DIRECTORS
Samuel F. Johnson	Chairman
Rebecca L. Johnson	1st Vice Chairman
Samuel A. (Andy) Johnson	2nd Vice Chairman
Larry Huggins
Wade Hankins
Robert Bennett
Alex Brown
Russell Brown
Don Callaway
Larry Clark
Charles Cook
Tommy Howard
Charles Rigdon
Justin Shelton
OFFICERS AND EMPLOYEES
Samuel F. Johnson	Chairman of the Board
Larry Huggins	Chief Executive Officer
Joy Spencer	President
Judy B. Biggers	Executive Vice President & COO
Karl Williams	Executive Vice President & SCO
Samuel A. (Andy) Johnson	Executive Vice President & CFO
Wade Hankins	Senior Vice President
Billy Shackelford	Vice President
Henry V. Adams	Vice President & Associate SCO
Rebecca Johnson	Vice President
Marsha Granen	Vice President
Geraldine Hankins	Assistant Vice President
Debra Jenkins	Senior Accounting Officer
Elois McDaniel	Customer Service Officer
Barbara Bass	Compliance Officer & Auditor
Amanda Freeman	Loan Processing Supervisor
Melanie Beard	Wire Transfer Officer
Lena Dias	Loan Officer & Finance Officer
Melissa Ward	Customer Service
Wendy Gault	Data Processing
Angela McNees	Customer Service
Linda Oliver	Loan Review
Sarah Nethery	Document Imaging
Leah Edwards	Loan Operations
Angie Collier	Loan Support
Selena Shelnut	Loan Support
Ashley Lann	Loan Support
Vickie Brown	Mortgage Origination
Marilyn Whitten	Loan Assistant
Patsy Wilson	Associate Head Teller
Tammy Cantrell	Teller
Carol Vandervort	Teller
Alisha Estes	Teller
Ashley Lucas	Teller
Laura Harvill	Teller

First Vernon Bancshares, Inc.

Excessive Expenditures Policy

Dated: September 11, 2009

As a participant in the Capital Purchase Program (the “CPP”) being administered by the United States Department of the Treasury (“Treasury”), First Vernon Bancshares, Inc. is adopting this Excessive Expenditures Policy (this “Policy”) pursuant to the requirements of the American Recovery and Reinvestment Act of 2009, as implemented by the Interim Final Rule published June 15, 2009, by Treasury. Once this Policy has been adopted, a copy of this Policy will be provided to Treasury and Federal Reserve Bank of Atlanta and the text of this Policy will be posted on the Bank of Vernon's Internet website. Moreover, First Vernon Bancshares, Inc. will maintain this Policy during the remainder of its CPP participation, and, in the event the Board of Directors adopts any material amendment to this Policy, within 90 days of such amendment First Vernon Bancshares, Inc. will provide the amended policy to Treasury Federal Reserve Bank of Atlanta and will post the amended policy on the Bank of Vernon's Internet website.

I. Introduction

It is the overall policy of First Vernon Bancshares, Inc. to prohibit excessive expenditures on any of the following to the extent such expenditures are not reasonable expenditures for staff development, reasonable performance incentives, or other similar reasonable measures conducted in the normal course of the First Vernon Bancshares, Inc. and Bank of Vernon's business operations:

· Entertainment or events;

· Office and facility renovations;

· Aviation or other transportation services; and

· Other similar items, activities, or events for which First Vernon Bancshares, Inc. and Bank of Vernon may reasonably anticipate incurring expenses, or reimbursing an employee for incurring expenses.

This Policy is not intended to apply to bona fide business development or marketing expenditures, provided that the expenditure in question does not involve the conferring of a significant benefit on any employee or group of employees of First Vernon Bancshares, Inc. and Bank of Vernon.

The following policies and procedures shall govern such expenditures.

II. Prohibited Expenditures

Expenditures for entertainment, events or sponsorship of events, office or facility renovations, aviation services or other transportation services, or other similar expenditures will be prohibited where First Vernon Bancshares, Inc. and Bank of Vernon have not documented its determination that such expenditure either (i) benefits current or prospective customers or other sources of new business or serves some other legitimate business development purpose, (ii) serves a bona fide staff development purpose or (iii) serves some other bona fide business purpose.

III. Expenditures Requiring Prior Approval

The following types or categories of expenditures require prior approval (in accordance with the procedures described in part IV below):

· Entertainment, where the expenditure amount exceeds $25,000 per item, activity, or event or per employee receiving the item or participating in the activity or event;

· Events or sponsorship of events, where the expenditure amount exceeds $25,000 per item, activity, or event or per employee receiving the item or participating in the activity or event;

· Office or facility renovations, where the expenditure amount exceeds $250,000 per item, activity, or event or per employee receiving the item or participating in the activity or event;

· Aviation services, where the expenditure amount exceeds $25,000 per item, activity, or event or per employee receiving the item or participating in the activity or event;

· Other transportation services, where the expenditure amount exceeds $50,000 per item, activity, or event or per employee receiving the item or participating in the activity or event; and

· Other similar expenditures, where the expenditure amount exceeds $50,000 per item, activity, or event or per employee receiving the item or participating in the activity or event.

IV. Approval Procedures

For expenditures requiring prior approval, such prior approval may be obtained by submitting a written request to the following person(s):

· Where the amount of the proposed expenditure is less than $100,000, the written request must be approved by an appropriate superior holding the office of Vice President or higher with First Vernon Bancshares, Inc. and Bank of Vernon, as applicable.

· Where the amount of the proposed expenditure is greater than or equal to $100,000 but less than $250,000, the written request must be approved by an appropriate superior who is an SEO (which generally includes the CEO, the CFO, and the three most highly compensated executive officers other than the CEO and CFO) or by an executive officer of a substantially similar level of responsibility with First Vernon Bancshares, Inc. and Bank of Vernon, as applicable.

· Where the amount of the proposed expenditure is greater than or equal to $250,000, the written request must be approved by the Board of Directors of First Vernon Bancshares, Inc. and Bank of Vernon, as applicable.

V. CEO and CFO Certification of Certain Approvals

With respect to each expenditure requiring the prior approval of (i) any SEO (defined as the CEO; the CFO; the three most highly compensated executive officers other than the CEO and CFO who were serving as executive officers at the end of the last completed fiscal year; and up to two additional individuals who would qualify but for the fact that the individual was not serving as an executive officer at the end of the last completed fiscal year), (ii) any executive officer of a substantially similar level of responsibility, or (iii) First Vernon Bancshares, Inc.'s Board of Directors (or a committee of the Board), the CEO and the CFO will both certify in writing that the approval of such expenditure was properly obtained.

VI. Prompt Reporting of, and Accountability for, Violations

If any employee of First Vernon Bancshares, Inc. and Bank of Vernon becomes aware of a violation of this Policy, he or she must promptly report the violation to the Auditor. Upon receiving such a report, the Auditor must then conduct a discreet investigation, preliminary in nature, of the facts and circumstances giving rise to the allegation. If, after an appropriate investigation, the Auditor concludes there is a substantial likelihood that a violation has occurred, then the Auditor must submit to the Audit Committee of the Board of Directors a written report describing (i) the alleged violation, (ii) the Auditor's preliminary investigation into the allegation, and (iii) the reasons for the Auditor's conclusion that there is a substantial likelihood that a violation of this Policy has occurred. Upon receiving this written report, the Audit Committee will conduct a full inquiry into the facts and circumstances giving rise to the allegation.

If, after conducting a full inquiry into the facts and circumstances giving rise to the allegation, the Audit Committee determines that a violation of this Policy has occurred, the offending employee must be appropriately held accountable for the violation, in accordance with existing disciplinary policy.