal advice. Should any doubt arise about what
                  might be considered to be the giving of legal advice,
                  immediately contact the Legal Department.

                  Tax or Investment Advice - Employees should avoid giving
                  customers advice on tax inquiries, the preparation of tax
                  returns, or advice on investment decisions except as may be
                  appropriate in the performance of a fiduciary responsibility
                  or as otherwise required in the ordinary course of the
                  employee's authorized duties.

                  Recommending Others to Customers - During the course of their
                  contact with customers and the general public, employees may
                  occasionally be requested to recommend others who provide
                  professional services. Typically such requests involve
                  referrals to attorneys, accountants, insurance agents,
                  architects, contractors and real estate agents or brokers.
                  Persons who request such assistance should be provided with a
                  list of several qualified resources (at least two or more)
                  without any indication of favoritism.

                  Recommending Non-Deposit Investment Products - Non-registered
                  employees may not give advice to customers/clients regarding
                  the features and benefits of any annuity or security products.
                  However, non-registered employees may provide a referral to
                  one of the Company's registered employees for the purpose of
                  facilitating such a discussion.

SPEECHES/         Employees should uphold a responsibility to the Company with
PUBLICATIONS      regard to speeches and publications that might be considered
REPRESENTING      to represent the Company, either directly or indirectly. All
THE COMPANY       comments regarding the Company's financial condition, results
                  of operations or corporate transactions are strictly limited
                  by the Company's corporate disclosure policy. Employees should
                  consult with the President/CEO or the General Counsel prior to
                  making a definite commitment regarding a speech or article.

VIOLATION OF      Hawthorne Financial Corporation and its subsidiaries and
LAWS/REGULATIONS  affiliates are required by law to report violations of
                  criminal laws to state and/or federal law enforcement
                  agencies. Dishonest and fraudulent acts by Company employees
                  are crimes that may be punishable by fines and/or
                  imprisonment. Examples of activities prohibited by law
                  include:

                  o     Accepting anything of value (except an employee's salary
                        or other compensation paid by the Company) in connection
                        with the business of the Company;


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                  o     Intentionally failing to make Currency Transaction
                        Reports (CTR's);

                  o     Stealing, embezzling or misapplying Company funds or
                        assets;

                  o     Using threats, physical force or other unauthorized
                        means to collect debts;

                  o     Issuing unauthorized obligations (such as certificates
                        of deposit, promissory notes or deeds of trust) or
                        making false accounting entries;

                  o     Certifying a check drawn on an account with insufficient
                        funds;

                  o     Using a computer to gain unauthorized access to the
                        records of a customer;

                  o     Concealing or misapplying any of the Company's assets;
                        and,

                  o     Loaning funds to, or depositing funds with, third
                        parties with the understanding (express or implied) that
                        the party receiving such funds will make a loan or pay
                        any consideration to the employee or to the employee's
                        family.

MONEY             Federal and state laws prohibit the laundering of money. Money
LAUNDERING        is laundered to hide the criminal activity associated with it
ACTIVITY AND      - including the crimes by which it is generated, such as drug
THE BANK          trafficking, tax avoidance, counterfeiting, criminal money
SECRECY ACT       transfers, or "white-collar" crimes.

                  Employees need to "know the customer" and be alert to the
                  dangers to the Company should an employee become involved,
                  even unwittingly, in receiving funds that may be associated
                  with crime. Money laundering involves both deposits and loans
                  and can also involve securities transactions or purchase of
                  non-deposit investment products.

                  Financial institutions, securities brokers and insurance
                  agents are required to report any known or suspected criminal
                  activity, such as the structuring of transactions to evade the
                  reporting requirements of the Bank Secrecy Act, or the
                  laundering of money through other monetary instruments or
                  accounts. Company employees receive appropriate ongoing
                  training regarding the identification of suspicious
                  transactions and the methods by which to report them within
                  the Company. All employees are required to comply with these
                  policies and procedures to the very best of their capability.

APPEARANCE OF     Employees may not enter into or engage in any activity,
IMPROPRIETY       transaction or relationship that might give rise to an
                  appearance of impropriety and risk injury to the Company's
                  hard-earned and vital reputation for honesty and integrity in
                  the financial community. Any violation under this section may
                  subject the employee to disciplinary action, up to and
                  including termination of employment.

RELATIONSHIPS     In providing its full range of financial services, the Company
WITH COMPETITORS  engages in vigorous, yet fair and open competition. All
                  employees are expected to observe the highest standards of
                  ethical conduct in relationships with


                                       13

<PAGE>

                  our competitors. The dissemination of rumors or disparaging
                  statements regarding our competitors is considered to be
                  inappropriate and unethical. Hawthorne Financial Corporation
                  employees are to emphasize the quality and competence of our
                  services and our employees, rather than to criticize those of
                  our competitors.

                  For ethical as well as legal reasons, employees are prohibited
                  from entering into arrangements with competitors for the
                  purpose of setting or controlling prices, rates, trade
                  practices or marketing policies, or disclosing to competitors
                  the future plans of the Company that have not been disclosed
                  to the public.

TIE-INS AND       In general, agreements with customers that condition the sale
EXCLUSIVE         of goods or services on purchase by the customer of other
DEALING           goods and services from the same supplier, or prohibit the
(ANTITRUST LAW)   customer from dealing with other suppliers, may constitute a
                  violation of antitrust law. The Legal Department provides
                  instructions to Company employees as may be necessary to avoid
                  violation of antitrust law in areas of applicability to the
                  Company.

AUDITS AND        All employees are expected to cooperate fully with internal
INVESTIGATIONS    and external auditors and investigators, even to the point of
                  disclosing otherwise private or personal information where
                  such information is necessary or relevant to the audit or
                  matter under investigation. The withholding or omission of
                  material facts or information that may render the audit or
                  investigation incomplete or lead to an incorrect conclusion is
                  as serious as an intentional misstatement. Declining to
                  cooperate with audits or investigations may result in
                  disciplinary action, termination of employment and/or
                  prosecution.

BRIBES, ETC.      Bribes, kickbacks, extraordinary commissions, or other devices
                  for the purchase of favored treatment by governments, other
                  businesses, or individuals are strictly prohibited. Fees or
                  commissions will be paid only for clearly stated business
                  purposes. The choice of brokers, dealers, lawyers, consultants
                  and other professional service providers must always be
                  predicated on competitive conditions of quality, price and
                  benefit to the Company.

USE OF COMPANY    Company employees are not permitted to use or permit others to
PERSONNEL,        use Company employees, materials, equipment or other corporate
MATERIALS OR      property for personal purposes.
EQUIPMENT

                  Personal Telephone Calls - All telephone equipment is to be
                  used solely for the purpose of conducting required business
                  communications related to the employee's assigned area of
                  responsibility. Personal incoming telephone calls should be
                  kept to a minimum and as brief as possible. Long distance
                  telephone calls should not be permitted unless payment for
                  such calls is arranged in advance. Excessive use of telephone
                  equipment for personal business should be handled by
                  managers/supervisors as a disciplinary problem.


                                       14
<PAGE>

GENERAL
PRINCIPLES        Registered persons will:

                  o     Comply with all applicable laws, rules and regulations,
                        to include those of the National Association of
                        Securities Dealers (NASD), the Securities and Exchange
                        Commission (SEC), and, as applicable, the California
                        Department of Insurance.

                  o     Act honestly, fairly, with due skill and care, and in
                        the best interests of the Company's clients and the
                        integrity of the market.

                  o     Seek from each client the relevant information about
                        his/her financial situation, investment experience and
                        investment objectives in order to determine/recommend
                        the suitability of a service or solicitation for each
                        client's individual circumstances.

                  o     Make adequate disclosure of relevant material
                        information in all dealings with clients and assure that
                        any representation made and/or information provided to
                        the client is accurate and not misleading.

                  o     Ensure that client assets are promptly and properly
                        accounted for and adequately safeguarded.

                  o     Take all reasonable steps to execute promptly client
                        orders in accordance with the instructions of the client
                        and assure that such transactions are executed promptly
                        and fairly allocated to the accounts of the client on
                        whose behalf the transactions are executed.

                  o     Act diligently and carefully in providing advice to a
                        client and make recommendations based on thorough
                        analysis, taking into account the available alternatives
                        and providing clients with information about alternative
                        investments.

                  o     Respond to a client complaint in a timely and
                        appropriate manner assuring that the client is advised
                        of actions that will be taken to investigate and resolve
                        the complaint and any further steps that may be
                        available to the client.

                  o     Assure that transactions with outside firms are
                        conducted within an internal control framework designed
                        to reasonably assure that such transactions will not
                        result in unusual gains for those involved. (For
                        example, an unusual gain may refer to the existence of a
                        bribe, kickback, product bonus, special fringe benefit,
                        unusual price break or other windfall designed
                        ultimately to benefit the registered employee, or the
                        Company, or both.)

IMPLEMENTATION    Each employee of the Company is responsible to be familiar
AND REVIEW        with this Code of Conduct and to abide by the letter and
                  spirit of its provisions at all times. All directors, officers
                  and employees of the Company are required to submit a
                  Statement of Personal Interest form (see Exhibit B)


                                       15
<PAGE>


                  to evidence their agreement to comply with the provisions of
                  the Code of Conduct. The Statement of Personal Interest shall
                  be submitted upon employment and, at a minimum, on an annual
                  basis thereafter. Gifts from customers, vendors and others
                  shall be reported no less frequently than quarterly. The
                  annual update provides evidence of continuing compliance with
                  the Code of Conduct across the Company.

RESPONSIBILITY    The Ethics Committee is responsible for the overall
FOR               administration of the Code of Conduct. The continued
ADMINISTRATION    implementation of the Code will be accomplished through the
                  establishment of reporting procedures supplemented by sound
                  monitoring practices, audit policy, and personnel policy and
                  procedure.

                  Depending on the circumstances, there may be more than one
                  Ethics Committee. The members of the Ethics Committee are
                  recommended by the President/CEO and appointed by the Audit
                  Committee of the Company. The Ethics Committee(s) will meet on
                  an ad hoc basis (but not less than once each calendar quarter)
                  with the power to recommend administrative and/or personnel
                  actions to the President/CEO, or to the Board of Directors, as
                  may be appropriate.

REPORTING AND     Company employees are expected to read this Code of Conduct
REQUEST FOR       carefully, but we do not expect that this will answer every
WAIVER            possible question that an employee may have in the course of
PROCEDURES        conducting business. Employees are encouraged to seek
                  assistance from a member of the Ethics Committee regarding a
                  potential issue, or to report a problem, or to request the
                  consideration by the Ethics Committee of a waiver for an
                  activity/action. If the matter involves a department or
                  customer issue, the employee's first avenue for assistance is
                  to inquire with an immediate department head, manager or
                  supervisor. However, if the employee is uncomfortable with the
                  routine escalation process, perhaps because the matter is
                  sensitive, there is an additional option. The employee can
                  directly contact a member of the Ethics Committee as discussed
                  below.

                  The Company will also provide a means for the anonymous,
                  confidential reporting of ethical violations. Information
                  about such means will be contained on the Company's intranet.

SPECIFIC          All situations involving a potential conflict of interest or
SITUATIONS        other possible violation of the Code of Conduct should be
                  promptly reported to the Ethics Committee. The act of
                  reporting a questioned situation does not imply that a
                  violation exists. Rather, it affords the opportunity for
                  review and a conclusive assessment.

                  Before entering into any transaction or situation that may
                  violate the provisions of the Code of Conduct, a
                  director/officer/employee should submit a Statement of
                  Personal Interest form (see Exhibit B) for review.


                                       16
<PAGE>

                  Directors should submit the Statement of Personal Interest
                  either to the President/CEO or to the Chairman of the Audit
                  Committee. The Audit Committee will assemble an appropriate
                  Committee of the Board to review requests by Directors.

                  Officers/employees should submit the Statement of Personal
                  Interest request to Human Resources Department, which shall
                  distribute them to the Ethics Committee.

                  Situations should be disclosed in the Statement with
                  sufficient detail to support evaluation in a fair and
                  impartial manner.

                  Upon conclusion by the Ethics Committee, an advisory document
                  will be sent to the requesting employee and a copy will be
                  sent to the Director of Human Resources. Employees should not
                  participate in the transaction/activity nor exercise any
                  discretionary authority on behalf of the Company in relation
                  to the questioned situation until the Ethics Committee
                  communicates its conclusions.


                                       17
<PAGE>


                                    EXHIBIT A

MANAGEMENT        The Ethics Committee is comprised of a team of Company
ETHICS            officers who have been appointed by the Audit Committee of the
COMMITTEE         Board of Directors. These officers are responsible to promptly
                  handle all reports and inquiries with utmost confidentiality
                  as may be possible under the circumstances.

                  Reports to the Ethics Committee may be made in an anonymous
                  form. This may make it more difficult for the Committee to
                  follow-up and to assure resolution to the inquiry; however,
                  anonymous reports will be handled with all reasonable due
                  diligence by the Committee.

                  The following individuals have been appointed by the Audit
                  Committee of the Board to serve as the Management Ethics
                  Committee:

                  Chairperson       Eileen Lyon, General Counsel

                  Members:          Marilyn Momeny, Director of Human Resources
                                    Carol Ward, Director of Risk Management
                                    Simone Lagomarsino, Chief Executive Officer
                                    David Rosenthal, Chief Financial Officer


                                       18
<PAGE>


                                    EXHIBIT B

                         STATEMENT OF PERSONAL INTEREST

The Undersigned hereby certifies that I have read and fully understand the
provisions of the Code of Conduct of Hawthorne Financial Corporation and its
subsidiaries and affiliates (the "Company") and that I have abided and will
abide by the Code's provisions during my employment with the Company. I further
state that I realize that failure to observe and comply with the provisions of
the Code of Conduct may be a basis for disciplinary action, termination of
employment and/or prosecution.

I wish to report the following information, relationships, interests,
transactions or arrangements that may be of the kind or similar to the kind of
situations listed in the Code of Conduct.


<Table>
<S>                                                                                            <C>         <C>
1.       Are you a stockholder or interested financially in any way with:

a.       A competing institution (e.g., bank, savings and loan, finance company, etc.)?        YES [ ]    NO [ ]

b.       A supplier of goods or services or other business contact with Hawthorne Savings?     YES [ ]    NO [ ]

2.       Have you accepted any gift of a value in excess of $100 from customers                YES [ ]    NO [ ]
         or suppliers?

3.       If the answer to 2 above is "YES", have you reported the gift(s) to                   YES [ ]    NO [ ]
         your supervisor?

4.       Have you solicited for yourself or a third party, other than Hawthorne                YES [ ]    NO [ ]
         or its agents, anything of value from anyone in return for any
         business, service or confidential information Hawthorne?

5.       Have you accepted anything of value directly or indirectly from anyone                YES [ ]    NO [ ]
         in connection with the business of Hawthorne?

6.       Do you have outside employment that has not been previously approved as               YES [ ]    NO [ ]
         required by of this code?

7.       Have you received any compensation for acting as a director, officer,                 YES [ ]    NO [ ]
         trustee or consultant of an outside organization?

8.       Have you accepted an appointment as an executor, trustee, guardian or                 YES [ ]    NO [ ]
         conservator for other than those in your immediate family?

9.       Have you extended credit or otherwise influenced the extension of                     YES [ ]    NO [ ]
         credit to:

a.       A customer where the proceeds were used to pay a debt owing to your or                YES [ ]    NO [ ]
         a member of your immediate family?

b.       a customer who is your relative?                                                      YES [ ]    NO [ ]

c.       an individual to finance the purchase of real estate or personal                      YES [ ]    NO [ ]
         property from you?

d.       a firm in which you or a member of your immediate family has a                        YES [ ]    NO [ ]
         financial interest, or with which you are employed on a part time or
         consulting basis?

10.      Have you borrowed money from customers, other than recognized lending                 YES [ ]    NO [ ]
         institutions?

11.      Have you lent personal funds to employees of Hawthorne?                               YES [ ]    NO [ ]

12.      Have you cosigned, endorsed or otherwise assumed liability in                         YES [ ]    NO [ ]
         connection with the borrowing of any customer or supplier?

13.      Do you sign on any customer accounts, act as deputy or co-tenant of a                 YES [ ]    NO [ ]
         customer's safe deposit box, or otherwise represent customers, except
         for family members?

14.      Have you taken for your own benefit any opportunity or information that               YES [ ]    NO [ ]
         rightfully belongs to Hawthorne?
</Table>


                                       19
<PAGE>


<Table>
<S>                                                                                            <C>         <C>
15.      Do you have any business relationship with any present or former loan                 YES [ ]    NO [ ]
         customer of Hawthorne's for which you are aware?

16.      Have you solicited any business relationship with any present or former               YES [ ]    NO [ ]
         loan customer of Hawthorne's of which you are aware?

17.      Have you ever disclosed to anyone confidential non -public information                YES [ ]    NO [ ]
         regarding Hawthorne or its customers?

18.      Have you participated in any dealings with competitors for the purpose                YES [ ]    NO [ ]
         of setting prices, interest rates, trade practices or marketing
         policies?

19.      Have you withheld information or knowingly did not notify the proper                  YES [ ]    NO [ ]
         Senior Officers of any wrongdoing, including violations of laws,
         regulations or Bank policies?

20.      Have you offered, extended or in any way participated in the extension                YES [ ]    NO [ ]
         of a bribe to a political party, party official or candidate for
         political office for the purpose of obtaining, retaining, or directing
         business to Hawthorne?

21.      Are there circumstances or any other matters of a personal or family                  YES [ ]    NO [ ]
         nature that could reasonably be subject to question as to their effect
         on the interests of Hawthorne?
</Table>

In compliance with the provisions of Hawthorne's Conflict of Interest Policy, I
wish to disclose the following information:


   (Indicate item number from above, dollar value, number of shares, etc. as
              appropriate. Attach additional sheets if necessary.)

Under penalty of perjury, I certify that the information provided on this form
is true, correct and complete.


Date:                                   Signature:
     ----------------------                       ----------------------------

                                        Print Name:
                                                   ---------------------------

                                        Department:
                                                   ---------------------------

                                       20