Corporate Governance

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Corporate Governance

  1. Corporate Governance Guidelines
  2. Nominating Committee Charter
  3. Audit Committee Charter
  4. Code of Ethics
  5. Code of Ethics for Principal Executive and Financial Officers



The Board of Directors has established these Corporate Governance Guidelines to provide guidance with respect to the duties and responsibilities of the Board of Directors (the "Board") of Merchants & Marine Bank (the "Bank"). These guidelines are intended to reflect the Board’s commitment to monitor the effectiveness of policy and decision making at the Board and management levels, with a view to enhancing stockholder value over the long term.

  1. Directors Qualifications and Nomination

The Nominating Committee shall be responsible for recommending to the Board nominees for directorship. The Board will determine whether the recommended nominees will be included in the nominees for director in the Bank’s proxy statement distributed in connection with its annual meeting of shareholders.

In considering and making its recommendations, the Nominating Committee should:

  • Review with the Board the appropriate skills and characteristics required of directors, which at a minimum will include professional integrity, sound judgment and sufficient time available to devote to Board activities;
  • Review and determine any specific qualities or skills that one or more directors must possess;
  • Develop and implement any screening process deemed necessary or appropriate to identify qualified candidates; and
  • Identify individuals qualified to become directors consistent with criteria approved by the Board.

The Nominating Committee will consider and evaluate all director candidates on the same basis, without regard to whether they are identified by the Nominating Committee or proposed by management, a director or a shareholder. A shareholder that desires for the Nominating Committee to consider a nomination for director must comply with the notice, timing and other requirements provided for in the Bank’s by-laws, as amended. To the extent the Nominating Committee deems appropriate, it has authority to retain a search firm to identify director candidates and to approve any such search firm’s fees and other retention terms.

  1. Board Composition

    The Board will have a majority of directors who meet the "independence" criteria established by the NASDAQ Stock Market.

    As authorized by the Bank’s by-laws, as amended, the Board presently has ten (10) members. The by-laws provide that the Board may, from time to time, change the number of directors, so long as there is a minimum of nine (9) directors.

  2. Director Retirement

    Any director who reaches the age of 72 shall not be eligible to be nominated for election as a Director, but any Director who attains the age of 72 shall be permitted to continue in office until the expiration of his or her then current term of office. After completing his or her then current term of office, a director who has reached the age of 72 may, at the Board’s option, become an honorary director.

    Honorary directors may receive the same compensation as an active director, but only upon attendance at Board or committee meetings. Honorary directors shall not be entitled to vote at Board or committee meetings, and shall not be liable for any action taken by the Board.

  3. Director Responsibilities

    The basic responsibility of the directors is to oversee the business and affairs of the Bank. In the performance of their duties, the directors will exercise their business judgment to act in what they reasonably believe to be in the best interest of the Bank and its shareholders. Directors may seek information, advice or opinions from the Bank’s officers and employees and from other advisers, consultants and experts, and may rely in good faith upon information, advice or opinions provided by such persons.

    It is generally the duty of management (i.e., the Chief Executive Officer or his designee) to speak for the Bank. Absent unusual circumstances or as contemplated by the committee charters, Board members should communicate with third parties only at the request of management.

  4. Meetings

    Directors should seek to attend all Board meetings and meetings of committees on which they serve, and to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities. Information and data that are important to the Board's understanding of the business to be conducted at a Board or committee meeting should generally be distributed in writing to the directors before the meeting, and directors should review these materials in advance of the meeting.

    The CEO will establish the agenda for each Board meeting. Each Board member is free to suggest the inclusion of items on the agenda. Each Board member is free at any Board meeting to raise subjects that are not on the agenda for that meeting. The Board will review the Bank's long-term strategic plans and the principal issues that the Bank will face in the future during at least one Board meeting each year.

    Directors are strongly encouraged to attend the Bank’s annual meetings of shareholders.

  5. Independent Director Meetings

    The independent directors will meet in executive session following each regularly scheduled meeting of the Audit Committee. The director who presides at these meetings shall be chosen by the independent directors and will serve until the next regularly scheduled meeting of the independent directors.

  6. Board Committees

    The Board will have at all times an Audit Committee and a Nominating Committee. All of the members of both of these committees will be independent directors under the criteria established by the NASDAQ Stock Market and applicable law. Committee members will be appointed by the Board.

    The Board shall also have a Loan Committee, which shall be composed of such directors as the Board shall determine, but one of whom shall be the President of the Bank. The Loan Committee shall meet at such time and place, as the Board, from time to time, shall determine. The Loan Committee shall keep minutes of its meetings, which shall be presented to the Board. At each regular meeting of the Board, the Loan Committee shall report on loans, which have been made since the last report to the Board, and on the status of the Bank’s loan portfolio. The Board shall approve, review and regulate all matters pertaining to loans, discounts and extensions of lines of credit to individuals, corporations and other entities at meetings of the Loan Committee.

    The Chairman of each committee, in consultation with the committee members, will determine the frequency and length of the committee meetings consistent with any requirements set forth in the committee's charter, if any. The Chairman of each committee, in consultation with the appropriate members of the committee and management, will develop the committee's agenda.

    The Board does not have a separate compensation committee. Instead, the independent directors shall perform this function at meetings specifically called for that purpose. When acting in the capacity of a compensation committee, the independent directors shall review the performance of the principal officers of the Bank and determine the level of such officers’ salary and incentive compensation. Such compensation shall be based upon annual corporate and individual performance. In evaluating annual corporate performance, the Board shall take into account the return on assets, deposit growth, and other strategic goals set by the Bank’s management from time to time. In evaluating individual performance, the Board shall consider the annual individual performance evaluations of the executive officers. Under no circumstances shall the Chief Executive Officer participate in discussions of or vote on matters relating to Chief Executive Officer compensation.

    The Board and each committee have the power to hire, and compensate, independent legal, financial or other advisors, as they may deem necessary, without consulting or obtaining the approval of any officer of the Bank in advance.

    The Board may, from time to time, establish or maintain additional committees as necessary or appropriate.

  7. Audit Committee Responsibilities and Qualifications

    In general, the Audit Committee will oversee auditing and financial reporting matters. The Audit Committee also has the responsibilities set forth in the Audit Committee Charter and otherwise required by law and shall produce an annual report of the Audit Committee for inclusion in the Bank’s proxy statement. The Audit Committee shall have responsibility for appointing, dismissing, overseeing and determining the compensation of the Bank’s external auditors. The Audit Committee will assist the Board in monitoring (1) the integrity of the financial statements of the Bank, (2) the Bank’s compliance with legal and regulatory requirements and other requirements imposed on the Bank by the Board, and (3) the performance of the Bank’s internal audit function and independent auditors.

    Each Audit Committee member must meet the enhanced independence requirements imposed by federal law and the NASDAQ Stock Market. Each Audit Committee member must also be financially literate, and at least one member must possess certain accounting or financial expertise as required by federal law and as set forth in the listing standards for the NASDAQ Stock Market.

  8. Director Access to Officers and Employees

    To the extent appropriate for the discharge of their oversight function, directors may have full and free access to officers and employees of the Bank. The directors will use their judgment to ensure that any such contact is not disruptive to the business operations of the Bank. All information provided by the Bank or Bank personnel to a director should be considered confidential unless it has been publicly disclosed by the Bank.

    Executive officers of the Bank are encouraged to regularly attend Board meetings. If the CEO wishes to have additional Bank personnel attend on a regular basis, this suggestion should be brought to the Board for approval.

  9. Director Compensation

    The Bank may compensate members of the Audit Committee only for services rendered as a member of the Board or as a Board committee member. The Bank shall compensate employee members of the Board for service on the Board or a Board committee.

    Compensation for directors should be competitive with similarly situated companies. The form and amount of director compensation will be determined by the Board.

    The Board will review the form and amounts of Board compensation on a periodic basis to ensure its competitiveness with other companies and its effectiveness in attracting qualified members.

  10. Shareholder Communications

    All shareholder communications to the Board should be in written form and should be sent to Merchants & Marine Bank, P.O. Box 729, Pascagoula, Mississippi 39568-0729, Attention: Barbara Bass. As soon as reasonable, but at least once per quarter, Ms. Bass will attend a Board meeting and present to the Board at such Board meeting any shareholder communications received in the manner described above during the preceding quarter.

  11. Maintenance of Guidelines

    The Board will review these Corporate Governance Guidelines periodically and determine whether any changes should be made to these guidelines. In the case of any conflict between these Guidelines and the articles of incorporation, by-laws, or committee charters of any Board Committee, the articles of incorporation, by-laws, and/or committee charter, as the case may be, shall be controlling.

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The purpose of the Nominating Committee (the "Committee") of the Board of Directors (the "Board") of Merchants & Marine Bank (the "Bank") is to provide assistance to the Board in identifying and recommending candidates qualified to serve as directors of the Bank and to review the composition of the Board of Directors. The Committee shall make regular reports to the Board and shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board.

Committee Membership

The Committee shall consist of at least three (3) directors who shall be appointed by and serve at the discretion of the Board. The members of the Committee shall meet the independence requirements of the NASDAQ Stock Market and any other applicable legal, contractual and regulatory requirements. The members shall serve for a term of one (1) year or until their successors are duly elected and qualified. The Board shall designate one member of the Committee to serve as the Committee’s Chairperson.

Committee Authority and Responsibilities

The powers and duties of the Committee are as follows:

  1. Identify and recommend qualified candidates to serve as members of the Board, using a search firm if necessary and upon approval of the Board.

  2. Review qualifications of incumbent directors to determine whether to recommend them as nominees for reelection to the Board.

  3. Review and consider candidates who may be suggested by any director or executive officer of the Bank, or by any shareholder of the Bank if made in compliance with the Bank’s articles of incorporation, by-laws and applicable law.

  4. Recruit and recommend qualified candidates for new or vacant positions on the Board.

  5. Review considerations relating to Board composition, including size of the Board, criteria for membership and any matters set forth in the Bank’s Corporate Governance Guidelines.

  6. Make such recommendations to the Board and take such other actions, including the engagement of outside advisors at the Bank’s expense, as the Committee may consider appropriate and consistent with its purpose, and perform such other duties as may be delegated to it from time to time by the Board.

Meetings and Reports

Meetings of the Committee will be held at the pleasure of the Chairperson and other members of the Committee in response to the needs of the Board. Notwithstanding the foregoing, the Committee shall meet at least annually. The Committee shall provide the Board with a report of the Committee’s activities and proceedings, as appropriate. The Committee will maintain written minutes of its meetings, which minutes will be filed with the minutes of the meetings of the Board.

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There shall be a committee of the Bank’s Board of Directors (the "Board") to be known as the Audit Committee (the "Committee"). The Committee’s purpose is to:

  1. Oversee the accounting and financial reporting processes of the Bank and the audits of the financial statements of the Bank; and

  2. Prepare the report required by the rules promulgated by the Securities and Exchange Commission (the "SEC") to be included in the Bank’s annual report to shareholders and filed with the Federal Deposit Insurance Corporation (the "FDIC").


The Committee shall consist of at least three (3) members of the Board who meet the definitions of "independence" set forth by the NASDAQ Stock Market and Rule 10A-3 promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"). Members of the Committee must not have participated in the preparation of the financial statements of the Bank or any subsidiary of the Bank at any time during the past three years; and must be able to read and understand fundamental financial statements, including the Bank’s balance sheet, income statement, and cash flow statement.

The Board shall annually appoint the members of the Committee, determine that all such members meet the above described "independence" definitions, and determine whether the Committee has at least one member who is an "audit committee financial expert" as defined in Item 401 of Regulation S-K.

The Board shall elect or appoint a chairperson of the Committee. The chairperson will have authority to act on behalf of the Committee between meetings.

Specific Responsibilities and Authority

The specific responsibilities and authority of the Committee shall be as follows:

  1. Appointing, compensating, retaining and overseeing the work of the Bank’s independent accountants (including resolution of disagreements between management and the independent accountants regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Bank. The Bank’s independent accountants must report directly to the Committee.

  2. Establishing procedures for (i) the receipt, retention and treatment of complaints received by the Bank regarding accounting, internal accounting controls or auditing matters, and (ii) the confidential, anonymous submissions by Bank employees of concerns regarding questionable accounting or auditing matters.

  3. Receiving appropriate funding from the Bank, as determined by the Committee, for payment of: (i) compensation to the Bank’s independent accountants for work performed for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Bank; and (ii) ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.

  4. Ensuring its receipt from the Bank’s independent accountants of a formal written statement delineating all relationships between the independent accountants and the Bank, consistent with Independence Standards Board Standard No. 1, and actively engaging in a dialogue with the independent accountants with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent accountants and for taking, or recommending that the full Board take, appropriate action to oversee the independence of the independent accountants.

  5. Reporting to the Board on at least a quarterly basis.

  6. Reviewing and approving all related-party transactions as required by the rules of the NASDAQ Stock Market or other applicable legal or regulatory requirement.

  7. Reviewing and reassessing the adequacy of this Charter annually.

  8. Establishing procedures for the preapproval of audit and non-audit services performed by the independent accountants in order to assure that such services are consistent with the SEC’s rules and do not impair auditor independence.

  9. Making such other recommendations to the Board on such matters, within the scope of its function, as may come to its attention and which, in its discretion, warrant consideration by the Board.

  10. Engaging independent counsel and other advisers as it determines necessary or appropriate to carry out its duties.

General Comments

While the fundamental responsibility for the Bank’s financial statements and disclosures rests with management and the independent accountants, the Committee will review (A) major issues regarding accounting principles and financial statement presentations, including any significant changes in the Bank’s selection or application of accounting principles, and major issues as to the adequacy of the Bank’s internal controls and any special audit steps adopted in light of material control deficiencies; (B) analyses prepared by management and/or the independent accountants setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of the implementation of any alternative generally accepted accounting principle ("GAAP") methods on the financial statements; and (C) the effect of any regulatory and accounting initiatives, as well as any off-balance sheet structures, on the financial statements of the Bank.


The Committee shall meet at least four times per year on a quarterly basis, or more frequently as circumstances require. One or more meetings may be conducted in whole or in part by telephone conference call or similar means if it is impracticable to obtain the personal presence of each Committee member. The Bank shall make available to the Committee, at its meetings and otherwise, such individuals and entities as may be designated from time to time by the Committee, such as members of management including (but not limited to) the internal audit and accounting staff, the independent accountants, outside counsel, and other individuals or entities (whether or not employed by the Bank and including any individuals or entities performing internal audit services as independent contractors).


Any duties and responsibilities of the Committee, including, but not limited to, the authority to preapprove all audit and permitted non-audit services, may be delegated to one or more members of the Committee or a subcommittee of the Committee.


The Committee is responsible for the duties and responsibilities set forth in this charter, but its role is oversight and therefore it is not responsible for either the preparation of the Bank’s financial statements or the auditing of the Bank’s financial statements. The members of the Committee are not employees of the Bank and may not be accountants or auditors by profession or experts in accounting or auditing. Management has the responsibility for preparing the financial statements and implementing internal controls and the independent accountants have the responsibility for auditing the financial statements and monitoring the effectiveness of the internal controls, subject, in each case, to the oversight of the Committee described in this charter. The review of the financial statements by the Committee is not of the same character or quality as the audit performed by the independent accountants. The oversight exercised by the Committee is not a guarantee that the financial statements will be free from mistake or fraud. In carrying out its responsibilities, the Committee believes its policies and procedures should remain flexible in order to best react to a changing environment.

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A bank’s reputation for integrity is perhaps its most valuable asset, as determined by the conduct of its employees, officers, directors, agents, and attorneys (hereinafter referred to as "Bank Officials"). Each must manage their personal and business affairs so as to avoid situations which might lead to a conflict or even a suspected conflict between their self interest and their duty to the Bank, its customers, and its shareholders.

This Code of Ethics has been adopted for the purpose of providing guidance for the exercise of personal judgment to avoid conflicts of interest and the appearance of such conflicts, to assist Bank Officials in complying with the Federal Bank Bribery Law, and furthermore, to insure all employees maintain a position from which they can deal objectively and impartially with Bank customers.

All Bank Officials are expected to adhere to this Code of Ethics.


  1. A Bank Official shall not represent the Bank in any transaction where he or she has any material connection or substantial financial interest. When acting for the Bank, no Bank Official shall make or approve any loan to any family member or any business in which a family member has a significant financial interest, or shall exercise any discretionary authority whatsoever with respect to any other transaction or course of dealing between the Bank and any such family member or business. By extension, close personal friends also provide the potential of a similar conflict or interest. This policy includes, but is not limited to, approval of Bank overdrafts, authorizing or accepting checks on uncollected funds, and waiving of Bank charges, late charges or other normal fees. It also includes making loans, waiving financial statements or any similar type of activity.

  2. A loan request received from a relative of a Bank Official must be handled by another officer of the Bank who is senior in title and authorized to make loans. The loan request should be presented to the Loan Committee, if applicable, with a recommendation from the lending officer.

  3. Bank Officials should not commence or continue any relationships with outsiders which might, even by implication, cause embarrassment to themselves or impair the Bank’s best interest or public position. Bank Officials are to avoid conflicts involving business opportunities which come to their attention as a result of their duties with the Bank.

  4. A Bank Official may not receive anything of value for making a loan

  5. A Bank Official may not accept a fee for performance of any act the Bank could have performed.

  6. Bank Officials are prohibited from steering business to certain dealers, attorneys, appraisers, or accountants. When a customer needs the services described above, and asks for advice, the Bank Official should give the names without recommendation.

  7. All Bank Officials are expected to fully comply with the Mississippi Lobbying Law Reform Act of 1994.


In the course of performing Bank duties, Bank Officials acquire confidential information considered by customers to be extremely sensitive. This information must not be revealed to unauthorized persons, nor will customers’ finances be discussed with others within or outside the Bank unless their duties require the information. Information about customers can be released only when authorized by the customer or subpoenaed by a court of law or the IRS, and then the information released must be accurate and within the confines of the authorizing document.

When a customer uses the Bank as a credit reference, this is authority to release credit information. Banks also share credit information with each other. The sharing is only done to support credit decisions, and the sharing is based on assurances source confidentiality will be protected and the information is accurate and not misleading. The inherent conflict between the customer’s right to confidence and privacy and the need for creditors to share credit experience should be recognized. This conflict cannot be entirely resolved, but its consequences can be mitigated by exercising extreme care when exchanging credit information.


  1. The use of a Bank Official’s position, or the use of confidential or insider information for personal gain is strictly prohibited.

  2. In no instance shall a Bank Official engage in any outside employment which might reasonably subject the Bank to criticism or adverse publicity, or which will encroach on Bank working time.

  3. No Bank Official shall be affiliated, as an employee or in any other capacity, with any other bank, savings & loan association, finance company, or other institution which, in its principal activity, competes directly with the Bank.

  4. Any instances of outside employment by an officer or employee must be reported to the president. ALL instances of officer outside employment must be presented to the Board of Directors for approval.

  5. Each executive officer, director, or principal shareholder is required annually to identify the related interests of that person to comply with the Federal Reserve Board’s Regulation O.


  1. No Bank Official will invest in a customer’s business or enable others to do so as a result of material inside information.

  2. Loans to Bank Officials from customers, other than their reported affiliations, will not be permitted unless the customer’s usual line of business is the lending of money or the financing of merchandise.

  3. Bank Officials should handle their personal accounts and business affairs with the Bank in accordance with sound banking practices and quality standards.

  4. Bank Officials are urged to exercise extreme caution when participating in gaming activities and/or speculative investments. Care should be taken not to discredit our first duty as bankers in preserving public confidence and trust, nor risk damaging personal finances.


  1. The Bank encourages Bank Officials to keep themselves well informed concerning political issues and candidates, and to take an active interest in all such matters. However, Bank Officials participating in political and civic activities shall do so as individuals and not as representatives of Merchants & Marine Bank. To avoid any interpretation of Bank sponsorship or endorsement, neither the Bank’s name nor its address should be used in material mailed or funds solicited, nor should the Bank be identified in any advertisement or literature.

  2. Active participation by Bank Officials in organizations such as the Red Cross, Boy and Girl Scouts, and the United Way is encouraged. Officers and employees may solicit funds for charitable purposes provided no undue pressure or coercion is imposed on the customer, person or firm solicited.

  3. We should always be constantly aware of the fact the growth and progress of our Bank is dependent upon the growth and progress of our community. We encourage you to take a vital role in support of civic and community projects that make our city and surroundings a better place in which to live. The Bank is proud to have staff members involved in such endeavors.


Anyone making investments on behalf of the Bank is prohibited from taking advantage of the special circumstances associated with this duty. Specifically, an investment officer is prohibited from buying securities for his/her own account through dealers from which he/she buys securities for the Bank’s account, and may not accept gifts, entertainment, free travel, and so forth from a securities dealer or employees who work for a securities firm. If the investment officer is ever approached with a deal that would benefit him/her personally, he/she must immediately report the circumstances to the president, or in the case of the president, to the board of directors, and stop placing investment orders through that firm.


The following are not allowed:

  1. Bank Officials are prohibited from 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.

  2. Bank Officials are prohibited from accepting anything of value (other than bona fide salary, wages, fees, or other compensation paid or expenses paid or reimbursed in the usual course of business) from anyone in connection with the business of the Bank, either before or after a transaction is discussed or consummated.

  3. The acceptance of gifts of any kind by Bank Officials or members of their family from any Bank customer, supplier or any individual or organization with which the Bank deals or has relationships of any kind is discouraged.

  4. The acceptance by any Bank Official of gifts, weekend or travel entertainment not specifically allowed herein or by the Federal Bank Bribery Law.

The Federal Bank Bribery Law states:

  1. Whoever –
  1. corruptly gives, offers, or promises anything of value to any person, with intent to influence or reward an officer, director, employee, agent, or attorney of a financial institution in connection with any business or transaction of such institution; or

  2. as an officer, director, employee, agent, or attorney of a financial institution, corruptly solicits or demands for the benefit of any person, or corruptly accepts or agrees to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business or transaction of such institution; shall be fined under this title or three times the value of the thing given, offered, promised, solicited, demanded, accepted, or agreed to be accepted, whichever is greater, or imprisoned not more than 30 years, or both, but if the value of the thing given, offered, promised, solicited, demanded, accepted, or agreed to be accepted does not exceed $100, shall be fined under this title or imprisoned not more than one year, or both.

The following are allowed:

  1. The acceptance of gifts, gratuities, amenities, or favors based on obvious family or personal relationships (such as those between the parents, children or spouse of a Bank Official) where the circumstances make it clear it is those relationships rather than the business of the Bank concerned, which are motivating factors.

  2. The acceptance of gifts of a reasonable value which are related to commonly recognize events or occasions, such as weddings, retirement, holidays, or birthdays. Acceptance of advertising or promotional material of reasonable value, such as pens, pencils, note pads, key chains calendars, and similar items.

  3. Acceptance of gifts of a reasonable value which are related to commonly recognized events or occasions, such as weddings, retirement, holidays or birthdays. Acceptance of advertising or promotional material of reasonable value, such as pens, pencils, note pads, key chains calendars, and similar items.

  4. Acceptance of business meals, refreshments or entertainment, accommodations or travel arrangements, all of a reasonable value, in the course of a meeting or other occasion, the purpose of which is to hold bona fide business discussions or to foster better business relations, provided the expense would be paid for by the Bank as a reasonable business expense if not paid for by another party. Such acceptance of $100.00 or more shall be disclosed in writing to the Board of Directors.

  5. Acceptance of civic, charitable, educational, or religious organizational awards for recognition of service and accomplishment.


The Code of Ethics is considered integral to the bank’s business. Each Bank Official will be required to sign a written acknowledgment of this Code, and any subsequent material change thereto, together with the Bank Official’s agreement to comply with this Code. Bank Officials will be asked to sign a statement yearly, confirming they are abiding by the Code’s provisions at all times.


  1. If there is any question in the mind of a Bank Official as to whether any existing or proposed personal action, activity, relationship, or interest might involve or might reasonably be construed to involve a conflict of interest with the Bank, each is urged to exercise caution, for his own and the Bank’s welfare. All Bank Officials must disclose in writing to the Board of Directors all potential conflicts of interest including those in which they have been inadvertently placed due to either business or personal relationships with customers, suppliers, business associates, or competitors of the Bank.

  2. If a Bank Official is offered, or receives, something of value from a customer beyond what is authorized in this Code, the Bank Official must disclose that fact in a written report to the Board of Directors. The Bank will maintain a record of all such disclosures. Simply reporting such gifts will not avoid the prohibitions of the Federal Bank Bribery Act.

  3. Failure to report conflicts of interest or to comply with this Code will constitute a violation of the policy and may result in reprimands, denied promotions, demotions, or dismissal.

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This Code of Ethics for Principal Executive and Financial Officers applies to the principal executive and financial officers of Merchants & Marine Bank (the "Bank"). The Bank expects all of its employees, officers, directors, agents and attorneys to act in accordance with the highest standards of personal and professional integrity in all aspects of their activities, to comply with all applicable laws, rules and regulations, to deter wrongdoing and abide by the Merchants & Marine Bank Code of Ethics and other policies and procedures adopted by the Bank. This Code of Ethics for Principal Executive and Financial Officers is intended to supplement the Merchants & Marine Bank Code of Ethics.

As a principal executive or financial officer of the Bank, you agree to:

  1. Engage in and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

  2. Avoid conflicts of interest and to disclose to the Chairperson of the Audit Committee of the Board of Directors of the Bank any material transaction or relationship that reasonably could be expected to give rise to such a conflict;

  3. Take all reasonable measures to protect the confidentiality of non-public information about the Bank, or any subsidiary of the Bank, and their customers obtained or created in connection with your activities and to prevent the unauthorized disclosure of such information unless required by applicable law or regulation or legal or regulatory process;

  4. Produce full, fair, accurate, timely, and understandable disclosure in reports and documents that the Bank files with, or submits to, the Federal Deposit Insurance Corporation and other regulators and in other public communications made by the Bank, or any subsidiary of the Bank;

  5. Comply with applicable governmental laws, rules and regulations, as well as the rules and regulations of self-regulatory organizations of which the Bank, or any subsidiary of the Bank, is a member; and

  6. Promptly report any possible violation of this Code of Ethics to the Chairperson of the Audit Committee.

You are prohibited from directly or indirectly taking any action to fraudulently influence, coerce, manipulate or mislead the Bank’s independent accountants for the purpose of rendering the financial statements of the Bank misleading.

You understand that you will be held accountable for your adherence to this Code of Ethics for Principal Executive and Financial Officers. Your failure to observe the terms of this Code of Ethics for Principal Executive and Financial Officers may result in disciplinary action, up to and including termination of employment. Violations of this Code of Ethics for Principal Executive and Financial Officers may also constitute violations of law and may result in civil and criminal penalties for you and/or the Bank. If you have any questions regarding the best course of action in a particular situation, you should promptly contact the Chairperson of the Audit Committee. You may choose to remain anonymous in reporting any possible violation of this Code of Ethics for Principal Executive and Financial Officers.

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