COMPOSITE COPY
                                                             MAY 21, 1998

                          AMENDED AND RESTATED BYLAWS
                                      OF
                                   FNB CORP.


                                   ARTICLE I

                                    Offices
                                    -------

      1.  Principal Office.  The principal office of the corporation shall be
          ----------------
located at such place as the Board of Directors may determine.

      2. Other Offices. The corporation may have offices at such other places,
         -------------
either within or without the State of North Carolina, as the Board of Directors
may from time to time determine, or as the affairs of the corporation may
require.

                                  ARTICLE II

                            Shareholders' Meetings
                            ----------------------

      1. Place of Meetings. All meetings of the shareholders shall be held at
         -----------------
the principal office of the corporation, or at such other place, either within
or without the State of North Carolina, as shall be designated in the notice of
the meeting or agreed upon by a majority of the shareholders entitled to vote
thereat.

      2. Annual Meetings. The annual meeting of shareholders shall be held on
         ---------------
the second Tuesday in May, if not a legal holiday, but if a legal holiday, then
on the next day following not a legal holiday, for the purpose of electing
directors of the corporation and for the transaction of such other business as
may be properly brought before the meeting.

      3. Substitute Annual Meetings. If the annual meeting shall not be held on
         --------------------------
the day designated by these bylaws, a substitute annual meeting may be called in
accordance with the provisions of Section 4 of this Article. A meeting so called
shall be designated and treated for all purposes as the annual meeting.

      4.  Special Meetings.  Special meetings of the shareholders may be called
          ----------------
at any time by the President, Secretary or Board of Directors of the
corporation.

      5. Notice of Meetings. Written or printed notice stating the time and
         ------------------
place of the meeting shall be delivered no fewer than 10 nor more than 60 days
before the date thereof, either



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personally or by mail, by or at the direction of the President, the Secretary,
or other person calling the meeting, to each shareholder of record entitled to
vote at such meeting and to each nonvoting shareholder entitled to notice of the
meeting. If the corporation is required by law to give notice of proposed action
to nonvoting shareholders and the action is to be taken without a meeting
pursuant to Section 9 of this Article, written notice of such proposed action
shall be delivered to such shareholders not less than 10 days before such action
is taken.

      If notice is mailed, such notice shall be effective when deposited in the
United States mail with postage thereon prepaid and correctly addressed to the
shareholder's address shown in the corporation's current record of shareholders.

      In the case of an annual or substitute annual meeting, the notice of
meeting need not specifically state the business to be transacted thereat unless
it is a matter with respect to which specific notice to the shareholders is
expressly required by the provisions of the North Carolina Business Corporation
Act. In the case of a special meeting the notice of meeting shall specifically
state the purpose or purposes for which the meeting is called.

      When a meeting is adjourned for more than 120 days after the date fixed
for the original meeting or if a new record date for the adjourned meeting is
fixed, notice of the adjourned meeting shall be given as in the case of an
original meeting. When a meeting is adjourned for 120 days or less and no new
record date for the adjourned meeting is fixed, it is not necessary to give
notice of the adjourned meeting other than by announcement at the meeting at
which the adjournment is taken.

      6. Waiver of Notice. A shareholder may waive any notice required by law,
         ----------------
the Articles of Incorporation or these bylaws before or after the date and time
stated in the notice. Such waiver must be in writing, be signed by the
shareholder entitled to the notice, and be delivered to the corporation for
inclusion in the minutes or filing with the corporate records. A shareholder's
attendance at a meeting waives objection to lack of notice or defective notice
of the meeting, unless the shareholder at the beginning of the meeting objects
to holding the meeting or transacting business at the meeting. A shareholder's
attendance at a meeting also waives objection to consideration of a particular
matter at the meeting that is not within the purpose or purposes described in
the notice of meeting, unless the shareholder objects to considering the matter
before it is voted upon.

      7. Quorum. Shares representing a majority of the outstanding votes
         ------
entitled to vote upon a particular matter within each voting group represented
in person or by proxy shall constitute a quorum at meetings of shareholders. If
there is no quorum at the opening of a meeting of shareholders, such meeting may
be adjourned from time to time by a vote of a majority of the votes cast on the
motion to adjourn; at any adjourned meeting at which a quorum is present, any
business may be transacted which might have been transacted at the original
meeting unless a new record date is or must be set for the adjourned meeting.


                                     -2-

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      Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is set for that adjourned
meeting.

      8. Voting of Shares. Except as otherwise provided in the Articles of
         ----------------
Incorporation, each outstanding share having voting rights shall be entitled to
one vote on each matter submitted to a vote at a meeting of the shareholders.
Except in the election of directors, a majority of the votes cast on any matter
at a meeting of shareholders at which a quorum is present shall be the act of
the shareholders on that matter, unless a greater vote is required by law, by
the Articles of Incorporation or by a bylaw adopted by the shareholders of the
corporation.

      9. Informal Action by Shareholders. Any action which is required or
         -------------------------------
permitted to be taken at a meeting of the shareholders may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed, either before or after the time the action which is the subject of the
shareholder approval is taken, by all of the persons who would be entitled to
vote upon such action at a meeting and delivered to the corporation for
inclusion in the minutes or filing with the corporate records. Unless otherwise
fixed by law or these bylaws, the record date for determining the shareholders
entitled to take action without a meeting shall be the date the first
shareholder signs the consent.

      10. Voting Lists. After fixing a record date for a meeting, the
          ------------
corporation shall prepare an alphabetical list of the names of all the
shareholders entitled to notice of such meeting, arranged by voting group and
within each voting group by class or series of shares, with the address of and
number of shares held by each shareholder. Such list shall be available for
inspection by any shareholder, beginning two business days after notice is given
of the meeting for which the list was prepared and continuing through the
meeting, at the corporation's principal office or at a place identified in the
meeting notice in the city where the meeting will be held. A shareholder, or his
agent or attorney, is entitled on written demand to inspect and, subject to the
requirements of North Carolina law, to copy the list, during regular business
hours and at his expense, during the period it is available for inspection. This
list shall also be produced and kept open at the time and place of the meeting
and shall be subject to inspection by any shareholder, or his agent or attorney,
during the whole time of the meeting or any adjournment.

      11. Proxies. Shares may be voted either in person or by one or more agents
          -------
authorized by a written appointment form executed by the shareholder or by his
duly authorized attorney in fact. An appointment form is valid for 11 months
from the date of its execution, unless a different period is expressly provided
in the appointment form. An appointment is revocable by the shareholder unless
the appointment form conspicuously states that it is irrevocable and the
appointment is coupled with an interest.

      12.  Shares Held by Nominees. The corporation may establish a procedure by
           -----------------------
which

                                     -3-

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the beneficial owner of shares that are registered in the name of a nominee is
recognized by the corporation as a shareholder. The extent of this recognition
may be determined in the procedure.

                                   ARTICLE III

                                    Directors

      1. General Powers. Subject to the Articles of Incorporation, all corporate
         --------------
powers shall be exercised by or under the authority of, and the business and
affairs of the corporation be managed under the direction of, its Board of
Directors.

      2. Number, Term and Qualifications. The number of directors of the
         -------------------------------
corporation shall be not less than nine (9) nor more than twenty-five (25), the
exact number of directors within such minimum and maximum limits to be fixed and
determined from time to time by resolution by a majority of the full Board of
Directors or by resolution of the shareholders at any annual or special meeting
thereof.

      The Board of Directors shall be divided into three classes, which shall be
as nearly equal in number as possible. In the event of a change in the number of
directors, the Board of Directors shall determine the class or classes to which
the increased or decreased number of directors shall be apportioned; provided,
however, that no decrease in the number of directors shall affect the term of
any director then in office. The directors elected at the 1995 Annual Meeting of
Shareholders shall be designated as Class I Directors, Class II Directors and
Class III Directors at the time of their election and shall have terms of office
as follows: the term of office of Class I Directors shall expire at the 1996
Annual Meeting of Shareholders, the term of office of Class II Directors shall
expire at the 1997 Annual Meeting of Shareholders, and the term of office of
Class III Directors shall expire at the 1998 Annual Meeting of Shareholders,
with the members of each class of directors to hold office until their
successors are elected and qualified. At each Annual Meeting of Shareholders
subsequent to the 1995 Annual Meeting of Shareholders, directors elected to
succeed those whose terms are expiring shall be elected for a term of office to
expire at the third succeeding Annual Meeting of Shareholders and when their
respective successors are elected and qualified.

      Directors need not be residents of the State of North Carolina or
shareholders of the corporation, except insofar as such requirements are imposed
by national banking laws or by regulations of the Federal Reserve and/or the
U.S. Comptroller of the Currency.

      3. Election of Directors. Except as provided in Section 5 of this Article,
         ---------------------
the directors shall be elected at the annual meeting of shareholders by a
plurality of the votes cast.

      4.  Removal.  Directors may be removed from office with or without cause
          -------
by the affirmative vote of a majority of the outstanding votes of the
corporation entitled to be cast at

                                     -4-

<PAGE>


an election of the directors. However, unless the entire Board of Directors is
removed, an individual director may be removed only if the number of votes cast
for the removal exceeds the number of votes cast against the removal. If any
directors are so removed, new directors may be elected at the same meeting.

      A director may not be removed by the shareholders at a meeting unless the
notice of the meeting states that the purpose, or one of the purposes, of the
meeting is removal of the director.

      5. Vacancies. Unless the Articles of Incorporation provide otherwise, if a
         ---------
vacancy occurs on the Board of Directors, including, without limitation, a
vacancy resulting from an increase in the number of directors or from the
failure by the shareholders to elect the full authorized number of directors,
the vacancy may be filled by the shareholders or the Board of Directors. If the
directors remaining in office constitute fewer than a quorum of the Board of
Directors, vacancies may be filled by the affirmative vote of a majority of all
the directors, or by the sole remaining director. A vacancy that will occur at a
specific later date may be filled before the vacancy occurs but the new director
may not take office until the vacancy occurs. A director elected to fill a
vacancy shall serve for the unexpired term of his predecessor in office and
until his successor is elected and qualified.

      6. Chairman. There may be a Chairman of the Board of Directors elected by
         --------
the directors from their number at any meeting of the Board. The Chairman shall
preside at all meetings of the Board of Directors and perform such other duties
as may be directed by the Board. The Chairman of the Board shall not be an
officer of the corporation unless specifically so designated by the Board.

      7. Compensation. The Board of Directors may compensate a director for his
         ------------
services as such and may provide for the payment of all expenses incurred by a
director in attending regular and special meetings of the Board or in otherwise
fulfilling his duties as a director.

      8. Executive and Other Committees. Unless otherwise provided in the
         ------------------------------
Articles of Incorporation or the bylaws, the Board of Directors, by resolution
adopted by a majority of the number of directors then in office, may designate
from among its members an executive committee and one or more other committees,
each consisting of two or more directors. To the extent specified by the Board
of Directors or in the Articles of Incorporation of the corporation, such
committees shall have and may exercise all of the authority of the Board of
Directors in the management of the business and affairs of the corporation,
except that a committee may not authorize distributions; approve or propose to
shareholders action that North Carolina law requires be approved by
shareholders; fill vacancies on the Board of Directors or on any committee;
amend the Articles of Incorporation; adopt, amend, or repeal bylaws; approve a
plan of merger not requiring shareholder approval; authorize or approve
reacquisition of shares of capital stock of the corporation, except according to
a formula or method prescribed by the Board of Directors; or authorize or
approve the issuance or sale or

                                     -5-

<PAGE>


contract for sale of shares, or determine the designation and relative rights,
preferences, and limitations of a class or series of shares, except that the
Board of Directors may authorize a committee (or a senior executive officer of
the corporation) to do so within limits specifically prescribed by the Board of
Directors.

                                   ARTICLE IV

                              Meetings of Directors
                              ---------------------

      1. Regular Meetings. The Board of Directors may provide, by resolution,
         ----------------
the time and place, either within or without the State of North Carolina, for
the holding of regular meetings.

      2. Special Meetings. Special meetings of the Board of Directors may be
         ----------------
called by or at the request of the Chairman of the Board, the President or any
two directors. Such meetings may be held within or without the State of North
Carolina.

      3. Notice of Meetings. Regular meetings of the Board of Directors may be
         ------------------
held without notice.

      The person or persons calling a special meeting of the Board of Directors
shall, at least two days before the meeting, give notice thereof by any usual
means of communication. Such notice need not specify the purpose for which the
meeting is called.

      4. Waiver of Notice. Any director may waive any required notice before or
         ----------------
after the date and time stated in the notice. Attendance at or participation by
a director in a meeting shall constitute a waiver of notice of such meeting,
unless the director at the beginning of the meeting (or promptly upon his
arrival) objects to holding the meeting or transacting any business at the
meeting and does not thereafter vote for or assent to action taken at the
meeting.

      5. Quorum. A majority of the number of directors prescribed, or, if no
         ------
number is prescribed, the number in office immediately before the meeting
begins, shall constitute a quorum for the transaction of business at any meeting
of the Board of Directors.

      6. Manner of Acting. Except as otherwise provided by law, the Articles of
         ----------------
Incorporation or these bylaws, an act of the majority of the directors present
at a meeting at which a quorum is present shall be the act of the Board of
Directors.

      The vote of a majority of the directors then holding office shall be
required to adopt, amend or repeal a bylaw, if otherwise permissible. Approval
of a transaction in which one or more directors have an adverse interest shall
require a majority, not less than two, of the disinterested directors then in
office, even though less than a quorum.

                                     -6-

<PAGE>


      7. Presumption of Assent. A director of the corporation who is present at
         ---------------------
a meeting of the Board of Directors or a committee of the Board of Directors
when corporate action is taken shall be deemed to have assented to the action
taken unless his contrary vote is recorded; he objects at the beginning of the
meeting (or promptly upon his arrival) to holding it or transacting business at
the meeting; his dissent or abstention is entered in the minutes of the meeting;
or he files written notice of dissent or abstention with the presiding officer
of the meeting before its adjournment or with the corporation immediately after
the adjournment of the meeting. The right of dissent or abstention is not
available to a director who voted in favor of such action.

      8. Informal Action by Directors and Attendance by Telephone. Action taken
         --------------------------------------------------------
by a majority of the directors without a meeting is nevertheless Board action if
written consent to the action in question, describing the action taken, is
signed by all the directors and filed with the minutes of the proceedings of the
Board or with the corporate records, whether done before or after the action so
taken. Such action shall be effective when the last director signs the consent,
unless the consent specifies a different effective date. The Board of Directors
may permit any or all directors to participate in a regular or special meeting
by, or conduct the meeting through the use of, any means of communication by
which all directors participating may simultaneously hear each other during the
meeting. A director participating in a meeting by this means is deemed to be
present in person at the meeting.

      9. Loans to Directors. Except as otherwise provided by law, the
         ------------------
corporation shall not directly or indirectly lend money to or guarantee the
obligation of a director of the corporation unless the particular loan or
guarantee is approved by a majority of the votes represented by the outstanding
voting shares of all classes, voting as a single voting group, except the votes
of shares owned by or voted under control of the benefited director, or unless
the corporation's Board of Directors determines that the loan or guarantee
benefits the corporation and either approves the specific loan or guarantee or a
general plan authorizing loans and guarantees. The fact that a loan or guarantee
is made in violation of this Section does not affect the borrower's liability on
the loan.

                                    ARTICLE V

                                    Officers
                                    --------

      1. Number. The officers of the corporation shall consist of a Chairman, a
         ------
President, a Secretary, a Treasurer, and such Vice Presidents, Assistant Vice
Presidents, Assistant Secretaries, Assistant Treasurers and other officers as
may be elected from time to time. Any two or more offices may be held by the
same person, except the offices of President and Secretary, but no officer may
act in more than one capacity where action of two or more officers is required.
It shall not be necessary for any officer to be a shareholder of the
corporation.


                                     -7-

<PAGE>


      2. Election and Term. Except as hereafter provided, the officers of the
         -----------------
corporation shall be elected by the Board of Directors. Such election may be
held at any regular or special meeting of the Board. Unless otherwise determined
by the Board of Directors, the Chief Executive Officer may appoint assistant
officers. Each officer shall hold office until his death, resignation,
retirement, removal, disqualification or until his successor is elected and
qualified.

      3. Removal. Any officer or agent elected or appointed by the Board of
         -------
Directors may be removed by the Board with or without cause. Officers appointed
by the Chief Executive Officer may be removed by him. Any such removal shall be
without prejudice to the contract rights, if any, of the person so removed.

      4. Compensation. The compensation of all officers of the corporation other
         ------------
than assistant officers shall be fixed by the Board of Directors. No officer
shall serve the corporation in any other capacity and receive compensation
therefor unless such additional compensation be authorized by the Board of
Directors. The compensation of all assistant officers shall be fixed by the
Chief Executive Officer of the corporation or his designee.

      5. President. The President shall, unless otherwise determined by the
         ---------
Board of Directors, be the Chief Executive Officer of the corporation and,
subject to the control of the Board of Directors, shall supervise and control
the management of the corporation according to these bylaws. He shall, in the
absence of the Chairman, preside at all meetings of the shareholders. He shall
sign, with any other proper officer, certificates for shares of the corporation,
and any deeds, mortgages, bonds, contracts or other instruments that may
lawfully be executed on behalf of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be delegated by the Board of Directors to
some other officer or agent; and, in general, he shall perform all duties
incident to the office of President and such other duties as may be prescribed
by the Board of Directors from time to time.

      6. Vice Presidents. The Vice Presidents shall perform such duties and
         ---------------
shall have such other powers as the Board of Directors or the President shall
prescribe. The Board of Directors may designate one or more Vice Presidents as
Executive or Senior Vice President, or any other title that the Board of
Directors deems appropriate, and may rank the Vice Presidents in order of
authority. The Vice President, or, if more than one, the highest ranking
available Vice President, shall, in the absence or disability of the President,
perform the duties and exercise the powers of that office.

      7. Secretary. The Secretary shall keep accurate records of the acts and
         ---------
proceedings of all meetings of shareholders and directors. He shall give all
notices required by law and by these bylaws. He shall have general charge of the
corporate records and books and of the corporate seal, and he shall affix the
corporate seal to any lawfully executed instruments requiring it. He shall have
general charge of the stock transfer books of the Corporation and

                                     -8-

<PAGE>


shall keep, at the registered or principal office of the Corporation, a record
of shareholders showing the name and address of each shareholder and the number
and class of the shares held by each. He shall sign such instruments as may
require his signature, and in general, shall perform all duties incident to the
office of Secretary and such other duties as may be assigned to him from time to
time by the President or by the Board of Directors.

      8. Treasurer. The Treasurer shall have custody of all funds and securities
         ---------
belonging to the Corporation and shall receive, deposit or disburse the same
under the direction of the Board of Directors and the President. He shall keep
full and accurate records of the finances of the Corporation in books especially
provided for the purpose; and he shall cause a true statement of the assets and
liabilities as of the close of each fiscal year and of the results of its
operations and of changes in surplus for such fiscal year, all in reasonable
detail, including particulars as to convertible securities then outstanding, to
be made and filed at the registered or principal office of the Corporation
within four months after the end of such fiscal year. The statement so filed
shall be kept available for inspection by any shareholder for a period of ten
years and the Treasurer shall mail or otherwise deliver a copy of the latest
such statement to any shareholder upon his written request therefor. The
Treasurer shall, in general, perform all duties incident to his office and such
other duties as may be assigned to him from time to time by the President or by
the Board of Directors.

      9. Assistant Officers. The Assistant Vice Presidents, Secretaries and
         ------------------
Treasurers shall, in the absence or disability of their superiors, perform the
duties and exercise the powers of those offices and shall, in general, perform
such other duties as shall be assigned to them by the President or by the
respective officers to whom they report.

      10. Executive Officers. The Board of Directors may designate any officer
          ------------------
as Chief Executive Officer, Chief Operating Officer, Chief Financial Officer or
Chief Accounting Officer, which officer shall have such authority as the Board
of Directors may designate.

      11.  Contract Rights.  The appointment of an officer does not itself
           ---------------
create contract rights in the officer.

      12. Bonds. The Board of Directors may by resolution require any or all
          -----
officers, agents and employees of the corporation to give bond to the
corporation, with sufficient sureties, conditioned on the faithful performance
of the duties of their respective offices or positions, and to comply with such
other conditions as may from time to time be required by the Board of Directors.

                                   ARTICLE VI

                         Contracts, Checks and Deposits
                         ------------------------------

      1.  Contracts.  The Board of Directors may authorize any officer or
          ---------
officers, agent or

                                     -9-

<PAGE>


agents, to enter into any contract or execute and deliver any instrument on
behalf of the corporation, and such authority may be general or confined to
specific instances.

      2. Checks and Drafts. All checks, drafts or orders for the payment of
         -----------------
money issued in the name of the corporation shall be signed by such officer or
officers, agent or agents of the corporation and in such manner as shall from
time to time be determined by resolution of the Board of Directors.

      3. Deposits. All funds of the corporation not otherwise employed shall be
         --------
deposited from time to time to the credit of the corporation in such
depositories as the Board of Directors shall direct.

                                   ARTICLE VII

                  Certificates for Shares and Transfer Thereof
                  --------------------------------------------

      1. Certificates for Shares. The Chairman or the President and the
         -----------------------
Secretary or the Treasurer or any other two officers designated by the Board of
Directors shall sign (either manually or in facsimile) share certificates.
Shares may but need not be represented by certificates. Unless otherwise
provided by law, the rights and obligations of shareholders are identical
whether or not their shares are represented by certificates. If shares are
issued without certificates, the corporation shall, within a reasonable time
after such issuance, send the shareholder a written statement of the information
required on certificates by law. At a minimum each share certificate or
information statement shall state on its face the following information: the
name of the corporation and that it is organized under the law of North
Carolina; the name of the person to whom issued; the number and class of shares
and the designation of the series, if any, the certificate or information
statement represents; if the corporation is authorized to issue different
classes of shares or different series within a class, a summary of, or
alternatively, a conspicuous statement on the back or front of the certificate
or contained in the information statement that the corporation will furnish in
writing and without charge, the designations, relative rights, preferences, and
limitations applicable to each class and the variations in rights, preferences,
and limitations determined for each series (and the authority of the Board of
Directors to determine variations for future series); and, a conspicuous
statement of any restrictions on the transfer or registration of transfer of the
shares.

      2. Transfer of Shares. Transfer of shares of the corporation evidenced by
         ------------------
certificates shall be made only on the stock transfer books of the corporation
by the holder of record thereof, or by his legal representative, who shall
furnish proper evidence of authority to transfer, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary or
other officer or agent designated by the Board of


                                     -10-

<PAGE>


Directors, and on surrender for cancellation of the certificate for such shares.
Transfer of shares of the corporation not evidenced by certificates shall be
made upon delivery to the corporation of such documentation as the corporation
shall require.

      3. Fixing Record Date. For the purpose of determining the shareholders
         ------------------
entitled to notice of a meeting of shareholders, to vote, to take any other
action, or to receive a dividend with respect to their shares, the Board of
Directors may fix in advance a date as the record date for any such
determination of shareholders. Such record date fixed by the Board of Directors
under this Section shall not be more than 70 days before the meeting or action
requiring a determination of shareholders.

      If no record date is fixed for the determination of shareholders entitled
to notice of or to vote at a meeting of shareholders, or shareholders entitled
to a dividend, the close of the business day before the first notice is
delivered to shareholders or the date on which the Board of Directors authorizes
the dividend, as the case may be, shall be the record date for such
determination of shareholders.

      When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this Section, such determination shall
apply to any adjournment thereof unless the Board of Directors fixes a new
record date, which it must do if the meeting is adjourned to a date more than
120 days after the date fixed for the original meeting.

      4. Lost Certificates. If a shareholder claims that a certificated security
         -----------------
has been lost, apparently destroyed or wrongfully taken, the corporation shall
issue a new certificated security or, at the option of the corporation, an
equivalent noncertificated security in place of the original security, if the
shareholder so requests before the corporation has notice that the security has
been acquired by a bona fide purchaser, files with the corporation a sufficient
indemnity bond if so required by the corporation, and satisfies any other
reasonable requirements imposed by the corporation.

      5. Holder of Record. The corporation may treat as absolute owner of shares
         ----------------
the person in whose name the shares stand of record on its books just as if that
person had full competency, capacity and authority to exercise all rights of
ownership irrespective of any knowledge or notice to the contrary or any
description indicating a representative, pledge or other fiduciary relation or
any reference to any other instrument or to the rights of any other person
appearing upon its record or upon the share certificates except that any person
furnishing to the corporation proof of his appointment as a fiduciary shall be
treated as if he were a holder of record of its share.

      The corporation may reject a vote, consent, waiver, or proxy appointment
if the Secretary or other officer or agent authorized to tabulate votes, acting
in good faith, has reasonable basis for doubt about the validity of the
signature on it or about the signatory's authority to sign for the shareholder.

                                     -11-

<PAGE>


      6.  Reacquired Shares.  The corporation may acquire its own shares and
          -----------------
shares so acquired constitute authorized but unissued shares.

      7. Rights, Options and Warrants. The corporation may issue rights, options
         ----------------------------
or warrants for the purchase of shares of the corporation. The Board of
Directors shall determine the terms upon which the rights, options or warrants
are issued, their form and content, and the consideration for which the shares
are to be issued. Without limitation, the Board of Directors may include on such
rights, options and warrants restrictions or conditions that preclude or limit
the exercise, transfer or receipt of such rights, options or warrants by the
holder or holders, or beneficial owner or owners, of a specified number or
percentage of the outstanding voting shares of the corporation or by any
transferee of such holder or owner, or that invalidate or void such rights,
options or warrants held by any such holder or owner or by such transferee. In
addition, the Board of Directors may implement rights plans that create purchase
or conversion rights that are not exercisable by a hostile bidder involved in a
hostile takeover of the corporation.

                                  ARTICLE VIII.

                                 Indemnification
                                 ---------------

      1. Extent. In addition to the indemnification otherwise provided by law,
         ------
the corporation shall indemnify and hold harmless its directors and officers
against liability and litigation expense, including reasonable attorneys' fees,
arising out of their status as directors or officers or their activities in any
of such capacities or in any capacity in which any of them is or was serving, at
the corporation's request, in another corporation, partnership, joint venture,
trust or other enterprise, and the corporation shall indemnify and hold harmless
those directors, officers or employees of the corporation and who are deemed to
be fiduciaries of the corporation's employee pension and welfare benefit plans
as defined under the Employee Retirement Income Security Act of 1974, as amended
("ERISA fiduciaries") against all liability and litigation expense, including
reasonable attorneys' fees, arising out of their status or activities as ERISA
fiduciaries; provided, however, that the corporation shall not indemnify a
director or officer against liability or litigation expense that he may incur on
account of his activities that at the time taken were known or reasonably should
have been known by him to be clearly in conflict with the best interests of the
corporation, and the corporation shall not indemnify an ERISA fiduciary against
any liability or litigation expense that he may incur on account of his
activities that at the time taken were known or reasonably should have been
known by him to be clearly in conflict with the best interests of the employee
benefit plan to which the activities relate. The corporation shall also
indemnify the director, officer, and ERISA fiduciary for reasonable costs,
expenses and attorneys' fees in connection with the enforcement of rights to
indemnification granted herein, if it is determined in accordance with Section 2
of this Article that the director, officer and ERISA fiduciary is entitled to
indemnification hereunder.


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<PAGE>


      2. Determination. Any indemnification under Section 1 of this Article
         -------------
shall be paid by the corporation in any specific case only after a determination
that the director, officer or ERISA fiduciary did not act in a manner, at the
time the activities were taken, that was known or reasonably should have been
known by him to be clearly in conflict with the best interests of the
corporation, or the employee benefit plan to which the activities relate, as the
case may be. Such determination shall be made (a) by the affirmative vote of a
majority (but not less than two) of directors who are or were not parties to
such action, suit or proceeding or against whom any such claim is asserted
("disinterested directors") even though less than a quorum, or (b) if a majority
(but not less than two) of disinterested directors so direct, by independent
legal counsel in a written opinion, or (c) by the vote of a majority of all of
the voting shares other than those owned or controlled by directors, officers or
ERISA fiduciaries who were parties to such action, suit or proceeding or against
whom such claim is asserted, or by a unanimous vote of all of the voting shares,
or (d) by a court of competent jurisdiction.

      3. Advanced Expenses. Expenses incurred by a director, officer or ERISA
         -----------------
fiduciary in defending a civil or criminal claim, action, suit or proceeding
may, upon approval of a majority (but not less than two) of the disinterested
directors, even though less than a quorum, or, if there are less than two
disinterested directors, upon unanimous approval of the Board of Directors, be
paid by the corporation in advance of the final disposition of such claim,
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
director, officer or ERISA fiduciary to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified against such
expenses by the corporation.

      4. Corporation. For purposes of this Article, references to directors,
         -----------
officers or ERISA fiduciaries of the "corporation" shall be deemed to include
directors, officers and ERISA fiduciaries of FNB Corp., its subsidiaries, and
all constituent corporations absorbed into FNB Corp. or any of its subsidiaries
by a consolidation or merger.

      5. Reliance and Consideration. Any director, officer or ERISA fiduciary
         --------------------------
who at any time after the adoption of this Bylaw serves or has served in any of
the aforesaid capacities for or on behalf of the corporation shall be deemed to
be doing or to have done so in reliance upon, and as consideration for, the
right of indemnification provided herein. Such right shall inure to the benefit
of the legal representatives of any such person and shall not be exclusive of
any other rights to which such person may be entitled apart from the provision
of this Bylaw. No amendment, modification or repeal of this Article VIII shall
adversely affect the right of any director, officer or ERISA fiduciary to
indemnification hereunder with respect to any activities occurring prior to the
time of such amendment, modification or repeal.

      6. Insurance. The corporation may purchase and maintain insurance on
         ---------
behalf of its directors, officers, employees and agents and those persons who
were serving at the request of the corporation as a director, officer, partner
or trustee of, or in some other capacity in, another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as

                                     -13-

<PAGE>


such, whether or not the corporation would have the power to indemnify him
against such liability under the provisions of this Article or otherwise. Any
full or partial payment made by an insurance company under any insurance policy
covering any director, officer, employee or agent made to or on behalf of a
person entitled to indemnification under this Article shall relieve the
corporation of its liability for indemnification provided for in this Article or
otherwise to the extent of such payment, and no insurer shall have a right of
subrogation against the corporation with respect to such payment.

                                   ARTICLE IX

                               General Provisions
                               ------------------

      1. Dividends. The Board of Directors may from time to time declare, and
         ---------
the corporation may pay, dividends on its outstanding shares in such manner and
upon such terms and conditions as are permitted by law and by its Articles of
Incorporation.

      2. Waiver of Notice. Whenever any notice is required to be given to any
         ----------------
shareholder or director under the provisions of the North Carolina Business
Corporation Act or under the provisions of the Articles of Incorporation or
bylaws of the corporation, a waiver thereof in writing signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be equivalent to such notice.

      3. Fiscal Year. Unless otherwise ordered by the Board of Directors, the
         -----------
fiscal year of the corporation shall be from January 1 to December 31.

      4. Inspection of Records by Shareholders. The shareholders shall not be
         -------------------------------------
entitled to inspect or copy any accounting records of the corporation or any
records of the corporation with respect to any matter which the corporation
determines in good faith may, if disclosed, adversely affect the corporation in
the conduct of its business or may constitute material nonpublic information at
the time the shareholder's notice of demand to inspect and copy is received by
the corporation.

      5. Amendments. Except as otherwise provided herein, these bylaws may be
         ----------
amended or repealed and new bylaws may be adopted by the affirmative vote of a
majority of the directors then holding office at any regular or special meeting
of the Board of Directors.

      The Board of Directors shall have no power to adopt a bylaw: (1) requiring
more than a majority of the voting shares for a quorum at a meeting of
shareholders or more than a majority of the votes cast to constitute action by
the shareholders, except where higher percentages are required by law; (2)
providing for the management of the corporation otherwise than by the Board of
Directors or its Executive or other committees; (3) increasing or decreasing the
number of directors authorized by these bylaws; (4) classifying and staggering
the election of directors.

                                     -14-

<PAGE>


      No bylaw adopted or amended by the shareholders shall be altered or
repealed by the Board of Directors unless specifically authorized by the
shareholders at the time of such adoption or amendment.

      6. Inapplicability of Article 9. Article 9 of Chapter 55 of the General
         ----------------------------
Statutes of North Carolina entitled, "The North Carolina Shareholder Protection
Act," shall not apply to this corporation.

      7. Inapplicability of Article 9A. Article 9A of Chapter 55 of the General
         -----------------------------
Statutes of North Carolina, entitled "Control Share Acquisition Act," shall not
apply to this corporation.


                                     -15-