Denmark Bancshares, Inc.
Code of Ethics and Business Conduct

Introduction

Denmark Bancshares, Inc. and its subsidiaries (collectively the “DBI”) maintain a reputation for integrity and honesty and for acting in good faith in all of their dealings.  This reputation has been established over the years by the responsible conduct of every officer, director and employee of DBI.

This Code of Ethics and Business Conduct (the “Code”) covers a wide range of business practices and procedures.  It captures in written form those ethical principles that we have always followed in the conduct, management and oversight of our business.  This code provides a clear statement of policy that all directors, officers and employees of DBI (referred to collectively in this Code as “DBI personnel”) are required to follow.

Executive officers, as employees of Denmark State Bank, are also covered by Denmark State Bank’s more general Code of Ethics, which contains a number of provisions in addition to what is addressed herein.

Certain responsibilities under this Code are delegated to designated executive officers referred to herein as the “Ethics Officers”.  At present, the Ethics Officers are Linda Johanek, Human Resource Director of Denmark State Bank, and Michelle Wotachek, Internal Auditor and Compliance Officer of Denmark State Bank.  Any changes in the designated Ethics Officers will be communicated to all DBI personnel.  Except as may otherwise be required by applicable law, all communications by DBI personnel to the Ethics Officers in that capacity will be kept confidential by DBI.

Compliance with Laws

All DBI personnel must respect and obey the laws, rules and regulations of the federal government and the cities and states in which they operate.  DBI personnel are expected to report to the Ethics Officers identified above, any known or suspected criminal activity of any nature, or any dishonest or fraudulent act, which may affect DBI, its officers, directors, associates or customers.  Any person or person(s) reporting such activities in good faith shall be free from retaliation or retribution of any kind by DBI.

As a publicly owned company whose stock is registered with the SEC, DBI has an obligation to make periodic reports fairly presenting its financial condition and operating results, and to make prompt disclosure of other events or circumstances, which may be material to stockholders.  The Board of Directors and management have instituted, and review on a continuing basis, procedures designed to facilitate this disclosure.  All DBI personnel are advised that any failure to comply with these procedures will be viewed as a violation of their duty to obey applicable laws.

Gifts

In the conduct of DBI’s business, no bribes, kickbacks or gifts of any kind are to be solicited from any individual or organization for any reason.  Gifts having more than nominal value (which we currently define as $25) must not be accepted from any customer or supplier of DBI (unless such person is a family member or personal friend).  The offer or receipt of any gift having a value in excess of this amount from any customer or supplier of DBI other than a family member should be reported in writing to the Ethics Officers.  Meals and entertainment occurring in reasonable amounts and frequency within DBI’s service area may be accepted, but business decisions are not to be affected by such events, nor by the receipt of any gift which is permitted under this Code.

Confidential Customer Information

Any and all confidential information regarding a customer must be treated as confidential and not disclosed to anyone outside DBI unless proper authorization has been received from the Ethics Officers.  The use of such information for personal or other gain is unethical and may be illegal under the National Bank Act and other applicable laws.  All information in DBI’s files concerning customers or potential customers should be presumed to be confidential for purposes of this Code.

Protection and Proper Use of Company Assets

The resources of DBI should be used only for legitimate business purposes and for the benefit of DBI.  All DBI personnel should endeavor to protect DBI’s assets and ensure their efficient use.  Theft, carelessness and waste of assets have a direct impact on DBI’s profitability.  Any suspected incident of fraud or theft should be immediately reported to the Ethics Officers for investigation.  Equipment should not be used for non-DBI business, except by express written permission of the Ethics Officers.

The obligation of DBI personnel to protect DBI’s assets includes its proprietary information.  Proprietary information includes intellectual property such as trade secrets, patents, trademarks, and copyrights, as well as business, marketing and service plans, engineering and manufacturing ideas, designs, databases, records, salary information and any unpublished financial data and reports.  Unauthorized use or distribution of this information would violate DBI policy.  It could also be illegal and result in civil or even criminal penalties.

Insider Trading

It is generally a violation of federal securities laws for anyone who has material information about DBI, which is not known to the public in general either (a) to trade in shares of Denmark Bancshares, Inc., or (b) to disclose that information to another person who could be expected to make such a trade.  The same rules apply with respect to trading on or “tipping” inside information about other companies, such as information about a customer.  The trader, the “tipper,” the “tippee,” and DBI itself may all be subject to civil and even criminal penalties if violation of the insider trading rules occurs.  All such activities are strictly forbidden.

Conflicts of Interest

DBI personnel are expected to perform their responsibilities in such a way as to avoid any conflict, or potential or apparent conflict, between their personal interests and those of DBI.  Conflicts of interest may arise in many circumstances, including acting as a director, officer, consultant, agent, employee, advisor or in some other significant capacity for, or having a financial interest in, a person or firm with which DBI does business, or a competitor of DBI.  Actual or potential conflicting interests must be reported to the Ethics Officers.  If actual conflict exists, all DBI personnel are expected to comply with whatever means of resolution the Ethics Officers propose.

DBI personnel may not participate in any loan approval decision if they or related parties may benefit directly or indirectly from the decision to grant credit.  This prohibition extends to professional relationships with any company or firm receiving remuneration as a result of the decision to grant credit.

12 CFR §215, or federal Regulation O, deals with self‑dealing and personal gains by directors, executive officers and principal shareholders of banking institutions and their “related interests” in connection with extensions of credit from the banking institution and contains specific restrictions, prohibitions and requirements that must be followed.  Other conflict of interest situations involving matters such as deposits, investments, and the purchase and sale of goods and services may require compliance with other applicable laws and regulations.

Waivers of the Code of Ethics and Business Conduct

This description of our policies in this Code is necessarily a general summary.  In practice, it is expected that there may be particular situations that warrant making exceptions to some of the general rules set forth herein.  All requests for such exceptions and all questions concerning the interpretation or application of these policies should be directed to the Ethics Officers.  All DBI personnel should be aware that waivers of any provision of the Code are required by federal securities law to be publicly disclosed in appropriate detail.

Record Retention

DBI will retain the written reports of the required disclosures received from any DBI personnel for a period of ten years from the date of this report. 

Conclusion

These policies and procedures are intended to protect our own business secrets and those of our clients, to protect our reputation for integrity, and to protect our institution and our personnel from legal liability.  They are extremely important.

All DBI personnel will be expected to be familiar with and to observe these policies and procedures.  In addition, if any director, officer or employee of DBI becomes aware of an apparent violation of these policies and procedures by anyone, he or she must promptly report the relevant facts to the appropriate Ethics Officers.