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About Us

GRAND MOUNTAIN BANKSHARES, INC
EXCESSIVE OR LUXURY EXPEDNITURES POLICY

Board Approved 07-09

This policy fulfills the requirements under the Emergency Economic Stabilization Act of 2008 ("EESA") enacted October 3, 2008, and the American Recovery and Reinvestment Act of 2009 ("ARRA") enacted February 17, 2009. ARRA requires each recipient of funds under the Capital Purchase Program of the Troubled Assets Relief Program to have in place a company-wide policy regarding excessive or luxury expenditures, as identified by the Secretary of the Department of the United States Treasury and the Interim Final Rule promulgated under EESA and AARA.

Grand Mountain Bancshares, Inc., a Colorado corporation ("the Company"), and its banking subsidiary, Grand Mountain Bank, a federal savings bank ("the Bank"), prohibit excessive or luxury expenditures on entertainment and events, office or facility renovations, aviation or other transportation services or other activities or events that are not reasonable expenditures for conferences, staff development, reasonable performance incentives or other similar measures conducted in the normal course of business operations of the Company or the Bank.

Renovations

Renovations of facilities and office spaces should be relative to the approved project and current strategic plan, and tracked within the capital expenditure policy of the Company. An exception to this can be allowed if management must deal with an emergency situation, such as an act of nature, and the expenditure is necessary to make the facility operational for customer use. At no time should renovations be done that would have the appearance of being extraordinary or excessive from a shareholder perspective.

Entertainment

Entertainment is defined as an activity that employee or officer would use corporate funds for business development purposes relating to a current customer(s) or prospective customer(s) or to further enhance the Company's and the Bank's marketing efforts.

Our expectation is that all expenses incurred to the Bank would be for business purposes, and used to drive business to the Bank. Occasional events, such as taking customer(s) or prospect(s) on trips, playing golf, eating dinner, taking them to other events, the customer/ prospect would find pleasurable is a necessary part of the Company's and the Bank's marketing efforts and is not deemed as "entertainment" or violation of the Excessive or Luxury Expenditures Policy. These expenses should be documented and detailed as to the benefit derived by the Bank through the normal accounts payable process.

Events and parties specifically designed and focused on customers for the purpose of attracting their business would not fall under this policy.

Conferences

We encourage our staff to attend conferences that are appropriate educational opportunities. These conferences should be related to the financial service industry and have a direct correlation to their job. At times it may be appropriate that a spouse would travel to these conferences with Company attendees. Typically these conferences are sponsored by vendors, banking associations, or other industry related entities.

This Policy would EXCLUDE reward conferences whether paid for by the Company or other vendors as a violation of the policy if the purpose is meant to be a reward, or would have no value of education to the employee or officer.

Employee Recognition/Holiday Parties

We feel that employee recognition/holiday parties are part of an employee appreciation process. These events should be local in geographic nature and would include costs for such things as service awards and nominal door prizes. An event should not cost the sponsoring business unit more than an average day's payroll per employee.

Board/Management Retreats

Retreats should only be used for educational or strategic planning purposes, should be kept in consideration, and looked at in the same view and discretion as all other expenses. Board education is a vital part of maintaining, and keeping a dynamic director base, and this policy should not limit the retreat that is focused on strategic planning or education.

Events and parties focused on customers for the purpose of attracting their business would not fall under this policy.

Aviation Services

Transportation for Company and Bank staff to outlaying locations, including bank locations, conferences, business development purposes and merger and acquisition research, should be conducted in the most cost appropriate way for the Company. The accounting department will maintain, when appropriate, an analysis of trips to determine which mode of transportation is the most appropriate for the Company. Modes of transportation to be used for the analysis, for example may consist of vehicle, commercial air service and private air service. A determination of transportation analysis should consider factors such as cost, efficiency and timeliness of travel.