Code of Ethics

The Colonial BancGroup, Inc.; Colonial Bank; Colonial Brokerage, Inc.; CBG Investments, Inc.; Colonial Assets Management, Inc.; and any other entity or entities of which The Colonial BancGroup, Inc. directly or indirectly owns eighty percent or more of that entity or entities' stock (collectively, "Colonial") is judged by the conduct of its directors, officers and employees. It is good business to enhance Colonial's reputation for integrity, sound ethical business practices and being a good corporate citizen. Furthermore, it is acknowledged that the conduct of all directors, officers and employees is of importance to Colonial's bonding and insurance companies, the Federal Deposit Insurance Corporation (the "FDIC"), the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency (the "OCC"), and other regulatory authorities.

This written Code of Ethics will serve to establish the minimum standards of conduct for present and future directors, officers and employees of Colonial and its subsidiaries. "Employee" is defined as all employees of Colonial. "Director" is defined as all individuals who serve on Colonial's elected board of directors whether or not they receive compensation. All instances of violation to this policy will be reported to management and/or Human Resources and together they will take appropriate action. Action will be commensurate with the seriousness of the misconduct. Failure to comply with this policy may result in termination of employment.

EQUAL EMPLOYMENT OPPORTUNITY (EEO)

Colonial is an Affirmative Action/Equal Employment Opportunity employer and seeks, in all of its operations, to employ individuals for available positions who are qualified or qualifiable on the basis of merit and ability alone. Colonial extends its best efforts to identify and develop the broadest possible range of applicant sources and to promote the fair and effective use of such sources in all of its employment activities.

Colonial has developed written Affirmative Action Plans ("AAPs") to achieve prompt and full utilization of minorities, the disabled, disabled veterans, and women throughout its workforce. The results of the AAPs are reviewed annually and the AAPs may be modified as necessary to achieve stated objectives.

The following is Colonial's commitment to Equal Employment Opportunity:

All employees and qualified applicants for employment will be provided equal opportunity regardless of their race, religion, color, national origin, gender, age, physical or mental disability, or veteran status. This applies to all phases of the employment process, including:

·         Recruitment, advertising or solicitation for employment

·         Hiring and placement

·         Selection for promotion, transfer, demotion or discipline

·         Rates of pay or other forms of compensation and benefits

·         Selection for training, education and tuition assistance

·         Layoff, recall or termination

·         Social and recreational programs

When necessary, Colonial will work with applicants and employees who are physically or mentally disabled, as defined by the Americans With Disabilities Act, to determine whether a reasonable accommodation would allow them to perform the essential functions of a job they are seeking or the job to which they have been assigned.

Colonial's commitment to equal employment practices is the foundation of our professional and objective management approach. Human Resources has the overall responsibility for monitoring all employment affairs within Colonial's facilities. However, all management shares a similar responsibility to make objective and impartial employment decisions. Also, any employee who has been discriminated against or any employee who observes any discriminatory treatment of another employee should report this to Human Resources immediately.

No-Harassment / No Violence Policy

Colonial is committed to maintaining a work environment that is free from discrimination and violence in which employees at all levels can devote their full attention and best efforts to the job. Harassment, violence or threats of violence have no place in the work environment. Colonial does not authorize and will not tolerate any form of harassment, as described below, violence or threats of violence.

Race, gender, national origin, age, disability, religion, or any other characteristic that is protected by law.

This policy applies to management and non-management employees alike, and even to non-employees who harass our employees.

Examples of "harassment" that is covered by this policy include offensive language, jokes, or other physical, verbal, written, or pictorial conduct relating to the employee's gender, race, religion, national origin, age, disability, or other factor protected by law that would make a reasonable person experiencing such behavior feel uncomfortable or would interfere with the person's work performance.

The examples below are just that - examples. It is impossible to list every type of behavior that can be considered harassment in violation of this policy. In general, any conduct based on these traits that could interfere with an individual's work performance or could create an offensive environment will be considered harassment in violation of this policy. This is the case even if the offending employee did not mean to be offensive. It is essential that employees be sensitive to the feelings of others.

Sexual Harassment

Sexual harassment (whether opposite-sex or same-sex) is strictly prohibited. Examples of the types of behavior that may be considered sexual harassment in violation of this policy include the following:

Harassment Based on Race, National Origin, Age, Disability, or Religion

Harassment based on these other traits deserves special mention and is also strictly prohibited. Examples of the types of behavior that will be considered harassment based on these characteristics include the following:

"Harassing" Use of Colonial's Computer System

Use of Colonial's computer system for any harassing purpose (as defined above) will be treated as a violation of both this No-Harassment Policy and the End User Computing and Technology Policy. Examples of "dual violations" include the following:

If employees receive an unwanted message on Colonial's computer system, the employee should delete it immediately. If the problem reoccurs, the employee should report it to Human Resources or Corporate Employee Relations at 1-866-369-8686.

This policy obviously applies to activities conducted on workplace computers, but it also applies to transmissions from "outside" computers into Colonial's computer system, and to transmissions between different "outside" computers if the intended recipient finds the material unwelcome and is an employee, customer, or vendor of the company, or is in some other business relationship with the company.

Violence and Threats of Violence

Violence or threats of violence is also strictly prohibited. Examples of these types of antisocial behavior can include:

Reporting Harassment, Violence or Threats of Violence

Colonial cannot resolve matters that it does not know about. Every employee has a duty to immediately report harassment, violence or threats of violence so Colonial can try to resolve the situation. You should report harassment when

This is true whether the alleged harasser is an employee, a supervisor or manager, or even a non-employee, such as a customer or vendor with whom Colonial does business.

To report harassment, you must contact your local Human Resources Department or Corporate Employee Relations at 1-866-369-8686. These individuals have been trained to respond appropriately to reports of harassment.

Once their report has been received, Colonial will

No employee will be punished for bringing a good faith report of harassment to the company's attention or for cooperating in an investigation.

Our Commitment to an Effective No-Harassment Policy

Finally, if you feel that Colonial has not met its obligations under this policy, or if you are not satisfied with the way in which their report of harassment was handled, you should contact the Executive Vice President of Human Resources. An effective No-Harassment policy depends on all of us, working together, to address this very important subject.

COMPLIANCE WITH LAWS, RULES AND REGULATIONS

All directors, officers and employees must respect and obey the laws of the United States and the cities, states and counties in which we operate. The previous general statement is not limited in any way by reference to specific laws and regulations elsewhere in this Code of Ethics. Although not all employees are expected to know the details of these laws, it is important to know enough to determine when to seek advice from supervisors, managers or other appropriate personnel.

CORPORATE OPPORTUNITIES

Directors, officers and employees are prohibited from taking for themselves opportunities that are discovered through the use of corporate property, information or position without the consent of the Board of Directors. No director, officer or employee may use corporate property, information, or position for improper personal gain, and no employee may compete with Colonial directly or indirectly. Directors, officers and employees owe a duty to Colonial to advance its legitimate interests when the opportunity to do so arises.

COMPETITION AND FAIR DEALING

We seek to outperform our competition fairly and honestly. We seek competitive advantages through superior performance, never through unethical or illegal business practices. Stealing proprietary information, possessing trade secret information that was obtained without the owner's consent, or inducing such disclosures by past or present employees of other companies is prohibited. Each director, officer and employee should endeavor to respect the rights of and deal fairly with Colonial's customers, suppliers, competitors and employees. No director, officer or employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other intentional unfair-dealing practice.

PROTECTION AND PROPER USE OF COLONIAL ASSETS

General

All directors, officers and employees should endeavor to protect the Colonial's assets and ensure their efficient use. Theft, carelessness, and waste have a direct impact on the Colonial's profitability. Any suspected incident of fraud or theft should be immediately reported for investigation. Colonial equipment should not be used for non-company business, though incidental personal use may be permitted.

The obligation of directors, officers and employees to protect the Colonial's assets includes its proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks, and copyrights, as well as business, marketing and service plans, engineering and manufacturing ideas, designs, databases, records, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate this Code of Ethics. It could also be illegal and result in civil or criminal penalties.

End User Computing Policy

All employees are expected to become familiar with the policy Colonial has established to provide adequate controls for the use and acquisition of microcomputer hardware and software. Colonial's policies and procedures on this subject can be found on Colonial's Intranet. The controls are designed to ensure interoperability of hardware and software, provide for the efficient and effective use of technology expenditures, and minimize the risk to the employee and Colonial associated with the use of this technology.

The End User Computing Policy sets forth the process for the purchase of hardware and software, use of the Internet, Intranet and electronic mail. Also addressed are the policies related to physical and data security, virus protection, copyright protection and the like.

All employees are expected to comply with Colonial's End User Computing Policy. Failure to adhere to the requirements may result in disciplinary action, up to and including termination and criminal prosecution under certain circumstances.

By using Colonial's network, employees understand and agree that Colonial will monitor usage of e-mail and the Internet at its discretion, that employees have no expectation of privacy regarding any matter created, sent, received, or stored on Colonial's network, and further acknowledge that all materials and data on the Colonial network are the sole property of Colonial.

CONFIDENTIAL INFORMATION

General

Directors, officers and employees will preserve the confidentiality of existing and potential customers (including employees) financial interests and business relationships with Colonial.

Confidential information acquired in the course of duty shall be used solely for Colonial's business purposes and under no circumstances revealed to unauthorized persons, either within or external to Colonial.

Confidential information that might reflect favorably or adversely upon the investment value or future market value of any business enterprise, including Colonial, shall not be used for personal gain or to provide advantage to others.

Directors, officers and employees are cautioned against inadvertently making casual remarks that might disclose information of a confidential nature. This applies not only at work and in public places, but also at home and in all social contacts.

Federal Regulations

Colonial will comply with all required laws and regulations formulated by the Board of Governors of the Federal Reserve System, the OCC, and other bank regulatory authorities. All audits, regulatory reports and stockholder information are considered confidential information. In recognizing the importance of protecting bank customer records, Colonial is committed to compliance with the Right to Financial Privacy Act of 1978. This federal law generally prohibits disclosure by a financial institution of information in customer records to federal government authorities, unless the disclosure is made pursuant to written customer authorization, administrative subpoenas and summons, search warrants, judicial subpoenas or formal written requests. No director, officer or employee shall make any such disclosure of customer records without strict adherence to the requirements of this federal law.

Colonial will adhere to the requirements of the Fair Credit Reporting Act. This federal statute pertains to the reporting or use of information on a consumer for credit, insurance, personal, family or household purposes or in connection with employment. No director, officer or employee of Colonial shall request or use a consumer report unless the request or use is in accordance with the provisions of the Act. Directors, officers and employees will comply with federal and state laws regarding the dissemination of credit information.

Colonial will also adhere to the privacy requirements of the Gramm-Leach-Bliley Act. This federal statute pertains to the collection and use of non-public personal information regarding customers and consumers. Regulation P and Regulation S-P have been promulgated pursuant to the Gramm-Leach-Bliley Act by the Board of Governors of the Federal Reserve System and the Securities and Exchange Commission, respectively. Colonial has developed a Privacy Policy in accordance with the Gramm-Leach-Bliley Act and the regulations promulgated thereunder. No director, officer or employee of Colonial shall gather, make use of, or transmit a customer's or consumer's or employee¹s non-public personal information except in accordance with the Colonial Privacy Policy and Information Security Policy. Directors, officers and employees will comply with federal and state laws and regulations regarding the collection, use and dissemination of consumer and customer non-public personal information.

External Information Flow

The Chief Executive Officer, Chief Financial Officer, Chief Operations Officer, Chief Credit Officer, Executive Vice President Risk Management and the Investor Relations Director are the only employees designated to speak on behalf of Colonial regarding company business. No other director, officer or employee is permitted to communicate on behalf of Colonial to any outside party, (such as the press, shareholders or analysts), unless previously approved by executive management. Regional bank CEOs are permitted without prior approval to speak on behalf of their respective region to local press only. The Investor Relations Department should be notified of all communications outside Colonial regarding company business.

Internal Information Flow

While it is necessary that there be a flow of information throughout the organization, confidential information should be communicated only when such communication does not violate law or stated policy and only when there exists a legitimate business need to do so.

Sensitive financial information (such as monthly and quarterly earnings, charge-offs, provisions for loan losses, etc.), the occurrence of significant events, and certain other material data relating to Colonial may be made available within the organization prior to a public announcement only to those officers of Colonial requiring the information in order to discharge their responsibilities. Such information when provided as described will be considered confidential and kept in strict confidence until made public by an appropriate press release.

All Colonial materials (including, but not limited to, customer information) entrusted to employees during the course of their employment will be returned to Colonial on the last day of employment, whether the employee resigns or is terminated. Employees and Directors leaving the company agree and understand that they will not at any time or in any manner, either directly or indirectly, use, divulge, disclose, or communicate to any person, firm, or corporation, in any manner whatsoever any confidential information concerning any matters affecting or relating to the following: the business of Colonial, its customers, the prices it attains or has attained from the sale of its products or services, its manner of operation, its plans or other "proprietary information". It is not permissible for an employee or director who is leaving the company to transfer any company or customer information to computer disk or any other form upon leaving or take any customer account-related information. The above list is not meant to be all inclusive and does not limit the generality of the forgoing.

PROPER AND ACCURATE BOOKS AND RECORDS

It is essential that all transactions in the conduct of Colonial's business be properly and accurately reflected in its books and records. Knowingly entering false information into the bank books and records is governed by federal statutes and is considered a felony. Senior management should be informed of all matters considered pertinent to the position of the institution. Complete candor is expected in all dealings with security personnel, internal and external auditors, and regulators.

Employees are not permitted to process transactions or information pertaining to their own or their immediate family members' personal accounts or loans with the bank. Violation of this policy will result in disciplinary action up to and including termination.

Employees are not permitted to refund fees charged to officers, directors and employees for accounts with nonsufficient funds unless the overdrawn account is the result of a bank error.

IMPROPER PAYMENTS

The use of corporate funds for any purpose, which contradicts any laws and regulations, is strictly prohibited. No director, officer or employee may make any payment with Colonial funds, directly or indirectly, to any official of a government or government agency, political party, candidate for political office or other entity or representative thereof.

No unrecorded fund may be established or maintained for the purpose of facilitating the illegal payments prohibited above. No director, officer or employee shall engage in any transaction with the understanding that part of an anticipated payment is to be used for any unlawful or improper purpose.

A director, officer or employee intentionally violating the policy on improper payments or who knowingly permits, or counsels another to do so, shall be subject to dismissal or other appropriate disciplinary action. Violations or matters, which may be in violation of this policy, should be reported immediately to the Audit Committee of Colonial.

CONFLICTS OF INTEREST

Generally, directors, officers and employees are expected to be free of outside affiliations, activities, interests and influences which are incompatible with their service with Colonial, and which might adversely affect the exercise of their judgment or of the performance of their duties in its best interest.

It is not practical to define and provide positive rules for all the situations and complex relationships that may cause actual or potential conflicts. The general principles discussed below should be used for guidance and reference. These rules and guidelines must be applied with common sense and sound judgment. Even when interests are technically in conflict, they may not be cause for concern if the amounts involved are petty, relationships are remote, contingencies are unlikely, and temptations for wrongdoing are slight.

As a practical test in determining conflicts of interest, personnel should consider that if the facts of a situation became reported and publicly known, would Colonial, the individual and any outside party be without embarrassment and would there be any question of credibility.

It should be kept in mind that the appearance of a conflict or impropriety could sometimes be as damaging as the actual act.

Gifts, Fees and Entertainment

No director, officer or employee should accept a gift or entertainment from any customer, supplier, firm, or individual seeking favors or business from Colonial. In every instance, such a gift or entertainment should be refused with as much poise as possible.

Directors, officers and employees of Colonial should govern their conduct so as not to give the resemblance of seeking or receiving anything of value in exchange for any direct or indirect benefit which would compromise the integrity of the individual or Colonial. It is stated in federal law, the Crime Control Act of 1984, as amended, that it is a crime for a director, officer, employee, agent or attorney to corruptly solicit, accept or agree to receive as a benefit to themselves anything of value from an individual or third party with the intention of being influenced or rewarded in connection with any transaction or business of Colonial. This law imposes criminal liability on the giver, as well as the receiver. If the gift or favor is worth more than $100, the violation is a felony, punishable by up to 30 years in prison and/or a fine of $1,000,000 or three times the value of the gift or favor, whichever is greater. If the gift or favor does not exceed $100, the crime is a misdemeanor, punishable by up to one year in prison and a fine as described above. Under no circumstance will an employee be allowed to accept a gift of cash regardless of the amount.

It should be noted that even the smallest of gifts are covered by the Crime Control Act of 1984. Furthermore, this strict federal law establishes the standard for conduct as it relates to the giving and receiving of gifts and the providing and accepting of entertainment. In the Fall of 1987 guidelines for compliance with the Federal Bank Bribery Law were established, which modified the rules covered by the Crime Control Act of 1984 by providing limited exceptions to the general rule that a bank official cannot accept anything of value from any person conducting or seeking to do business with a financial institution. Directors, officers and employees should familiarize themselves with the guidelines of these laws.

Directors, officers and employees should also comply with the guidelines of the Crime Control Act of 1984 in any transaction conducted as normal accepted business practice. Conduct that falls within reasonable standards of behavior and which is calculated to do nothing more than facilitate discussion of business or foster good business relations within a community presents no corrupting threat to Colonial and is not in violation of this Code.

Care also should be exercised under any circumstance where a director, officer or employee accepts or gives a gift or favor within the context of a family or personal relationship. There should be no indication that such a gift relates in any way to the business of Colonial. When someone is conducting business with Colonial and provides as a token of advertisement nominal promotional items such as pens, note pads, key chains, or similar items, and these items are truly minimal in value and there is no indication of undue influence by those individuals involved in the promotion, then a director, officer or employee will be allowed to accept such gifts.

The acceptance of civic and related organizational awards for recognition of service and accomplishment, when of nominal value, is not a violation of this statute. This would include plaques, certificates, honorary memberships in organizations and recognition-related meal functions. The participation in non-lavish meal functions, when clearly a business expense defined under the Internal Revenue Service regulations and where there is no indication of undue influence affecting the participants, is also within the guidelines of the law. If there is a question of whether a director, officer or employee should participate in any such activities, advance approval should be secured to ensure that there is no appearance of impropriety.

Loans to officers of correspondent financial institutions or other business organizations shall not be made at favorable rates or terms based on any agreement or understanding concerning deposit balances of the correspondent financial institution or other businesses.

Directors, officers, retired officers and employees (or members of their immediate families) will not accept, directly or indirectly, any bequest or legacy from a Colonial customer, except where such an individual is the natural object of the customer's bounty, irrespective of any banking relationship. If a director, officer, retired officer or employee learns that such a legacy exists in a customer's will, he should report all pertinent facts to the Board of Directors.

Appointment as a Fiduciary or Co-Fiduciary

An officer or employee must obtain approval from the Chief Executive Officer, unless specific approval from the Board of Directors is received, before accepting an appointment as a fiduciary or co-fiduciary (executor, administrator, guardian or trustee) with a bank, another individual or firm. The only exception to this policy would be if the appointment involves members of an employee's family.

Extensions of Credit to Executive Officers, Directors and Principal Stockholders Loans to executive officers, directors and principal stockholders of Federal Reserve Member banks, FDIC Insured State Nonmember banks, and savings banks regulated by the Office of Thrift Supervision are subject to certain restrictions and requirements imposed by the Federal Reserve Act, the Federal Deposit Insurance Act, Federal Reserve Board Regulations, and FDIC regulations.

An executive officer, director or principal stockholder is subject to these rules when affiliated with Colonial Bank, The Colonial BancGroup, Inc. (of which the Bank is a subsidiary) or any other subsidiary of The Colonial BancGroup, Inc. Furthermore, these restrictions also apply to any extension of credit by the bank to a company controlled by any of the persons mentioned above, or to a political campaign or campaign committee that benefits or is controlled by such a person.

An extension of credit is broadly defined. It includes any loan, line of credit or extension of credit in any particular form or manner. Some activities specifically enumerated as extensions of credit include advances by means of overdraft (nonsufficient funds), unless it is an "inadvertent overdraft"; an advance of unearned salary or other unearned compensation for a period in excess of thirty (30) days; and a purchase under a repurchase agreement of securities, other assets or obligations.

With respect to "inadvertent overdrafts," these activities are not considered an extension of credit. An "inadvertent overdraft" is defined as an aggregate amount of $1,000 or less, provided that the account is not overdrawn for more than five (5) business days and the bank charges the officer or director the same fee as other customers of the bank in similar circumstances.

Some activities which have specifically been excluded from the definition of "extension of credit" are:

1. Advances against accrued salary or compensation.

2. Advances for the payment of authorized travel.

3. Other expenses incurred on behalf of the bank.

4. Debt acquired through merger or consolidation of banks.

No bank may extend credit to any of its officers, directors or other principal stockholders or to any related interests of that person, unless the extension of credit is made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with creditworthy customers who are not covered by this rule and the extension does not involve more than the "normal risk of repayment or other present unfavorable features."

Except for "inadvertent overdrafts", a bank may not pay an overdraft of an executive officer or director unless 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 is made pursuant to a written, preauthorized transfer of funds from another account of the account holder at the bank.

Colonial cannot extend credit to an executive officer, director or principal stockholder or to their related interests in an amount that, "when aggregated with the amount of all other extensions of credit and lines of credit by the bank to that person and to all related interests of that person, exceed $500,000 unless the extension of credit or the line of credit has been approved in advance by the majority of the entire Board of Directors and the interested party has abstained from participating, directly or indirectly, in the voting."

Approval by the Board of Directors is not required if the extension of credit is made pursuant to a line of credit that was approved within the past fourteen (14) months. Executive officers', directors' or principal stockholders' participation in the discussion of an extension of credit, or any other attempt to influence the approval process regarding an extension of credit, constitutes indirect participation.

The following additional restrictions apply only to credit extended to executive officers of the bank:

A. Credit extended to (1) the bank's executive officers and (2) partnerships of which an executive officer, either individually or with other executive officers of the bank, holds a majority interest, are subject to special lending limits. The bank may not extend credit that would exceed, when added to all other outstanding credit extended to the executive officer and partnerships which he or she controls, the higher of 2.5 percent of the bank's capital and unimpaired surplus or $25,000 or, in any event, $100,000. If credit is extended to a partnership controlled by one or more executive officer(s) of the bank, the entire amount of the credit is considered to have been extended to the executive officer(s) in question.

B. Notwithstanding the limits described in paragraph A, the bank may extend credit to any executive officer in any amount up to the generally applicable "loans-to-one-borrower" limit, only if the following reasons apply:

1. To finance the education of the executive officer's children.

2. To finance the purchase, construction, maintenance or improvement of an executive officer's residence, if the extension of credit is secured by a first lien on the residence and the residence is owned (or expected to be owned after the extension of credit) by the executive officer.

3. If secured by a perfected security interest in U.S. Treasury obligation, obligation fully guaranteed as to the principal and interest by the U.S. Treasury or a segregated deposit account in the lending bank.

Outside Activities

Officers and other employees shall not engage in business activities or other employment which interferes with their job duties to Colonial, divides their loyalty, allows a possibility of conflict of interest or could cause injury or financial loss to Colonial. Specific types of outside activities that raise conflict of interest or other possible difficulties include:

A. Employment by another company other than Colonial or personally engaging in any activity that is competitive with Colonial.

B. Preparation, audit or certification of statements or documents upon which Colonial might rely for lending or other purposes.

C. Rendering investment counsel or other advice based upon information, reports or analysis that are accessible primarily from or through Colonial employment.

D. Drawing wills or engaging in any other activity which could be construed to be practicing law.

E. Entailing use of the individual's identity as a Colonial employee to another business's benefit, or to imply Colonial's sponsorship or support of the outside business.

F. Using Colonial's corporate name or letterhead, equipment, supplies or facilities for personal reasons.

G. Intruding on working time and attention so as to interfere unduly with the performance of normal duties.

H. Making such demands on personal energies as to impair physical and mental effectiveness or adversely affect the quality of work performance.

I. Are of such a nature that the individual or Colonial would suffer adverse publicity, criticism or embarrassment should the individual's relationship with Colonial become known.

J. Involvement in any outside activity whether personal or of a business nature that could create potential conflicts of interest. For example, a lending officer who also is personally involved in real estate development and underwrites and approves real estate loans. Exceptions require approval by the Regional Presidents and CEOs.

Certain types of outside affiliations are specifically prohibited or limited by law. These laws have varying provisions, limitations and exceptions, which may require guidance in the situations affected.

Under most circumstances, law prohibits directors and officers of Colonial from serving as directors, officers or employees of:

A. Other banks, trust companies or mutual savings banks having capital stock (15 USC 19; Fed. Res. Reg. L).

B. Dealers in securities (12 USC 78).

C. Public utility holding companies or their affiliates (15 USC 79 q(c)).

D. Interstate power companies (15 USC 82 d(b)).

Law prohibits directors and officers of Colonial from having certain connections with registered investment companies (15 USC 80a-10c), or indenture trustees (15 USC 77jjj(b)).

Colonial employees are not permitted to practice law, real estate, insurance, taxes or investment counseling outside of their Colonial duties. Exceptions require approval by the Regional Presidents and CEOs.

Officers and employees of Colonial shall make full disclosure to the Regional Presidents and CEOs and obtain prior approval of all outside employment, involvement in business ventures, directorships, or fiduciary appointments. Failure to comply with this policy may result in termination of employment.

Civic and Political Activities

Officers and other employees are encouraged and urged to participate in civic organizations and political activities provided such participation does not unduly interfere with their duties or bring detriment to Colonial. As a matter of policy, officers and employees should discuss proposed civic activities with management prior to acceptance. However, care should be taken to avoid any implication that Colonial as an institution is sponsoring or supporting any political candidate, political party, civic organization, religious organization or similar outside organization. Contribution of Colonial funds or property for political purposes is absolutely prohibited and is illegal for federal elections.

An individual contemplating engagement in a political activity, such as running for federal, state or local elective office or serving as campaign treasurer or treasurer of a political committee, should discuss such plans in advance with senior management of Colonial.

Buying and Selling Colonial Stock

Directors, officers and employees of Colonial or one of its affiliates may receive important information about Colonial, which is not yet publicly available ("Material Inside Information"). Because of access to this information, directors, officers and employees may be in a position to either (1) profit financially by buying, selling or otherwise dealing in Colonial stock; or (2) to benefit financially or otherwise by passing on this information to some other person. It is illegal to use such information in order to gain personal benefit or to pass on such information to someone else who does. This could result in civil liability and criminal penalties.

"Material Inside Information" is any information which is not yet publicly available that a reasonable investor would consider important in a decision to buy, hold or sell Colonial stock. The key to determining whether non-public information about Colonial is material is whether disclosure of the information would be likely to affect the market price of Colonial's stock or would be likely to be considered important by investors who are considering trading in Colonial's stock. Generally, if the information makes directors, officers or employees want to buy, sell or hold their stock, it would probably have the same effect on others.

Although by no means all-inclusive, the following is a list of the types of information, which may be considered Material Inside Information until publicly disclosed:

A. financial performance or forecasts

B. new products or services

C. technological developments or discoveries

D. possible acquisitions, dispositions or joint ventures

E. possible tender offers

F. proposed stock splits, dividends or other re-capitalizations

G. possible public or private sales or purchases of debt or equity securities or significant borrowings

H. gain or loss of a substantial customer or supplier

I. top management or control changes

J. significant write-offs; and

K. significant litigation or labor disputes.

Information is not public until it has been effectively communicated to the marketplace. For example, information found in a press release, a report filed with the SEC, appearing in The Wall Street Journal or other publications of general circulation would be considered public. However, even if information has been communicated to the public, it takes time for it to be disseminated. Therefore, it would be improper for a Colonial employee to enter into a trade immediately after Colonial has made a public announcement of material information. Colonial's shareholders and the investing public should be afforded the time to receive the information and act upon it.

This general rule also applies to information relating to any other company, including customers or suppliers of Colonial, obtained through service as a director, officer or employee of Colonial. The same restrictions that apply to you also apply to family members and others living in the household of a director, officer or employee. Company employees and directors are expected to be responsible for the compliance of their immediate family and personal household.

Directors and executive officers of Colonial are required to report, usually within two (2) business days, any changes in Colonial stock ownership to the Securities Exchange Commission under Section 16 of the Securities Exchange Act of 1934. Each director and executive officer is responsible for the timely and accurate reporting of his/her transactions under the Act, both to the SEC and to the Secretary of Colonial. Other requirements apply to executive officers and directors, as well. Such individuals should check with the Secretary of Colonial or his designee to learn more about those additional requirements.

Questions regarding trading in Colonial stock should be directed to the Secretary of Colonial or his designee.


PERSONAL FINANCES

Directors, officers and employees are expected to manage their personal financial affairs in a manner consistent with Colonial's policies and procedures.

Colonial does not wish to intrude into personal financial affairs. However, it has a legitimate concern in affairs that may affect Colonial's own business interests and community standing. Imprudent management of one's personal affairs can lead to impairment of that individual's independent judgment in acting on behalf of Colonial and to the undermining of public confidence in Colonial. For example, use of a personal or business checking account in an attempt to draw against uncollected funds for personal or business gain (check kiting) is covered by federal statutes and is considered a felony. A simple definition of check kiting follows: A depositor issues a check, overdrawing an account at one bank or drawing against uncollected funds at that bank, and deposits into that account another check, similarly drawn against insufficient or uncollected funds.

Employees who are past due on a loan made by Colonial for personal or business purposes will be subject to disciplinary action. An employee with a loan that is thirty days past due will be given a written warning. If the loan becomes sixty days past due, the employee will be placed in a probationary status. If the loan becomes ninety days past due, the employee will be subject to additional disciplinary action up to and including termination of employment.

The policies and provisions affecting directors, officers and employees also apply, generally, to their spouses and others who are members of their households.

Directors, officers and employees shall disclose to the Board of Directors substantial ownership or beneficial interests in businesses, customers, suppliers or competitors of Colonial. Investments in a customer, supplier, business or competitor can create conflicts or the appearance of conflicts irrespective of the percentage of ownership. All individuals should, for example, avoid an investment if it is of such magnitude in relation to his or her personal net worth that it might reasonably bring into question whether it could influence the employee's decisions regarding the company involved. If a conflict of interest with Colonial exists, appropriate action will be taken. It is recognized that directors, officers and employees will have outside investments and this policy is not intended to discourage or restrict those investments. It is intended, however, to ensure that any potential conflict of interest, whether real or apparent, is made known to all of the affected parties. Permissible employee borrowings consist of:

A. loans from other banks or lending institutions on terms offered to other borrowers under similar circumstances;

B. normal charge accounts, credit card accounts, installment purchase contracts and personal bills;

C. loans which, in their practical effect, are totally unrelated to the employee's connection with Colonial, provided the employee has no role in negotiation, approving transactions or otherwise influencing an account relationship between the creditor and Colonial.

Directors, officers and employees will not borrow from customers, prospective customers, suppliers, other employees or other persons or companies with which Colonial does business, except for relatives and those engaged in lending in the usual course of business and then only on terms offered to others under similar circumstances.

Officers and other employees shall not accept offers, which may come to them because of their position, to buy a security at terms more favorable than those available to the public.

Employees are expected to be prudent in their personal investments, and to avoid forms or methods of investment incompatible with their service with Colonial or their means. Colonial personnel should avoid unwarranted speculative forms of investment involving substantial sums and high risks, in the hope of large gains. No member of the New York Stock Exchange is permitted to accept margin accounts from bank employees without the prior written approval of Colonial.

Employees may not make investments, buy property or engage in any other transactions for personal profit or advantage, if by so doing, the employee diverts business opportunities away from Colonial.

BANK SECRECY ACT/ANTI-MONEY LAUNDERING LEGISLATION

Colonial shall at all times adhere to the requirements of the Bank Secrecy Act and other anti-money laundering legislation, including the USA Patriot Act of 2001. No director, officer or employee of Colonial shall become a party to any schemes involving the structuring of currency transactions which are designed to evade the reporting and record keeping requirements of the Bank Secrecy Act. Clear violations of the law will promptly be reported to the appropriate authorities.

EMPLOYMENT OF RELATIVES/NON-FRATERNIZATION POLICY

Colonial permits the employment of qualified relatives of employees provided that they are not employed within the same department/branch of a close relative and does not cause a potential conflict of interest or disruption of the workplace.

"Close relative" is defined as spouse, parent, child, sibling, aunt, uncle, niece, nephew, step-parent, step-child, step-brother, step-sister, in-laws, grandparent, grandchild or any other significant relationship determined by Colonial that could result in a conflict of interest. Additionally, a Colonial employee may not engage in a dating relationship with another Colonial employee in the same department/branch. If two employees working in the same department/branch reside within the same household or are engaged in a dating relationship, only one may retain his/her position with Colonial in that department/branch. The other employee will be given 60 days to obtain employment at another Colonial location or outside of Colonial. If both individuals are unable to make a decision on which employee will begin searching for other opportunities, Colonial will step-in and utilize the following criteria in making the determination:1) the uniqueness of the positions—which would be the more difficult position to replace within the community, 2) performance, or 3) seniority. Any exceptions will be made by the Chief Executive Officer.

Guidelines:


WAIVERS OF THE CODE OF ETHICS

Any waiver of this Code of Ethics for executive officers or directors may be made only by the Board or a Board committee and will be promptly disclosed as required by law or stock exchange regulation.

ADMINISTRATION

For the purpose of implementing this Code, each director, officer and employee will read the Code and agree to abide by its provisions at all times. A written certification to that effect will be made annually.

Directors, officers and other employees shall report promptly the existence of any relationship or interest which might involve a conflict of interest or be a violation of this Code.

There will be no reprisal or retaliation for any good faith report of a violation of this Code. If any employee believes he or she has been the subject of reprisal or retaliation because of such a report, he or she should immediately notify their Regional Human Resources Director or the Corporate Human Resources Director for Colonial.

Occasionally, employees will be confronted with situations not clearly covered by this Code. When these matters arise, officers and employees must submit them to the Human Resources Director for review. In certain cases arising under the Code, circumstances may exist which dictate that the Chief Executive Officer may grant an exception to the general policy.

As required by law, Colonial reports all identified wrongdoing by customers, employees, officers or directors to the proper law enforcement and/or regulatory agencies. Appropriate criminal and/or civil legal action is initiated when warranted.

The Board of Directors shall have ultimate responsibility for establishing and maintaining policies in accordance with this Code, and this Code shall be reviewed annually to ensure it meets changing conditions. Any revisions to this Code shall be made only upon majority vote of a quorum of the Board of Directors at a regularly scheduled or properly called special meeting.