Exhibit
3.2




BYLAWS


OF


SEVERN
BANCORP, INC.


ARTICLE
I. HOME OFFICE





The home
office of Severn Bancorp, Inc. (the "Corporation") is 1919A West Street,
Annapolis, in the County of Anne Arundel,in the State of
Maryland.





ARTICLE
II. SHAREHOLDERS





Section
1.   Place of Meetings.
All annual and special meetings of Shareholders shall be held at the home office
of the Corporation or at such other place in the State in which the principal
place of business of the Corporation is located as the Board of Directors may
determine.





Section
2.    Annual
Meeting.         meeting of the
shareholders of the Corporation for the election of directors and for the
transaction of any other business of the Corporation shall be held annually
within 120 days after the end of the Corporation's fiscal year as the Board of
Directors may determine.





Section
3.    Special Meetings.
Special Meetings for any purpose or purposes may be called at any time by the
Chairman of the Board, the President or a majority of the Board of Directors,
and shall be called by the Chairman of the Board, the President or the Secretary
upon the written request of the holders of no less than 25% of all the
outstanding capital stock of the Corporation entitled to vote at the meeting.
Such written request shall state the purpose or purposes of the meeting and
shall be delivered to the home office of the Corporation addressed to the
Chairman of the Board, the President or the Secretary.





Section
4.    Conduct of Meetings.
Annual and Special Meetings shall be conducted in accordance with the most
current edition of Robert's Rules of Order unless otherwise prescribed by
regulations of the Board or these Bylaws. The Board of Directors shall
designate, when present, either the Chairman of the Board or President to
preside at such meetings.





Section
5.    Notice of
Meetings.      Written notice stating the
place, day and hour of the meeting and the purpose(s) for which the meeting is
called shall be delivered no fewer than 10 nor more than 50 days before the date
of the meeting, either personally or by mail, by or at the direction of the
Chairman of the Board, the President, or the secretary, or the directors 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 mail,
addressed to the Shareholder at the address as it appears on the stock transfer
books or  records of the Corporation as of the record date prescribed
in Section 6 of this Article II, with postage prepaid. When any Shareholders'
meeting, either Annual or Special, is adjourned for 30 days or more, notice of
the adjourned meeting shall be given as in the case of an original meeting. It
shall not be necessary to give any notice of the time and place of any meeting
adjourned for less than 30 days or of the business to be transacted at the
meeting, other than an announcement at the meeting at which such adjournment is
taken.





Section
6.    Fixing of Record
Date.     For the purpose of determining
Shareholders entitled to notice of or to vote at any meeting of Shareholders or
any adjournment , or Shareholders entitled to receive payment of any dividend,
or in order to make a determination of Shareholders for any other proper
purpose, the Board of Directors shall fix in advance a date as the record date
for any such determination of Shareholders. Such date in any case shall be not
more than 60 days and, in case of a meeting of Shareholders, not fewer than 10
days prior to the date on which the particular action, requiring such
determination of Shareholders, is to be taken. 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.





1




Section
7.    Voting
Lists.      At least 20 days before each
meeting of the Shareholders, the officer or agent having charge of the stock
transfer books for shares of the Corporation shall make a complete list of the
Shareholders entitled to vote at such meeting, or any adjournment, arranged in
alphabetical order, with the address and the number of shares held by each. This
list of Shareholders shall be kept on file at the home office of the Corporation
and shall be subject to inspection by any Shareholder at any time during usual
business hours, for a period of 20 days prior to such meeting. Such 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 during the entire time of the meeting.
The original stock transfer book shall constitute prima facie evidence of the
Shareholders entitled to examine such list or transfer books or to vote at any
meeting of Shareholders.





Section
8.   Quorum.  A
majority of the outstanding shares of the Corporation entitled to vote,
represented in person or by proxy, shall constitute a quorum at a meeting of
Shareholders. If less than a majority of the outstanding shares is represented
at a meeting, a majority of the shares so represented may adjourn the meeting
from time to time without further notice. At such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified. The
Shareholders present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
Shareholders to constitute less than a quorum.





Section 9. Proxies.    At
all meetings of Shareholders, a Shareholder may vote by proxy executed in
writing by the Shareholder or by his duly authorized attorney in fact. Proxies
solicited on behalf of the management shall be voted as directed by the
Shareholder or, in the absence of such direction, as determined by a majority of
the Board of Directors.  No proxy shall be valid more than eleven
months from the date of its execution except for a proxy coupled with an
interest.





Section 10. Voting of Shares in the Name
of Two or More Persons.When ownership stands in the name of two or more
persons, in the absence of written directions to the Corporation to the
contrary, at any meeting of the Shareholders of the Corporation any one or more
of such Shareholders may cast, in person or by proxy, all votes to which such
ownership is entitled. In the event an attempt is made to cast conflicting
votes, in person or by proxy, by the several persons in whose names shares of
stock stand, the vote or votes to which those persons are entitled shall be cast
as directed by a majority of those holding such and present in person or by
proxy at such meeting, but no votes shall be cast for such stock if a majority
cannot agree.





Section 11. Voting of Shares by Certain
Holders.   Shares standing in the name of another
corporation may be voted by any officer, agent or proxy as the Bylaws of such
corporation may prescribe, or, in the absence of such provision, as the Board of
Directors of such corporation may determine. Shares held by an administrator,
executor, guardian or conservator may be voted by him, either in person or by
proxy, without a transfer of such shares into his name. Shares standing in the
name of a trustee may be voted by him, either in person or by proxy, but no
trustee shall be entitled to vote shares held by him without a transfer of such
shares into his name. Shares standing in the name of a receiver may be voted by
such receiver, and shares held by or under the control of a receiver may be
voted by such receiver without the transfer into his name if authority to do so
is contained in an appropriate order of the court or other public authority by
which such receiver was appointed.





2


A
Shareholder whose shares are pledged shall be entitled to vote such shares until
the shares have been transferred into the name of the pledgee and thereafter the
pledgee shall be entitled to vote the shares so transferred.





Neither
treasury shares of its own stock held by the Corporation nor shares held by
another corporation, if a majority of the shares entitled to vote for the
election of directors of such other corporation are held by the Corporation,
shall be voted at any meeting or counted in determining the total number of
outstanding shares at any given time for purposes of any meeting.





Section 12. Voting.    At
each election for directors every shareholder entitled to vote at such election
shall be entitled to one vote for each share of stock held by him. Unless
otherwise provided by these Bylaws, the Articles of Incorporation, or the
General Laws of the State of Maryland, a majority of those votes cast by
shareholders at a lawful meeting shall be sufficient to pass on a transaction or
matter.





Section 13. Inspectors of
Election.   In advance of any meeting of Shareholders, the
Board of Directors may appoint any persons other than nominees for off ice as
inspectors of election to act at such meeting or any adjournment. The number of
inspectors shall be either one or three. Any such appointment shall not be
altered at the meeting. If inspectors of election are not so appointed, the
Chairman of the Board or the President may, or on the request of not fewer than
l0% of the votes represented at the meeting shall, make such appointment at the
meeting. If appointed at the meeting, the majority of the votes present shall
determine whether one or three inspectors are to be appointed. In case any
person appointed as inspector fails to appear or fails or refuses to act, the
vacancy may be filled by appointment by the Board of Directors in advance of the
meeting, or at the meeting by the Chairman of the Board or the President. Unless
otherwise prescribed by regulations of the Board, the duties of such inspectors
shall include: determining the number of shares represented at the meeting, the
existence of a quorum, and the authenticity, validity and effect of proxies;
receiving votes, ballots, or consents; hearing and determining all challenges
and questions in any way arising in connection with the rights to vote; counting
and tabulating all votes or consents; determining the result; and such acts as
may be proper to conduct the election or vote with fairness to all
Shareholders.





Section
14.   Nominating
Committee.  The Board of Directors shall act as a nominating
committee for selecting the management nominees for election as
directors.  Except in the case of a nominee substituted as a result of
the death or other incapacity of a management nominee, the nominating committee
shall deliver written nominations to the Secretary at least 60 days prior to the
date of the Annual Meeting.  No nominations for directors except those
made by the nominating committee shall be voted upon at the Annual Meeting
unless other nominations by Shareholders are made in writing and delivered to
the Secretary of the Corporation at least 60 days prior to the date of the
Annual Meeting.  Ballots bearing the names of all persons nominated by
the nominating committee and by Shareholders shall be provided for use at the
Annual meeting.  However, if the nominating committee shall fail or
refuse to act at least 20 days prior to the Annual Meeting, nominations for
directors may be made at the Annual Meeting by any Shareholder entitled to vote
and shall be voted upon.




Section
15.   New
Business.  Any new business to be taken up at the Annual
Meeting shall be stated in writing and filed with the Secretary of the
Corporation at least 60 days before the date of the Annual Meeting, and all
business so stated, proposed, and filed shall be considered at the Annual
Meeting but no other proposal shall be acted upon at the Annual
Meeting.  Any shareholder may make any other proposal at the Annual
Meeting and the same may be discussed and considered, but unless stated in
writing and filed with the Secretary at least 60 days before the meeting, such
proposal shall be laid over for action at an Adjourned, Special, or Annual
Meeting of the Shareholders taking place 30 days or more
thereafter.  This provision shall not prevent the consideration and
approval or disapproval at the Annual Meeting of reports of officers, directors
and committees; but in connection with such reports no new business shall be
acted upon at such Annual Meeting unless stated and filed as herein
provided.





3


Section
16.     Informal Action by
Shareholders.    Any action required to be taken at a
meeting of the Shareholders, or any other action which may be taken at a meeting
of the Shareholders, may be taken without a meeting if consent in writing,
setting forth the action so taken, shall be given by all of the Shareholders
entitled to vote with respect to the subject matter.





ARTICLE
III. BOARD OF DIRECTORS





Section
1.    General
Powers.      The business and affairs of
the Corporation shall be under the direction of its Board of Directors. The
Board of Directors shall annually elect a Chairman of the Board and a President
from among its members and shall designate, when present, either the Chairman of
the Board or the President to preside at its meetings.





Section
2.      Number and
Term.  The Board of Directors shall consist of up to eleven
directors and no less than seven directors.  The directors shall be
divided into three classes as nearly equal in number as possible.  The
directors of each class shall be elected for a term of three years and until
their successors are elected and qualified.  One class shall be
elected by ballot annually.





Section
3.     Regular
Meetings.    A Regular Meeting of the Board of
Directors shall be held without other notice than this Bylaw immediately after,
and at the same place as, the Annual Meeting of Shareholders. The Board of
Directors may provide, by resolution, the time and place for the holding of
additional regular meetings without other notice than such
resolution.





Section
4.    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
one-third of the directors. The persons authorized to call Special Meetings of
the Board of Directors may fix any place as the place for holding any Special
Meeting of the Board of Directors called by such persons.





Members
of the Board of Directors may participate in Special Meetings by means of
conference telephone, or by means of similar communications equipment by which
all persons participating in the meeting can hear each other. Such participation
shall constitutepresence in person but shall not constitute attendance for the
purpose of compensation pursuant to Section 12 of this Article.





Section
5.   Notice.   Written
notice of any Special Meeting shall be given to each director at least two days
prior thereto when delivered personally or by telegram, or at least five days
prior thereto when delivered by mail at the address at which the director is
most likely to be reached. Such notice shall be deemed to be delivered when
deposited in the mail so addressed, with postage prepaid if mailed, or when
delivered to the telegraph company if sent by telegram. Any director may waive
notice of any meeting by a writing filed with the Secretary. The attendance of a
director at a meeting shall constitute a waiver of notice of 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. Neither the business to be transacted at, nor the purpose of, any
meeting of the Board of Directors need be specified in the notice of waiver of
notice of such meeting.





4


Section
6.  Quorum.   A
majority of the number of directors fixed by Section 2 of this Article III shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors, but if less than such majority is present at a meeting; ­a
majority of the directors present may adjourn the meeting from time to time.
Notice of any Adjourned Meeting shall be given in the same manner as prescribed
by Section 5 of this Article III.





Section
7.  Manner of
Acting.     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, unless a greater number is prescribed by regulation of
the Board or by these Bylaws.





Section
8.     Action Without a
Meeting.  Any action required or permitted to be taken by the
Board of Directors at a meeting may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by all of the
directors.





Section
9.     Resignation.  Any
director may resign at any time by sending a written notice of such resignation
to the home office of the Corporation addressed to the Chairman of the Board or
President. Unless otherwise specified, such resignation shall take effect upon
receipt by the Chairman of the Board or President. More than three consecutive
absences from regular meetings of the Board of Directors, unless excused by
resolution of the Board of Directors, shall automatically constitute a
resignation, effective when such resignation is accepted by the Board of
Directors.





Section
10.     Vacancies.  Any
vacancy occurring in the Board of Directors may be filled by the affirmative
vote of a majority of the remaining directors although less than a quorum of the
Board of Directors. A director elected to fill a vacancy shall be elected to
serve until the next election of directors by the Shareholders. Any directorship
to be filled by reason of an increase in the number of directors may be filled
by election by the Board of Directors for a term of office continuing only until
the next election of directors by the Shareholders.





Section
11.  Compensation.
Directors, as such, may receive a stated salary for their services. By
resolution of the Board of Directors, a reasonable fixed sum, and reasonable
expenses of attendance, if any, may be allowed for actual attendance at each
Regular or Special Meeting of the Board of Directors. Members of either standing
or special committees may be allowed such compensation for actual attendance at
committee meetings as the Board of Directors may determine.





Section
12.    Presumption of
Assent. A director of the Corporation who is present at a meeting of the
Board of Directors at which action on any Corporation matter is taken shall be
presumed to have assented to the action taken unless- his dissent or abstention
shall be entered in the minutes of the meeting or unless he shall file a written
dissent to such action with the person acting as the Secretary of the meeting
before the adjournment thereof or shall forward such dissent by registered mail
to the Secretary of the Corporation within five days afterthe date a copy of the
minutes of the meeting is received. Such right to dissent shall not apply to a
director who voted in favor of such action.





Section
13.   Removal of Directors.
At a meeting of Shareholders called expressly for that purpose, any Director may
be removed for cause by a vote of the holders of 75% of the shares then entitled
to vote at an election of directors. If less than the entire board is to be
removed, no one of the directors may be removed if the votes cast against the
removal would be sufficient to elect a director if then cumulatively voted at an
election of the class of directors of which such director is a part. Whenever
the holders of the shares of any class are entitled to elect one or more
directors by the provisions of the Charter or supplemental sections thereto, the
provisions of this selection shall apply, in respect to the removal of a
director or directors so elected, to the vote of the holders of the outstanding
shares of that class and not to the vote of the outstanding shares as a
whole.





5


ARTICLE
IV. EXECUTIVE AND OTHER COMMITTEES





Section
1.  Appointment. The
Board of Directors, by resolution adopted by a majority of the full Board, may
designate the President and two or more of the other directors to constitute an
executive committee. The designation of any committee pursuant to this Article
IV and the delegation of authority shall not operate to relieve the Board of
Directors, or any director, of any responsibility imposed by law or
regulation.





Section
2.   Authority. The
executive committee, when the Board of Directors is not in session, shall have
and may exercise all of the authority of the Board of Directors except to the
extent, if any, that such authority shall be limited by the resolution
appointing the executive committee; and except also that the executive committee
shall not have the authority of the Board of Directors with reference to: the
declaration of dividends; the amendment of the Articles of Incorporation or
Bylaws of the Corporation, or recommending to the Shareholders a plan of merger,
consolidation, or conversion; the sale, lease or other, disposition of all or
substantially all of the property and assets of the Corporation otherwise than
in the usual and regular course of its business; a voluntary dissolution of the
Corporation; a revocation of any of the foregoing; or the approval of a
transaction in which any member of the executive committee, directly or
indirectly, has any material beneficial interest.





Section 3. Tenure. Subject to
the provisions of Section 8 of this Article IV, each member of the executive
committee shall hold office until the next Regular Annual Meeting of the Board
of Directors following his or her designation and until a successor is
designated as a member of the executive committee.





Section
4.     Meetings. Regular
Meetings of the executive committee may be held without notice at such times and
places as the executive committee may fix from time to time by resolution.
Special Meetings of the executive committee may be called by any member thereof
upon not less than one day's notice stating the place, date and hour of the
meting, which notice may be written or oral. Any member of the executive
committee may waive notice of any meeting and no notice of any meeting need be
given to any member thereof who attends in person. The notice of a meeting of
the executive committee need not state the business proposed to be transacted at
the meeting.





Section
5.   Quorum. A majority of
the members of the executive committee shall constitute a quorum for the
transaction of business at any meeting thereof, and action of the executive
committee must be authorized by the affirmative vote of a majority of the
members present at a meeting at which a quorum is present.





Section
6.   Action Without a
Meeting. Any action required or permitted to be taken by the executive
committee at a meeting may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by all of the members of the
executive committee.





6


Section
7.  Vacancies. Any
vacancy in the executive committee may be filled by a resolution adopted by a
majority of the full Board of Directors.





Section
8.  Resignations and
Removal. Any member of the executive committee may be removed at any time
with or without cause by resolution adopted by a majority of the full Board of
Directors. Any member of the executive committee may resign from the executive
committee at any time by giving written notice to the­ President or
Secretary of the Corporation. Unless otherwise specified, such resignation shall
take effect upon its receipt; the acceptance of such resignation shall not be
necessary to make it effective.





Section
9.   Procedure. The
executive committee shall elect a presiding officer from its members and may fix
its own rules of procedure which shall not be inconsistent with these Bylaws. It
shall keep regular minutes of its proceedings and report the same to the Board
of Directors for its information at the meeting held next after the proceedings
shall have occurred.





Section
10.   Other Committees. The
Board of Directors may by resolution establish an audit, loan, or other
committees composed of directors as they may determine to be necessary or
appropriate for the conduct of the business of the Corporation and may prescribe
the duties, constitution and procedures thereof.





ARTICLE
V. OFFICERS





Section
1.      Positions. The
officers of the Corporation shall be a President, one or more Vice Presidents, a
Secretary, and a Treasurer, each of whom shall be elected by the Board of
Directors. The Board of Directors may also designate the Chairman of the Board
as an officer. The Chairman of the Board shall be the Chief Executive officer,
and the President will be Chief Operating Officer. The President shall be a
director of the Corporation. The offices of the Secretary and Treasurer may be
held by the same person and a Vice President may also be either the Secretary of
the Treasurer. The Board of Directors may designate one or more Vice Presidents
as Executive Vice President or Senior Vice President. The Board of Directors may
also elect or authorize the appointment of such other officers as the business
of the Corporation may require. The officers shall have such authority and
perform such duties as the Board of Directors may from time to time authorize or
determine. In the absence of action by the Board of Directors, the officers
shall have such powers and duties as generally pertain to their respective
offices.





Section
2.   Election and Term of Office. The officers of the Corporation shall be elected annually at the first
meeting of the Board of Directors held after each annual meeting of the
Shareholders. If the election of officers is not held at such meeting, such
election shall be held as soon thereafter as possible. Each officer shall hold
office until a successor has been duly elected and qualified or until the
officer's death, resignation or removal in the manner hereinafter provided.
Election or appointment of an officer, employee or agent shall not of itself
create contractual rights. The Board of Directors may authorize the Corporation
to enter into an employment contract with any officer in accordance with
regulations of the Board; but no such contract shall impair the right of the
Board of Directors to remove any officer at any time in accordance with Section
3 of this Article V.





Section
3.         Removal. Any officer
may be removed by the Board of Directors whenever in its judgment the best
interests of the Corporation will be served thereby, but such removal, other
than for cause, shall be without prejudice to the contractual rights, if any, of
the person so removed.





7


Section
4.      Vacancies. A vacancy
in any office because of death, resignation, removal, disqualification or
otherwise, may be filled by the Board of Directors for the unexpired portion of
the term.





Section
5.      Remuneration. The
remuneration of the officers shall be fixed from time to time by the Board of
Directors.





ARTICLE
VI. CONTRACTS, LOANS, CHECKS AND DEPOSITS





Section
1.      Contracts.   To
the extent permitted by regulations of the Board, and except as otherwise
prescribed by these Bylaws with respect to certificates for shares, the Board of
Directors may authorize any officer, employee, or agent of the Corporation to
enter into any contract or execute and deliver any instrument in the name of and
on behalf of the Corporation.  Such authority may be general or
confined to specific instances.





Section
2.     Loans. No loans shall
be contracted on behalf of the Corporation and no evidence of indebtedness shall
be issued in its name unless authorized by the Board of Directors. Such
authority may be general or confined to specific instances.





Section
3.      Checks, Drafts, Etc.
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the Corporation shall be signed
by one or more officers, employees or agents of the Corporation in such manner
as shall from time to time be determined by the Board of Directors.





Section
4.     Deposits. All funds
of the Corporation not otherwise employed shall be deposited from time to time
to the credit of the Corporation in any duly authorized depository as the Board
of Directors may select.





ARTICLE
VII. CERTIFICATES FOR SHARES AND THEIR TRANSFER





Section
1.     Certificates for
Shares. Certificates representing shares of capital stock of the
Corporation shall be in such form as shall be determined by the Board of
Directors and approved by the Board. Such certificates shall be signed by the
chief executive officer or by any other officer of the Corporation authorized by
the Board of Directors, attested by the Secretary or an Assistant Secretary, and
sealed with the corporate seal or a facsimile thereof. The signatures of such
officers upon a certificate may be facsimiles if the certificate is manually
signed on behalf of a transfer agent or a registrar other than the Corporation
itself or one of its employees. Each certificate for shares of capital stock
shall be consecutively numbered or otherwise identified. The name and address of
the person to whom the shares are issued with the number of shares and date of
issue, shall be entered on the stock transfer books of the
Corporation.  All certificates surrendered to the Corporation for
transfer shall be cancelled and no new certificate shall be issued until the
former certificate for a like number of shares has been surrendered and
cancelled, except that in case of a lost or destroyed certificate, a new
certificate may be issued upon such terms and indemnity to the Corporation as
the Board of Directors may prescribe.





Section
2.    Transfer of Shares.
Transfer of shares of capital stock of the Corporation shall be made only on its
stock transfer books. Authority for such transfer shall be given only by the
holder of record or by his legal representative, who shall furnish proper
evidence of such authority, or by his attorney authorized by a duly executed
power of attorney and filed with the Corporation. Such transfer shall be made
only on surrender for cancellation of the certificate for such shares. The
person in whose name shares of capital stock stand on the books of the
Corporation shall be deemed by the Corporation to be the owner for all
purposes.





8




Section
3.       Lost Certificates.
The Board of Directors may direct a new certificate to be issued in place of any
certificate theretofore issued by the Corporation alleged to have been lost
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost stolen, or destroyed certificate or his legal representative,
to give the Corporation a bond in such sum as it may direct as indemnity against
any claim that may be made against the Corporation with respect to the
certificate alleged to have been lost, stolen, or destroyed.





Section
4.       Beneficial Owners.
The Corporation shall be entitled to recognize the exclusive right of a person
registered on its books as the owner of shares to receive dividends, and to vote
as such owner, and shall not be bound to recognize any equitable or other claim
to or interest in such shares on the part of any other person, whether or not
the Corporation shall have express or other notice thereof, except as otherwise
provided by law.





ARTICLE
VIII. FISCAL YEAR; ANNUAL AUDIT





The
fiscal year of the Corporation shall end on the 31st day of December of each
year. The Corporation shall be subject to an annual audit as of the end of its
fiscal year by independent public accountants appointed by and responsible to
the Board of Directors.





ARTICLE
IX. DIVIDENDS





Subject
to the terms of the Corporation's Articles of Incorporation and the regulations
and orders of the Board, the Board of Directors may, from time to time, declare,
and the Corporation may pay, dividends on its outstanding shares of capital
stock.





ARTICLE X
.. CORPORATE SEAL





The
Corporate Seal of the Corporation shall be in such form as the Board of
Directors shall prescribe.





ARTICLE
XI. AMENDMENTS





In
accordance with the Corporation's Articles of Incorporation, these Bylaws may be
repealed, altered, amended or rescinded by the Shareholders of the Corporation
only by vote of not less 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 one class) cast at a meeting of the Shareholders
called for that purpose (provided that notice of such proposed repeal,
alteration, amendment or rescission is included in the notice of such meeting).
In addition, except as expressly reserved for the Shareholders of the
Corporation in the Articles of Incorporation, the Board of Directors may repeal,
alter, amend or rescind these Bylaws by vote of a majority of the Board of
Directors at a legal meeting held in accordance with the provisions of these
Bylaws.





9


AMENDMENT
TO BYLAWS OF SEVERN BANCORP, INC.





RESOLVED:  that the Bylaws of
the Corporation as set forth herein shall be amended as follows, effective
immediately.





Sections 14 and 15 of the Bylaws of the
Corporation are deleted and the following are substituted:





“Section
14.   Nominating
Committee.  The Board of Directors shall act as a nominating
committee for selecting the management nominees for election as
directors.  Except in the case of a nominee substituted as a result of
the death or other incapacity of a management nominee, the nominating committee
shall deliver written nominations to the Secretary at least 60 days prior to the
date of the Annual Meeting.  No nominations for directors except those
made by the nominating committee shall be voted upon at the Annual Meeting
unless other nominations by Shareholders are made in writing and delivered to
the Secretary of the Corporation at lease 60 days prior to the date of the
Annual Meeting.  Ballots bearing the names of all persons nominated by
the nominating committee and by Shareholders shall be provided for use at the
Annual meeting.  However, if the nominating committee shall fail or
refuse to act at least 20 days prior to the Annual Meeting, nominations for
directors may be made at the Annual Meeting by any Shareholder entitled to vote
and shall be voted upon.”





“Section
15.      New
Business.     Any new business to be taken up at
the Annual Meeting shall be stated in writing and filed with the Secretary of
the Corporation at least 60 days before the date of the Annual Meeting, and all
business so stated, proposed, and filed shall be considered at the Annual
Meeting but no other proposal shall be acted upon at the Annual
Meeting.  Any shareholder may make any other proposal at the Annual
Meeting and the same may be discussed and considered, but unless stated in
writing and filed with the Secretary at least 60 days before the meeting, such
proposal shall be laid over for action at an Adjourned, Special, or Annual
Meeting of the Shareholders taking place 30 days or more
thereafter.  This provision shall not prevent the consideration and
approval or disapproval at the Annual Meeting of reports of officers, directors
and committees; but in connection with such reports no new business shall be
acted upon at such Annual Meeting unless stated and filed as herein
provided.”








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AMENDMENTS TO THE BYLAWS OF
SEVERN BANCORP, INC.





Article
VII of the Corporation’s Bylaws is hereby amended and restated to read as
follows:





ARTICLE
VII. CERTIFICATES FOR SHARES, UNCERTIFICATED SHARES,


AND THEIR
TRANSFER





Section 1. Certificates for
Shares. Shares of stock of the Corporation may be represented by
certificates or may be uncertificated. Any such certificate for shares shall be
in such form as the Board of Directors shall prescribe, and shall bear such
information as may be required to be included in stock certificates under
Maryland law. The certificate shall be signed by the chief executive officer or
by any other officer of the Corporation authorized by the Board of Directors,
attested by the Secretary or an Assistant Secretary, and sealed with the
corporate seal or a facsimile thereof. The signatures of such officers upon a
certificate may be facsimiles if the certificate is manually signed on behalf of
a transfer agent or a registrar other than the Corporation itself or one of its
employees.





Section 2. Uncertificated
Shares. The Corporation may issue some or all of any class or series of
stock without certificates, in compliance with the procedures required under
applicable law for the issuance and registration of transfer thereof, and may
take any other action relating to uncertificated shares as the Board of
Directors may deem appropriate. No such authorization shall affect previously
issued and outstanding shares represented by certificates until such
certificates shall have been surrendered to the Corporation. Within a reasonable
time after the issuance or transfer of uncertificated shares, the Corporation
shall issue or caused to be issued to the holder of such shares a written
statement of the information required to be included on stock certificates under
Maryland law. Notwithstanding the adoption of any resolution providing for
uncertificated shares, each registered holder of stock represented by
uncertificated shares shall be entitled, upon request to the custodian of the
stock transfer books of the Corporation, or other person designated as the
custodian of the records of uncertificated shares, to have physical certificates
representing such shares registered in such holder’s name. Except as otherwise
expressly provided by law, the rights and obligations of the holders of shares
represented by certificates and the rights and obligations of the holders of
uncertificated shares of the same class and series shall be
identical.





Section 3. Transfers of Shares.
Transfer of shares of capital stock of the Corporation shall be made only on its
stock transfer books. Authority for such transfer shall be given only by the
holder of record or by his legal representative, who shall furnish proper
evidence of such authority, or by his attorney authorized by a duly executed
power of attorney and filed with the Corporation. Transfers of shares
represented by certificates shall be made only on surrender for cancellation of
the certificate for such shares. Transfer of uncertificated shares shall be made
only upon the receipt of proper transfer instructions from the registered owner
thereof. The person in whose name shares of capital stock stand on the books of
the Corporation shall be deemed by the Corporation to be the owner thereof for
all purposes.





Section 4. Lost, Stolen or Destroyed
Certificates. Any person claiming a share certificate to be lost, stolen
or destroyed shall make an affidavit or affirmation of the fact in such manner
as the Board of Directors may require and shall, if the Board of directors so
requires, give the Corporation a bond of indemnity in form and amount, and with
one or more sureties satisfactory to the Board of Directors, as the Board of
Directors may require, whereupon the Corporation may issue (i) a new certificate
or certificates of stock or (ii) uncertificated shares in place of any
certificate or certificates previously issued by the Corporation alleged to have
been lost, stolen or destroyed.





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Section 5. Beneficial Owners.
The Corporation shall be entitled to recognize the exclusive right of a person
registered on its books as the owner of shares to receive dividends, and to vote
as such owner, and shall not be bound to recognize any equitable or other claim
to or interest in such shares on the part of any other person, whether or not
the Corporation shall have express or other notice thereof, except as otherwise
provided by law.


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