Privacy Statement – June 14, 2007

YOUR PRIVACY IS IMPORTANT TO US

You provide important information about yourself to a variety of businesses and organizations. The same is true when you do business with our financial institution. You are asked to provide us with certain personal information that helps us give you better service and complete your transactions more effectively.

We work diligently to safeguard the information you give to us. In fact, we developed the following policies to ensure your confidentiality and maintain your confidence in our institution. These policies detail the strict standards we have in place. For this reason, we ask you to please read the following information carefully.

NOTICE OF YOUR FINANCIAL PRIVACY RIGHTS

We, our, and us, when used in this notice, mean Emerald Bank.

This is our privacy notice for our customers. When we use the words "you" and "your" we mean the following types of customers:

Our consumer customers who have a continuing relationship by purchasing or holding financial products or services such as a(n):

Deposit account
Loan account
Safe deposit box

We will tell you the sources of the information we collect about you. We will tell you what measures we take to secure that information.

We first define some terms.

Nonpublic personal information means information about you that we collect in connection with providing a financial product or service to you. Nonpublic personal information does not include information that is available from public sources, such as telephone directories or government records. Hereafter, we will use the term “information” to mean nonpublic personal information as defined in this section.

An affiliate is a company we own or control, a company that owns or controls us, or a company that is owned or controlled by the same company that owns or controls us. Ownership does not mean complete ownership, but means owning enough to have control.

A nonaffiliated third party is a company that is not an affiliate or ours. This is also known as nonaffiliated third party, or simply, an “other party.”

THE INFORMATION WE COLLECT

We collect nonpublic personal information about you from the following sources:

Information you give us on applications or other forms
Information about your transactions with us
Information about your transactions with other parties
Information from a consumer reporting agency

INFORMATION WE DISCLOSE ABOUT YOU

We do NOT disclose any nonpublic personal information about you to anyone, except as permitted by law. Examples of this might include disclosures necessary to service your account or prevent unauthorized transactions.

THE CONFIDENTIALITY, SECURITY, AND INTEGRITY OF YOUR INFORMATION

We restrict access to nonpublic personal information about you to those employees who need to know that information to provide products or services to you. We maintain physical, electronic, and procedural safeguards to protect this information.

INFORMATION ABOUT FORMER CUSTOMERS

We do not disclose information about former customers, except as permitted by law.

At Emerald Bank (EB) we recognize and respect the importance of our customers’ privacy. We want your relationship with the Bank to be as free from privacy concerns as possible. Our policy is to keep information that we have about you restricted only to those who legitimately have a need for data to process transactions or provide services for you. Reinforcing our commitment to safeguard the privacy of our customers’ nonpublic personal information, Emerald Bank has adopted the following Privacy Statement.

1. COLLECTION, RETENTION, AND USE OF CUSTOMER INFORMATION BY THE BANK

Information We May Collect About You

Naturally, the type of information we collect about you depends on the service or product that you request. Some of the information is publicly available information, for example your name and your listed telephone number and address, which information generally is not considered "nonpublic personal information." The nonpublic personal information that we may collect and retain includes personally identifiable financial information such as:

your social security number, annual income, current and former employers;
answers to questions on deposit, loan, insurance, credit card, and investment applications;
deposit and loan balances, overdraft history, and payment history with us and what types of products or services you purchase or use from us and how you use them; and
your credit history and savings history, including current and past debts and credit scores.

We collect nonpublic personal information about you from applications and other forms; from information about your transactions with us or with others; and from information we receive from credit reporting agencies.

How We Use This Information

At the Emerald Bank we do not sell customer information to any outside parties for marketing or any other purpose. EB collects this information about our customers and applicants for specific business purposes, such as for loan qualification or to open an account. We also collect information when we believe that it will help us administer our business or provide products, services and other opportunities for our customers. EB will use the information it collects:

to protect and administer customer records, accounts and funds;
to qualify you for products or services;
to complete transactions initiated or approved by our customers and prospects;
to comply with laws and regulations;
to help us create new and improved products and services for our customers; and
to introduce new products and services to our customers.

Here Are Examples of How Our Policy Works:

When you apply for any of our products or services, we will ask you for certain personal information to process your application. This information may be retained by EB and by the third-party businesses that help us provide you with the product or service. If you send us an e-mail, EB may retain the contents of the e-mail, the domain or source of the visitor, and our response.

2. DISCLOSING YOUR INFORMATION OUTSIDE OF Emerald Bank

From time to time, EB will provide information about you to our business partners, or to others as allowed by law. In many cases information sharing is necessary for us to perform business functions and services, such as processing your ATM transactions or bill payments.

Disclosures Allowed by Law

as necessary to effect, administer, or enforce a transaction requested or authorized by a consumer or customer in connection with servicing or processing a product or service requested by a customer;
with your consent or at your direction;
to protect the confidentiality or security of EB's records, protect against fraud, manage risk, and resolving customer’s matters;
to provide information to insurance rating agencies, guaranty funds, or to assess compliance by EB;
to cooperate with law enforcement and government regulatory agencies and other investigations on matters of public safety, to the extent allowed by law;
to report to a consumer reporting agency;
in connection with a proposed merger, transfer or exchange; and
to comply with federal and state legal requirements and investigations.

Disclosures to Business Partners and under Joint Marketing Agreements

EB may also share nonpublic personal information about you with our agents, whether a person or a company, with our affiliates, which are companies we own or control or that own or control us, or under joint marketing arrangements with other financial institutions that provide convenient access to other products or services that we believe benefit you.

EB enters into agreements with business partners and agents to provide key business functions, such as credit and debit card processing, and expanded financial products and services. For example, we may offer insurance, uninsured products and stock brokerage services through arrangements with third parties to enhance and expand the products and services available through the Bank, or a third party might offer credit life insurance to loan customers of EB. Our business partners and agents are asked to enter into agreements with EB prohibiting them from disclosing or using the nonpublic personal information for any purpose other than carrying out the purposes for which you disclosed the information, performing necessary business functions or services, or making disclosures allowed by law.

Here Are Examples of Information Sharing with Third Parties

When you apply for a mortgage loan, we share information about you with title companies and appraisal firms because that is necessary for us to ascertain the quality of title on the property securing the loan you apply for and the appraised value of that property. And we share information about you with credit reporting agencies so that we can determine your credit standing. Or we might share information about you to companies that offer mortgage insurance and credit life insurance to you. If we sell your mortgage loan in the secondary mortgage loan market, we must provide your entire mortgage loan file to the party purchasing your loan, for example Fannie Mae or Freddie Mac. If you have a checking account with EB, we share information about you – including your account number – with a third party that prints checks for EB customers. If you apply for a credit card, we share information about you with the credit card issuer because it could not issue a card to you without that information. These examples illustrate some of the circumstances in which we share personal nonpublic information about you.

Summary of EB’s Disclosures to Nonaffiliated Third Parties

EB will not provide any non-public, personal information about our customers or former customers to nonaffiliated third parties

except as permitted by law, or
except without entering into a business partnership or agency.

We restrict our disclosures of nonpublic personal information about customers and former customers in this way because we want control over the privacy of your information. Therefore, there are no opt-out provisions of our policy.

3. INFORMATION WE NEVER SHARE WITH NONAFFILIATED THIRD PARTIES

With the exception of companies who we contract with to provide transaction authorizations and processing services for our customers, we will never share your access code for your savings or credit accounts at EB. We will not share account numbers with nonaffiliated third parties for use in telemarketing, direct mail marketing or marketing through electronic mail. We will not use or share — internally or externally — personally identifiable medical information for any purpose other than the underwriting or administration of a customer’s policy, claim or account, or as disclosed to the customer when the information is collected, or to which our customer consents.

4. DISCLOSING YOUR INFORMATION TO Emerald Bank AFFILIATES

In the future, we could provide products and services to customers through affiliated companies. Affiliated companies are entities that control, are controlled by, or are under common control with another company. This control factor among affiliated companies ensures that information may flow freely while ensuring that policies and controls necessary to protect the privacy of information will be consistently enforced. By allowing affiliates to share information about you and the products and services you obtain, you could receive easier access to certain account features, new or enhanced products, special promotional offers and special discounts that you might not otherwise know about or be eligible to receive.

The Fair Credit Reporting Act governs information sharing among affiliates. It would allow us to share personal information about you, unless you exercise your rights under the Fair Credit Reporting Act to prevent sharing of that information. Currently, the only Emerald Bank affiliate is Middlefield Banc Corp.

5. MAINTAINING THE INTEGRITY OF YOUR INFORMATION

We strive to maintain current, accurate and complete information on our website. We have procedures to investigate customer reports of incorrect information, and we correct information when we determine that it is inaccurate. We also follow security procedures that are designed to guard against unauthorized access to and disclosure of customer information. Any employee who violates our confidentiality standards is subject to disciplinary action.

Security Procedures Protect Your Information

We have disaster preparedness programs to secure your information in case of natural disaster, hazards, or threats. We also test our security and confidentiality procedures to make sure they work.

Employee Training and Access to Your Information

We maintain physical, electronic, and procedural safeguards that comply with federal standards to guard your nonpublic personal information. We train our employees and agents to be sensitive about confidentiality and customer privacy. Every EB employee is required to verify in writing that he or she has received and read the Employee Handbook, which describes employees’ responsibility for safeguarding the confidentiality of our customers’ and prospects’ records and financial affairs.

We restrict access to nonpublic personal information about you to those employees who need to know that information so that we can provide products and services to you. We will not provide information to anyone without first verifying who the person is and whether that person has legal access to the information. We prohibit our employees or agents from giving information about you if it would violate law or our privacy policy.

6. LIMITATIONS AND ADDITIONAL PRIVILEGES

Nothing in this policy prevents EB from marketing our own products and services to our customers. If you do not want to receive any solicitations or information from us on new products or services at any time, please let us know by writing to us at: