<PAGE>

                                  EXHIBIT 3.1

                         CERTIFICATE OF INCORPORATION

                                      OF

                        THE SOUTHERN BANC COMPANY, INC.


                                   ARTICLE I

                                     Name

         The name of the corporation is The Southern Banc Company, Inc. (herein
the "Corporation").


                                  ARTICLE II

                               Registered Office

         The address of the Corporation's registered office in the State of
         Delaware is 1209 Orange Street, Corporation Trust Center, in the City
         of Wilmington, County of New Castle. The name of the Corporation's
         registered agent at such address is The Corporation Trust Company.


                                  ARTICLE III

                                    Powers

         The purpose for which the Corporation is organized is to act as a
financial services holding company and to transact all other lawful business for
which corporations may be incorporated pursuant to the laws of the State of
Delaware. The Corporation shall have all the powers of a corporation organized
under the General Corporation Law of the State of Delaware.


                                  ARTICLE IV

                                     Term

         The Corporation is to have perpetual existence.


                                   ARTICLE V

                                 Incorporator

         The name and mailing address of the incorporator are as follows:

              Name                          Mailing Address
              ----                          ---------------

         James B. Little, Jr.               221 S. 6/th/ Street
                                            Gadsden, Alabama 35902

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                                  ARTICLE VI

                               Initial Directors


         The number of directors constituting the initial board of directors of
the Corporation is seven, and the names and addresses of the persons who are to
serve as directors until their successors are elected and qualified, together
with the classes of directorships to which such person have been assigned, are:

<TABLE>
<CAPTION>
   Name                                     Address                                    Class
   ----                                     -------                                    -----
<S>                                         <C>                                        <C>
Craig 0. Cantrell                           221 S. 6/th/ Street                         III
                                            Gadsden, Alabama 35901

Thomas F. Dowling                           221 S. 6/th/ Street                          II
                                            Gadsden, Alabama 35901

Grady Gillam                                221 S. 6/th/ Street                           I
                                            Gadsden, Alabama 35901

Rex G. Keeling, Jr.                         221 S. 6/th/ Street                           I
                                            Gadsden, Alabama 35901

Gates Little                                221 S. 6/th/ Street                          II
                                            Gadsden, Alabama 35901

James B. Little, Jr.                        221 S. 6/th/ Street                         III
                                            Gadsden, Alabama 35901

Fred Taylor                                 221 S. 6/th/ Street                          II
                                            Gadsden, Alabama 35901
</TABLE>

                                  ARTICLE VII

                                 Capital Stock

         The aggregate number of shares of all classes of capital stock which
the Corporation has authority to issue is 4,000,000 of which 3,500,000 are to be
shares of common stock, $.01 par value per share, and of which 500,000 are to be
shares of serial preferred stock, $.01 pre value per share. The shares may be
issued by the Corporation from time to time as approved by the board of
directors of the Corporation without the approval of the stockholders except as
otherwise provided in this Article VII or the rules of a nation securities
exchange if applicable, the consideration for the issuance of the shares shall
be paid to or received by the Corporation in full before their issuance and
shall not be less than the par value per share. The consideration for the
issuance of the shares shall be cash, services rendered, personal property
(tangible or intangible), real property, leases of real property or any
combination of the foregoing. In the absence of actual fraud in the transaction,
the judgment of the board of directors as to the value of such consideration
shall be conclusive. Upon payment of such consideration such shares shall be
deemed to be fully paid and nonassessable. In the case of a stock dividend, the
part of the surplus of the Corporation which is transferred to stated capital
upon the issuance of shares as a stock dividend shall be deemed to be the
consideration for their issuance.

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         A description of the different classes and series (if any) of the
Corporation's capital stock, and a statement of the relative powers,
designations, preferences and rights of the shares of each class and series (if
any) of capital stock, and the qualifications, limitations or restrictions
thereof, are as follows:

         A.  Common Stock. Except as provided in this Certificate, the holders
             ------------
of the common stock shall exclusively possess all voting power. Each holder of
shares of common stock shall be entitled to one vote for each share held by such
holder, except as otherwise expressly set forth in this Certificate.

         Whenever there shall have been paid, or declared and set aside for
payment, to the holders of the outstanding shares of any class of stock having
preference over the common stock as to the payment of dividends, the full amount
of dividends and sinking fund or retirement fund or other retirement payments,
if any, to which such holders are respectively entitled in preference to the
common stock, then dividends may be paid on the common stock, and on any class
or series of stock entitled to participate therewith as to dividends, out of any
assets legally available for the payment of dividends, but only when and as
declared by the board of directors of the Corporation.

         In the event of any liquidation, dissolution or winding up of the
Corporation, after there shall have been paid, or declared and set aside for
payment, to the holders of the outstanding shares of any class having preference
over the common stock in any such event, the full preferential amounts to which
they are respectively entitled, the holders of the common stock and of any class
or series of stock entitled to participate therewith, in whole or in part, as to
distribution of assets shall be entitled, after payment or provision for payment
of all debts and liabilities of the Corporation, to receive the remaining assets
of the Corporation available for distribution, in cash or in kind.

         Each share of common stock shall have the same relative powers,
preferences and rights as, and shall be identical in all respects with, all the
other shares of common stock of the Corporation, except as otherwise expressly
set forth in this Certificate.

         B.  Serial Preferred Stock. Except as provided in this Certificate, the
             ----------------------
board of directors of the Corporation is authorized, by resolution or
resolutions from time to time adopted, to provide for the issuance of serial
preferred stock in series and to fix and state the powers, designations,
preferences and relative, participating, optional or other special rights of the
shares of each such series, and the qualifications, limitations or restrictions
thereof, including, but not limited to determination of any of the following:

         (1)      the distinctive serial designation and the number of shares
                  constituting such series;

         (2)      the dividend rates or the amount of dividends to be paid on
                  the shares of such series, whether dividends shall be
                  cumulative and, if so, from which date or dates, the payment
                  date or dates for dividends, and the participating or other
                  special rights, if any, with respect to dividends;

         (3)      the voting powers, full or limited, if any, of the shares of
                  such series;

         (4)      whether the shares of such series shall be redeemable and, if
                  so, the price or prices at which, and the terms and conditions
                  upon which such shares may be redeemed;

         (5)      the amount or amounts payable upon the shares of such series
                  in the event of voluntary or involuntary liquidation,
                  dissolution or winding up of the Corporation;

         (6)      whether the shares of such series shall be entitled to the
                  benefits of a sinking or retirement fund to be applied to the
                  purchase or redemption of such shares, and, if so

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                  entitled, the amount of such fund and the manner of its
                  application, including the price or prices at which such
                  shares may be redeemed or purchased through the application of
                  such funds;

         (7)      whether the shares of such series shall be convertible into,
                  or exchangeable for, shares of any other class or classes or
                  any other series of the same or any other class or classes of
                  stock of the Corporation and, if so convertible or
                  exchangeable, the conversion price or prices, or the rate or
                  rates of exchange, and the adjustments thereof, if any, at
                  which such conversion or exchange may be made, and any other
                  terms and conditions of such conversion or exchange;

         (8)      the subscription or purchase price and form of consideration
                  for which the shares of such series shall be issued; and

         (9)      whether the shares of such series which are redeemed or
                  converted shall have the status of authorized but unissued
                  shares of serial preferred stock and whether such shares may
                  be reissued as shares of the same or any other series of
                  serial preferred stock.

         Each share of each series of serial preferred stock shall have the same
relative powers, preferences and rights as, and shall be identical in all
respects with, all the other shares of the Corporation of the same series,
except as otherwise expressly set forth in this Certificate.


                                 ARTICLE VIII

                               Preemptive Rights

         No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series of
stock or of other securities of the Corporation shall have any preemptive right
to purchase or subscribe for any unissued stock of any class or series, or any
unissued bonds, certificates of indebtedness, debentures or other securities
convertible into or exchangeable for stock of any class or series or carrying
any right to purchase stock of any class or series; but any such unissued stock,
bonds, certificates or indebtedness, debentures or other securities convertible
into or exchangeable for stock or carrying any right to purchase stock may be
issued pursuant to resolution of the board of directors of the Corporation to
such persons, firms, corporations or associations, whether or not holders
thereof, and upon such terms as may be deemed advisable by the board of
directors in the exercise of its sole discretion.


                                  ARTICLE IX

                             Repurchase of Shares

         The Corporation may from time to time, pursuant to authorization by the
board of directors of the Corporation and without action by the stockholders,
purchase or otherwise acquire shares of any class, bonds, debentures, notes,
scrip, warrants, obligations, evidences of indebtedness, or other securities of
the Corporation in such manner, upon such terms, and in such amounts as the
board of directors shall determine; subject, however, to such limitations or
restrictions, if any, as are contained in the express terms of any class of
shares of the Corporation outstanding at the time of the purchase or acquisition
in question or as are imposed by law.

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                                   ARTICLE X

                  Meetings of Stockholders; Cumulative Voting

         A.  Notwithstanding any other provision of this Certificate or the
bylaws of the Corporation, no action required to be taken or which may be taken
at any annual or special meeting of stockholders of the Corporation may be taken
without a meeting, and the power of stockholders to consent in writing, without
a meeting, to the taking of any action is specifically denied.

         B.  Special meetings of the stockholders of the Corporation for any
purpose or purposes may be called at any time by the board of directors of the
Corporation, or by a committee of the board of directors which has been duly
designated by the board of directors and whose powers and authorities, as
provided in a resolution of the board of directors or in the bylaws of the
Corporation, include the power and authority to call such meetings, but such
special meetings may not be called by any other person or persons.

         C.  There shall be no cumulative voting by stockholders of any class or
series in the election of directors of the Corporation.

         D.  Meetings of stockholders may be held at such place as the bylaws
may provide.


                                  ARTICLE XI

               (a)     Notice for Nominations and Proposals

         A.  Nominations for the election of directors and proposals for any new
business to be taken up at any annual or special meeting of stockholders may be
made by the board of directors of the Corporation or by any stockholder of the
Corporation entitled to vote generally in the election of directors. In order
for a stockholder of the Corporation to make any such nominations and/or
proposals, he or she shall give notice thereof in writing, delivered or mailed
by first class United States mail, postage prepaid, to the Secretary of the
Corporation not less than thirty days nor more than sixty days prior to the date
of any such meeting; provided, however, that if less than forty days' notice of
the meeting is given to stockholders, such written notice shall be delivered or
mailed, as prescribed, to the Secretary of the Corporation not later than the
close of business on the tenth day following the day on which notice of the
meeting was mailed to stockholders. Each such notice given by a stockholder with
respect to nominations for the election of directors shall set forth (i) the
name, age, business address and, if known, residence address of each nominee
proposed in such notice, (ii) the principal occupation or employment of each
such nominee, and (iii) the number of shares of stock of the Corporation which
are beneficially owned by each such nominee. In addition, the stockholder making
such nomination shall promptly provide any other information reasonably
requested by the Corporation.

         B.  Each such notice given by a stockholder to the Secretary with
respect to business proposals to be brought before a meeting shall set forth in
writing as to each matter: (i) a brief description of the business desired to be
brought before the meeting and the reasons for conducting such business at the
meeting; (ii) the name and address, as they appear on the Corporation's books,
of the stockholder proposing such business; (iii) the class and number of shares
of the Corporation which are beneficially owned by the stockholder; and (iv) any
material interest of the stockholder in such business. Notwithstanding anything
in this Certificate to the contrary, no new business shall be conducted at the
meeting except in accordance with the procedures set forth in this Article.

         C.  The Chairman of the annual or special meeting of stockholders may,
if the facts warrant,

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determine and declare to such meeting that a nomination or proposal was not made
in accordance with the foregoing procedure, and, if he should so determine, he
shall so declare to the meeting and the defective nomination or proposal shall
be disregarded and laid over for action at the next succeeding special or annual
meeting of the stockholders taking place thirty days or more thereafter. This
provision shall not require the holding of any adjourned or special meeting of
stockholders for the purpose of considering such defective nomination or
proposal.


                                  ARTICLE XII

                                   Directors

         A. Number: Vacancies. The number of directors of the Corporation shall
            -----------------
be such number, not less than five nor more than ten (exclusive of directors, if
any, to be elected by holders of preferred stock of the Corporation, voting
separately as a class), as shall be set forth from time to time in the bylaws,
provided that no action shall be taken to decrease or increase the number of
directors unless at least two-thirds of the directors then in office shall
concur in said action. Vacancies in the board of directors of the Corporation,
however caused, and newly created directorships shall be filled by a vote of
two-thirds of the directors then in office, whether or not a quorum, and any
director so chosen shall hold office for a term expiring at the annual meeting
of stockholders at which the term of the class to which the director has been
chosen expires and when the director's successor is elected and qualified.

         B. Classified Board. The board of directors of the Corporation shall be
            ----------------
divided into three classes of directors which shall be designated Class I, Class
II and Class III. The members of each class shall be elected for a term of three
years and until their successors are elected and qualified. Such classes shall
be as nearly equal in number as the then total number of directors constituting
the entire board of directors shall permit, with the terms of office of all
members of one class expiring each year. Subject to the provisions of this
Article XII, should the number of directors not be equally divisible by three,
the excess director or directors shall be assigned to Classes I or II as
follows: (i) if there shall be an excess of one directorship over a number
equally divisible by three, such extra directorship shall be classified in Class
I; and (ii) if there be an excess of two directorships over a number equally
divisible by three, one shall be classified in Class I and the other in Class
II. At the first annual meeting of stockholders, directors of Class I shall be
elected to hold office for a term expiring at the third succeeding annual
meeting thereafter. At the second annual meeting of stockholders, directors of
Class II shall be elected to hold office for a term expiring at the third
succeeding annual meeting thereafter. At the third annual meeting of
stockholders, directors of Class III shall be elected to hold office for a term
expiring at the third succeeding annual meeting thereafter. Thereafter, at each
succeeding annual meeting, directors of each class shall be elected for three
year terms. Notwithstanding the foregoing, the director whose term shall expire
at any annual meeting shall continue to serve until such time as his successor
shall have been duly elected and shall have qualified unless his position on the
board of directors shall have been abolished by action taken to reduce the size
of the board of directors prior to said meeting.

         Should the number of directors of the Corporation be reduced, the
directorship(s) eliminated shall be allocated among classes as appropriate so
that the number of directors in each class is as specified in the immediately
preceding paragraph. The board of directors shall designate, by the name of the
incumbent(s), the position(s) to be abolished. Notwithstanding the foregoing, no
decrease in the number of directors shall have the effect of shortening the term
of any incumbent director. Should the number of directors of the Corporation be
increased, the additional directorships shall be allocated among classes as
appropriate so that the number of directors in each class is as specified in the
immediately preceding paragraph.

Whenever the holders of any one or more series of preferred stock of the
Corporation shall have the right, voting separately as a class, to elect one or
more directors of the Corporation, the board of directors shall

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consist of said directors so elected in addition to the number of directors
fixed as provided in this Article XII. Notwithstanding the foregoing, and except
as otherwise may be required by law or by the terms and provisions of the
preferred stock of the Corporation, whenever the holders of any one or more
series of preferred stock of the Corporation shall have the right, voting
separately as a class, to elect one or more directors of the Corporation, the
terms of the director or directors elected by such holders shall expire at the
next succeeding annual meeting of stockholders.


                                 ARTICLE XIII

                             Removal of Directors

         Notwithstanding any other provision of this Certificate or the bylaws
of the Corporation, any director or the entire board of directors of the
Corporation may be removed, at any time, but only for cause and only by the
affirmative vote of the holders of at least 80% of the outstanding shares of
capital stock of the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a meeting of the
stockholders called for that purpose. Notwithstanding the foregoing, whenever
the holders of any one or more series of preferred stock of the Corporation
shall have the right, voting separately as a class, to elect one or more
directors of the Corporation, the preceding provisions of this Article XIII
shall not apply with respect to the director or directors elected by such
holders of preferred stock.


                                  ARTICLE XIV

                         Acquisition of Capital Stock

         A. Five-Year Prohibition. For a period of five years from the effective
            ---------------------
date of the completion of the conversion of First Federal Savings and Loan
Association of Gadsden, Gadsden, Alabama, from mutual to stock form (which
entity shall become a wholly owned subsidiary of the Corporation upon such
conversion), no person shall directly or indirectly offer to acquire or acquire
the beneficial ownership of more than 10% of any class of equity security of the
Corporation, unless such offer or acquisition shall have been approved in
advance by a two-thirds vote of the Continuing Directors, as defined in Article
XV. In addition, for a period of five years from the completion of the
conversion of First Federal Savings and Loan Association of Gadsden from mutual
to stock form (which entity shall become a wholly owned subsidiary of the
Corporation upon such conversion), and notwithstanding any provision to the
contrary in this Certificate or in the bylaws of the Corporation, where any
person directly or indirectly acquires beneficial ownership of more than 10% of
any class of equity security of the Corporation in violation of this Article
XIV, the securities beneficially owned in excess of 10% shall not be counted as
shares entitled to vote, shall not be voted by any person or counted as voting
shares in connection with any matter submitted to the stockholders for a vote,
and shall not be counted as outstanding for purposes of determining a quorum or
the affirmative vote necessary to approve any matter submitted to the
stockholders for a vote.

         B. Prohibition After Five Years. If, at any time after five years from
            ----------------------------
the effective date of the completion of the conversion of First Federal Savings
and Loan Association of Gadsden from mutual to stock form (which entity shall
become a wholly owned subsidiary of the Corporation upon such conversion), any
person shall acquire the beneficial ownership of more than 10% of any class of
equity security of the Corporation without the prior approval by a two-thirds
vote of the Continuing Directors, as defined in Article XV hereof, then the
record holders of voting stock of the Corporation beneficially owned by such
acquiring person shall have only the voting rights set forth in this paragraph B
on any matter requiring the vote or consent of shareholders. With respect to
each vote in excess of 10% of the voting power of the outstanding shares of
voting stock of the Corporation which such record holders

                                       7
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would otherwise be entitled to cast without giving effect to this paragraph B,
such record holders in the aggregate shall be entitled to cast only one-
hundredth (1/100) of a vote, and the aggregate voting power of such record
holders, so limited, for all shares of voting stock of the Corporation
beneficially owned by such acquiring person shall be allocated proportionately
among such record holders. For each such record holder, this allocation shall be
accomplished by multiplying the aggregate voting power as so limited, of the
outstanding shares of voting stock of the Corporation beneficially owned by such
acquiring person by a fraction whose numerator is the number of votes
represented by the shares of voting stock of the Corporation owned of record by
such record holder (and which are beneficially owned by the acquiring person)
and whose denominator is the total number of votes represented by the shares of
voting stock of the Corporation that are beneficially owned by such acquiring
person. A person who is a record owner of shares of voting stock of the
Corporation that are beneficially owned simultaneously by more than one person
shall have, with respect to such shares, the right to cast the least number of
votes that such person would be entitled to cast under this paragraph B by
virtue of such shares being so beneficially owned by any of such acquiring
persons.

     C. Definitions. The term "person" means an individual, a group acting in
        -----------
concert, a corporation, a partnership, an association, a joint stock company, a
trust, an unincorporated organization or similar company, a syndicate or any
other group acting in concert formed for the purpose of acquiring, holding,
voting or disposing of securities of the Corporation. The term "acquire"
includes every type of acquisition, whether effected by purchase, exchange,
operation of law or otherwise. The term group "acting in concert" includes (a)
knowing participation in a joint activity or conscious parallel action towards a
common goal whether or not pursuant to an express agreement, and (b) a
combination or pooling of voting or other interest in the Corporation's
outstanding shares for a common purpose, pursuant to any contract,
understanding, relationship, agreement or other arrangement, whether written or
otherwise. The term "beneficial ownership" shall have the meaning defined in
Rule 13d-3 of the General Rules and Regulations under the Securities and
Exchange Act of 1934, as in effect on the date of filing of this Certificate.

     D. Exclusion for Employee Benefit Plans, Directors. Officers. Employees
        --------------------------------------------------------------------
and Certain Proxies. The restrictions contained in this Article XIV shall not
-------------------
apply to (i) any underwriter or member of an underwriting or selling group
involving a public sale or resale of securities of the Corporation or a
subsidiary thereof; provided, however, that upon completion of the sale or
resale of such securities, no such underwriter or member of such selling group
is a beneficial owner of more than 10% of any class of equity security of the
Corporation, (ii) any proxy granted to one or more Continuing Directors, as
defined in Article XV, by a stockholder of the Corporation or (iii) any employee
benefit plans of the Corporation. In addition, the Continuing Directors (as
defined in Article XV), the officers and employees of the Corporation and its
subsidiaries, the directors of subsidiaries of the Corporation, the employee
benefit plans of the Corporation and its subsidiaries, entities organized or
established by the Corporation or any subsidiary thereof pursuant to the terms
of such plans and trustees and fiduciaries with respect to such plans acting in
such capacity shall not be deemed to be a group with respect to their beneficial
ownership of voting stock of the Corporation solely by virtue of their being
directors, officers or employees of the Corporation or a subsidiary thereof or
by virtue of the Continuing Directors (as defined in Article XV), the officers
and employees of the Corporation and its subsidiaries and the directors of
subsidiaries of the Corporation being fiduciaries or beneficiaries of an
employee benefit plan of the Corporation or a subsidiary of the Corporation.
Notwithstanding the foregoing, no director, officer or employee of the
Corporation or any of its subsidiaries or group of any of them shall be exempt
from the provisions of this Article XIV should any such person or group become a
beneficial owner of more than 10% of any class of equity security of the
Corporation.

     E. Determinations. A majority of the Continuing Directors, as defined in
        --------------
Article XV, shall have the power to construe and apply the provisions of this
Article XIV and to make all determinations necessary or desirable to implement
such provisions, including but not limited to matters with respect to (a) the
number of shares beneficially owned by any person, (b) whether a person has an
agreement,

                                       8
<PAGE>

arrangement or understanding with another as to the matters referred to in the
definition of beneficial ownership, (c) the application of any other definition
or operative provision of this Article XIV to the given facts or (d) any other
matter relating to the applicability or effect of this Article XIV. Any
constructions, applications, or determinations made by the Continuing Directors
pursuant to this Article XIV in good faith and on the basis of such information
and assistance as was then reasonably available for such purpose shall be
conclusive and binding upon the Corporation and its stockholders.


                                  ARTICLE XV

                (1)  Approval of Certain Business Combinations

     The stockholder vote required to approve Business Combinations (as
hereinafter defined) shall be as set forth in this section.

     A.   (1) Except as otherwise expressly provided in this Article XV, the
affirmative vote of the holders of (i) at least 80% of the outstanding shares
entitled to vote thereon (and, if any class or series of shares is entitled to
vote thereon separately, the affirmative vote of the holders of at least 80% of
the outstanding shares of each such class or series), and (ii) at least a
majority of the outstanding shares entitled to vote thereon, not including
shares deemed beneficially owned by a Related Person (as hereinafter defined),
shall be required in order to authorize any of the following:

               (a)  any merger or consolidation of the Corporation with or into
          a Related Person (as hereinafter defined);

               (b)  any sale, lease, exchange, transfer or other disposition,
          including without limitation, a mortgage, or any other capital device,
          of all or any Substantial Part (as hereinafter defined) of the assets
          of the Corporation (including without limitation any voting securities
          of a subsidiary) or of a subsidiary, to a Related Person;

               (c)  any merger or consolidation of a Related Person with or into
          the Corporation or a subsidiary of the Corporation;

               (d)  any sale, lease, exchange, transfer or other disposition of
          all or any Substantial Part of the assets of a Related Person to the
          Corporation or a subsidiary of the Corporation;

               (e)  the issuance of any securities of the Corporation or a
          subsidiary of the Corporation to a Related Person;

               (f)  the acquisition by the Corporation or a subsidiary of the
          Corporation of any securities of a Related Person;

               (g)  any reclassification of the common stock of the Corporation,
          or any recapitalization involving the common stock of the Corporation;
          and

               (h)  any agreement, contract or other arrangement providing for
          any of the transactions described in this Article.

          (2) Such affirmative vote shall be required notwithstanding any other
     provision of this Certificate, any provision of law, or any agreement with
     any regulatory agency or national securities exchange which might otherwise
     permit a lesser vote or no vote.

                                       9
<PAGE>

          (3) The term "Business Combination" as used in this Article XV shall
     mean any transaction which is referred to in any one or more of
     subparagraphs A(1 )(a) through (h) above.

     B. The provisions of paragraph A shall not be applicable to any particular
Business Combination, and such Business Combination shall require only such
affirmative vote as is required by any other provision of this certificate, any
provision of law, or any agreement with any regulatory agency or national
securities exchange, if the Business Combination shall have been approved by a
two-thirds vote of the Continuing Directors (as hereinafter defined);provided,
however, that such approval shall only be effective if obtained at a meeting at
which a Continuing Director Quorum (as hereinafter defined) is present.


     C. For the purposes of this Article XV the following definitions apply:

          (1)  The term "Related Person" shall mean and include (a) any
     individual, corporation, partnership or other person or entity which
     together with its "affiliates" (as that term is defined in Rule 12b-2 of
     the General Rules and Regulations under the Securities Exchange Act of
     1934), "beneficially owns" (as that term is defined in Rule l3d-3 of the
     General Rules and Regulations under the Securities Act of 1934) in the
     aggregate 10% or more of the outstanding shares of the common stock of the
     Corporation; and (b) any "affiliate" (as that term is defined in Rule 12b-2
     under the Securities Exchange Act of 1934) of any such individual,
     corporation, partnership or other person or entity. Without limitation, any
     shares of the common stock of the Corporation which any Related Person has
     the right to acquire pursuant to any agreement, or upon exercise or
     conversion rights, warrants or options, or otherwise, shall be deemed
     "beneficially owned" by such Related Person.

          (2)  The term "Substantial Part" shall mean more than 25 percent of
     the total assets of the Corporation, as of the end of its most recent
     fiscal year ending prior to the time the determination is made.

          (3)  The term "Continuing Director" shall mean any member of the board
     of directors of the Corporation who is unaffiliated with the Related Person
     and was a member of the board prior to the time that the Related Person
     became a Related Person, and any successor of a Continuing Director who is
     unaffiliated with the Related Person and is recommended to succeed a
     Continuing Director by a majority of Continuing Directors then on the
     board.

          (4)  The term "Continuing Director Quorum" shall mean two-thirds of
     the Continuing Directors capable of exercising the powers conferred on
     them.


                                  ARTICLE XVI

                      Evaluation of Business Combinations

     In connection with the exercise of its judgment in determining what is in
the best interests of the Corporation and of the shareholders, when evaluating a
Business Combination (as defined in Article XV) or a tender or exchange offer,
the board of directors of the Corporation may, in addition to considering the
adequacy of the amount to be paid in connection with any such transaction,
consider all of the following factors and any other factors which it deems
relevant; (i) the social and economic effects of the transaction on the
Corporation and its subsidiaries, employees, depositors, loan and other
customers, creditors and other elements of the communities in which the
Corporation and its subsidiaries operate or are located; (ii) the business and
financial condition and earnings prospects of the acquiring person or

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<PAGE>

entity, including, but not limited to, debt service and other existing financial
obligations, financial obligations to be incurred in connection with the
acquisition and other likely financial obligations of the acquiring person or
entity and the possible effect of such conditions upon the Corporation and its
subsidiaries and the other elements of the communities in which the Corporation
and its subsidiaries operate or are located; and (iii) the competence,
experience, and integrity of the acquiring person or entity and its or their
management.


                                 ARTICLE XVII

                                Indemnification

     A. Persons. The Corporation shall indemnify, to the extent provided in
        -------
paragraphs B, D or F:

          (1)  any person who is or was a director, officer, employee, or agent
     of the Corporation; and

          (2)  any person who serves or served at the Corporation's request as a
     director, officer, employee, agent, partner or trustee of another
     corporation, partnership, joint venture, trust or other enterprise.

     B. Extent- Derivative Suits. In case of a threatened, pending or completed
        ------------------------
action or suit by or in the right of the Corporation against a person named in
paragraph A by reason of his holding a position named in paragraph A, the
Corporation shall indemnify him if he satisfies the standard in paragraph C, for
expenses (including attorneys' fees but excluding amounts paid in settlement)
actually and reasonably incurred by him in connection with the defense or
settlement of the action or suit.

     C. Standard- Derivative Suits. In case of a threatened, pending or
        --------------------------
completed action or suit by or in the right of the Corporation, a person named
in paragraph A shall be indemnified only if:

          (1)  he is successful on the merits or otherwise; or

          (2)  he acted in good faith in the transaction which is the subject of
     the suit or action, and in a manner he reasonably believed to be in, or not
     opposed to, the best interests of the Corporation, including, but not
     limited to, the taking of any and all actions in connection with the
     Corporation's response to any tender offer or any offer or proposal of
     another party to engage in a Business Combination (as defined in Article
     XV) not approved by the board of directors. However, he shall not be
     indemnified in respect of any claim, issue or matter as to which he has
     been adjudged liable to the Corporation unless (and only to the extent
     that) the court in which the suit was brought shall determine, upon
     application, that despite the adjudication but in view of all the
     circumstances, he is fairly and reasonably entitled to indemnity for such
     expenses as the court shall deem proper.

     D. Extent-- Nonderivative Suits. In case of a threatened, pending or
        ----------------------------
completed suit, action or completed action or suit by or in the right of the
Corporation, together hereafter referred to as a nonderivative suit, against a
person named in paragraph A by reason of his holding a position named in
paragraph A, the Corporation shall indemnify him if he satisfies the standard in
paragraph E, for amounts actually and reasonably incurred by him in connection
with the defense or settlement of the nonderivative suit, including, but not
limited to (i) expenses (including attorneys' fees), (ii) amounts paid in
settlement, (iii) judgments, and (iv) fines.

     E. Standard -- Nonderivative Suits. In case of a nonderivative suit, a
        ---------------------------------
person named in paragraph A shall be indemnified only if:

                                       11
<PAGE>

          (1)  he is successful on the merits or otherwise; or

          (2)  he acted in good faith in the transaction which is the subject of
     the nonderivative suit and in a manner he reasonably believed to be in, or
     not opposed to, the best interests of the Corporation, including, but not
     limited to, the taking of any and all actions in connection with the
     Corporation's response to any tender offer or any offer or proposal of
     another party to engage in a Business Combination (as defined in Article
     XV) not approved by the board of directors and, with respect to any
     criminal action or proceeding, he had no reasonable cause to believe his
     conduct was unlawful. The termination of a nonderivative suit by judgment,
     order, settlement, conviction, or upon a plea of nolo contendere or its
                                                      ---------------
     equivalent shall not, in itself, create a presumption that the person
     failed to satisfy the standard of this subparagraph E(2).

     F. Determination That Standard Has Been Met. A determination that the
        ----------------------------------------
standard of paragraph C or E has been satisfied may be made by a court, or,
except as stated in subparagraph C(2) (second sentence), the determination may
be made by:

          (1)  the board of directors by a majority vote of a quorum consisting
     of directors of the Corporation who were not parties to the action, suit or
     proceeding; or

          (2)  independent legal counsel (appointed by a majority of the
     disinterested directors of the Corporation, whether or not a quorum) in a
     written opinion; or

          (3)  the stockholders of the Corporation.

     G. Proration. Anyone making a determination under paragraph F may
        ---------
determine that a person has met the standard as to some matters but not as to
others, and may reasonably prorate amounts to be indemnified.

     H. Advance Payment. The Corporation shall pay in advance any expenses
        ---------------
(including attorneys' fees) which may become subject to indemnification under
paragraphs A through G if:

          (1)  the board of directors authorizes the specific payment; and

          (2)  the person receiving the payment undertakes in writing to repay
     the same if it is ultimately determined that he is not entitled to
     indemnification by the Corporation under paragraphs A through G.

     I. Nonexclusive. The indemnification and advance payment of expenses
        ------------
provided by paragraphs A through H shall not be exclusive of any other rights to
which a person may be entitled by law, bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise.

     J. Continuation. The indemnification provided by this Article XVII shall be
        ------------
deemed to be a contract between the Corporation and the persons entitled to
indemnification thereunder, and any repeal or modification of this Article XVII
shall not affect any rights or obligations then existing with respect to any
state of facts then or theretofore existing or any action, suit or proceeding
theretofore or thereafter brought based in whole or in part upon any such state
of facts. The indemnification and advance payment provided by paragraphs A
through H shall continue as to a person who has ceased to hold a position named
in paragraph A and shall inure to his heirs, executors and administrators.

     K. Insurance. The Corporation may purchase and maintain insurance on
        ---------
behalf of any person who holds or who has held any position named in paragraph
A, against any liability incurred by him in any such position, or arising out of
his status as such, whether or not the Corporation would have power to

                                       12
<PAGE>

indemnify him against such liability under paragraphs A through H.

     L. Intention and Savings Clause. It is the intention of this Article
        ----------------------------
XVII to provide for indemnification to the fullest extent permitted by the
General Corporation Law of the State of Delaware, and this Article XVII shall be
interpreted accordingly. If this Article XVII or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each director, officer, employee, and
agent of the Corporation as to costs, charges, and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, including an action by or in the right of the Corporation to the
full extent permitted by any applicable portion of this Article XVII that shall
not have been invalidated and to the full extent permitted by applicable law. If
the General Corporation Law of the State of Delaware is amended, or other
Delaware law is enacted, to permit further or additional indemnification of the
persons defined in this Article XVII A, then the indemnification of such persons
shall be to the fullest extent permitted by the General Corporation Law of the
State of Delaware, as so amended, or such other Delaware law.


                                 ARTICLE XVIII

                      Limitations on Directors' Liability

     A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except: (i) for any breach of the director's duty of loyalty
to the Corporation or its stockholders, (ii) for acts or omissions that are not
in good faith or that involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the director derived any
improper personal benefit. If the General Corporation Law of the State of
Delaware or other Delaware law is amended or enacted after the date of filing of
this Certificate to further eliminate or limit the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the General Corporation
Law of the State of Delaware, as so amended, or such other Delaware law. Any
repeal or modification of the foregoing paragraph by the stockholders of the
Corporation shall not adversely affect any right or protection of a director of
the Corporation existing at the time of such repeal or modification.


                                  ARTICLE XIX

                              Amendment of Bylaws

     In furtherance and not in limitation of the powers conferred by statute,
the board of directors of the Corporation is expressly authorized to adopt,
repeal, alter, amend and rescind the bylaws of the Corporation by a vote of two-
thirds of the board of directors. Notwithstanding any other provision of this
Certificate or the bylaws of the Corporation (and notwithstanding the fact that
some lesser percentage may be specified by law), the bylaws shall not be
adopted, repealed, altered, amended or rescinded by the stockholders of the
Corporation except by the vote of the holders of not less than 80% of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class) cast at a meeting of the stockholders called for that purpose (provided
that notice of such proposed adoption, repeal, alteration, amendment or
rescission is included in the notice of such meeting), or, as set forth above,
by the board of directors.

                                  ARTICLE XX

                                       13
<PAGE>

                   Amendment of Certificate of Incorporation

     The Corporation reserves the right to repeal, alter, amend or rescind any
provision contained in this Certificate in the manner now or hereafter
prescribed by law, and all rights conferred on stockholders herein are granted
subject to this reservation. Notwithstanding the foregoing, the provisions set
forth in Articles X, XI, XII, XIII, XIV, XV, XVI, XVII, XVIII, XIX and this
Article XX may not be repealed, altered, amended or rescinded in any respect
unless the same is approved by the affirmative vote of the holders of not less
than 80% of the outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors (considered for this purpose as a
single class) cast at a meeting of the stockholders called for that purpose
(provided that notice of such proposed repeal, alteration, amendment or
rescission is included in the notice of such meeting); except that such repeal,
alteration, amendment or rescission may be made by the affirmative vote of the
holders of a majority of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors (considered
for this purpose as a single class) if the same is first approved by a majority
of the Continuing Directors, as defined in Article XV of this Certificate.

                                       14