<PAGE>

                                                                     EXHIBIT 3.1

                   ARTICLES OF AMENDMENT AND RESTATEMENT OF

                       VIRGINIA CAPITAL BANCSHARES, INC.
        ---------------------------------------------------------------

                                      ONE

     The name of the corporation is Virginia Capital Bancshares, Inc.

                                      TWO

     The Articles of Incorporation of Virginia Capital Bancshares, Inc. have
been amended and restated as attached.

                                     THREE

     The Amended and Restated Articles of Incorporation of Virginia Capital
Bancshares, Inc. do not provide for an exchange, reclassification or
cancellation of issued shares.

                                     FOUR

     The Amended and Restated Articles of Incorporation of Virginia Capital
Bancshares, Inc. were adopted by unanimous consent of the Board of Directors on
November 24, 1998.

                                     FIVE

     The Amended and Restated Articles of Incorporation of Virginia Capital
Bancshares, Inc. were adopted by unanimous consent of the Board of Directors on
November 24, 1998, pursuant to Section 13.1-709 of the Virginia Stock
Corporation Act, under which a corporation's board of directors may amend the
articles of incorporation if the corporation has not yet issued shares.  As of
November 24, 1998, Virginia Capital Bancshares, Inc. had not issued any shares.

     The undersigned President and Director declares that the facts herein
stated are true as of November 25, 1998.

                              VIRGINIA CAPITAL BANCSHARES, INC.


                              By: /s/ Samuel C. Harding, Jr.
                                  --------------------------
                                  Samuel C. Harding, Jr.
                                  President and Director
<PAGE>

                             AMENDED AND RESTATED
                           ARTICLES OF INCORPORATION
                                      OF
                       VIRGINIA CAPITAL BANCSHARES, INC.



     FIRST:  The name of the Corporation is Virginia Capital Bancshares, Inc.
     -----
sometimes referred to as the "Corporation").

     SECOND:  The name of the Corporation's Registered Agent is Samuel C.
     ------
Harding, Jr. who is a resident of the Commonwealth of Virginia and is named
herein as an initial director of the Corporation.  The post office address of
the Corporation's registered agent is 400 George Street, Fredericksburg,
Virginia 22404, located in the City of Fredericksburg.

     THIRD:  The purpose of the Corporation is to engage in any lawful act or
     -----
activity for which a corporation may be organized under the Virginia Stock
Corporation Act.

     FOURTH:
     ------

          A.  The total number of shares of all classes of stock which the
     Corporation shall have authority to issue is eighty million (80,000,000)
     consisting of:

               1. Five million (5,000,000) shares of Preferred Stock, par value
                  one cent ($.01) per share (the "Preferred Stock"); and

               2. Seventy-five million (75,000,000) shares of Common Stock, par
                  value one cent ($.01) per share (the "Common Stock").

          B.  Except to the extent to which the Board of Directors shall have
     specified voting power with respect to any other class of stock and except
     as otherwise provided by law, the exclusive voting power shall be vested in
     the Common Stock, the holders thereof being entitled to one vote for each
     share of such Common Stock standing in his or her name on the books of the
     Corporation.  Subject to any rights and preferences of any other class of
     stock, holders of Common Stock are entitled to such dividends as may be
     declared by the Board of Directors out of funds lawfully available
     therefor.  Upon any liquidation, dissolution or winding up of the affairs
     of the Corporation, whether voluntary or involuntary, holders of Common
     Stock are entitled to receive pro rata the remaining assets of the
     Corporation after the holders of any class of stock ranking prior to the
     Common Stock have been paid in full any sums to which they may be entitled.

          C.  Shares of Preferred Stock may be issued from time to time in one
     or more series as may from time to time be determined by the Board of
     Directors, each of said series to be distinctly designated.  All shares of
     any one series of Preferred Stock shall be identical. The voting powers and
     the preferences and relative, participating, optional and other special
<PAGE>

     rights of each such series, and the qualifications, limitations or
     restrictions thereof, if any, may differ from those of any and all other
     series at any time outstanding; and the Board of Directors of the
     Corporation is hereby expressly granted authority to fix by amendment to
     these Articles of Incorporation (which amendment, pursuant to Virginia law,
     may become effective without stockholder action) adopted prior to the
     issuance of any shares of a particular series of Preferred Stock, the
     voting powers and the designations, preferences and relative, optional and
     other special rights, and the qualifications, limitations and restrictions
     of such series, including, but without limiting the generality of the
     foregoing, the following:

               1. The distinctive designation of, and the number of shares of
                  Preferred Stock which shall constitute such series, which
                  number may be increased or decreased (but not below the number
                  of shares then outstanding) from time to time by like action
                  of the Board of Directors;

               2. The rate and times at which, and the terms and conditions on
                  which, dividends, if any, on Preferred Stock of such series
                  shall be paid, the extent of the preference or relation, if
                  any, of such dividends payable on any other class or classes
                  or series of the same or other classes of stock and whether
                  (and the dates from which) such dividends shall be cumulative
                  or noncumulative;

               3. The right, if any, of the holders of Preferred Stock of such
                  series to convert the same into or exchange the same for,
                  shares of any other class or classes or of any series of the
                  same or any other class or classes of stock of the Corporation
                  or any other corporation and the terms and conditions of such
                  conversion or exchange;

               4. Whether or not Preferred Stock of such series shall be subject
                  to redemption, and the redemption price or prices and the time
                  or times at which, and the terms and conditions on which,
                  Preferred Stock of such series may be redeemed;

               5. The rights, if any, of the holders of Preferred Stock of such
                  series upon the voluntary or involuntary liquidation, merger,
                  consolidation, distribution or sale of assets, dissolution or
                  winding up of the Corporation;

               6. The terms of the sinking fund or redemption or purchase
                  account, if any, to be provided for the Preferred Stock of
                  such series; and

               7. The voting powers, if any, of the holders of such series of
                  Preferred Stock.

                                       2
<PAGE>

          D.  1.  Notwithstanding any other provision of these Articles of
                  Incorporation, in no event shall any record owner of any
                  outstanding Common Stock which is beneficially owned, directly
                  or indirectly, by a person who, as of any record date for the
                  determination of stockholders entitled to vote on any matter,
                  beneficially owns in excess of 10% of the then-outstanding
                  shares of Common Stock (the "Limit"), be entitled, or
                  permitted to any vote in respect of the shares held in excess
                  of the Limit. The number of votes which may be cast by any
                  record owner by virtue of the provisions hereof in respect of
                  Common Stock beneficially owned by such person beneficially
                  owning shares in excess of the Limit shall be a number equal
                  to the total number of votes which a single record owner of
                  all Common Stock beneficially owned by such person would be
                  entitled to cast, (subject to the provisions of this Article
                  FOURTH) multiplied by a fraction, the numerator of which is
                  the number of shares of such class or series which are both
                  beneficially owned by such person and owned of record by such
                  record owner and the denominator of which is the total number
                  of shares of Common Stock beneficially owned by such person
                  owning shares in excess of the Limit.

               2. The following definitions shall apply to this Section D of
                  this Article FOURTH:

                    a. "Affiliate" shall have the meaning ascribed to it in Rule
                       12b-2 of the General Rules and Regulations under the
                       Securities Exchange Act of 1934, as amended, as in effect
                       on the date of filing of these Articles of Incorporation.

                    b. "Beneficial ownership" shall be determined pursuant to
                       Rule 13d-3 of the General Rules and Regulations under the
                       Securities Exchange Act of 1934, as amended, (or any
                       successor rule or statutory provision), or, if said Rule
                       13d-3 shall be rescinded and there shall be no successor
                       rule or provision thereto, pursuant to said Rule 13d-3 as
                       in effect on the date of filing of these Articles of
                       Incorporation; provided, however, that a person shall, in
                       any event, also be deemed the "beneficial owner" of any
                       Common Stock:

                         (1) which such person or any of its affiliates
                             beneficially owns, directly or indirectly; or

                         (2) which such person or any of its affiliates has: (i)
                             the right to acquire (whether such right is
                             exercisable immediately or only after the passage
                             of time), pursuant to any agreement, arrangement or

                                       3
<PAGE>

                             understanding (but shall not be deemed to be the
                             beneficial owner of any voting shares solely by
                             reason of an agreement, contract, or other
                             arrangement with this Corporation to effect any
                             transaction which is described in any one or more
                             of clauses 1 through 5 of Section A of Article
                             EIGHTH of these Articles of Incorporation ("Article
                             EIGHTH")), or upon the exercise of conversion
                             rights, exchange rights, warrants, or options or
                             otherwise, or (ii) sole or shared voting or
                             investment power with respect thereto pursuant to
                             any agreement, arrangement, understanding,
                             relationship or otherwise (but shall not be deemed
                             to be the beneficial owner of any voting shares
                             solely by reason of a revocable proxy granted for a
                             particular meeting of stockholders, pursuant to a
                             public solicitation of proxies for such meeting,
                             with respect to shares of which neither such person
                             nor any such Affiliate is otherwise deemed the
                             beneficial owner); or

                         (3) which are beneficially owned, directly or
                             indirectly, by any other person with which such
                             first mentioned person or any of its Affiliates
                             acts as a partnership, limited partnership,
                             syndicate or other group pursuant to any agreement,
                             arrangement or understanding for the purpose of
                             acquiring, holding, voting or disposing of any
                             shares of capital stock of this Corporation; and
                             provided further, however, that: (1) no Director or
                             Officer of this Corporation (or any Affiliate of
                             any such Director or Officer) shall, solely by
                             reason of any or all of such Directors or Officers
                             acting in their capacities as such, be deemed, for
                             any purposes hereof, to beneficially own any Common
                             Stock beneficially owned by any other such Director
                             or Officer (or any Affiliate thereof); and (2)
                             neither any employee stock ownership or similar
                             plan of this Corporation or any subsidiary of this
                             Corporation, nor any trustee with respect thereto
                             or any Affiliate of such trustee (solely by reason
                             of such capacity of such trustee), shall be deemed,
                             for any purposes hereof, to beneficially own any
                             Common Stock held under any such plan. For purposes
                             only of computing the percentage of beneficial
                             ownership of Common Stock of a person, the
                             outstanding Common Stock shall include shares
                             deemed owned by such person through

                                       4
<PAGE>

                             application of this subsection but shall not
                             include any other Common Stock which may be
                             issuable by this Corporation pursuant to any
                             agreement, or upon exercise of conversion rights,
                             warrants or options, or otherwise. For all other
                             purposes, the outstanding Common Stock shall
                             include only Common Stock then outstanding and
                             shall not include any Common Stock which may be
                             issuable by this Corporation pursuant to any
                             agreement, or upon the exercise of conversion
                             rights, warrants or options, or otherwise.

                    c. The "Limit" shall mean 10% of the then-outstanding shares
                       of Common Stock.

                    d. A "person" shall include an individual, a firm, a group
                       acting in concert, a corporation, a partnership, an
                       association, a joint venture, a pool, a joint stock
                       company, a trust, an unincorporated organization or
                       similar company, a syndicate or any other group formed
                       for the purpose of acquiring, holding or disposing of
                       securities or any other entity.

               3.   The Board of Directors shall have the power to construe and
                    apply the provisions of this section and to make all
                    determinations necessary or desirable to implement such
                    provisions, including but not limited to matters with
                    respect to:  (i) the number of shares of Common Stock
                    beneficially owned by any person; (ii) whether a person is
                    an affiliate of another; (iii) whether a person has an
                    agreement, arrangement, or understanding with another as to
                    the matters referred to in the definition of beneficial
                    ownership; (iv) the application of any other definition or
                    operative provision of the section to the given facts; or
                    (v) any other matter relating to the applicability or effect
                    of this section.

               4.   The Board of Directors shall have the right to demand that
                    any person who is reasonably believed to beneficially own
                    Common Stock in excess of the Limit (or holds of record
                    Common Stock beneficially owned by any person in excess of
                    the Limit) supply the Corporation with complete information
                    as to:  (i) the record owner(s) of all shares beneficially
                    owned by such person who is reasonably believed to own
                    shares in excess of the Limit; and (ii) any other factual
                    matter relating to the applicability or effect of this
                    section as may reasonably be requested of such person.

               5.   Except as otherwise provided by law or expressly provided in
                    this Section D, the presence, in person or by proxy, of the
                    holders of

                                       5
<PAGE>

                    record of shares of capital stock of the Corporation
                    entitling the holders thereof to cast a majority of the
                    votes (after giving effect, if required, to the provisions
                    of this Section D) entitled to be cast by the holders of
                    shares of capital stock of the Corporation entitled to vote
                    shall constitute a quorum at all meetings of the
                    stockholders, and every reference in these Articles of
                    Incorporation to a majority or other proportion of capital
                    stock (or the holders thereof) for purposes of determining
                    any quorum requirement or any requirement for stockholder
                    consent or approval shall be deemed to refer to such
                    majority or other proportion of the votes (or the holders
                    thereof) then entitled to be cast in respect of such capital
                    stock.

               6.   Any constructions, applications, or determinations made by
                    the Board of Directors pursuant to this section 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.

               7.   In the event any provision (or portion thereof) of this
                    Section D shall be found to be invalid, prohibited or
                    unenforceable for any reason, the remaining provisions (or
                    portions thereof) of this Section shall remain in full force
                    and effect, and shall be construed as if such invalid,
                    prohibited or unenforceable provision had been stricken
                    herefrom or otherwise rendered inapplicable, it being the
                    intent of this Corporation and its stockholders that each
                    such remaining provision (or portion thereof) of this
                    Section D remain, to the fullest extent permitted by law,
                    applicable and enforceable as to all stockholders, including
                    stockholders owning an amount of stock over the Limit,
                    notwithstanding any such finding.

     FIFTH:  The following provisions are inserted for the management of the
     -----
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its Directors and stockholders:

          A.  The business and affairs of the Corporation shall be managed by or
     under the direction of the Board of Directors.  In addition to the powers
     and authority expressly conferred upon them by statute or by these Articles
     of Incorporation or the Bylaws of the Corporation, the Directors are hereby
     empowered to exercise all such powers and do all such acts and things as
     may be exercised or done by the Corporation.

          B.  The Directors of the Corporation need not be elected by written
     ballot unless the Bylaws so provide.

                                       6
<PAGE>

          C.  Any action required or permitted to be taken by the stockholders
     of the Corporation must be effected at a duly called annual or special
     meeting of stockholders of the Corporation and may not be effected by any
     consent in writing by such stockholders.

          D.  Special meetings of stockholders of the Corporation may be called
     only by the Board of Directors pursuant to a resolution adopted by a
     majority of the Whole Board or as otherwise provided in the Bylaws.  The
     term "Whole Board" shall mean the total number of authorized directorships
     (whether or not there exist any vacancies in previously authorized
     directorships at the time any such resolution is presented to the Board for
     adoption).

          E.  The holders of the Common Stock have no pre-emptive rights or
     other rights to subscribe to any other shares of Common Stock or other
     securities of the Corporation. Holders of the Common Stock or any other
     equity securities of the Corporation have no right to cumulate votes for
     the election of directors.

     SIXTH:
     -----

          A.  The number of Directors shall be fixed from time to time
     exclusively by the Board of Directors pursuant to a resolution adopted by a
     majority of the Whole Board.  The Directors shall be divided into three
     classes, as nearly equal in number as reasonably possible, with the term of
     office of the first class to expire at the first annual meeting of
     stockholders, the term of office of the second class to expire at the
     annual meeting of stockholders one year thereafter and the term of office
     of the third class to expire at the annual meeting of stockholders two
     years thereafter with each Director to hold office until his or her
     successor shall have been duly elected and qualified.  At each annual
     meeting of stockholders following such initial classification and election,
     Directors elected to succeed those Directors whose terms expire shall be
     elected for a term of office to expire at the third succeeding annual
     meeting of stockholders after their election with each Director to hold
     office until his or her successor shall have been duly elected and
     qualified.


          B.  Subject to the rights of holders of any series of Preferred Stock
     outstanding, the newly created directorships resulting from any increase in
     the authorized number of Directors or any vacancies in the Board of
     Directors resulting from death, resignation, retirement, disqualification,
     removal from office or other cause may be filled only by a majority vote of
     the Directors then in office, though less than a quorum, and Directors so
     chosen shall hold office for a term expiring at the next annual meeting of
     stockholders at which Directors are elected and until their successors
     shall be elected and qualified.  No decrease in the number of Directors
     constituting the Board of Directors shall shorten the term of any incumbent
     Director.

          C.  Advance notice of stockholder nominations for the election of
     Directors and of business to be brought by stockholders before any meeting
     of the stockholders of the Corporation shall be given in the manner
     provided in the Bylaws of the Corporation.

                                       7
<PAGE>

          D.  Subject to the rights of holders of any series of Preferred Stock
     then outstanding, any Director, or the entire Board of Directors, may be
     removed from office at any time, but only for cause and only by the
     affirmative vote of the holders of at least 80 percent of the voting power
     of all of the then-outstanding shares of capital stock of the Corporation
     entitled to vote generally in the election of Directors (after giving
     effect to the provisions of Article FOURTH of these Articles of
     Incorporation ("Article FOURTH")), voting together as a single class.

     SEVENTH:  The Board of Directors is expressly empowered to adopt, amend or
     -------
repeal Bylaws of the Corporation.  Any adoption, amendment or repeal of the
Bylaws of the Corporation by the Board of Directors shall require the approval
of a majority of the Whole Board.  The stockholders shall also have power to
adopt, amend or repeal the Bylaws of the Corporation; provided, however, that,
in addition to any vote of the holders of any class or series of stock of this
Corporation required by law or by these Articles of Incorporation, the
affirmative vote of the holders of at least 80 percent of the voting power of
all of the then-outstanding shares of the capital stock of the Corporation
entitled to vote generally in the election of Directors (after giving effect to
the provisions of Article FOURTH), voting together as a single class, shall be
required to adopt, amend or repeal any provisions of the Bylaws of the
Corporation.

     EIGHTH:
     ------

          A.  In addition to any affirmative vote required by law or these
     Articles of Incorporation, and except as otherwise expressly provided in
     this Article EIGHTH:

               1. any merger or consolidation of the Corporation or any
                  Subsidiary (as hereinafter defined) with: (i) any Interested
                  Stockholder (as hereinafter defined); or (ii) any other
                  corporation (whether or not itself an Interested Stockholder)
                  which is, or after such merger or consolidation would be, an
                  Affiliate (as hereinafter defined) of an Interested
                  Stockholder; or

               2. any sale, lease, exchange, mortgage, pledge, transfer or other
                  disposition (in one transaction or a series of transactions)
                  to or with any Interested Stockholder, or any Affiliate of any
                  Interested Stockholder, of any assets of the Corporation or
                  any Subsidiary having an aggregate Fair Market Value (as
                  hereinafter defined) equaling or exceeding 25% or more of the
                  combined assets of the Corporation and its Subsidiaries; or

               3. the issuance or transfer by the Corporation or any Subsidiary
                  (in one transaction or a series of transactions) of any
                  securities of the Corporation or any Subsidiary to any
                  Interested Stockholder or any Affiliate of any Interested
                  Stockholder in exchange for cash, securities or other property
                  (or a combination thereof) having an aggregate Fair Market
                  Value (as hereinafter defined) equaling or

                                       8
<PAGE>

                  exceeding 25% of the combined Fair Market Value of the
                  outstanding common stock of the Corporation and its
                  Subsidiaries, except for any issuance or transfer pursuant to
                  an employee benefit plan of the Corporation or any Subsidiary
                  thereof; or

               4. the adoption of any plan or proposal for the liquidation or
                  dissolution of the Corporation proposed by or on behalf of an
                  Interested Stockholder or any Affiliate of any Interested
                  Stockholder; or

               5. any reclassification of securities (including any reverse
                  stock split), or recapitalization of the Corporation, or any
                  merger or consolidation of the Corporation with any of its
                  Subsidiaries or any other transaction (whether or not with or
                  into or otherwise involving an Interested Stockholder) which
                  has the effect, directly or indirectly, of increasing the
                  proportionate share of the outstanding shares of any class of
                  equity or convertible securities of the Corporation or any
                  Subsidiary which is directly or indirectly owned by any
                  Interested Stockholder or any Affiliate of any Interested
                  Stockholder;

     shall require the affirmative vote of the holders of at least 80% of the
     voting power of the then-outstanding shares of stock of the Corporation
     entitled to vote in the election of Directors (the "Voting Stock") (after
     giving effect to the provisions of Article FOURTH), voting together as a
     single class.  Such affirmative vote shall be required notwithstanding the
     fact that no vote may be required, or that a lesser percentage may be
     specified, by law or by any other provisions of these Articles of
     Incorporation, in any agreement with any national securities exchange or
     otherwise.

          The term "Business Combination" as used in this Article EIGHTH shall
     mean any transaction which is referred to in any one or more of paragraphs
     1 through 5 of Section A of this Article EIGHTH.

          B.  The provisions of Section A of this Article EIGHTH shall not be
     applicable to any particular Business Combination, and such Business
     Combination shall require only the affirmative vote of the majority of the
     outstanding shares of capital stock entitled to vote after giving effect to
     the provisions of Article FOURTH, or such vote (if any), as is required by
     law or by these Articles of Incorporation, if, in the case of any Business
     Combination that does not involve any cash or other consideration being
     received by the stockholders of the Corporation solely in their capacity as
     stockholders of the Corporation, the condition specified in the following
     paragraph 1 is met or, in the case of any other Business Combination, all
     of the conditions specified in either of the following paragraphs 1 or 2
     are met:

               1. The Business Combination shall have been approved by a
                  majority of the Disinterested Directors (as hereinafter
                  defined).

                                       9
<PAGE>

               2. All of the following conditions shall have been met:

                    a. The aggregate amount of the cash and the Fair Market
                       Value as of the date of the consummation of the Business
                       Combination of consideration other than cash to be
                       received per share by the holders of Common Stock in such
                       Business Combination shall at least be equal to the
                       higher of the following:

                         (1) (if applicable) the Highest Per Share Price (as
                             hereinafter defined), including any brokerage
                             commissions, transfer taxes and soliciting dealers'
                             fees, paid by the Interested Stockholder or any of
                             its Affiliates for any shares of Common Stock
                             acquired by it: (i) within the two-year period
                             immediately prior to the first public announcement
                             of the proposal of the Business Combination (the
                             "Announcement Date"); or (ii) in the transaction in
                             which it became an Interested Stockholder,
                             whichever is higher; or

                         (2) the Fair Market Value per share of Common Stock on
                             the Announcement Date or on the date on which the
                             Interested Stockholder became an Interested
                             Stockholder (such latter date is referred to in
                             this Article EIGHTH as the "Determination Date"),
                             whichever is higher.

                    b. The aggregate amount of the cash and the Fair Market
                       Value as of the date of the consummation of the Business
                       Combination of consideration other than cash to be
                       received per share by holders of shares of any class of
                       outstanding Voting Stock other than Common Stock shall be
                       at least equal to the highest of the following (it being
                       intended that the requirements of this subparagraph (b)
                       shall be required to be met with respect to every such
                       class of outstanding Voting Stock, whether or not the
                       Interested Stockholder has previously acquired any shares
                       of a particular class of Voting Stock):

                         (1) (if applicable) the Highest Per Share Price (as
                             hereinafter defined), including any brokerage
                             commissions, transfer taxes and soliciting dealers'
                             fees, paid by the Interested Stockholder for any
                             shares of such class of Voting Stock acquired by
                             it: (i) within the two-year period immediately
                             prior to the

                                      10
<PAGE>

                             Announcement Date; or (ii) in the transaction in
                             which it became an Interested Stockholder,
                             whichever is higher; or

                         (2) (if applicable) the highest preferential amount per
                             share to which the holders of shares of such class
                             of Voting Stock are entitled in the event of any
                             voluntary or involuntary liquidation, dissolution
                             or winding up of the Corporation; or

                         (3) the Fair Market Value per share of such class of
                             Voting Stock on the Announcement Date or on the
                             Determination Date, whichever is higher.

                    c. The consideration to be received by holders of a
                       particular class of outstanding Voting Stock (including
                       Common Stock) shall be in cash or in the same form as the
                       Interested Stockholder has previously paid for shares of
                       such class of Voting Stock. If the Interested Stockholder
                       has paid for shares of any class of Voting Stock with
                       varying forms of consideration, the form of consideration
                       to be received per share by holders of shares of such
                       class of Voting Stock shall be either cash or the form
                       used to acquire the largest number of shares of such
                       class of Voting Stock previously acquired by the
                       Interested Stockholder. The price determined in
                       accordance with subparagraph B.2 of this Article EIGHTH
                       shall be subject to appropriate adjustment in the event
                       of any stock dividend, stock split, combination of shares
                       or similar event.

                    d. After such Interested Stockholder has become an
                       Interested Stockholder and prior to the consummation of
                       such Business Combination: (1) except as approved by a
                       majority of the Disinterested Directors (as hereinafter
                       defined), there shall have been no failure to declare and
                       pay at the regular date therefor any full quarterly
                       dividends (whether or not cumulative) on any outstanding
                       stock having preference over the Common Stock as to
                       dividends or liquidation; (2) there shall have been: (i)
                       no reduction in the annual rate of dividends paid on the
                       Common Stock (except as necessary to reflect any
                       subdivision of the Common Stock), except as approved by a
                       majority of the Disinterested Directors; and (ii) an
                       increase in such annual rate of dividends as necessary to
                       reflect any reclassification (including any reverse stock
                       split), recapitalization, reorganization or any similar
                       transaction

                                      11
<PAGE>

                       which has the effect of reducing the number of
                       outstanding shares of the Common Stock, unless the
                       failure to so increase such annual rate is approved by a
                       majority of the Disinterested Directors, and (3) neither
                       such Interested Stockholder or any of its Affiliates
                       shall have become the beneficial owner of any additional
                       shares of Voting Stock except as part of the transaction
                       which results in such Interested Stockholder becoming an
                       Interested Stockholder.

                    e. After such Interested Stockholder has become an
                       Interested Stockholder, such Interested Stockholder shall
                       not have received the benefit, directly or indirectly
                       (except proportionately as a stockholder), of any loans,
                       advances, guarantees, pledges or other financial
                       assistance or any tax credits or other tax advantages
                       provided, directly or indirectly, by the Corporation,
                       whether in anticipation of or in connection with such
                       Business Combination or otherwise.

                    f. A proxy or information statement describing the proposed
                       Business Combination and complying with the requirements
                       of the Securities Exchange Act of 1934, as amended, and
                       the rules and regulations thereunder (or any subsequent
                       provisions replacing such Act, and the rules or
                       regulations thereunder) shall be mailed to stockholders
                       of the Corporation at least 30 days prior to the
                       consummation of such Business Combination (whether or not
                       such proxy or information statement is required to be
                       mailed pursuant to such Act or subsequent provisions).

          C.   For the purposes of this Article EIGHTH:

               1.   A "Person" shall include an individual, a firm, a group
                    acting in concert, a corporation, a partnership, an
                    association, a joint venture, a pool, a joint stock company,
                    a trust, an unincorporated organization or similar company,
                    a syndicate or any other group formed for the purpose of
                    acquiring, holding or disposing of securities or any other
                    entity.

               2.   "Interested Stockholder" shall mean any person (other than
                    the Corporation or any Holding Company or Subsidiary
                    thereof) who or which:

                    a. is the beneficial owner, directly or indirectly, of more
                       than 10% of the voting power of the outstanding Voting
                       Stock; or

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<PAGE>

                    b. is an Affiliate of the Corporation and at any time within
                       the two-year period immediately prior to the date in
                       question was the beneficial owner, directly or
                       indirectly, of 10% or more of the voting power of the
                       then outstanding Voting Stock; or

                    c. is an assignee of or has otherwise succeeded to any
                       shares of Voting Stock which were at any time within the
                       two-year period immediately prior to the date in question
                       beneficially owned by any Interested Stockholder, if such
                       assignment or succession shall have occurred in the
                       course of a transaction or series of transactions not
                       involving a public offering within the meaning of the
                       Securities Act of 1933, as amended.

               3.   For purposes of this Article EIGHTH, "beneficial ownership"
                    shall be determined in the manner provided in Section D of
                    Article FOURTH hereof.

               4.   "Affiliate" and "Associate" shall have the respective
                    meanings ascribed to such terms in Rule 12b-2 of the General
                    Rules and Regulations under the Securities Exchange Act of
                    1934, as in effect on the date of filing of these Articles
                    of Incorporation.

               5.   "Subsidiary" means any corporation of which a majority of
                    any class of equity security is owned, directly or
                    indirectly, by the Corporation; provided, however, that for
                    the purposes of the definition of Interested Stockholder set
                    forth in Paragraph 2 of this Section C, the term
                    "Subsidiary" shall mean only a corporation of which a
                    majority of each class of equity security is owned, directly
                    or indirectly, by the Corporation.

               6.   "Disinterested Director" means any member of the Board of
                    Directors who is unaffiliated with the Interested
                    Stockholder and was a member of the Board of Directors prior
                    to the time that the Interested Stockholder became an
                    Interested Stockholder, and any Director who is thereafter
                    chosen to fill any vacancy of the Board of Directors or who
                    is elected and who, in either event, is unaffiliated with
                    the Interested Stockholder and in connection with his or her
                    initial assumption of office is recommended for appointment
                    or election by a majority of Disinterested Directors then on
                    the Board of Directors.

               7. "Fair Market Value" means:

                    a.   in the case of stock, the highest closing sales price
                         of the stock during the 30-day period immediately
                         preceding the date in question of a share of such stock
                         on the National

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<PAGE>

                         Association of Securities Dealers Automated Quotation
                         System or any system then in use, or, if such stock is
                         admitted to trading on a principal United States
                         securities exchange registered under the Securities
                         Exchange Act of 1934, as amended, Fair Market Value
                         shall be the highest sale price reported during the 30-
                         day period preceding the date in question, or, if no
                         such quotations are available, the Fair Market Value on
                         the date in question of a share of such stock as
                         determined by the Board of Directors in good faith, in
                         each case with respect to any class of stock,
                         appropriately adjusted for any dividend or distribution
                         in shares of such stock or any stock split or
                         reclassification of outstanding shares of such stock
                         into a greater number of shares of such stock or any
                         combination or reclassification of outstanding shares
                         of such stock into a smaller number of shares of such
                         stock; and

                    b.   in the case of property other than cash or stock, the
                         Fair Market Value of such property on the date in
                         question as determined by the Board of Directors in
                         good faith.

               8.   Reference to "Highest Per Share Price" shall in each case
                    with respect to any class of stock reflect an appropriate
                    adjustment for any dividend or distribution in shares of
                    such stock or any stock split or reclassification of
                    outstanding shares of such stock into a greater number of
                    shares of such stock or any combination or reclassification
                    of outstanding shares of such stock into a smaller number of
                    shares of such stock.

               9.   In the event of any Business Combination in which the
                    Corporation survives, the phrase "consideration other than
                    cash to be received" as used in Subparagraphs (a) and (b) of
                    Paragraph 2 of Section B of this Article EIGHTH shall
                    include the shares of Common Stock and/or the shares of any
                    other class of outstanding Voting Stock retained by the
                    holders of such shares.

          D.  A majority of the Disinterested Directors of the Corporation shall
     have the power and duty to determine for the purposes of this Article
     EIGHTH, on the basis of information known to them after reasonable inquiry:
     (a) whether a person is an Interested Stockholder; (b) the number of shares
     of Voting Stock beneficially owned by any person; (c) whether a person is
     an Affiliate or Associate of another; and (d) whether the assets which are
     the subject of any Business Combination have, or the consideration to be
     received for the issuance or transfer of securities by the Corporation or
     any Subsidiary in any Business Combination has an aggregate Fair Market
     Value equaling or exceeding 25% of the combined Fair Market Value of the
     Common Stock of the Corporation and its Subsidiaries.

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<PAGE>

     A majority of the Disinterested Directors shall have the further power to
     interpret all of the terms and provisions of this Article EIGHTH.

          E.  Nothing contained in this Article EIGHTH shall be construed to
     relieve any Interested Stockholder from any fiduciary obligation imposed by
     law.

          F.  Notwithstanding any other provisions of these Articles of
     Incorporation or any provision of law which might otherwise permit a lesser
     vote or no vote, but in addition to any affirmative vote of the holders of
     any particular class or series of the Voting Stock required by law, these
     Articles of Incorporation or any Preferred Stock Designation, the
     affirmative vote of the holders of at least 80 percent of the voting power
     of all of the then-outstanding shares of the Voting Stock (after giving
     effect to the provisions of Article FOURTH), voting together as a single
     class, shall be required to alter, amend or repeal this Article EIGHTH.

     NINTH:    The Board of Directors of the Corporation, when evaluating any
     -----
offer of another Person (as defined in Article EIGHTH hereof) to:  (A) make a
tender or exchange offer for any equity security of the Corporation; (B) merge
or consolidate the Corporation with another corporation or entity; or (C)
purchase or otherwise acquire all or substantially all of the properties and
assets of the Corporation, may, in connection with the exercise of its judgment
in determining what is in the best interest of the Corporation and its
stockholders, give due consideration to all relevant factors, including, without
limitation, those factors that Directors of any subsidiary of the Corporation
may consider in evaluating any action that may result in a change or potential
change in the control of the subsidiary, and the social and economic effect of
acceptance of such offer:  on the Corporation's present and future customers and
employees and those of its Subsidiaries (as defined in Article EIGHTH hereof);
on the communities in which the Corporation and its Subsidiaries operate or are
located; on the ability of the Corporation to fulfill its corporate objective as
a savings and loan holding company under applicable laws and regulations; and on
the ability of its subsidiary savings bank to fulfill the objectives of a stock
form savings bank under applicable statutes and regulations.

     TENTH:
     -----

          A.  Each person who was or is made a party or is threatened to be made
     a party to or is otherwise involved in any action, suit or proceeding,
     whether civil, criminal, administrative or investigative (hereinafter a
     "proceeding"), by reason of the fact that he or she is or was a Director or
     an Officer of the Corporation or is or was serving at the request of the
     Corporation as a Director, Officer, employee or agent of another
     corporation or of a partnership, joint venture, trust or other enterprise,
     including service with respect to an employee benefit plan (hereinafter an
     "indemnitee"), whether the basis of such proceeding is alleged action in an
     official capacity as a Director, Officer, employee or agent or in any other
     capacity while serving as a Director, Officer, employee or agent, shall be
     indemnified and held harmless by the Corporation to the fullest extent
     authorized by the Virginia Stock Corporation Act, as the same exists or may
     hereafter be amended (but, in the case of any such amendment, only to the
     extent that such amendment permits the Corporation to provide broader
     indemnification rights than such law permitted the Corporation to provide
     prior to

                                      15
<PAGE>

     such amendment), against all expense, liability and loss (including
     attorneys' fees, judgments, fines, ERISA excise taxes or penalties and
     amounts paid in settlement) reasonably incurred or suffered by such
     indemnitee in connection therewith; provided, however, that, except as
     provided in Section C hereof with respect to proceedings to enforce rights
     to indemnification, the Corporation shall indemnify any such indemnitee in
     connection with a proceeding (or part thereof) initiated by such indemnitee
     only if such proceeding (or part thereof) was authorized by the Board of
     Directors of the Corporation.

          B.  The right to indemnification conferred in Section A of this
     Article TENTH shall include the right to be paid by the Corporation the
     expenses incurred in defending any such proceeding in advance of its final
     disposition (hereinafter an "advancement of expenses"); provided, however,
     that, if the Virginia Stock Corporation Act requires, an advancement of
     expenses incurred by an indemnitee in his or her capacity as a Director or
     Officer (and not in any other capacity in which service was or is rendered
     by such indemnitee, including, without limitation, services to an employee
     benefit plan) shall be made only upon delivery to the Corporation of an
     undertaking (hereinafter an "undertaking"), by or on behalf of such
     indemnitee, to repay all amounts so advanced if it shall ultimately be
     determined by final judicial decision from which there is no further right
     to appeal (hereinafter a "final adjudication") that such indemnitee is not
     entitled to be indemnified for such expenses under this Section or
     otherwise.  The rights to indemnification and to the advancement of
     expenses conferred in Sections A and B of this Article TENTH shall be
     contract rights and such rights shall continue as to an indemnitee who has
     ceased to be a Director, Officer, employee or agent and shall inure to the
     benefit of the indemnitee's heirs, executors and administrators.

          C.  If a claim under Section A or B of this Article TENTH is not paid
     in full by the Corporation within sixty days after a written claim has been
     received by the Corporation, except in the case of a claim for an
     advancement of expenses, in which case the applicable period shall be
     twenty days, the indemnitee may at any time thereafter bring suit against
     the Corporation to recover the unpaid amount of the claim.  If successful
     in whole or in part in any such suit, or in a suit brought by the
     Corporation to recover an advancement of expenses pursuant to the terms of
     an undertaking, the indemnitee shall be entitled to be paid also the
     expenses of prosecuting or defending such suit.  In (i) any suit brought by
     the indemnitee to enforce a right to indemnification hereunder (but not in
     a suit brought by the indemnitee to enforce a right to an advancement of
     expenses) it shall be a defense that, and (ii) in any suit by the
     Corporation to recover an advancement of expenses pursuant to the terms of
     an undertaking the Corporation shall be entitled to recover such expenses
     upon a final adjudication that, the indemnitee has not met any applicable
     standard for indemnification set forth in the Virginia Stock Corporation
     Act.  Neither the failure of the Corporation (including its Board of
     Directors, independent legal counsel, or its stockholders) to have made a
     determination prior to the commencement of such suit that indemnification
     of the indemnitee is proper in the circumstances because the indemnitee has
     met the applicable standard of conduct set forth in the Virginia Stock
     Corporation Act, nor an actual determination by the Corporation (including
     its Board of Directors, independent legal counsel, or its stockholders)
     that the indemnitee has not met such applicable standard of conduct, shall
     create a

                                      16
<PAGE>

     presumption that the indemnitee has not met the applicable standard of
     conduct or, in the case of such a suit brought by the indemnitee, be a
     defense to such suit. In any suit brought by the indemnitee to enforce a
     right to indemnification or to an advancement of expenses hereunder, or by
     the Corporation to recover an advancement of expenses pursuant to the terms
     of an undertaking, the burden of proving that the indemnitee is not
     entitled to be indemnified, or to such advancement of expenses, under this
     Article TENTH or otherwise shall be on the Corporation.

          D.  The rights to indemnification and to the advancement of expenses
     conferred in this Article TENTH shall not be exclusive of any other right
     which any person may have or hereafter acquire under any statute, the
     Corporation's Articles of Incorporation, Bylaws, agreement, vote of
     stockholders or Disinterested Directors or otherwise.

          E.  The Corporation may maintain insurance, at its expense, to protect
     itself and any Director, Officer, employee or agent of the Corporation or
     subsidiary or Affiliate or another corporation, partnership, joint venture,
     trust or other enterprise against any expense, liability or loss, whether
     or not the Corporation would have the power to indemnify such person
     against such expense, liability or loss under the Virginia Stock
     Corporation Act.

          F.  The Corporation may, to the extent authorized from time to time by
     the Board of Directors, grant rights to indemnification and to the
     advancement of expenses to any employee or agent of the Corporation to the
     fullest extent of the provisions of this Article TENTH with respect to the
     indemnification and advancement of expenses of Directors and Officers of
     the Corporation.

     ELEVENTH: A Director of this Corporation shall not be personally liable to
     --------
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director, except for liability:  (i) for any breach of the Director's
duty of loyalty to the Corporation or its stockholders; (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law; (iii) under Section 13.1-692 of the Virginia Stock Corporation
Act; or (iv) for any transaction from which the Director derived an improper
personal benefit.  If the Virginia Stock Corporation Act is amended to authorize
corporate action further eliminating or limiting 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 Virginia Stock
Corporation Act, as so amended.

     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.

     TWELFTH:  The Corporation reserves the right to amend or repeal any
     -------
provision contained in these Articles of Incorporation in the manner prescribed
by the laws of the Commonwealth of Virginia and all rights conferred upon
stockholders are granted subject to this reservation; provided, however, that,
notwithstanding any other provision of these Articles of Incorporation or any
provision of law which might otherwise permit a lesser vote or no vote, but in
addition to any vote of the holders of any class or series of the stock of this
Corporation required by law or by these

                                      17
<PAGE>

Articles of Incorporation, the affirmative vote of the holders of at least 80
percent of the voting power of all of the then-outstanding shares of the capital
stock of the Corporation entitled to vote generally in the election of Directors
(after giving effect to the provisions of Article FOURTH), voting together as a
single class, shall be required to amend or repeal this Article TWELFTH, Section
D of Article FOURTH, Sections C or D of Article FIFTH, Article SIXTH, Article
SEVENTH, Article EIGHTH or Article TENTH.

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