NOTICE OF YOUR FINANCIAL PRIVACY RIGHTS

We, our, and us, when used in this notice, mean Capital 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
• Self-directed Individual Retirement Account
• Mortgage brokerage services

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 person we do not employ or a company that is not an affiliate of ours. This is also known as nonaffiliated third party, or simply, an "other party."

The Information We Collect
We collect 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 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 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.

CUSTOMER IDENTIFICATION REQUIREMENTS

On September 11, 2001 our lives changed forever when our country was attacked. In an effort to protect you and our country, President Bush signed the USA Patriot Act into law on October 26, 2001.

One Section of the USA Patriot Act says we must:

Verify the identity of any person seeking to open an account (which includes, trust, investments, safe deposit, loans and deposit accounts).

Verify the identity of signatory individuals added to an existing or new account.

Maintain records of the information used to verify the person's name, address and other identifying means.

Capital Bank will follow this law by obtaining picture identification and verifying other information given by the customer. In some cases, identification will be requested for those banking with Capital Bank prior to October 1, 2003 because original documentation was not obtained with the opening of the account, or the bank is unable to form a reasonable belief that it knows the true identity of the existing customer. In all cases, protection of our customer's identity and confidentiality is the bank's pledge to you.