First Reliance Bancshares, Inc., has adopted and shall adhere to this policy of Business Ethics and Conduct, as well as its subsidiaries.
The successful business operation and reputation of First Reliance Bank is built upon the principles of fair dealing and ethical conduct of our employees. Our reputation for integrity and excellence requires careful observance of the spirit and letter of all applicable laws and regulations, as well as a scrupulous regard for the highest standards of conduct and personal integrity.
As a member of First Reliance Bank’s staff, you play an important role in maintaining high standards of excellence. Your conduct on and off the job influences the public’s impression of the Bank.
The continued success of the Bank is dependent upon our customers’ trust and we are dedicated to preserving that trust. Employees owe a duty to the Bank, its customers, shareholders, and associates to act in a way that will merit the continued trust and confidence of the public.
The Bank will comply with all applicable laws and regulations and expects its directors, officers, and employees to conduct business in accordance with the letter, spirit, and intent of all relevant laws and to refrain from any illegal, dishonest, or unethical conduct.
In general, the use of good judgment, based on high ethical principles, will guide you with respect to lines of acceptable conduct. If a situation arises where it is difficult to determine the proper course of action, the matter should be discussed openly with your immediate supervisor and, if necessary, with the President for advice and consultation.
Compliance with this policy of business ethics and conduct is the responsibility of every First Reliance Bank employee. Disregarding or failing to comply with this standard of business ethics and conduct could lead to disciplinary action, up to and including possible termination of employment.
Dishonesty and Regulatory Agencies
The Federal Deposit Insurance Corporation specifies that any person convicted of a criminal offense involving dishonesty or breach of trust is ineligible for employment or continued employment with First Reliance Bank as an insured Bank.
Regulatory rulings require that all staff members have fidelity bond coverage. If any employee commits a dishonest or fraudulent act, fidelity bond coverage ends as soon as the Bank learns of the act, whether or not there has been, or will be, prosecution and conviction. Without fidelity bond coverage, a person may not continue his or her employment at the Bank. An investigation will be made into any suspected dishonest or fraudulent act, and the facts will then be presented to the employee. Any employee indicted on such a charge may be suspended without pay, pending the outcome of his or her indictment and may be subject to disciplinary action, up to and including termination.
Your Financial Affairs
It is our business to help manage the financial affairs of others. To do this successfully, First Reliance Bank must at all times merit and hold the absolute trust of its customers. We cannot merit this trust unless our own financial house is in order and above reproach. It is mandatory that each staff member exercise good judgment and proper care with all personal financial relationships.
Conflicts of Interest
The sections that follow represent examples of conflicts of interest most likely to arise in bank employment. They do not purport to embrace all situations in which conflicts arise. It is incumbent upon each employee to exercise judgment to determine whether or not a conflict exists, and whether it would justify remedial action. In a doubtful situation, this matter should be first fully disclosed and discussed with a senior officer of the Bank.
- Employees must disclose to Senior Management substantial ownership of beneficial interest in customers, suppliers, or competitors of the Bank. If a conflict of interest with the Bank exists, or appears to exist, appropriate action will be taken.
- Employees must not accept offers, which come to them because of their position, to buy a security at terms more favorable than those available to the general public.
- Employees must not use any information that may be available to them through their position in the Bank, or their association with customers, to influence personal investments.
- No officer, director, or employee shall engage in transactions, when there is a conflict with their duty to protect the Bank’s interest that may lead to any personal gain or benefit.
- Staff members must avoid any conflict of interest involving loans, investments, gifts, or other activity, which may interfere with the independent and objective exercise of judgment for the Bank.
- The following policies will help you to avoid potential conflict of interest situations:
- When representing the Bank in business situations with any person or firm with whom you have any family connection, significant financial interest, or other close personal involvement, you should refer the customer to an impartial associate.
- Federal Law prohibits the use of inside information for financial gain. If you have access to sensitive information prior to its disclosure to the public, you are responsible for protecting the confidentiality of that information. Violation of this policy may lead to termination of employment and/or legal remedies.
- Entertainment of or by the Bank’s customers, prospects, or suppliers is often required. Such business-related entertainment is normal and desirable in reasonable proportions.
- When the Bank provides entertainment, it must have a clear business purpose, not be excessive, and be in compliance with Internal Revenue Service regulations and expense account policies. Employees of the Bank must not provide any entertainment that would be embarrassing or compromising. Moreover, employees should not accept any entertainment which is excessive, or which First Reliance Bank could not reasonably reciprocate.
- As a general rule, substantial gifts (over $50.00 in value) should not be given or accepted.Any gifts with a value of more than $50.00 should be reported to your immediate supervisor. Documentation reflecting the gifts and their disposition will be maintained.
- The Bank Bribery Act (18 USC 215) prohibits employees, officers, directors, agents or attorneys of the Bank from:
- (1) Soliciting for themselves or for a third party (other than the Bank itself) anything of value from anyone in return for any business, service, or confidential information of the Bank, or
- (2) Accepting anything of value (other than normal authorized compensation) from anyone in connection with the business of the Bank either before or after a transaction is discussed or consummated. A violation of this act is either a felony or misdemeanor, which may result in immediate termination of employment. Employees of the Bank should never accept a gift or bequest of any amount in cash, or in any form that could prove embarrassing or compromise your objectivity. You should not accept anything of value given as quid pro quo (something for something) either to induce a particular transaction or as a gratuity in support of a particular transaction.
- If you are offered or receive something of value from a customer beyond what is expressly authorized herein, you should disclose this in writing to your supervisor for review and direction.
The above policies relating to gifts and entertainment are not intended to interfere with the normal exchange of common courtesies, reasonable favors, and expressions of good will between staff members and customers or friends. The purpose of the policies is to ensure that employees maintain objectivity and avoid conflicts of interest in the Bank’s business relationships.
The payment or receipt of money, gifts, services, or anything of value, which could be construed as a bribe, kickback, or illegal payment from or to any individual or firm with whom First Reliance Bank does business or hopes to do business, is prohibited.
Federal and state laws, and the Bank’s policy explicitly forbid the making, directly or indirectly, of any political contributions from corporate funds, assets, or services regardless of the amount or value involved.
The Bank encourages your voluntary participation in activities of the political party of your choice, elections, and other matters of civic importance. The Bank will be nonpartisan in political matters.
The following guidelines govern employee involvement in political activities:
- Your political activity in support of any candidate or party is solely a matter of personal choice.
- You must not give the impression that you speak or act for the Bank in any political activity. Your activity must clearly be your own as an individual.
- Your political interests and activities must not interfere with your own work or the work of other staff members.
As a financial organization, we handle matters of utmost confidence and importance to our customers, both personal and private. Information concerning the affairs of the Bank and its customers is always to be treated as strictly confidential.
Disclosing confidential Bank information to any person not entitled to receive such information, or assisting any person to gain unauthorized access to company records, are both direct violations of policy. The communication of false or derogatory information about its customers, or its staff members is also a violation of Bank policy.
Disclosing or discussing confidential credit or financial information of a customer or a Bank employee with associates or anyone who does not have a need to know may be cause for disciplinary action including termination.
Confidential information about its plans, services, and other aspects of its business are among the most valuable assets of the Bank, and must not be misused by employees, or outsiders. If you have worked for a competitor, you are expected to avoid misusing any proprietary information from your former employer.
Use of Bank Letterhead Stationery
It is inappropriate for any officer or staff member to use official Bank stationery for personal or other nonjob-related purposes. To do so may imply Bank endorsement and may be cause for disciplinary action including termination.
Outside Business Directorship
All appointments to positions of directorships in business organizations must receive prior approval of Senior Management and /or the Board of Directors. Regulations restrict employees and directors of banks from serving as a director, officer, or employee of certain institutions such as other banks, dealers in securities, and savings and loan associations. Compliance with government trade laws, in spirit and in detail, is policy.
The Bank does not directly or indirectly engage in price fixing, agreements to limit production or services, unjustified or undocumented preferential prices, or trade reciprocity. If you are exposed to discussion about such matters by competitors, or by third parties, it is your responsibility to remove yourself from the area of the discussion and report the incident to Senior Management.
The Bank recognizes the value of having the Bank’s directors, officers, and employees serve as directors of other corporations. The acceptance of an outside directorship should be selective and based upon the careful exercise of judgment as to whether it is in the best interests of the Bank. If there are any questions about the propriety of serving as director of any corporation, the matter should be referred to the Board for its consideration.
Directors, officers, and employees should strive at all times to avoid not only actual conflicts of interest, but also the appearance thereof. In many cases, the appearance of conflict can be even more damaging than the actual conflict. All directors, officers, and employees should be aware of those situations in which an appearance of conflict might arise.
Use of Bank Funds and Property
The Bank holds each staff member responsible for maintaining accurate records, and for accuracy in expense account vouchers reflecting legitimate business expenses. Misapplication or improper use of Bank funds or property by employees or others must, in accordance with banking laws, be reported to authorities for investigation, possible prosecution, and potential imprisonment if convicted.
Personal use of Bank facilities must not add to the Bank’s costs or hinder the conduct of business. If the personal use of Bank property does result in adding cost, arrangements should be made to reimburse the Bank. A staff member involved in unauthorized use of or intentional damage to Bank property is subject to disciplinary action. Some examples of personal use of Bank property include, but are not limited to, personal use of telephones, supplies, facilities, copiers or time.
Purchase and Sale of Assets: Employees in a Fiduciary Capacity
Employees and their immediate families, whether acting individually or in a fiduciary capacity, are not permitted to sell assets or to purchase assets from the Bank or any estate being administered by the Bank without prior consent by Senior Management.
Except with the specific approval of the Board of Directors, no officer or employee, while actively working for the Bank, may retain compensation for acting as a co-fiduciary in the administration of any account undertaken by the Bank.
Staff members are not encouraged to accept regular or part-time employment outside without special permission of Senior Management. All employees will be judged by the same performance standards and will be subject to the Bank’s scheduling demands, regardless of any existing outside work requirements.
If the Bank determines that an employee’s outside work interferes with performance or the ability to meet the requirements of the Bank as they are modified from time to time, the employee may be asked to terminate the outside employment if he or she wishes to remain with the Bank.
Outside employment should not cause a conflict of interest for the Bank. Outside employment will present a conflict of interest if it has an adverse impact on the Bank.
If you are a notary when hired, or later become a notary, the Bank regards your salary as being in lieu of notary fees. No fees will be charged for notarizing documents.
Advice on Personal Matters
No employee of First Reliance Bank is authorized to advise a staff member regarding the election of available options under any retirement or other benefit plans. Information will be provided on each of the alternatives, but the choice of an option must be each employee’s personal decision.
All employees of the Bank are responsible for monitoring and enforcing ethical practices within their specific areas of supervisory responsibilities.
Ethical Conduct in Relation to First Reliance Bank
All employees represent one element of an organizational structure, which has been constructed to carry forward the Bank’s objectives and to carry out its processes. The well being of the Bank depends upon the maintaining of that structure and the purposes for which it is designed. Therefore, an officer who accepts an official appointment is ethically bound to behave in a manner that supports the organization’s structure as it exists. If he or she believes the structure should be changed, he or she should seek such change only through proper channels provided for the purpose.
The specific ethical concept supporting this general ethic is as follows:
An employee is ethically bound to follow established organizational channels, except in situations in which there is a violation of a regulatory or legal nature.
Ethical Conduct in Relations with Managers
All employees have an important responsibility to behave ethically in dealing with their managers. The ethical employee recognizes the need to behave in a manner that supports the efforts of all of his or her managers.
Specific ethical concepts supporting this general ethic are as follows:
- An employee is ethically bound to take responsibility for his or her own actions and does not assign responsibility upward.
- An employee is ethically bound in dealing with subordinates and others to support, in both action and words, the decisions of his or her supervisors.
- An employee is ethically bound to keep all information given to him or her by managers, which does not need to be disseminated, in confidence.
- An employee is ethically bound to furnish, to his or her managers, all information that he or she has that would be helpful in making decisions.
- An employee is ethically bound to refuse to be influenced by any personal relationship, i.e. friendship in dealing with managers.
An employee is ethically bound to refrain from discussing managers or their decisions with the manager’s contemporaries or subordinates and especially should not discuss such matters with persons outside of the Bank.
General Ethical Conduct
An employee is ethically bound to avoid repeating negative information unless it serves a constructive purpose.
An employee is ethically bound to avoid the discussion of vital, confidential information with individuals not requiring the information for performance of assigned duties.
An employee is ethically bound to use the authority vested in him or her by right of his or her position only in instances relating to that position.
An employee is ethically bound to behave at all times with integrity.
Confidential information regarding the Bank should be limited to those discussions required by an employee’s direct responsibility.
The protection of confidential business information and trade secrets is vital to the interests and the success of the Bank. Such confidential information includes, but is not limited to, the following examples:
- Compensation Data
- Computer Processes
- Computer Programs And Codes
- Customer Lists
- Customer Preferences
- Financial Information
- Future Expansion Plans of the Bank
- Marketing Strategies
- New Materials Research
- Pending Projects And Proposals
- Technological Data
Employees may be required to sign a non-disclosure agreement as a condition of employment. Employees who improperly use or disclose trade secrets or confidential business information may be subject to disciplinary action, up to and including termination of employment and legal action, even if they do not actually benefit from the disclosed information.