Excessive Or Luxury Expenditure Policy

This policy is intended to fulfill the requirement under Section 111(d) of the Emergency Economic Stabilization Act of 2008 (EESA), which requires each recipient of funds under the Capital Purchase Program (CPP) to have in place a company-wide policy regarding excessive or luxury expenditures, as identified by the Secretary of the US Department of the Treasury.

Ridgestone Financial Services, Inc. and its subsidiary, Ridgestone Bank, intend to prohibit excessive or luxury expenditures on entertainment and events, office or facility renovations, aviation and other modes of transportation, and other activities or conferences. Expenses will be considered "excessive or luxury" if they are not reasonable expenditures for staff development, reasonable performance incentives, or other similar reasonable measures conducted in the normal course of business operations. This policy is not intended to limit or restrict normal and customary reasonable expenditures for business and staff development, reasonable performance incentives or the ongoing operation of the bank or company. The company's board of directors requires that all employees and service providers adhere to this policy and will hold violators accountable.

Entertainment And Events

Entertainment is defined as any leisure-type activity for which an employee would use corporate funds for the purpose of developing business relating to an existing or prospective customer, or to further enhance the company's and/or the bank's marketing efforts.

All entertainment expenses will be for company and/or bank business purposes and must be expended in an effort to enhance the business opportunities of the company and/or the bank. Occasional events, such as taking customers or prospects to sporting or other entertainment events and/or meals, are a necessary part of the company's and bank's marketing efforts and are not deemed a violation of this Policy. These expenses must be documented, including detail as to the presumed benefit derived by the company and/or bank, in accordance with existing company and/or bank policy for reimbursement and must be approved by and employee's supervisor before any reimbursement to the employee.

Types of entertainment which are prohibited under this Policy include any single expenditure that exceeds $1,000 per person entertained. Expenditures of this type which exceed $500 per person entertained require the prior written approval of the CEO, CFO or Market President. This approval must be documented in the form of an e-mail or internal memorandum, with a copy forwarded to the Controller.

Office Or Facility Renovations

Office and facility renovations should be approved within the company's and/or bank's fixed asset expenditure policy and should be designed to enhance operational efficiency, maintain a safe and clean work environment and be consistent with existing architectural and structural design. The fixed asset expenditure policy requires prior approval by the CEO, CFO or Market President for expenditures over $25,000, and prior board approval for the expenditures over $100,000. At no time should renovations be done that would have the appearance of being extraordinary or excessive.

Transportation Expenses

Excessive aviation or other transportation expenditures are prohibited. The organization will not purchase or lease any aircraft without company board approval. Transportation for bank staff for conferences, business development, training and other ordinary business needs shall be done in the most cost appropriate manner. These expenses should be documented and detailed as to the business purpose for the bank. Any transportation expense of greater than $2000 per person, per trip requires prior approval of the CEO or CFO.

Other Activities

We encourage staff to attend conferences, training sessions and other events that relate to the financial services industry and have a correlation to their job. These expenditures should be pre-approved by an employee's supervisor and, typically, shall be considered normal business expenses not subject to this Policy. However, costs in excess of $2000 per person, per event must be secondarily approved by the CEO or CFO.

The company's CEO and CFO will be required to certify, in accordance with the applicable provisions of EESA, that any approvals required in accordance with this Policy were obtained in accordance with this Policy.

If violations of the Luxury Expenditure Policy are identified they must be reported to the Compliance Officer for investigation and documentation.

Approved by Ridgestone Financial Services, Inc. and Ridgestone Bank boards of directors on July 21, 2009.