Code of Ethics



The code of Ethics publication was approved by the Board of Directors of Patapsco Bancorp, Inc. and is intended for all full-time and part-time employees of Patapsco Bancorp, Inc., The Patapsco Bank, Prime Business Leasing and the Financial Services of The Patapsco Bank.

The Code of Ethics is administered by Patapsco Bancorp, Inc.'s Board of Directors.


The reputation of Patapsco Bancorp, Inc. and its subsidiaries ("the Company") depends upon the collective and individual performance of all Company representatives acting in a manner that merits public trust and confidence.

The reputation of Patapsco Bancorp, Inc. and its subsidiaries ("the Company") depends upon the collective and individual performance of all Company representatives acting in a manner that merits public trust and confidence.

The Code of Ethics consists of ethical and professional standards for personal conduct and business activities. The standards are intended not only to prohibit unacceptable conduct, but also encourage outstanding service which adds to the Company's stature. All employees are encouraged to refer questions regarding specific situations involving themselves or others to the appropriate individual(s) as detailed in the Directors, Officers and Employee Policy (the Employee Handbook). Compliance with the Code of Ethics is a condition of employment for all Company representatives. The standards imposed by this policy are applicable both during the employment and, with regard to the confidentiality and other requirements relevant to former Company representatives, after termination of employment with the Company.

Responsibilities of directors, officers and employees are as follows: (i) familiarity and understanding of this document; (ii) alertness to situations which could inadvertently result in violations of law or exceptions to this policy, or the appearance thereof; (iii) seeking advice regarding issues of ethics or potential conflicts; (iv) reporting of potential conflicts of interest as they arise; (v) taking or avoiding actions, as appropriate, to eliminate issues of ethics or conflicts; and (vi) annual reporting of applicable transactions.

The term "Company representative", as used in this policy, refers to directors, officers and employees of the Company.

Company representatives are expected, in appropriate circumstances, to impose standards within the Code of Ethics on the terms of engagement on non-employee professionals, consultants and others acting on the Company's behalf.


The objective of the Company is to maintain a superior reputation for ethical standards and conduct. Many areas of conduct addressed by the Code of Ethics are also the subject of laws, regulations, and formal regulatory policies. It is the intent of this Code of Ethics to establish standards of conduct that in most instances exceed the minimal requirements of the law and in all instances to demand full compliance and appropriate familiarity with laws, regulations, and policies relevant to employee conduct.

Conflicts of Interest

Policy Statement

All Company representatives must manage their personal and business affairs to avoid situations which might lead to a conflict, or even the appearance of a conflict, between their self-interest and their duty to the Company, its customers and its shareholders.

General Requirements

Identification. A conflict of interest may exist when a Company representative or a member of his or her immediate family had a personal financial interest in a business or venture which conducts business as a customer or vendor with the Company or any of its subsidiaries. A conflict of interest may also occur when a Company representative has a substantial financial interest in a business which competes with another company conducting business, banking or otherwise, with the Company. In general, Company representatives are expected to avoid conflict of interest situations, or remove themselves from exercising decision making authority or influence when such conflicts cannot be avoided.

Law. All Company representatives will act in accordance with this policy and Regulation O and other applicable laws and regulations.

Self-Dealing. Company representatives are prohibited from self-dealing or otherwise trading on their positions with the Company. Such individuals are also prohibited from accepting business from someone conducting or seeking to conduct business with the Company when the business opportunity is not available to other persons or which is made available because of the individual's position within the Company.

Vendors. Contracts with vendors will be awarded based solely on the pricing and value of the goods or services to the Company, and exclusive of personal favoritism or bias.

Fiduciary Appointments. Company employees or their immediate family members may not accept bequests from customers (other than their own relatives) in wills or trust instruments without the prior approval of the Board of Directors. Furthermore, Company officers and employees and their immediate family members may not solicit or accept personal appointment as trustee, executor, guardian, or similar position with respect to a trust or estate of a customer (other than their own relatives) without the prior written approval of the Board of Directors.

Reporting. Company representatives' responsibility to report actual or apparent conflicts is in addition to their responsibility to take action to avoid or eliminate conflicts. Any situations involving possible conflicts or appearance of conflicts shall be promptly disclosed to the employee's supervisor and the Board of Directors. Directors, officers, and employees at least must make annual disclosures of any relationships, receipts of gifts, annual compensation, or other similar offers leading to potential conflicts of interest to the Board of Directors.

Any situation which may cause an employee to lose objectivity regarding a specific business relationship or where possible conflicts may occur must be disclosed in accordance with this policy. In addition, existence of significant interests in the business of a borrower, applicant, or other customer of the Company requires reporting conflicts to superiors.

Directors and executive officers must make at least annual disclosures to the Board of Directors of any actual or potential conflicts of interest and any potential conflicts of their related interests.

Gifts, Entertainment and Meals

General Prohibition. Company representatives are generally prohibited from soliciting or accepting any gift, fee, service, investment opportunity, discount, gratuity, entertainment or anything of value provided by a prospective or current customer, supplier, or any other individual or business. This prohibition is continuing and applies at any time, both before or after a transaction is discussed or consummated but is subject to certain exceptions for gifts of nominal value as discussed herein.

Policy. Gifts, entertainment and meals are occasionally offered by current or prospective customers or suppliers for various reasons, some of which may be to induce the Company's representatives to conduct business in a different manner or to approve transactions which would not normally be approved. The policy of the Company is to prevent solicitation or acceptance of gifts, entertainment, meals, or other things of value in circumstances where (i) on a reasonable basis, there exists a substantial likelihood that the Company representative's business judgment could be affected; or (ii) a customer, supplier or a disinterested person reasonably would expect the representative's business judgment could be affected; or (iii) such conduct is prohibited by law. Prior to accepting gifts or other things of value, the circumstances should be reviewed to determine if the offering meets these criteria.

Specific Situations. There are certain specific exceptions and situations distinguishable from the general prohibition of acceptance of things of value by a Company representative:

Nominal Value. Receipt of gratuities or favors of nominal value are acceptable if:

  • The intent of the donor is clearly not to materially influence any Company transactions;
  • The gift or favor is unsolicited, and
  • The value of the gift, meal, or other thing of value offered does not exceed $200. For example, acceptance of the following things of nominal value is permitted:
  • Ao Advertising or promotional material of reasonable value, such as pens, pencils, note pads, key chains, calendars, and similar items; and
  • o Gifts of reasonable value related to commonly recognized events or occasions, such as a promotion, new job, wedding, retirement, Christmas or bar mitzvah, provided that the value of such gifts does not exceed $200.

Personal Relationship. Gifts, gratuities, amenities or favors based on obvious family or personal relationships (such as those with the parents, children or spouse of a Company representative) are permitted when the circumstances make it clear that it is those relationships, rather than the business of the Company concerned, which are the motivating factors.

Business Purpose Entertainment and Travel. Meals, refreshments, travel expenses and entertainment of reasonable value are permitted for occasions of demonstrable business purpose. Business purpose can be demonstrated by (i) substantial, bona fide discussion of specific business matters, or (ii) fostering better business relations in circumstances where the expense would be a reasonable business if paid for by the Company. Reasonable value is determined in light of all the circumstances, including the significance of the business at hand and the usefulness of the setting to conducting business.

  • • It should be noted that extended travel in which recreation predominates over conduct of business, such as weekend hunting or fishing trips, has been questioned by some authorities as serving no demonstrable business purpose. Therefore, travel which may be so regarded should be specifically reviewed by line of business supervisor on a case-by-case basis and documented with a memo to the Board of Directors.

Loans On Customary Terms. Loans from other banks or financial institutions on customer terms generally available to the public to finance proper and usual personal activities of Company officials, such as home mortgage loans, are permitted.

Merchandise On Customary Terms. Discounts or rebates on merchandise or services are permitted when they do not exceed those available to other customers.

Awards. Civic, charitable, educational, or religious organization awards for recognition of service and accomplishment are permitted provided the value of such gifts does not exceed $200.

Regardless of the dollar amount or value of the gift or other offering, all circumstance surrounding the offer of a gift or a service must be reviewed in light of this policy, with consideration given to the nature and purpose of the offer. If acceptance of any gift or service, regardless of amount, would cause embarrassment to the receiver or to the Company, the gift should be declined.

All gifts or other things of value in excess of $200 which are given to representatives of the Company must be promptly reported to the Board of Directors.

External Activity

The Company encourages involvement in civic, philanthropic, business, political and professional activities which promote public welfare and add to the Company's stature in the community. At the same time, the Company recognizes that such activities must not be undertaken so as to create the fact or appearance of seeking improper influence or other improper purpose.

Improper Payments

No Company representative, or any other person acting on behalf of the Company, shall make improper payments or inducements to encourage or discourage action by governmental, political, labor or business organizations or representatives. Federal law prohibits banks from making political contributions. At no time will Company representatives solicit other employees for political contributions or coerce others into contributing to any organization with the exception of political fundraising done on behalf of industry related Political Action Committees (PACs).

Outside Appointments

Officers of directorships by any outside organization which has or aspires to have a business relationship with the Company, or by any other financial institution, must be reported to the Board of Directors by Company representatives prior to acceptance.

Outside Employment

Outside employment (which is defined to exclude non-business volunteer work) is permitted only if it does not:

  • Violate a specific banking law or regulation;
  • Encroach on the time or attention that should be devoted to the officer's or employee's duties with the Company;
  • Adversely affect the Company's reputation.
  • Involve use of the Company's equipment, supplies, or facilities;
  • Imply the support of the Company on behalf of the outside employment or organization;
  • Adversely affect the Company?s reputation.

Employees should avoid outside employment which is not available to other persons or which is made available because of the employee's position in the Company.

Before accepting outside employment as director, consultant or similar position, notice must be given to the Board of Directors.

Financial Responsibility

All Company representatives are expected to conduct their personal and corporate financial affairs in a prudent and responsible manner. Proper management of finances should be above reproach and include:

  • Proper payment of bills;
  • Handling personal checking accounts without overdrafts;
  • Adherence to internal lending practices for employee loans; and
  • Use of good judgment in incurring debts.

Should a Company representative become financial overextended, the Company will assist in locating sources of debt counseling available in the Company representative?s community.

Other Areas of Ethical Concern

Confidential Information

Company representatives in numerous functions are regularly entrusted with information about the Company or its customers which is entitled to appropriate confidential treatment. Company representatives are expected to take proper steps to safeguard such information against misuse and to refrain from any use of information other than for the Company's and/or customer's intended business purposes.

Any non-public information concerning the Company or its customers must not be used for personal advantage, for the advantage of the Company in making investment decisions, nor for the advantage of third parties. It must not be divulged until released and made available to the general public. Company representatives and former Company representatives shall not divulge confidential information of the Company or its customers unless specifically authorized by appropriate management consent otherwise legally compelled to make such disclosure. Use of confidential information for other than Company business purposes may result in prohibited disclosures of insider information. Non-public information may not be used to purchase or sell securities until such time as that information is made available to the general public.

Substance Abuse

The Company maintains a workplace free of drug abuse in order to protect employees, customers and assets and to provide all employees with a safe and healthy environment in which to work.

Employees are expected to perform their work free from the influence or effect of drugs. The term "drugs" includes alcoholic beverages, inhalants and illegal drugs. Use of prescription medication must be consistent with doctors' orders such that performance and/or safety is not impaired. Employees determined to be in violation of this policy are subject to immediate disciplinary action, including termination of employment, in accordance with the Company's employment policy.

Nondiscrimination and Hiring Practices

The Company recruits, hires, trains and promotes for all job classifications without regard to race, religion, color, national origin, sex or age. Furthermore, the Company adheres to a program of affirmative action with respect to recruiting, hiring and promotion of minority and female candidates, as well as qualified Vietnam-era veterans and disabled applicants.

All Company representatives shall refrain from activities which are considered to be harassment, whether based on sex, race, religion, or any other personal characteristics.

Recommendations to Customers

Care must be exercised in discussion with customers so that nothing is said which might be interpreted as the giving of legal or tax advice. In discussions having this potential, the employee shall suggest in appropriate instances that the customer consult with his or her own legal, tax or financial advisor. If requested, an employee may recommend advisors or agents such as attorneys, accountants, insurance brokers and agents, stockbrokers, and real estate agents, but in every case, several names should be given without indicating favorites. An employee may recommend a subsidiary of the Company, where appropriate, providing that employee is familiar with the business of the subsidiary.

Employment Based on Personal or Family Relationships

Employment may not be offered or accepted by a Company representative when the offer is primarily based on a personal or family relationship rather than the performance and experience of the candidate under consideration. Related employees will not be employed in the same department, nor may one relative report to another. The term "relative" includes spouses, children, siblings, parents, aunts, uncles, nephews, nieces, cousins, and relatives by marriage.

Purchase and Sale of Bank Assets and Services

The purchase and sale of Bank assets and services must be executed in the Company's best interest. General policies on conflicts apply. All conduct of such business must be on an arm's length basis.

To ensure compliance, the Company and all of its subsidiaries shall keep books, records, and accounts which accurately reflect the transactions and dispositions of assets of the Company. Internal accounting controls shall be maintained to assure that all transactions are recorded and reported in accordance with generally accepted accounting practices.

Investment in Stock

Employment with the Company requires prudent and proper conduct in investment and other situations. Speculation or trading in the stock of the Company is prohibited, as is the purchase or sale based on insider information as discussed above.

Securities Dealers

Company representatives who are directly involved in purchasing and selling securities for the Company are prohibited from engaging in personal securities transactions with the same securities firm used by the Company for its transactions, unless such relationship is approved in advance by the Board of Directors Compensation Committee.

Questionable Accounting or Auditing Matters

Any Company representative who has suspicious concerns or knowledge of questionable, irregular or suspicious accounting and/or auditing practices, must report such activity directly to the Chairperson of the Bank's Audit Committee at the following address:

All such reports will be confidential and may be made anonymously.

Administration of the Code of Ethics

All exceptions to the policy, if any, will be reported immediately within 10 days to the Board of Directors.

Each director, officer and employee shall be provided a copy of the Code of Ethics policy at the time of appointment or employment and whenever the Board of Directors approves and the Company distributes new and/or revised Employee Guidelines. The Code of Ethics and its requirements shall be reviewed by the Board whenever the Board reviews the Directors, Officers and Employee Policy which this Code of Ethics shall be considered as an addendum thereto. At that time, directors, officers and employees shall sign a written affirmation acknowledging that they have read, understood, acknowledge as binding, and have complied with the Code of Ethics.

Previously unreported transaction or events that appear to be in violation of the Code must be documented.

Failure to comply with the Code of Ethics constitutes grounds for disciplinary action and may include dismissal. Based on the nature of the noncompliance, legal action may also result.

Company representatives are encouraged to consult with the Board of Directors if there is any question regarding compliance.

Audit Committee Chairperson
Patapsco Bancorp, Inc.
1301 Merritt Boulevard
Dundalk, MD 21222

Chairman of the Board
Patapsco Bancorp, Inc.
1301 Merritt Boulevard
Dundalk, MD 21222


Human Resources Administrator
The Patapsco Bank
1301 Merritt Boulevard
Dundalk, MD 21222