Exhibit 99.1



                           FIRST LITCHFIELD FINANCIAL
                                  CORPORATION
                                       and
                      THE FIRST NATIONAL BANK OF LITCHFIELD








                    CODE OF ETHICS AND CONFLICTS OF INTEREST
                                     POLICY






                        Adopted By The Board of Directors
                                 April 30, 2003

                        Last Approval Date: May 31, 2007


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                    THE FIRST NATIONAL BANK OF LITCHFIELD and
                     FIRST LITCHFIELD FINANCIAL CORPORATION

                 CODE OF ETHICS AND CONFLICTS OF INTEREST POLICY
                     for Directors, Officers, and Employees

Policy Statement
----------------

The  First  National  Bank of  Litchfield  (the  "Bank")  and  First  Litchfield
Financial  Corporation (the "Holding  Company") (herein referred to collectively
as "The  Corporation")  are institutions of public trust that are dependent upon
public  confidence.  Inherent in that trust is The Corporation's  responsibility
not only to preserve and safeguard public  confidence but also to strengthen and
renew such  confidence.  The  reputation  and  soundness of The  Corporation  is
dependent on its  commitment  to avoid  conflicts of  interest.  Board  members,
employees and officers are expected to act with integrity, conduct themselves in
a professional manner and comply with all rules, regulations and policies of The
Corporation.  In  addition,  all  directors,  officers  and  employees  have  an
obligation to The Corporation to ensure that their outside activities, interests
and personal  affairs are not in conflict with The  Corporation's  interests and
that they do not reflect  negatively  upon The  Corporation's  reputation in the
community.  It is to this end that this  Conflict  of  Interest & Code of Ethics
Policy ("Policy") was adopted.  This Policy also serves as the Holding Company's
"Code of Ethics" for purposes of Section 406 of the  Sarbanes-Oxley  Act of 2002
and the regulations of the Securities and Exchange Commission.

No one  associated  with The  Corporation,  whether  as a  director,  officer or
employee, should use their position,  directly or indirectly,  for private gain,
to advance  personal  interests or to obtain favors or benefits for  themselves,
their  families or related  interests,  or any other  entity.  Such persons must
manage their personal and business  affairs so as to avoid situations that might
lead to a conflict  of  interest  or the  appearance  of a conflict  of interest
involving The Corporation. Compliance with this policy is required.

The purpose of the Code of Ethics and Conflicts of Interest  Policy is to ensure
that  business  dealings  and  transactions  between  The  Corporation  and  its
officers,  directors,  principal  shareholders and employees are conducted in an
arm's-length fashion.


CONFLICTS OF INTEREST

Officers,  directors  and  employees  must not put their  personal  or  business
interests or those of others above the interests of The  Corporation.  Personnel
must be fair in their dealings with The Corporation, and personal interests must
not be allowed to bias  decisions.  They must not take  advantage  of  potential
"corporate  opportunities,"  such as business  enterprises,  properties,  or new
products  that they  learn of as a result of their  position  or that are in The
Corporation's "line of business."

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Full disclosure  must be made to the board of directors when personal  interests
are involved in matters that may affect The Corporation.  Such transactions must
be reviewed by board  members who are not involved in the  transaction  so as to
ensure that the transaction is fair to The Corporation.

PERSONAL CONDUCT

Each officer,  director and employee is expected to maintain the highest ethical
standards in their personal and professional dealings.

Employees,  officers  and  directors of The  Corporation  are expected to accept
certain responsibilities, adhere to acceptable business principles in matters of
personal conduct,  and exhibit a high degree of personal integrity at all times.
This not only involves  respect for the rights of others,  but also demands that
with  respect to business and personal  matters,  such persons  refrain from any
behavior  that  might be  harmful  to The  Corporation,  or that might be viewed
unfavorably by current or potential customers or with respect to the public.

PERSONAL FINANCES

Each  officer,  director,  and  employee  should  maintain  his or her  personal
finances in a prudent,  businesslike  manner.  Checking  accounts for  officers,
directors,  principal  shareholders  and  employees  are  to  be  handled  in  a
professional manner.  Deposits may not bear a greater rate of interest than that
paid to the general public.  In accordance with 12 CFR 215.4(e) of Regulation O,
the Bank may not pay an  overdraft  of an  executive  officer or director of the
Bank or of an affiliate of the Bank, on an account at the Bank, unless either:

     o   The   payment  of  funds  is  made  in   accordance   with  a  written,
         preauthorized, interest-bearing extension of credit plan that specifies
         a method of repayment,  or a written,  preauthorized  transfer of funds
         from another account of the account holder at the Bank.

     o   The  payment  is of  an  inadvertent  overdraft  on  an  account  in an
         aggregate  amount  of  $1,000  or less,  provided  the  account  is not
         overdrawn  for more than five business  days,  and the Bank charges the
         executive  officer  or  director  the same  fee  charged  to any  other
         customer of the Bank in similar circumstances.

The following activities are prohibited:

     1.   Borrowing from other staff members;

     2.   Borrowing from The  Corporation's  customers other than those that are
          lending institutions;

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     3.   Borrowing from the Holding Company or borrowing at preferential  rates
          from  the  Bank.  Bank  loans to  executive  officers,  directors  and
          principal  shareholders  must be on the same terms and  conditions  as
          those offered to the general public; and

     4.   Borrowing from The Corporation or any other  institution,  on terms or
          conditions  (or through a process)  which would violate any applicable
          law, rule or regulation, or which would be contrary to the policies of
          The Corporation.

The Policy of The  Corporation  and banking laws impose various  restrictions on
certain "insider" loan transactions.  Please refer to the Bank's Insider Lending
Policy & Procedures and Regulation O Compliance Policy.

BUSINESS DEALINGS

In addition to lending  transactions,  any dealings  between The Corporation and
directors,  executive officers,  principal shareholders and related interests of
such persons,  including  transactions  between The Corporation and the spouses,
children,   parents,  or  siblings  of  corporate   insiders,   must  constitute
arm's-length transactions.
The following insider transactions are prohibited:
--------------------------------------------------

     1.   A  transaction  or  business  dealing  which is not  intended  for the
          benefit  of The  Corporation  but is merely an  accommodation  for the
          insider's benefit;

     2.   A transaction which is not made on terms and under circumstances which
          are  substantially the same or as favorable as those prevailing at the
          time for comparable  business dealings with persons not covered by the
          Policy; or

     3.   A transaction  which is an investment in real estate,  either directly
          or indirectly, whether in the form of an equity interest, partnership,
          joint venture,  or any other form, if The  Corporation,  in substance,
          has virtually  the same risks and potential  rewards as an investor in
          the borrower's investment in real estate.

With  regard to use of The  Corporation  property  and  personnel,  the board of
directors has taken the position that all supplies, copy services, postage meter
and support personnel are for The Corporation's  business and should not be used
for personal  needs.  Any questions or areas of confusion  regarding this policy
should be addressed to the Chief Executive Officer.

Conflicts of interest between  officers,  employees,  principal  shareholders or
directors of The  Corporation and customers of The Corporation (or their related
interests) shall be avoided at all times. Conflicts of interest include, but are
not limited to, compensation from or investments in customers of The Corporation
or  their  related  interests.  Similarly,  the  authorized  use  of  privileged
information constitutes a conflict of interest. Any officer, employee, principal
shareholder or director  contemplating a transaction that may involve a conflict
of interest  must obtain the proper  approval of the Board of  Directors  of the
Holding Company or the Bank, respectively.

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The following activities are prohibited:
----------------------------------------

     1.   A direct or indirect  financial  interest  including joint ventures or
          directorship   in  or  with  a  supplier,   customer  or   appropriate
          prospective  customer  without prior  disclosure to and prior approval
          from the Board of Directors.

     2.   Receiving preferential treatment from customers of The Corporation.

     3.   Selling or leasing goods or services to The Corporation  without prior
          disclosure and approval by a majority of disinterested  directors.  In
          addition,  the terms and conditions of  transactions  must not be more
          favorable than those offered to others.

     4.   Receiving  discounts on personal purchases from suppliers or customers
          because of business relationships with The Corporation.

     5.   Giving preferential  treatment to a customer,  supplier or prospective
          customer   because  of  any  favor,   gratuity  or  outside   business
          relationship with such customer, supplier or prospective customer.

Actual conflicts of interest and any known potential  conflicts of interest must
be disclosed to the board of directors,  including those arising due to business
or personal  relationships with customers,  suppliers,  business associates,  or
competitors of The Corporation.

CONFIDENTIALITY

Information obtained in the course of evaluating a loan application, servicing a
loan and other information  including  financial,  personal and other non-public
information  on  customers,  suppliers,   prospective  customers,  employees  or
applicants is strictly confidential. Use of such information to further personal
interests is prohibited. In addition, such information may not be shared or made
available to individuals outside The Corporation.

As defined in The Corporation's policies with respect to insider trading, use of
"material inside  information" in securities trading  constitutes a violation of
federal  securities  laws.  Please refer to the policies  entitled  Confidential
Information  and  Avoidance  of Insider  Trading  and  Pre-Clearance  of Insider
Transactions for further information on these requirements.

SAFEGUARDING CONFIDENTIAL INFORMATION
-------------------------------------

The  Corporation's  Privacy Policy,  IT Policy and Security Policy implement the
requirements  of the  Gramm-Leach-Bliley  Act. These policies  provide  detailed
guidance as to The  Corporation's  standards for protecting  sensitive  customer
information.  All

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officers,  directors and  employees are expected to understand  and follow these
guidelines which are incorporated by reference into this policy.

ENSURING THE CONFIDENTIALITY OF RECORDS
---------------------------------------

Bank records and accounting  information must be accurate and must be maintained
with  reliability and integrity.  Transactions  must be reflected in an accurate
and timely  manner.  False entries and  activities  that result in false entries
will be not are  tolerated.  Such  entries or  activities  will be  considered a
serious  violation  of this  policy  and may  result  in  severe  discipline  or
termination of the officers or employees involved.

PROVIDING STRONG INTERNAL CONTROLS OVER ASSETS
----------------------------------------------

Employees,  officers,  and directors are expected to comply with sound  internal
control  practices and procedures which are adopted by The Corporation to ensure
the  safeguarding of assets and the proper reporting and disclosure of financial
information.  Failure  to  follow  sound  procedures  in  this  regard  will  be
considered a serious  violation of this policy

CANDOR IN DEALING WITH AUDITORS, EXAMINERS AND LEGAL COUNSEL
------------------------------------------------------------

Employees, officers, and directors are expected to respond honestly when dealing
with the independent and internal auditors,  regulators and attorneys.  Failures
to respond  honestly  and  candidly  will be deemed a serious  violation of this
policy.

AVOIDING SELF-DEALING AND ACCEPTANCE OF GIFT AND FAVORS
-------------------------------------------------------

The Bank Bribery Act makes it illegal for anyone to offer or promise anything of
value to an employee,  officer,  director, agent, or attorney of a bank with the
intent to  influence  or reward the person in  connection  with any  business or
transaction  of The  Corporation.  It is also illegal for an employee,  officer,
director,  agent,  or attorney of a bank to solicit or accept  anything of value
from any person  intending to be influenced  or rewarded in connection  with any
business or transaction of the bank.

     If a person is convicted of violating  the act, the sentence can be as much
     as a $1,000,000 fine and 30 years in jail.

     It is the policy of The Corporation that no employee,  director,  agent, or
     attorney of the bank shall accept  anything of value from a customer of the
     bank or a vendor to the bank other than:

          o    Gifts  of a  reasonable  value  based  on a  family  or  personal
               relationship  where that  relationship is the obvious  motivating
               factor for the gift.

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          o    Meals,  refreshments,  entertainment,  accommodations,  or travel
               arrangements  of a  reasonable  value  provided  they  are in the
               course of a meeting or occasion,  the purpose of which is to hold
               bona fide business discussions or to foster better relations, and
               provided that the expense would be paid for by The Corporation if
               not paid for by another party.

          o    Advertising  or  promotional  material  with a value of less than
               $50.

          o    Gifts  with  a  value  of  less  than  $50  related  to  commonly
               recognized  events,  such  as  a  promotion,  religious  holiday,
               wedding, or retirement.

          o    Discounts  or  rebates on  merchandise  or  services  that do not
               exceed those available to other customers of the merchant.

          o    Rewards for recognition of service or accomplishment  from civic,
               charitable,  educational,  or  religious  organizations  provided
               remuneration is $100 or less.

     No  employee,  director,  agent,  or  attorney  of the bank  shall  solicit
     anything of value from any customer of the bank or vendor to the bank.


OUTSIDE EMPLOYMENT

With respect to an employee of The Corporation, employment is a full-time career
unless otherwise  provided by the appropriate Board of Directors (or in the case
of a non-officer employee, as provided by executive  management).  The undivided
interest and loyalty of employees is important to the  continued  success of The
Corporation.  Employment  with outside firms is permitted  only if approval from
the board of directors  (officers) or senior management  (non-official staff) is
obtained and the work:

     1.   Will not interfere with work assignments or performance;

     2.   Will  not  involve  the  possibility  of  adverse   publicity  to  The
          Corporation;

     3.   Is not with a competitor, supplier or customer;

     4.   Does not imply sponsorship by The Corporation;

     5.   Does  not  involve  serving  as  a  director,   officer,  managers  or
          consultant; and

In addition,  certain  affiliations  by  directors,  officers and  employees are
specifically prohibited by law. Examples of such prohibitions include serving as
a director, officer, or employee of:

     1.   A  public  utility  holding  company  or  its  affiliates  (15  U.S.C.
          ss.79q(c)); and

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     2.   An interstate  power company (16 U.S.C.  ss.825d(b) or having  certain
          specified affiliations with a registered investment company (15 U.S.C.
          ss.80a-10(c)).

In addition, the Depository  Institutions  Management Interlocks Act prohibits a
"management  official" (officer,  director,  advisory director or the nominee of
such  persons) of The  Corporation  from serving as a  "management  official" of
another  depository  institution in the same community or one that is contiguous
or adjacent within ten miles (12 U.S.C. ss.3201 et seq.).

CONTRIBUTIONS - POLITICAL ACTIVITIES

The Corporation,  as a responsible citizen,  encourages  contributions to worthy
charitable,  social and educational causes.  However, due to the requirements of
the working  environment,  employee  contributions  to political  or  charitable
organizations  may not be  solicited  on the  premises or during  working  hours
without prior management  approval.  Officers and employees shall not contribute
directly or indirectly on behalf of The  Corporation,  time,  money,  service or
favors  to  political  parties,   candidates  or  workers.  The  Corporation  is
prohibited from engaging in politics or making political contributions including
the use of its facilities and/or supplies.

Any  officer  or  employee  who  wishes  to take an active  role as a  political
candidate for any elective public office or is appointed to any  governmental or
civic  position,  must discuss the details and receive  prior  approval from the
Chief Executive Officer and the board of directors.

CREDIT PRACTICES

It is important  that all loans be made in a prudent  manner.  In addition,  all
loans should be made as arm's-length transactions. Thus, officers, directors and
employees  may not extend  credit or  participate  in any credit  extension to a
customer in the following circumstances:

     1.   The borrower  gives the proceeds of a loan to an employee,  officer or
          director.

     2.   The  borrower  gives  the  proceeds  of the loan to the  family  or an
          associated financial interest of an officer, director or employee.

     3.   The borrower  loans the proceeds of the loan to an employee,  officer,
          director, or to the family or associated financial interest of same.

     4.   The borrower  uses the  proceeds to purchase  assets from an employee,
          officer or director, or from the family or financial interest of same.

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     5.   The borrower uses the proceeds to pay debts of an employee, officer or
          director or those of family members or associated financial interests.

     6.   The loan is made at a preferential  rate which has not been authorized
          by the Loan Committee or other appropriate authority within the Bank;

     7.   The loan is made to an employee of a bank regulatory agency, which has
          supervision over the Bank; or

     8.   The borrower obtains a loan from another bank on a preferential  basis
          as part of a reciprocal arrangement pursuant to which the Bank extends
          credit to such other bank on a preferential basis.

Additional rules apply to loans to executive officers,  directors, and principal
shareholder.  Please review The  Corporation's  Policy Regarding Insider Lending
Policy and Procedures and Regulation O Compliance Policy.

LITIGATION

No suits of any kind or for any reason are to be  instituted  in the name of The
Corporation  by any officer  without first fully  discussing the matter with the
Chief Executive Officer. This rule would not apply to matters where quick action
in the normal  course of business  is  necessary  to protect  The  Corporation's
position.

EMBEZZLEMENT

Employees  have a positive duty to report to  management or the Audit  Committee
any facts relative to a suspected  embezzlement or any other  suspected  illegal
act committed by a fellow employee.

E-MAIL AND OTHER ELECTRONIC OR TELEPHONIC COMMUNICATIONS

All electronic and telephonic  communication  systems and all communications and
information  transmitted  by,  received from, or stored in these systems are the
property of The Corporation and as such are to be used for job-related purposes.
The unauthorized use of any software and business equipment,  including, but not
limited to,  facsimiles,  computers  and copy  machines for private  purposes is
strictly prohibited.

Further,  employees are not permitted to use a code,  access a file, or retrieve
any stored communication unless authorized to do so or unless they have received
prior clearance from an authorized  supervisor.  All pass codes are the property
of The  Corporation.  No employee may use a pass code or voice-mail  access code
that has not been issued to

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that employee or that is unknown to The Corporation.  Moreover,  improper use of
the e-mail system or the Internet,  i.e.,  spreading offensive jokes or remarks,
will not be  tolerated.  Employees  who  violate  this  policy  are  subject  to
disciplinary action, up to and including discharge.

To ensure that the use of electronic and telephonic  communications  systems and
business  equipment is consistent  with The  Corporation's  legitimate  business
interests,  authorized representatives of The Corporation may monitor the use of
such  equipment  from time to time.  This may  include  a review  of  electronic
messages including e-mail and voice-mail messages.

ADDITIONAL REQUIREMENTS FOR SENIOR FINANCIAL OFFICERS OF THE CORPORATION
------------------------------------------------------------------------

For purposes of this section,  the term "senior financial  officer" includes all
executive officers as defined under Regulation O and any other person serving in
an  equivalent  financial  position  regardless  of  whether  or  not  they  are
designated as executive officers for Regulation O purposes.

Because equity shares of The Corporation are publicly  traded,  senior financial
officers  are  held to an  especially  high  set of  ethical  standards.  Senior
financial  officers will not act contrary to these standards of conduct nor will
they condone the commission of such acts by others within the organization.

Senior financial  officers will conduct their personal and professional  affairs
so as to avoid real and apparent  conflicts of interest.  They will refrain from
engaging in any activity  that would  compromise  their  professional  ethics or
otherwise  prejudice  their  ability to carry out their  duties to the bank.  In
addition, senior financial officers will adhere to the following guidelines:

     |X|  Communicate  to  executive  management  and  to  accounts  engaged  in
          financial  audits  all  relevant  unfavorable  as  well  as  favorable
          information and professional judgments and opinions

     |X|  Encourage  open   communication   and  full  disclosure  of  financial
          information by providing a well understood  process for the disclosure
          of financial  information of importance  including any departures from
          policy, practice or sound accounting principals.

     |X|  Ensure that all relevant staff members understand the corporate policy
          regarding full disclosure.

     |X|  Refrain from the  disclosure of  confidential  information  and ensure
          that all staff understand corporate policy with respect to disclosure.

     |X|  Refrain from using or appearing to use  confidential  information  for
          unethical or illegal advantage, either personally or through others.

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     |X|  Establish and maintain  appropriate  systems and  procedures to ensure
          business  transactions  are recorded on the bank's books in accordance
          with  Generally  Accepted  Accounting  Principals,  company policy and
          regulatory guidelines.

     |X|  Establish  policies and  procedures  to protect and retain  accounting
          records as required by law.

     |X|  Establish and administer  accounting  controls that are appropriate to
          ensure  the  integrity  of the  financial  reporting  process  and the
          availability of timely  information for the safe, sound and profitable
          operation of the bank.

     |X|  Completely disclose relevant  information to regulatory  examiners and
          auditors.

OTHER REQUIREMENTS

Questions regarding the application of the requirements of this policy should be
addressed to management or to the Human Resources Department.

The Chief Executive  Officer and Chief Financial Officer shall be accountable to
the Audit  Committee  and Board of  Directors  for  assuring  adherence  to this
Policy. The Audit Committee shall establish procedures for:

     |X|  The receipt,  retention,  and treatment of complaints  received by The
          Corporation  regarding  accounting,  internal accounting controls,  or
          auditing matters; and

     |X|  The  confidential,  anonymous  submission by employees of  information
          concerning questionable auditing or accounting matters.

Compliance  with this Policy is a condition of employment  and failure to comply
may be a basis for disciplinary action, termination or may result in other legal
consequences.



----------------------              ---------------------------
Date                                Joseph J. Greco
                                    President



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                     FIRST LITCHFIELD FINANCIAL CORPORATION
                                       and
                      THE FIRST NATIONAL BANK OF LITCHFIELD



Name                                  Department
    --------------------                        --------------------

Job Title
         -----------------------


My signature below indicates that I have, received, read and understand the Code
                                                                            ----
of Ethics and Conflicts of Interest  Policy.  Furthermore,  I understand that if
-------------------------------------------
there are any questions relating to the policy I may contact the Human Resources
Department for an explanation.



-----------------------------                        ---------------
Employee                                             Date



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                     FIRST LITCHFIELD FINANCIAL CORPORATION
                                       and
                      THE FIRST NATIONAL BANK OF LITCHFIELD


Gifts and Gratuities Reporting Sheet


Date     Name of        Name of        Gift      Approx. Value    Circumstances
Rec'd    Employee       Donor

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