**Exhibit14.0**

 

COAST NATIONAL BANK EMPLOYEE HANDBOOK:SECTION 1

YOUR ROLE AT COAST NATIONAL BANK

 

The reputationof an organization can hinge on many things, yet we often form an opinion of acompany based on experience with a single employee.  Many people will get their most lasting impression of CoastNational Bank through you.  Yourpersonal qualities, such as courtesy, helpfulness, knowledge and being good atwhat you do, influence the public’s attitude toward you and our organization.

 

1.0           CODEOF ETHICS

 

Coast NationalBank’s reputation for integrity and honesty is at the cornerstone of itsbusiness and its most valuable asset. Such a reputation is built and maintained through the efforts of itsofficers, managers and employees at all levels.  Coast National Bank must conduct all of its activities in amanner deserving of the constant trust and confidence of its customers.  All employees, officers and managers ofCoast National Bank are expected to adhere to the highest ethical standards byconducting themselves in a manner which will bring credit to Coast NationalBank, and avoiding any actions which might discredit Coast National Bank.

 

An employee’sactions under this policy are deemed to be significant indications of theindividual’s judgment and competence. Accordingly, disregard of or insensitivity to the principles of thispolicy will be grounds for disciplinary action, up to and including immediatedischarge.

 

1.1                                 CONFIDENTIALCUSTOMER INFORMATION

 

In the courseof performing Bank duties, Coast National Bank employees acquire confidentialinformation considered to be extremely sensitive by customers.  This information shall not be revealed tounauthorized persons nor shall customers’ finances be discussed with otherswithin the Bank unless their duties require the information.  Additionally, you should always be discretewhen discussing customer information where others might hear you.  Information about customers can be releasedonly when authorized by the customer or subpoenaed by the court or administrativeagencies, and then the information released must be accurate and within theconfines of the release-authorizing document.

 

When acustomer identifies Coast National Bank in writing as a credit reference, thisis a signed authorization to release credit information.  Banks also share credit information witheach other, but this is only done when there is a written authorization.  This sharing is only done to support creditdecisions, and the sharing is based on assurances that source confidentialitywill be respected and that the information is accurate and not misleading.  No information should be given over thephone; the only exception would be to confirm if there are sufficient funds inan account to cover a check at a particular moment.  The inherent conflict between the customer’s right to confidenceand privacy and the need for creditors to share credit experience should berecognized.  This conflict cannot beentirely resolved, but its

 

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consequences can be mitigatedby exercising extreme care when exchanging credit information.

 

1.2                                 INTEGRITY

 

Coast NationalBank does not want to be in a position where it might be thought that one ofour employees compromised his/her professional integrity or acted in a biasedmanner for any reason. Employees should never use any customer information forthe benefit of themselves or others. Confidential information about Bank customers that reflects favorably oradversely on the investment value of any business enterprise is “insiderinformation”.  It should not be used forpersonal investment advantage or provided to others for their investmentadvantage.

 

•                  A Coast NationalBank employee should not represent the Bank in any transaction where he or she hasa material connection or a financial interest. Examples of material connections would include relatives or closepersonal friends, whether the transaction involves them as individuals or asprincipals in a firm doing business with the Bank.  An example of a financial interest would be an officer’sinvolvement as a proprietor, partner, or joint venture of or with a firm doingbusiness with the Bank.

 

•                  Bank employeesshould avoid taking part in transactions involving any of the abovecircumstances.  By “transactions”, weare talking about not only making loans, but also about approval of overdrafts,accepting checks on uncollected funds, waiving NCF, overdrafts or late charges,and waiving the requirements for financial statements or collateral documents.  When there is a potential conflict ofinterest, ask someone else in the Bank to handle the transaction.

 

# **1.2.1.**      GIFTS, FEES,LEGACIES AND LOANS

 

Coast NationalBank cannot permit the impartial judgment of its employees to be compromisedthrough the inappropriate receipt of entertainment, gifts, gratuities or othercourtesies (collectively “gratuities”). Employees may not accept anything as a result of, or in anticipation ofany transaction with a present or prospective customer or vendor.  It is important that employees decline anygratuities which would cause even the slightest question of improperinfluence.  The receipt of any cashgratuities from anyone and receipt of any gratuities from competitors isabsolutely prohibited.

 

When in doubt, employees should neither accept nor offergratuities.  Employees shouldimmediately discuss any questions or concerns regarding the application of thispolicy to any specific situation with the President or Chairman.

 

These ethicalstandards flow both ways.  Accordingly,it would be a violation of these standards for any Coast National Bank employeeto offer an inappropriate gratuity to any customer, vendor or competitor.

 

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•                  A Bank employeeshould not accept a loan from a Bank customer, supplier, or any other personseeking a relationship with the Bank (hereinafter collectively referred to as“Bank customer”).  This prohibition doesnot apply to loans from banks or other financial institutions on customaryterms to finance proper credit needs.  Allexecutive officers must report within 10 days to the Board of Directors anyborrowings from other Banks*.*

 

•                  A Bank employeeshould not personally make loans to a Bank customer.

 

•                  A Bank employeeshould not receive anything of value for making a loan.

 

•                  A Bank employeeshould not accept a fee for performing any act that the Bank could haveperformed.

 

•                  It is improperfor a Bank employee to accept a gift from a customer.  This rule does not apply to (a) food, refreshments orentertainment at meals or business meetings, (b) advertising or promotionalmaterial of nominal value, (c) awards from charitable organizations, or (d)gifts of nominal value on special occasions such as Christmas.  (Nominal value will be determined on acase-by-case basis; however, items valued at over $50 would need to be reviewedby the Board of Directors.)

 

•                  A Bank employeeshould not sell anything to a customer at a value in excess of its worth norshould he or she purchase anything from a customer at a price below itsworth.  (Acceptance of discounts orrebates on merchandise is permitted if they are also available to their routinecustomers of the Bank.)

 

•                  A Bank employeeshould refuse any legacy or bequest from a Bank customer who is not a closerelative.  He or she should also refuseto serve personally as an executor, trustee, or guardian of the Bank customer’sreal estate or trust unless the customer is a close relative.

 

•                  A Bank employeeshould not indirectly perform any act that these rules prohibit directly; forexample, it is just as wrong to arrange for a member of the family to receive agift as it is for the employee to accept the gift directly.

 

# **1.2.2.**      INVESTMENTS

 

•                  It is prudent torefrain from investing in a Bank customer’s business and it is improper for aBank employee to subscribe to new issues of stock in a Bank customer’sbusiness.

 

•                  Speculativeinvesting such as playing the commodities market, margin buying, shortaccounts, puts, calls, or combinations are not prudent for Bank employees.

 

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1.2.3        DISHONESTOR FRAUDULENT ACTS

 

Any form ofdishonesty or fraud on the part of Coast National Bank employees is totallyunacceptable conduct.  Acts which areconsidered to be dishonest or fraudulent include, but are not limited to:

 

•                  Employeesperforming transactions on any account on which they have a personal interest,i.e., co-owner, co-signer.

•                  Manipulation ofloan accounts, documents, computer records, shares, or checking accounts.

•                  Theft of anykind, including stealing from customers’ accounts, overpayments of interest orcreating fictitious loans.

•                  Repeatedincidents of non-sufficient funds checks.

•                  Check kiting.

•                  Forgeries.

•                  Tampering,altering, or falsifying time sheets.

•                  Unauthorized orunapproved salary advances or overtime.

•                  Violation ofCoast National Bank rules, internal controls, regulations or procedures.

•                  Failing tosecure collateral, to properly record a security interest in collateral, orpledging a customer’s account as collateral without that customer’s permission.

•                  Granting orrequesting preferential treatment for ANYONE.

 

Upon discoveryof a dishonest or fraudulent act committed by an employee or any evidencesuggesting such an act, the Personnel Department must be immediately notified.

 

Federal lawrequires Coast National Bank to submit a written report to various agencies(including the F.B.I. and the U.S. Attorney’s Office) whenever Coast NationalBank becomes aware of or suspects any of the following situations:  any violations of federal or state bankinglaws; any check kiting operations (whether or not Coast National Bank suffers aloss); any mysterious disappearance or unexplained shortage of Bank funds orother assets.  Once reported, thesematters become the sole responsibility of the federal authorities and CoastNational Bank is powerless to protect its employees from any penalties suchauthorities might impose.

 

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**COAST BANCORP**

 

** **

# **March 2004**

 

The Board of Directors of Coast Bancorp (with its subsidiaries, the“Company”) has adopted this code of ethics (this “Code”) to:

 

•                  promote honestand ethical conduct, including fair dealing and the ethical handling ofconflicts of interest;

 

•                  promote full,fair, accurate, timely and understandable disclosure;

 

•                  promotecompliance with applicable laws and governmental rules and regulations;

 

•                  ensure theprotection of the Company’s legitimate business interests, including corporateopportunities, assets and confidential information; and

 

•                  deterwrongdoing.

 

All Directors, Officers and Employees of the Company are expected to befamiliar with the Code and to adhere to those principles and procedures setforth in the Code that apply to them. The Company’s more detailed policies and procedures set forth in theCode of Conduct Policy are separate requirements and are not part of this Code.

 

For purposes of this Code, the “Code of Ethics Contact Person” will bethe Company’s Audit Committee Chair.

 

From time to time, the Companymay waive some provisions of this Code. Any waiver of the Code for executive officers or directors of theCompany may be made only by the Board of Directors and must be promptlydisclosed as required by the rules and regulations of the Securities andExchange Commission (the “SEC).  Anywaiver for other Employees may be made only by the President and CEO.

 

## **Honest and Candid Conduct**

 

Each Director or Officer owes aduty to the Company to act with integrity. Integrity requires, among other things, being honest and candid.  Deceit and subordination of principle areinconsistent with integrity.

 

Each Director and Officer must:

 

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•                  Act withintegrity, including being honest and candid while still maintaining theconfidentiality of information where required or consistent with the Company’spolicies.

 

•                  Observe both theform and spirit of laws and governmental rules and regulations, accountingstandards and Company policies.

 

•                  Adhere to a highstandard of business ethics.

 

**Conflictsof Interest**

 

A “conflict of interest” occurs when an individual’s private interestinterferes or appears to interfere with the interests of the Company.  A conflict of interest can arise when aDirector or Officer takes actions or has interests that may make it difficultto perform his or her Company work objectively and effectively.  For example, a conflict of interest wouldarise if a Director or Officer, or a member of his or her family, receivesimproper personal benefits as a result of his or her position in the Company..  Any material transaction orrelationship that could reasonably be expected to give rise to a conflict ofinterest should be discussed with the Code of Ethics Contact Person.

 

Service to the Company should never be subordinated to personal gainand advantage.  Conflicts of interestshould, wherever possible, be avoided.

 

Clear conflict of interestsituations may include the following:

 

•                  any significantownership interest in any supplier or client;

•                  any consultingor employment relationship with any supplier, competitor or client;

•                  any outsidebusiness activity that detracts from an individual’s ability to devoteappropriate time an attention to his or her responsibilities with the Company ;

•                  the receipt ofnon-nominal gifts or excessive entertainment from any company with which theCompany has current or prospective business dealings;

•                  being in theposition of supervising, reviewing or having any influence on the job,evaluation, pay or benefit of any immediate family member: and

•                  selling anythingto the Company or buying anything from the Company , except on the same termsand conditions as comparable Directors or Officers are permitted to so purchaseor sell.

 

Such situations, if material,should always be discussed with the Code of Ethics Contact Person.

 

Anything that would present aconflict for a Director or Officer would likely also present a conflict if itis related to a member of his or her family.

 

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**Disclosure**

 

Each Director, Officer or Employee involvedin the Company’s disclosure process, including the Chief Executive Officer, theChief Financial Officer, the Controller and the Credit Administrator, isrequired to be familiar with and comply with the Company’s disclosure controlsand procedures and internal control over financial reporting, to the extentrelevant to his or her area of responsibility, so that the Company’s publicreports and documents filed with the SEC comply in all material respects withthe applicable federal securities laws and SEC rules.  In addition, each such persons having direct or supervisoryauthority regarding these SEC filings or the Company’s other publiccommunications concerning its general business, results financial condition andprospects should, to the extent appropriate within his or her area ofresponsibility, consult with other Company Officers and Employees and takeother appropriate steps regarding these disclosures with the goal of makingfull, fair, accurate, timely and understandable disclosure.

 

Each Director or Employee whois involved in the Company’s disclosure process, including without limitationthe Senior Financial Officers, must:

 

•                  Familiarizehimself or herself with the disclosure requirements applicable to the Companyas well as the business and financial operations of the Company.

 

•                  No knowinglymisrepresent, or cause others to misrepresent, facts about the Company toothers, whether within or outside the Company, including to the Company’sindependent auditors, governmental regulators and self-regulatoryorganizations.

 

•                  Properly reviewand critically analyze proposed disclosure for accuracy and completeness.

 

### **Compliance**

 

It is the Company’s policy tocomply with all laws, rules and regulations. It is the personal responsibility of each Officer and Director to adhereto the standards and restrictions imposed by those laws, rules and regulations.

 

It is against Company policyand in many circumstances illegal for a Director or Officer to profit fromundisclosed information relating to the Company or any other company.  Any Director or Officer may not purchase orsell any of the Company’s securities (stock) while in possession of materialnonpublic information relating to the Company .  Also, any Director or Officer may not purchase or sell securitiesor any other company while in possession of any material nonpublic informationrelating to the company.

 

Any Director or Officer who inuncertain about the legal rules involving a purchase or sale of any Companysecurities or any securities in companies

 

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he or she is familiar with byvirtue of his or her work for the Company, should consult with the Company’slegal representative.

 

### **Reporting andAccountability**

 

The Company’s Audit Committeeis responsible for applying this Code to specific situations in which questionsare presented to it and has the authority to interprets this Code in anyparticular situation.  Any Director whobecomes aware of any existing or potential violation of this Code is requiredto notify the Code of Ethics Contact Person promptly.  Failure to do so is itself a violation of this Code.

 

Any questions relating to howthis Code should be interpreted or applied should be addressed to the Code ofEthics Contact Person.  A Director orOfficer who is unsure o whether a situation violates this Code should discussthe situation with the Code of Ethics Contact Person to prevent possiblemisunderstandings and embarrassment at a later date.

 

Each Director or Officer must:

 

•                  Notify the Codeof Ethics Contact Person promptly of any existing or potential violation ofthis Code.

 

•                  Not retaliateagainst any other Director, Officer or Employee for reports of potentialviolations that are made in good faith.

 

The Company’s Audit Committeeshall take all action they consider appropriate to Investigate any violationsreported to them.  If a violation hasoccurred, the Company will take such disciplinary or preventative action as itdeems appropriate, after consultation with the Audit Committee.

 

From time to time, the Companymay waive some provisions of this Code. Any waiver of the Code for Executive Officers or Directors of theCompany may be made only by the Board of Directors and must be promptlydisclosed as required by SEC.

 

### **Corporate Opportunities**

 

Directors and Officers owe aduty to the Company to advance the Company’s business interests when theopportunity to do so arises. Directors and Officers are prohibited from taking(or directing to a third party) a business opportunity that is discoveredthrough the use of corporate property, information or position, unless theCompany has already been offered the opportunity and turned it down.  More generally, Directors and Officers areprohibited from using corporate property, information or position or forpersonal gain and from competing with the Company.

 

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Sometimes the line betweenpersonal and Company benefits is difficult to draw, and sometimes there areboth personal and Company benefits in certain activities. Directors andOfficers who intend to make use of Company property or services in a manner notsolely for the benefit of the Company should consult with the Company.

 

### **Confidentiality**

 

In carrying out the Company’sbusiness, Directors and Officers often learn confidential or proprietaryinformation about the Company, its customers, clients, suppliers or jointventure parties.  Directors and Officersmust maintain the confidentiality of all information so entrusted to them,except when disclosure is authorized or legally mandated.  Confidential or proprietary information ofthe Company , and of other companies, includes any nonpublic information thatwould be harmful to the relevant company or useful or helpful to competitors ifdisclosed.

 

### **Fair Dealing**

 

We have a history of succeedingthrough honest business competition.  Wedo not seek competitive advantages through illegal or unethical businesspractices. Each Director and Officer should endeavor to deal fairly with theCompany’s customers, clients, service providers, suppliers, competitors andemployees.  No Director or Officershould take unfair advantage of anyone through manipulation, concealment, abuseor privileged information, misrepresentation of material facts, or any unfairdealing practice.

 

### **Protection and Proper Use of Company Assets**

 

All Directors and Officersshould protect the Company’s assets and ensure their efficient use.  All Company assets should be used only forlegitimate business purposes.

 

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