BYLAWS
                                       OF
                               CENTENNIAL BANCORP

                                   ARTICLE 1.

                              SHAREHOLDERS' MEETING

                  Section  1.01.  ANNUAL  MEETING:  The  annual  meeting  of the
shareholders  shall be held on the second Thursday in April of every year at the
principal  office of the  corporation  or at such  other time or place as may be
determined by the Board of Directors.  At such meeting the shareholders entitled
to vote shall elect a Board of Directors and transact such other business as may
legally come before the meeting.

                  Section  1.02.  SPECIAL  MEETINGS:  Special  meetings  of  the
shareholders  of this  corporation  may be held at any  time on  request  of the
President or on the request of the Board of Directors or on demand in writing by
shareholders  of  record  holding  not less than  one-tenth  of the stock of the
corporation entitled to vote.

                  Section 1.03.  VOTING:  Each shareholder  shall be entitled to
one  vote,  in  person or by proxy,  for each  share of stock  entitled  to vote
outstanding in such shareholder's name on the books of the corporation.

                  Section  1.04.  QUORUM:  A majority of the shares  entitled to
vote,  represented  in  person  or by proxy,  shall  constitute  a quorum at any
meeting of the shareholders. If a quorum is present, the affirmative vote of the
majority of the shares  represented  at the meeting and  entitled to vote on the
subject  matter  shall  be the act of the  shareholders,  unless  the  vote of a
greater  number or  voting by  classes  is  required  by law,  the  Articles  of
Incorporation or other provision of these Bylaws.

                  Section 1.05.  NOTICE:  Written or printed  notice stating the
place,  day and hour of the  meeting,  and,  in case of a special  meeting,  the
purpose or purposes for which the meeting is called, shall be delivered not less
than ten nor more  than  sixty  days  before  the  date of the  meeting,  either
personally or by mail, by or at the direction of the  President,  the Secretary,
or the officer or person  calling the  meeting,  to each  shareholder  of record
entitled to vote at such meeting.  If mailed,  such notice shall be deemed to be
delivered when deposited in the United States Mail addressed to the  shareholder
at his  address as it appears on the stock  transfer  books of the  corporation,
with postage thereon prepaid.


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                                   ARTICLE 2.

                               BOARD OF DIRECTORS

                  Section 2.01.  NUMBER AND ELECTION OF DIRECTORS:  The Board of
Directors of this  corporation  shall  consist of not more than 15 members.  The
number of directors shall be set from time to time by resolution of the Board of
Directors,  but no decrease in the number of directors  shall have the effect of
shortening  the term of any  incumbent  director.  At each  annual  meeting  the
shareholders  shall elect  directors to hold office for the term for which he is
elected and until his successor  shall have been elected and qualified,  subject
to prior death, resignation or removal. No person shall be eligible for election
or  reelection  as a director if he will have  attained the age of seventy (70),
which can be extended to a time  certain  upon  written  request of the affected
individual and agreement by a majority of the Board of Directors, at the time of
his election or  reelection,  provided that a director  attaining such age shall
complete  the term for which he was  elected  and  continue  to serve  until his
successor shall have been elected and qualified.

                  Section 2.02. VACANCIES: Any vacancy occurring in the Board of
Directors shall be filled by election at a special  meeting of directors  called
for that purpose.  A director elected to fill a vacancy shall be elected for the
unexpired term of his predecessor in office, subject to prior death, resignation
or  removal.  Any  directorship  to be filled by reason of any  increase  in the
number of  directors  shall be filled in the same manner as if a vacancy in that
position  shall have  occurred,  provided the Articles of  Incorporation  of the
corporation reserves to the Board of Directors the power to fill such position.

                  Section 2.03. ANNUAL MEETING:  The Annual Meeting of the Board
of Directors shall be held without notice at the office of the corporation or at
such other place as the Board of Directors may designate  immediately  after the
adjournment of the regular meeting of the shareholders.

                  Section 2.04. SPECIAL MEETINGS:  Special meetings of the Board
of Directors shall be called by the Secretary when requested by the President or
any member of the Board of Directors  upon no less than 48 hours written or oral
notice to each  director.  Special  meetings of the directors may be held at any
time when all  members of the Board are present  and  consent  thereto.  Special
meetings  of the  directors  shall  be  held  at  the  principal  office  of the
corporation  or at any other  place  designated  by a  majority  of the Board of
Directors.

                  Section 2.05.  QUORUM: A majority of the number of elected and
qualified directors shall constitute a quorum for the transaction of business.


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                  Section 2.06. VOTING: The 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.

                  Section 2.07.  REMOVAL OF DIRECTORS:  Shareholders,  holding a
majority of the shares then entitled to vote for election of  directors,  may at
any  annual  meeting  of the  shareholders  or at  any  special  meeting  of the
shareholders  called for that purpose,  remove any director from office, with or
without cause.

                  Section  2.08.  POWERS OF  DIRECTORS:  The Board of  Directors
shall have sole  responsibility for the entire management of the business of the
corporation. In the management and control of the property, business and affairs
of the  corporation,  the Board of  Directors  is hereby  vested with all of the
powers  possessed  by the  corporation,  itself,  so far as this  delegation  of
authority is not inconsistent with the Oregon Business Corporation Act, with the
Articles of Incorporation of the corporation, or with these Bylaws. The Board of
Directors shall have power to determine what  constitutes net earnings,  profits
and surplus, respectively; what amount shall be reserved for working capital and
for any other purpose and what amount shall be declared as  dividends;  and such
determination by the Board of Directors shall be final and conclusive  except as
otherwise  provided by the Oregon  Business  Corporation Act and the Articles of
Incorporation.

                  Section 2.09. EXECUTIVE COMMITTEE:  The Board of Directors may
appoint  from among its members an Executive  Committee of two or more  members.
The Executive  Committee shall have such powers and shall perform such duties as
may be delegated  and assigned to the Executive  Committee  from time to time by
the Board of Directors. A majority of the members of the Executive Committee may
fix its rules of  procedure.  All  action by the  Executive  Committee  shall be
reported to the Board of  Directors  at the meeting  succeeding  such action and
shall be subject to revision, alteration and approval by the Board of Directors;
provided,  that no rights or acts of third parties shall be affected by any such
revision or  alteration.  Meetings of the Executive  Committee  shall be called,
from time to time, at the direction and upon the request of any member  thereof.
Notice of such meetings,  unless waived, shall in each instance be given to each
member of the  Committee  at his last known  business  address at least 24 hours
before such meeting,  either orally or in writing.  All actions by the Executive
Committee shall be by unanimous written approval, if taken without a meeting, or
if taken at a meeting, by a majority of those then serving on the Committee. The
Executive Committee shall keep such records of its activities and proceedings as
it shall  deem  appropriate.  All  meetings  shall be held in the  office of the
corporation unless all members of the Committee shall agree otherwise.

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                  Section 2.10.  OTHER  COMMITTEES:  In addition to an Executive
Committee,  the Board of  Directors  may  appoint  from among its  members  such
committees as it deems  appropriate.  Such committees shall have such powers and
perform such duties as shall be assigned to them by the Board of Directors  from
time to time. The Board of Directors in the  resolutions  establishing  any such
committee  shall  cover  such  matters  as a  committee's  rules of  procedures,
reporting to the Board of  Directors,  notice of committee  meetings,  action by
unanimous consent, records, location of meetings, and other appropriate matters.

                  Section  2.11.  CHAIRMAN OF THE BOARD:  The Board of Directors
may elect one of its members to be the Chairman of the Board of  Directors.  The
Chairman  shall  advise  and  consult  with the  Board and the  officers  of the
corporation  as to the  determination  of policy of the  corporation,  and shall
perform such other functions and  responsibilities  as the Board shall designate
from time to time.

                  Section  2.12.  VICE-CHAIRMAN  OF  THE  BOARD:  The  Board  of
Directors  may elect one or more of its  members  to be a  Vice-Chairman  of the
Board of Directors.  The  Vice-Chairman  shall advise and consult with the Board
and the officers of the  corporation  as to the  determination  of policy of the
corporation.  He  shall  act as  Chairman  of the  Board in the  absence  of the
Chairman.

                                   ARTICLE 3.

                                    OFFICERS

                  Section 3.01.  COMPOSITION:  The officers of this  corporation
shall consist of a President, a Secretary, and a Treasurer or Financial Officer,
each of whom shall be elected by the Board of Directors at the annual meeting of
the Board of Directors.  One or more Vice-Presidents and such other officers and
assistant  officers  and  agents as may be deemed  necessary  may be  elected or
appointed by the Board of Directors,  and any vacancies  occurring in any office
of this  corporation  may be filled by election or  appointment  by the Board of
Directors at any special meeting. All officers shall hold their office until the
next annual  meeting of the Board of Directors  and until their  successors  are
elected and qualified,  subject to prior death,  resignation or removal. Any two
or more offices may be held by the same person,  except the offices of President
and Secretary.

                  Section  3.02.  PRESIDENT:  The  President  shall be the chief
executive  officer of this  corporation.  He shall act as chairman only at those
meetings of the  shareholders and of the Board of Directors at which there is no
duly elected and acting Chairman or Vice-Chairman of the Board of Directors.  He
shall sign  certificates  of stock of the  corporation  and all  deeds,  leases,
contracts,


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mortgages,  deeds of trust and other  instruments  binding upon the corporation,
and perform such other duties as may be required  from time to time by the Board
of Directors.

                  Section 3.03. VICE-PRESIDENTS: The Vice-Presidents, if any, in
the order of seniority or as  designated by the Board of Directors or President,
shall in the absence or  disability  of the  President  exercise  the powers and
perform the duties of the  President.  Each  Vice-President  shall also exercise
such other powers and perform such other  duties as shall be  prescribed  by the
directors,  and such powers and duties of the  President as may be designated by
the President.

                  Section 3.04. SECRETARY:  The Secretary shall keep the minutes
and records of all the  meetings of the  shareholders  and  directors  and other
official business of the corporation. He shall have the power, together with the
President or Vice-President,  to sign all deeds, leases,  contracts,  mortgages,
deeds  of  trust,  certificates  of stock or  other  documents  executed  by the
corporation.  He shall also give  notice of  meetings  to the  shareholders  and
directors  and shall  perform such other duties as may be required of him by the
Board of Directors.

                  Section 3.05. TREASURER: It shall be the duty of the Treasurer
to receive  all moneys and funds of the  corporation  and to deposit the same in
the bank or banks  designated  by the Board of Directors  and in the name and to
the account of the corporation. He shall keep full and accurate books of account
and shall make such reports of such official transactions of the finances of the
corporation as may from time to time be required by the Board of Directors,  and
he shall  perform  such other  duties as may be  required of him by the Board of
Directors. If the Board of Directors appoints a Vice-President-Finance  or other
Financial  Officer,  the  duties  of the  office of  Treasurer  may rest in such
officer and in such event, the Board of Directors need not appoint a Treasurer.

                  Section 3.06. REMOVAL: The directors, by majority vote, at any
special meeting called for that purpose, may remove any officer from office with
or without  cause;  provided,  however,  that no such  removal  shall impair the
contract rights of this corporation or any person or entity.

                                   ARTICLE 4.

                           SECURITIES AND REGISTRATION
                              AND TRANSFER THEREOF

                  Section  4.01.  CERTIFICATES:  All  certificates  of stock and
other  securities of this  corporation  shall be signed by the President and the
Secretary of the  corporation,  or by any other  officer


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duly  authorized by the Board of  Directors,  and may be sealed with the seal of
the corporation or a facsimile thereof.

                  Section  4.02.  TRANSFER  AGENT  AND  REGISTRAR:  The Board of
Directors may from time to time appoint one or more  Transfer  Agents and one or
more Registrars for the capital stock and other  securities of the  corporation.
The  signatures  of the  President or a  Vice-President  and the Secretary or an
Assistant  Secretary upon a certificate  may be facsimiles if the certificate is
countersigned by a Transfer Agent, or registered by a Registrar,  other than the
corporation itself or an employee of the corporation.

                  Section  4.03.  TRANSFER:  Title to a  certificate  and to the
interest in this corporation represented thereby can be transferred only: (a) by
delivery of the certificate endorsed either in blank or to a specified person by
the  person  appearing  by the  certificate  to be  the  owner  of the  interest
represented  thereby,  or (b) by  delivery  of the  certificate  and a  separate
document  containing  a  written  assignment  of the  certificate  or a power of
attorney  to sell,  assign  or  transfer  the same or the  interest  represented
thereby,  signed by the person  appearing by the  certificate to be the owner of
the interest  represented  thereby.  Such assignment or power of attorney may be
either in blank or to a specified person.

                  Section  4.04.  NECESSITY  FOR  REGISTRATION:   Prior  to  due
presentment for registration  upon the books of the corporation of a transfer of
a security of this  corporation,  the  corporation  or its agent for purposes of
registering  transfers of its securities  may treat the registered  owner of the
security as the person exclusively  entitled to vote, to receive any notices, to
receive   payment  of  any  interest  on  a  security,   or  of  any   ordinary,
extraordinary,  partial liquidating, final liquidating, or other dividend, or of
any other  distribution,  whether paid in cash or in  securities or in any other
form,  or  otherwise to exercise or enjoy any or all of the rights and powers of
an owner.

                  Section  4.05.  CLOSING  TRANSFER  BOOKS:  For the  purpose of
determining  the  registered  owners of stock or other  securities  entitled  to
notice  of or to vote at any  meeting  of the  shareholders  or any  adjournment
thereof,  or to  receive  payment  of  any  interest  on a  security,  or of any
ordinary,  extraordinary,  partial  liquidating,  final  liquidating,  or  other
dividend, or of any other distribution, whether paid in cash or in securities or
in any other form,  or  otherwise  to exercise or enjoy any or all of the rights
and powers of an owner, or in order to make a determination of registered owners
for any other  proper  purpose,  the Board of  Directors  may  provide  that the
transfer  books shall be closed for a stated period of not more than 50 days. If
the transfer books shall be closed for the purpose of determining the registered
owners  entitled to notice of or to vote at a meeting of the  shareholders or an
adjournment thereof,  such


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books shall be closed for a stated period of not more than 50 days nor less than
10 days immediately preceding such meeting.

                  Section  4.06.  FIXING  RECORD  DATE:  In lieu of closing  the
transfer books,  the Board of Directors may fix in advance a date as record date
for any  determination  of registered  owners for which the transfer books might
have been  closed as provided  in Section  4.05 above,  such date to be not more
than 70 days and,  in case of a meeting of  shareholders,  not less than 10 days
prior  to  the  date  on  which  the  particular   action  which  requires  such
determination of registered owners is to be taken.

                  Section  4.07.  LOST  CERTIFICATES:  In  case  of the  loss or
destruction of a certificate of stock or other security in this  corporation,  a
duplicate certificate may be issued in its place upon such terms as the Board of
Directors shall prescribe.

                                   ARTICLE 5.

                                WAIVER OF NOTICE

                  Whenever any notice is required to be given to any shareholder
or director of the corporation by these Bylaws or the Articles of Incorporation,
or by the corporation  laws of the State of Oregon, 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 deemed  equivalent  to the required  notice.
Presence of a director at any meeting  shall  constitute  a waiver of any notice
required for such  meeting,  except  where a director  attends a meeting for the
express  purpose of objecting  to the  transaction  of any business  because the
meeting is not lawfully called or convened.

                                   ARTICLE 6.

                             ACTION WITHOUT MEETING

                  Any action  required or  permitted to be taken at a meeting of
the shareholders or directors of this corporation, or any other action which may
be taken at a meeting of the  shareholders or directors,  may be taken without a
meeting  if a consent  in writing  setting  forth the  action so taken  shall be
signed by all of the shareholders or directors  entitled to vote with respect to
the subject matter thereof. Such consent shall have the same force and effect as
a unanimous vote of such  shareholders or directors and may be stated as such in
any articles or document filed with the Corporation Commissioner of the State of
Oregon, any other governmental authority or any person or entity.


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                                   ARTICLE 7.

                                 CORPORATE SEAL

                                                  If this corporation shall have
                                             a  corporate  seal,  its  size  and
                                             style   shall   be   shown  by  the
                                             impression on the margin hereof.

                                   ARTICLE 8.

                                   AMENDMENTS

             The Bylaws of this corporation may be altered,  amended or repealed
by the directors or the  shareholders  at any regular  meeting or at any special
meeting called for that purpose, provided notice of the proposed change is given
in the notice of the meeting or notice thereof is waived in writing.

                                   ARTICLE 9.

                                  CONSTRUCTION

             In construing these Bylaws, it is understood that if the context so
requires, the masculine pronoun shall be taken to mean and include the feminine.




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