Introduction

All officers and employees are expected to conduct their personal affairs so there can be no opportunity for unfavorable reflection on the Company, either expressed or implied. The use of common sense, good ethical standards, and discretion will guide you in proper conduct.

This Code of Business Conduct and Ethics covers a wide range of business practices and procedures. It does not cover every issue that may arise, but it sets out basic principles for guidance. Directors, officers and employees must conduct themselves accordingly and seek to avoid even the appearance of improper behavior.

Confidential Information

Employees must maintain the confidentiality of confidential information entrusted to them by the Company or its customers, except when disclosure is authorized by the Corporate Secretary or CEO or required by laws or regulations. Confidential information includes all non-public information that might be of use to competitors, or harmful to the Company or its customers. It also includes information that suppliers and customers have entrusted to us. The obligation to preserve confidential information continues even after employment ends.

All of our records are confidential and may not be copied or disclosed without authorization from management. Discussion of customer affairs, accounts, files, or printed material is inappropriate, except with other employees on a need-to-know basis. Confidential information includes all personnel and payroll records, information about our customers, and operational policies and procedures.

On a periodic basis, the bank is examined. The reports that examiners furnish are the property of the regulatory agency and are strictly confidential. Information contained in the reports is privileged information and should not be communicated to anyone not officially connected with the bank.

Financial information regarding the Company is not to be released to any person unless it has been published in reports to shareholders or otherwise made available to the public in compliance with applicable disclosure regulations currently in effect. Any questions regarding disclosures of confidential financial information should be reviewed with the CEO, General Counsel or Chief Financial Officer prior to disclosure.

Conflict of Interest

A "conflict of interest" exists when a person's private interests are different in any way from the interests of the Company. A conflict situation can arise when an employee, officer or director takes actions or have interests that may make it difficult to perform his or her Company responsibilities objectively and effectively. Conflicts of interest may also arise when an employee, officer or director, or member of his or her family, receives improper personal benefits as a result of his or her position in the company. Loans to, or guarantees of obligations of, employees, officers or directors and their family members may create conflicts of interest.

A conflict of interest may also occur when an officer or director has a spouse or child who works for the Company, a vendor, customer or service provider of the Company. Any person who has a conflict of interest due to family employment must recuse himself from any discussions and decisions regarding performance, scope of engagement or compensation of the department, vendor, customer or service provider.

It is a conflict of interest for a Company employee to work simultaneously for a competitor, customer or supplier even as a consultant or Board Director. The best policy is to avoid any personal direct or indirect business connection with our customers, suppliers or competitors.

Conflicts of interest are prohibited as a matter of Company policy, except when disclosed to and pre-approved by the Board of Directors or the CEO. Conflicts of interest are not always clear-cut. If you have a question, you should consult with higher levels of management or the Company's Corporate Affairs Department. Any employee, officer or director who becomes aware of a conflict or potential conflict should bring it to the attention of appropriate personnel.

Extension of Credit to Relatives and Business Associates

The Holding Company and any subsidiary other than the Bank cannot make loans to directors and executive officers.

No employee, officer or director of Hudson United Bank shall make or approve loans to any bank, partnership, estate, trust, association, business or other entity or person in which they have an interest directly or indirectly (whether as a director, officer, shareholder, manager, lender, joint venture, or other controlling investor), or in which a member of their immediate family has such an interest or business association. Any such request for credit extension is to be referred to a higher ranking bank officer or Board Committee with no connection or affiliation to the potential borrower. All transactions are to be arm's-length transactions. FRB Regulation O will be adhered to.

Gifts and Fees

The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers. No gift or entertainment should ever be offered, given, provided or accepted by any Company employee, family member of an employee or agent unless it: (1) is not a cash gift, (2) is consistent with customary business practices, (3) is not excessive in value, (4) cannot be construed as a bribe or payoff and (5) does not violate any laws or regulations. Please discuss with your supervisor any gifts or proposed gifts which you are not certain are appropriate.

Employees and their families (as well as their agents or attorneys) are not to solicit or accept an improper personal benefit from any customer, vendor, individual, or organization seeking to do business with the Company.

Corporate Opportunities

Employees, officers and directors are prohibited from taking for themselves personally, opportunities that are discovered through the use of corporate property, information or position without the consent of the Board of Directors. No employee, officer or director may use corporate property, information, or position for improper personal gain, and no such person may compete with the Company directly or indirectly. Employees, officers and directors owe a duty to the Company 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 employee, officer or director should endeavor to respect the rights of and deal fairly with the Company's customers, suppliers, competitors and employees. No such person 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 Company Assets

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

The obligation of employees to protect the Company'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, product ideas, designs, databases, records, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate Company policy. It could also be illegal and result in civil or even criminal penalties.

Compliance with Laws, Rules and Regulations

Obeying the law, both in letter and in spirit, is the foundation on which this Company's ethical standards are built. All employees must respect and obey the laws of the cities, states and country in which we operate. 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.

The Company provides information and training sessions to promote compliance with laws, rules and regulations, including insider-trading laws.

Regulatory Compliance Accountability

It is the responsibility of business units to ensure they have in place the requisite policies and procedures to comply with regulatory requirements. All employees must be aware of the regulatory requirements that pertain to their respective areas of responsibilities, in order to perform their duties in such a way that business activities are conducted in compliance with applicable laws and regulations.

The Company expects that all employees will strictly follow applicable laws and regulations when conducting business activities. Non-Compliance with applicable laws and regulations can seriously undermine the reputation of, and public confidence in the Company. Willful violations of laws and regulation could result in disciplinary actions against the Company, including penalties assessed by regulators, prohibition of designated business activities and other sanctions. Employees found to be involved in willful violations could also be subjected to disciplinary action, including dismissal from employment.

Insider Trading

Employees, officers or directors who have access to confidential information are not permitted to use or share that information for stock trading purposes or for any other purpose except the conduct of our business. All material non-public information about the company should be considered confidential information. To use material non-public information for personal financial benefit or to "tip" others who might make an investment decision on the basis of this information is not only unethical but also illegal. If you have any questions, please consult the Company's Corporate Affairs Department.

Reporting any Illegal or Unethical Behavior

Employees are encouraged to talk to supervisors, managers and other appropriate personnel about perceived illegal or unethical behavior or when in doubt about the best course of action in a particular situation. It is the policy of the Company not to allow retaliation for reports of misconduct made in good faith. Employees are expected to cooperate in internal investigations of misconduct.

Compliance Procedures

We must all work to ensure prompt and consistent action against violations of this code. However, in some situations it is difficult to know right from wrong. Since we cannot anticipate every situation that will arise, it is important that we have a way to approach a new question or problem. These are the steps to keep in mind:

  • Make sure you have all the facts. In order to reach the right solutions, we must be as fully informed as possible.
  • Ask yourself: What specifically am I being asked to do? Does it seem ethical and proper? This will enable you to focus on the specific question you are faced with, and the alternatives you have. Use your judgment and common sense; if something seems unethical or improper, it probably is.
  • Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss the problem.
  • Discuss the problem with your supervisor. This is the basic guidance for all situations. In many cases, your supervisor will be more knowledgeable about the question, and will appreciate being brought into the decision-making process. Remember that it is your supervisor's responsibility to help solve problems.
  • Seek help from Company resources. In the rare case where it may not be appropriate to discuss an issue with your supervisor, or where you do not feel comfortable approaching your supervisor with your question, discuss it locally with your office manager or your Human Resources manager. If that also is not appropriate, call 201-236-2650, the Company's Ethics Line, which will put you in direct contact with the appropriate people at Company headquarters. If you prefer to write, address your concerns to: Office of the Chairman, 1000 MacArthur Boulevard, Mahwah, NJ 07430.
  • You may report ethical violations in confidence and without fear of retaliation. If your situation requires that your identity be kept secret, your anonymity will be protected. The company does not permit retaliation of any kind against employees for good faith reports of ethical violations.
  • Always ask first, act later: If you are unsure of what to do in any situation, seek guidance before you act.

Waivers of the Code of Business Conduct and Ethics

Any waiver of this Code 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.