PHSB FINANCIAL CORPORATION
                                       AND
                            PEOPLES HOME SAVINGS BANK

                                 CODE OF ETHICS

Preface.  This Code of Ethics of PHSB Financial  Corporation (the "Company") and
Peoples Home Savings Bank (the "Bank")  applies to all  directors,  officers and
employees  of the  Company  and the  Bank,  including  the  principal  executive
officer, the principal financial officer and the principal accounting officer or
controller, as well as to any other person performing similar functions ("Senior
Financial Officers").

         The Company and the Bank expect the Senior Financial Officers,  as well
as all of the  directors  and  employees of the Company and the Bank,  to act in
accordance with the highest  standards of personal and  professional  conduct in
all aspects of their  employment and association  with the Company and the Bank,
to comply with all applicable laws, rules and regulations,  and to adhere to the
policies  and  procedures   adopted  by  the  Company  and  the  Bank  governing
professional conduct.

         Duties. Each person subject to the Code of Ethics must:



<PAGE>



o    Engage in honest and ethical conduct and  proactively  promote such conduct
     in the workplace.

o    Avoid real or perceived  conflicts of interest between the private interest
     of the  individual and the interest of the Company and the Bank, as when an
     individual  receives improper personal benefits as the result of his or her
     position  with the Company or the Bank,  or when the  individual  has other
     duties,  responsibilities  or  obligations  that run  counter to his or her
     duties to the Company or the Bank.

o    Disclose to the  Company's  Ethics  Officer or to the Audit  Committee  any
     transaction or relationship  that reasonably could be expected to give rise
     to a real or perceived conflict of interest.

o    Promote the production of full, fair,  accurate,  timely and understandable
     disclosure  in reports and documents  that the Company or its  subsidiaries
     file with the  Securities  and  Exchange  Commission  and other  regulatory
     authorities,  as well as in other public communications made by the Company
     or its subsidiaries.

o    Complywith,  and take all  reasonable  measures  to  ensure  the  Company's
     compliance with, all applicable governmental laws, rules and regulations.

o    Promptly report any questionable behavior as described below under "Reports
     of Violations." Reports of Violations. An employee, officer or director has
     a duty to promptly report to his/her supervisor, if applicable,  and to the
     Ethics Officer, any action that he or she reasonably believes to constitute
     a violation of this Code of Ethics. The reporting  individual may at his or
     her  election  submit  a report  in  writing  and may  submit  such  report
     anonymously  if he or she so chooses.  If an individual  has no supervisor,
     such report must be made to the Board of Directors, or alternatively to one
     or more members of the Audit Committee. No retaliatory action will be taken
     against any person reporting a violation.

         Accountability,  Enforcement  and  Penalties  for  Non-compliance.  All
persons  subject  to the Code of  Ethics  are on  notice  that they will be held
accountable for their adherence to the Code and that their continued  employment
by the Company or its  subsidiaries  depends on their full  compliance  with the
policies and duties stated in this Code.

         The Code of Ethics is part of the personnel policies of the Company and
the Bank. Accordingly, formal warnings, suspension and termination shall be used
as  remedies  and  penalties  for  violations  of this  Code as the  nature  and
circumstances of the violations warrant. The Ethics Officer will promptly notify
the Board of Directors of any violation of the Code. The Board of Directors will
review any  violation of this Code brought to its attention and will indicate in
the minutes of the Board Meeting the specific  measures  adopted by the Board to
correct the violation.
         Violations of this Code of Ethics may also constitute violations of law
and may  result in civil and  criminal  penalties  for the  officers  and/or the
Company and Bank.

Waivers. The Boards of Directors of the Company and the Bank shall have the sole
and absolute discretionary authority to approve any deviation from or any waiver
of any  provision  of the Code of Ethics.  The nature of and reason for any such
waiver shall be  disclosed  by filing a Current  Report on Form 8-K with the SEC
within five business days of such waiver. Additionally, the nature of and reason
for any  "implicit  waiver,"  defined by SEC  regulations  as the failure of the
Company or Bank to take action  within a reasonable  period of time  following a
material  departure  from a provision of the Code that has been made known to an
executive  officer of the  Company or the Bank,  must be  disclosed  by filing a
Current  Report  on Form 8-K  with the SEC  within  five  business  days of such
implicit waiver.

         Amendments.  This Code of Ethics will be reviewed at least annually and
revised, if necessary, to reflect changes in applicable law or regulation and to
cover new ethical issues as they arise.  The nature of any amendment (other than
technical,  administrative or other  non-substantive  amendments) to the Code of
Ethics shall be  disclosed  by filing a Current  Report on Form 8-K with the SEC
within five business days of such  amendment.  The Code of Ethics shall be filed
annually as an exhibit to the Company's Annual Report on Form 10-K.




<PAGE>



         Ethics Officer;  Administration.  The Board of Directors of the Company
has appointed an Ethics Officer who will be responsible  for the  administration
of the Code of Ethics.  Any person who has questions  regarding the  appropriate
course of action in a particular  situation  should promptly  contact the Ethics
Officer.

         All persons  subject to this Code of Ethics  shall be  provided  with a
copy of the Code on an annual basis, as well as promptly following any amendment
to the Code, and shall be requested to sign a Commitment of Compliance (attached
hereto as Appendix A).






         This Code of Ethics is adopted as of  ___________________,  2004 by the
Boards of Directors of PHSB Financial Corporation and Peoples Home Savings Bank.



<PAGE>






                                   APPENDIX A

                           PHSB FINANCIAL CORPORATION
                                       AND
                            PEOPLES HOME SAVINGS BANK
                                 CODE OF ETHICS

                            COMMITMENT OF COMPLIANCE



         I  acknowledge  that  I have  received  and  read  the  PHSB  Financial
Corporation  and Peoples Home Savings Bank Code of Ethics dated  _______________
2004,  and  understand  my  duties  under  the  Code  of  Ethics  as  well as my
obligations to comply with the Code of Ethics.

         I understand that if I do not comply with this Code of Ethics,  I could
be subject to penalties,  including  dismissal from employment or service on the
Board of Directors.  I agree that my agreement to comply with the Code of Ethics
does not create or establish any right to be employed by the Company or to serve
on the Board of Directors.


Date: _________________

                                                     _______________________
                                                     (signature)


                                                     _______________________
                            (printed name and title)



This signed and dated form must be returned to the Ethics Officer.