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                                                                     EXHIBIT 3.2
                                    BYLAWS OF

                             INTERWEST BANCORP, INC.


1.      OFFICES

        The principal office of the corporation in the State of Washington shall
        be located at 1259 West Pioneer Way, Oak Harbor, Washington 98277, or at
        such other location as may be determined by the board of directors.


2.      SHAREHOLDERS

        1.      Annual Meeting: The annual meeting of shareholders shall be held
                on the third Tuesday of January in each year, at 1:30 p.m., or
                on such other date and at such other time as may be determined
                by the board of directors, for the purpose of electing directors
                and for the transaction of such other business as may properly
                come before the meeting. If the day fixed for the annual meeting
                shall be a legal holiday in the State of Washington, the meeting
                shall be held on the next succeeding business day. If the
                election of directors is not held on the day designated herein
                for any annual meeting of the shareholders or at any adjournment
                thereof, the board of directors shall cause the election to be
                held at a meeting of the shareholders as soon thereafter as
                conveniently may be held.

        2.      Special Meetings: Special meetings of the shareholders for any
                purpose or purposes, unless otherwise prescribed by statute, may
                be called by the president, by the board of directors, or by the
                written request of holders of not less than a majority of all
                the shares of the bank entitled to vote at the meeting.

        3.      Place of Meeting: All meetings of the shareholders shall be held
                at the principal place of business of the corporation, or at
                such other place as shall be determined from time to time by the
                board of directors. The place at which the meeting of
                shareholders will be held shall be stated in the notice of the
                meeting.

        4.      Notice of Meetings: Written or printed notice stating the place,
                day and hour of a meeting of shareholders and, in case of a
                special meeting of shareholders, the purpose or purposes for
                which the meeting is called shall be delivered to each
                shareholder entitled to vote at such meeting, not less than 10
                days and no more than 50 days before the meeting, either
                personally or by mail, by the secretary or at the direction of
                the person or persons calling the meeting. If mailed, such
                notice shall be deemed to be delivered when deposited in the
                United States mail, addressed to the shareholder at his address
                as it appears on the stock transfer records of the bank, with
                postage thereon prepaid.

        5.      Closing of Stock Transfer Records or 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
                thereof, 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 may provide
                that the stock transfer records of the corporation shall be
                closed 





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                for a stated period but not to exceed in any case 50 days. If
                the stock transfer records shall be closed for the purpose of
                determining shareholders entitled to notice of or to vote at a
                meeting of shareholders, such books shall be closed for at least
                10 days immediately preceding such meeting. In lieu of closing
                the stock transfer records, the board of directors may fix, in
                advance, a date as the record date for any such determination of
                shareholders, which date in any case shall not be more than 50
                days and, in case of a meeting of shareholders, not less than 10
                days prior to the date on which the particular action requiring
                such determination of shareholders entitled to notice of, or to
                vote at, a meeting of shareholders, or shareholders entitled to
                receive payment of a dividend. When a determination of
                shareholders entitled to vote at any meeting of shareholders has
                been made as provided in this section, such determination shall
                apply to any adjournment thereof.

        6.      Voting Lists: At least 10 days before each meeting of the
                shareholders, the officer or agent having charge of the stock
                transfer records for shares of the corporation shall make a
                complete record of the shareholders entitled to vote at the
                meeting or any adjournment thereof, arranged in alphabetical
                order, with the address of and the number of shares held by
                each, which record for a period of 10 days prior to the meeting
                shall be kept on file at the registered office of the
                corporation. Such record shall be produced and kept open at the
                time and place of the meeting and shall be subject to the
                inspection of any shareholder for any proper purpose during the
                whole time of the meeting. Failure to comply with the
                requirements of this bylaw shall not affect the validity of any
                action taken at the meeting.

        7.      Quorum: One-third 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. The
                shareholders present at a duly organized meeting may continue to
                transact business until adjournment notwithstanding the
                withdrawal of sufficient shares to leave less than a quorum. If
                less than one-third of the outstanding shares are represented at
                a meeting, the meeting may be adjourned to such time and place
                as may be determined, with the approval of a majority of the
                shares represented at the meeting, without further notice,
                except that any meeting at which directors are to be elected
                shall be adjourned only from day to day until such directors
                have been elected. At any 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
                called, and in the case of any adjourned meeting called for the
                election of directors, those who attend the second of the
                adjourned meetings, although less than a quorum, shall
                nevertheless constitute a quorum for the purpose of electing
                directors.

        8.      Proxies: A shareholder of record may vote either in person or by
                proxy executed in writing by the shareholder or by his duly
                authorized attorney-in-fact. All proxies shall be filed with the
                secretary of the corporation before or at the commencement of
                meetings. No unrevoked proxy shall be valid after 11 months from
                the date of its execution unless otherwise expressly provided in
                the proxy.

        9.      Voting of Shares: Each outstanding share, shall be entitled to
                one vote on each matter submitted to a vote of the shareholders
                at a meeting of shareholders. In the election of directors,
                every shareholder of record entitled to vote at the meeting of
                shareholders shall have the right to vote the number of shares
                owned by him for as many persons as there are directors to be
                elected by the holders of such shares. Cumulative voting shall
                not be permitted in the election of directors.



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10.     Voting of Shares by Certain Holders:

        1.      Shares standing in the name of another corporation, domestic or
                foreign, may be voted by such 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. A certified copy of action taken by the
                corporations shall be conclusive as to proper authorization by
                the corporation.

        2.      Shares held by an administrator, executor, guardian or
                conservator may be voted by such person, either in person or by
                proxy, upon delivery of appropriate evidence of such person's
                authority to act as administrator, executor, guardian or
                conservator. Shares standing in the name of a trustee may be
                voted by such person, either in person or by proxy.

        3.      Shares held by a receiver may be voted by such receiver, and
                shares held by or under the control of a receiver may be voted
                by the receiver without the transfer thereof into the name of
                the receiver if authority so to do be contained in an
                appropriate order of the court by which such receiver was
                appointed.

        4.      If shares are held jointly by three or more fiduciaries, the
                will of the majority of the fiduciaries shall control the manner
                of voting or the giving of a proxy, unless the instrument or
                order appointing such fiduciaries directs otherwise.

        5.      Treasury shares shall not be voted at any meeting or counted in
                determining the total number of outstanding shares entitled to
                vote at any meeting of shareholders.

        6.      Shares of another corporation held by this corporation may be
                voted by the chairman of the board, the president or any
                executive vice president, or by proxy executed by any such
                officer, unless the board of directors by resolution shall
                designate some other person to vote shares held by the
                corporation.

11.     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 a consent
        in writing setting forth such action shall be signed by all the
        shareholders entitled to vote with respect to the subject matter
        thereof.

12.     Notice for Nominations and Proposals:

        1.      Nominations for the election of directors and proposals for any
                new business to be taken up at any annual or special meeting of
                shareholders may be made by the board of directors of the
                corporation or by any shareholder of the corporation entitled to
                vote generally in the election of directors. In order for a
                shareholder of the corporation to make any such nominations
                and/or proposals, he or she shall give notice thereof in




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                writing, delivered or mailed by first class United States
                mail, postage prepaid, to the Secretary of the corporation not
                less than thirty days nor more than sixty days prior to any such
                meeting; provided, however, that if less than thirty-one days'
                notice of the meeting is given to shareholders, such written
                notice shall be delivered or mailed, as prescribed, to the
                Secretary of the corporation not later than the close of the
                tenth day following the day on which notice of the meeting was
                mailed to shareholders. Each such notice given by a shareholder
                with respect to nominations for election of directors shall set
                forth (i) the name, age, business address and, if known,
                residence address of each nominee proposed in such notice (ii)
                the principal occupation or employment of each such nominees,
                (iii) the number of shares of stock of the corporation which are
                beneficially owned by each such nominee, (iv) such other
                information as would be required to be included in a proxy
                statement soliciting proxies for the election of the proposed
                nominee pursuant to Regulation 14A of the Securities Exchange
                Act of 1934, as amended, including, without limitation, such
                person's written consent to being named in the proxy statement
                as a nominee and to serving as a director, if elected, and (v)
                as to the shareholder giving such notice (a) his name and
                address as they appear on the corporation's books, and (b) the
                class and number of shares of the corporation which are
                beneficially owned by such shareholder. In addition, the
                shareholder making such nomination shall promptly provide any
                other information reasonably requested by the corporation.

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

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



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3.      BOARD OF DIRECTORS

        1.      General Powers: The business and affairs of the corporation
                shall be managed by the board of directors.

        2.      Number, Tenure and Qualifications:

                1.      The board of directors shall consist of nine members, a
                        majority of which shall not be officers or employees of
                        the corporation or any of its subsidiaries. The number
                        of directors may at any time be increased or decreased
                        by the board of directors at any regular or special
                        meeting of the board of directors, provided that no
                        decrease shall have the effect of shortening the term of
                        any incumbent director except as provided in Section 3.9
                        of this Article 3.

                2.      Directors shall be elected to staggered terms so that
                        one-third of the directors, or as near as may be, are
                        elected each year. If additional directors are added to
                        the board, the terms of those directors shall be
                        staggered so that approximately one-third of the
                        directors are elected each year. Unless removed in
                        accordance with the corporation's Articles of
                        Incorporation each director shall hold office until his
                        successor shall have been elected and qualified.

                3.      A person shall not be a director of the corporation if
                        the person has been adjudicated bankrupt, or has taken
                        the benefit of any assignment for the benefit of
                        creditors, or has suffered a judgment recovered against
                        him for a sum of money to remain unsatisfied of record
                        or unsuperseded on appeal for a period of more than
                        three months. A person shall not be a director of the
                        corporation if the person (1) is not a resident of a
                        state of the United States; (2) has been adjudicated a
                        bankrupt or has taken the benefit of any insolvency law,
                        or has made a general assignment for the benefit of
                        creditors; (3) has suffered a judgment recovered against
                        him for a sum of money to remain unsatisfied of record
                        or unsecured on appeal for a period of more than three
                        months; (4) is a trustee, officer, clerk or other
                        employee of a savings bank that is not controlled by the
                        corporation. 1.


                4.      Oath. Each director upon election shall take an oath
                        that he will, so far as it devolves on him, diligently
                        and honestly administer the affairs of the corporation,
                        and will not knowingly violate, or willing permit to be
                        violated, any of the provisions of law applicable to
                        such corporation. Further, upon such election, each
                        director shall sign a statement certifying compliance
                        with the foregoing qualifications as a director.

                5.      Age. No person shall be eligible for initial election as
                        a director who is 72 years of age or more and no person
                        shall continue to serve as a director who is 75 years of
                        age or more and the office of such director shall be
                        come vacant on the last day of the month in which such
                        director reaches his 75th birthday.




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        3.      Meetings: An annual meeting of the board of directors and of any
                committee designated by 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 notice, if any,
                required, and the time and place, either within or without the
                State of Washington, for holding any other regular meetings of
                the board of directors; the chairman, the president, the board
                of directors or any director may call a special meeting of
                directors. 1.

        4.      Notice: Notice of special meetings of the board of directors
                giving the time and place thereof shall be provided to each
                director at least one day prior to the date set for such meeting
                by the person or persons authorized to call such meeting or by
                the secretary at the direction of the person or persons
                authorized to call the meeting, either by personal delivery,
                mail or telegram addressed to the last known address of such
                director, or by personal telephone call or any other means
                sufficient to permit attendance at the meeting. If mailed,
                notice shall be deemed to be delivered when deposited in the
                United States mail, postage prepaid, so addressed to the
                director. If notice is by telegram, notice shall be deemed
                delivered when the telegram is delivered to the telegraph office
                for transmission. If notice is by personal telephone call or
                other means, the information concerning the meeting shall be
                given to the director personally and an affidavit of the person
                giving such notice shall be included in the minute book with the
                minutes of the meeting. If no place for a special meeting is
                designated in the notice thereof, the meeting shall be held at
                the principal place of business of the corporation. A waiver of
                notice signed by the director or directors, whether before or
                after the time stated for meeting, shall be equivalent to the
                giving of notice. The attendance of a director or a committee
                member at a meeting shall constitute a waiver of notice of the
                meeting except where a director or committee member attends a
                meeting for the express purpose of objecting to the transaction
                of any business because the meeting is not lawfully convened.
                Unless otherwise required by law, neither the business to be
                transacted at, nor the purpose of, any regular or special
                meeting of the board of directors or any committee designated by
                the board of directors need be specified in the notice or waiver
                or notice of such meeting.

        5.      Quorum: A majority of the number of directors fixed by or in the
                manner provided in these bylaws shall constitute a quorum for
                the transaction of any business at any meeting of the directors.
                If less than such majority shall attend a meeting, a majority of
                the directors present may adjourn the meeting from time to time
                without further notice, and a quorum present at such adjourned
                meeting may transact business.

        6.      Manner of Acting: The act of the majority of the directors
                present at a meeting or adjourned meeting at which a quorum is
                present shall be the act of the board of directors. Members of
                the board of directors or any committee designated by the board
                of directors may participate in a meeting of such board or
                committee by means of a conference telephone or similar
                communications equipment by which all persons participating in
                the meeting can hear each other at the same time; participating
                by such means shall constitute presence in person at a meeting.
                Notwithstanding the foregoing, the following decisions shall
                require the act of 2/3 of the directors present:

                1.      approval of any plan of merger, consolidation or
                        exchange involving the corporation; and

                2.      the sale of substantially all of the assets of the
                        corporation.





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        7.      Informal Action: Any action permitted or required to be taken at
                a meeting of the directors or permitted to be taken at a meeting
                of a committee of directors may be taken without a meeting if a
                consent in writing setting forth the action so taken shall be
                signed by all the directors or all the members of the committee,
                as the case may be.

        8.      Board Committees: The board of directors may designate, by
                resolution adopted by a majority of the full board of directors
                of the corporation, from among its members an executive
                committee and one or more other committees, each of which, to
                the extent provided in such resolution, shall have and may
                exercise the authority of the board of directors, except as
                limited by law. The designation of any such committee and the
                delegation thereto of authority shall not relieve the board of
                directors, or any member thereof, of any responsibility imposed
                by law. The executive committee shall be three members of the
                board if the board consists of seven or fewer members; and the
                executive committee shall consist of four members of the board
                if the board consists of eight or more members.

        9.      Removal: A director may be removed from office only in the
                manner prescribed by the corporation's Articles of
                Incorporation.

        10.     Vacancies: Any vacancy occurring in the board of directors may
                be filled by the affirmative vote of a majority of the remaining
                directors though less than a quorum of the board of directors. A
                director elected to fill a vacancy shall be elected for the
                unexpired term of his predecessor in office. Any vacancy to be
                filled by reason of an increase in the number of directors shall
                be filled by the board of directors for a term of office
                continuing only until the next election of directors by
                shareholders.

        11.     Compensation: By resolution of the board of directors, the
                directors may be paid a fixed sum for attendance and their
                expenses, if any, of attendance at meetings of the board of
                directors or committee thereof. No such payment shall preclude
                any director from serving the bank in any other capacity and
                receiving compensation therefor. A director receiving
                compensation for service as an officer of the corporation,
                provided his duties as officer require and receive his regular
                and faithful attendance at the corporation, shall not receive
                any additional compensation for service as a director.


4.      OFFICERS

        1.      Number: The officers of the corporation may include a chief
                executive officer, chief operations officer, chairman of the
                board of directors, president, one or more executive vice
                presidents, one or more senior vice presidents, one or more vice
                presidents, a secretary and a treasurer, each of whom shall be
                elected by the board of directors. Such other officers as may be
                deemed necessary or appropriate may be elected or appointed by
                the board of directors with the power and authority of such
                officer being established at the time such office is
                established. Except for the offices of president and secretary,
                any two or more offices may be held by the same person.
                Assistant vice presidents shall not be considered as officers of
                the corporation.

        2.      Election and Term of Office: The officers of the corporation to
                be elected by the board of directors may be elected for such
                term as the board may deem advisable or may be elected to serve
                for an indefinite term at the pleasure of the board. Officers of
                the corporation 




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                shall be elected at the first meeting of directors following the
                expiration of the term of office. Each officer shall hold office
                until his successor shall have been duly elected and qualified
                regardless of his term of office, except in the event of his
                prior death or resignation or his removal in the manner
                hereinafter provided.

        3.      Removal: Any officer or agent elected or appointed by the board
                of directors may be removed by the board of directors whenever
                in its judgment the best interests of the bank would be served
                thereby, but such removal shall be without prejudice to the
                contract rights, if any, of the person so removed. Election or
                appointment of an officer or agent shall not of itself create
                contract rights.

        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. 1.

        5.      Chairman of the Board: The chairman of the board, if there be
                such an officer, shall, if present, preside at all meetings of
                the board of directors, and exercise and perform such other
                powers and duties as may be determined from time to time by the
                board of directors.

        6.      Chief Executive Officer: The chief executive officer shall
                exercise and perform all duties incident to such office and such
                duties as may be determined from time to time by the board of
                directors.

        7.      Chief Operating Officer: The chief operating officers shall
                exercise and perform all duties incident to such office and such
                duties as may be determined from time to time by the board of
                directors.

        8.      President: The president shall exercise and perform such powers
                and duties as may be determined from time to time by the board
                of directors. He may sign, with the secretary or any other
                proper officer of the corporation, certificates for shares of
                the corporation. In general, he shall perform all duties
                incident to the office and such duties as may be prescribed by
                resolution of the board of directors from time to time.

        9.      The Executive Vice Presidents and/or Senior Vice Presidents: The
                executive vice presidents and/or senior vice presidents, if any,
                shall exercise and perform such powers and duties as may be
                determined from time to time by the board of directors.

        10.     The Vice Presidents: The vice presidents shall exercise and
                perform such powers and duties as may be determined from time to
                time by the board of directors.

        11.     The Secretary: The secretary shall keep the minutes of the
                proceedings of the shareholders and board of directors, shall
                give notices in accordance with the provisions of these bylaws
                and as required by law, shall be custodian of the corporate
                records and of the seal of the corporation, shall keep a record
                of the names and addresses of all shareholders and the number
                and class of shares held by each, have general charge of the
                stock transfer records of the corporation, may sign with the
                corporation, deeds, mortgages, bonds, contracts or other
                instruments which shall have been authorized by resolution of
                the board of directors, and in general shall perform all duties
                incident to the office of secretary and such other duties as
                from time to time may be assigned by the board of directors.




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        12.     The Treasurer: If required by the board of directors, the
                treasurer shall give a bond for the faithful discharge of his
                duties in such sum and with such surety or sureties as the board
                of directors shall determine. He shall have charge and custody
                of and be responsible for keeping correct and complete books and
                records of account, for all funds and securities of the
                corporation, receive and give receipts for moneys due and
                payable to the corporation from any source whatsoever, deposit
                all such moneys in the name of the corporation in the banks,
                trust companies or other depositories as shall be selected in
                accordance with the provisions of these bylaws, and in general
                perform all of the duties incident to the office of treasurer
                and such other duties as from time to time may be assigned to
                him by the board of directors.

        13.     Assistant Vice Presidents, Assistant Secretaries and Assistant
                Treasurers: The assistant vice presidents, assistant secretaries
                and assistant treasurers, in general, shall perform such duties
                as shall be assigned to them by the board of directors. If
                required by the board of directors, the assistant treasurers
                shall respectively give bonds for the faithful discharge of
                their duties in such sums and with such sureties as the board of
                directors shall determine. Neither the assistant vice
                presidents, the assistant secretaries nor the assistant
                treasurers shall be considered officers of the corporation.

        14.     Compensation of Officers and Employees: Compensation of officers
                and other employees may be fixed from time to time by the board
                of directors. No officer shall be prevented from receiving a
                salary because of service as a director of the corporation.


5.      CONTRACTS

        1.      Contracts: The board of directors may authorize any officer or
                officers, agent or agents, to enter into any contract or execute
                and deliver any instrument in the name of and on behalf of the
                corporation, and that authority may be general or confined to
                specific instances.

        2.      Contracts with, Loans to Corporate Directors and Officers: The
                corporation may enter into contracts and otherwise transact
                business as vendor, purchaser, or otherwise, with its directors,
                officers, and shareholders and with corporations, associations,
                firms and entities in which they are, or may become interested
                in, as directors, officers, shareholders, or otherwise, as
                freely as though such interest did not exist, except that no
                loan shall be made by the corporation secured by its shares. In
                the absence of fraud, the fact that any director, officer,
                shareholder, or any association, firm or other entity of which
                any director, officer, or shareholder is interested, is in any
                way interested in any transaction or contract shall not make the
                transaction or contract void or voidable, or require the
                director, officer, or shareholder to account to this bank for
                any profits therefrom if the transaction or contract is or shall
                be authorized, ratified, or approved by (1) vote of a majority
                of quorum of the board of directors, excluding any interested
                director or directors, (2) the written consent of the holders of
                a majority of the shares entitled to vote, or (3) a general
                resolution approving the acts of the directors and officers
                adopted by vote of the holders of a majority of the shares
                entitled to vote at a meeting of shareholders. All transactions
                or contracts, including loans to officers and directors, made
                pursuant to this section of these bylaws, shall be subject to
                any applicable federal and state laws and regulations. Nothing
                herein contained shall create or imply any liability in the
                circumstances above described 




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                or prevent the authorization, ratification or approval of such
                transactions or contracts in any other manner.


6.      SHARES

        1.      The shares of stock issued by the corporation shall be at par
                value as authorized by the Articles of Incorporation. The
                shareholders at any regular or special meeting called for that
                purpose may authorize the issuance of additional capital stock
                upon such terms and conditions as may be included in such
                authorization.

                The board of directors may change the number of authorized
                shares of stock to effectuate a split of, or stock dividend in,
                the corporation's own shares, and to change the number of
                authorized shares in proportion thereto.

        2.      Withdrawal:

                1.      Stock shall be paid for in cash or other consideration
                        at a price not less than the par value thereof as may be
                        approved by the board of directors. Stock shall not be
                        subject to withdrawal except upon liquidation or
                        dissolution and until all claims of creditors first
                        shall have been fully paid.

                2.      Shareholders shall participate in any distribution of
                        assets upon liquidation or dissolution after payment has
                        been made in full to all creditors and to all holders of
                        withdrawable savings.

        3.      Certificates for Shares: The shares of the corporation shall be
                represented by certificates in such form as may be required by
                law and signed by the president or executive vice president and
                by the secretary or an assistant secretary and may be sealed
                with the seal of the corporation or a facsimile thereof. The
                signatures of the corporate officers on the certificate may be
                facsimiles if the certificate is manually signed on behalf of an
                independent transfer agent or registrar.

        4.      Transfer of Shares: Transfer of shares of the corporation shall
                be made only on the stock transfer records of the corporation by
                the holder of record thereof or by his legal representative who
                shall furnish proper evidence of authority to transfer shares,
                or by his attorney thereunto authorized by power of attorney
                duly executed and filed with the secretary of the corporation,
                on surrender for cancellation of the certificate for the shares.
                Except as otherwise permitted by these bylaws, the person in
                whose name shares stand on the stock transfer records of the
                corporation shall be deemed by the corporation to be the owner
                thereof for all purposes. All certificates surrendered to the
                corporation for transfer shall be canceled and no new
                certificate shall be issued until the former certificate for a
                like number of shares shall have been surrendered and canceled,
                except that in case of a lost, destroyed or mutilated
                certificates, a new certificate may be issued therefor upon the
                terms, including indemnification as the corporation may request.

        5.      Dividends: No dividends shall be declared on stock until the
                corporation has satisfied any applicable net worth or other
                requirements imposed by law. Subject to such requirements,



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                shares of stock shall be entitled to such dividends, as may be
                declared and issued from time to time by the board of directors.


7.      SEAL

        The seal of the corporation shall be circular in form and consist of the
        name of the corporation, the state and year of incorporation, and the
        words "corporate seal."


8.      WAIVER OF NOTICE

        Whenever any notice is required to be given to any shareholder or
        director of the corporation, a waiver thereof in writing, signed by the
        person or persons entitled thereto, whether before or after the time
        stated for such notice, shall be deemed equivalent to the giving of
        notice.


9.      INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS

        1.      As used in this article

                1.      "Director" means any person who is or was a director of
                        the corporation and any person who, while a director of
                        the corporation, is or was serving at the request of the
                        corporation as a director, officer, partner, trustee,
                        employee, or agent of another foreign or domestic
                        corporation, partnership, joint venture, trust, other
                        enterprise, or employee benefit plan.

                2.      "Corporation" includes any domestic or foreign
                        predecessor entity of the corporation in a merger,
                        consolidation, or other transaction in which the
                        predecessor's existence ceased upon consummation of such
                        transaction.

                3.      "Expenses" includes attorneys' fees.

                4.      "Official capacity" means: (1) when used with respect to
                        a director, the office of director in the corporation
                        and (2) when used with respect to a person other than a
                        director as contemplated in subsection 10 of this
                        article, the elective or appointive office in the
                        corporation held by the officer or the employment or
                        agency relationship undertaken by the employee or agent
                        in behalf of the corporation, but in each case does not
                        include service for any other foreign or domestic
                        corporation or any partnership, joint venture, trust,
                        other enterprise, or employee benefit plan.

                5.      "Party" includes a person who was, is, or is threatened
                        to be made, a named defendant or respondent in a
                        proceeding.

                6.      "Proceeding" means any threatened, pending or completed
                        action, suit or proceeding, whether civil, criminal,
                        administrative or investigative.


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        2.      The corporation shall indemnify any person made a party to any
                proceeding (other than a proceeding referred to in subsection
                9.3 of this article), by reason of the fact that he is or was a
                director, against judgments, penalties, fines, settlements and
                reasonable expenses actually incurred by him in connection with
                such proceeding if:

                1.      He conducted himself in good faith and (1) in the case
                        of conduct in his own official capacity with the
                        corporation, he reasonably believed his conduct to be in
                        the corporation's best interest, or (2) in all other
                        cases, he reasonably believed his conduct to be at least
                        not opposed to the corporation's best interests; and

                2.      In the case of any criminal proceeding, he had no
                        reasonable cause to believe his conduct was unlawful.

                The termination of any proceeding by judgment, order,
                settlement, conviction, or upon a plea of nolo contendere or its
                equivalent, shall not, of itself, be determinative that the
                person did not meet the requisite standard of conduct set forth
                in this subsection.

        3.      The corporation shall indemnify any person made a party to any
                proceeding by or in the right of the corporation by reason of
                the fact that he is or was a director against reasonable
                expenses actually incurred by him in connection with such
                proceeding if he conducted himself in good faith, and

                1.      in the case of conduct in his official capacity with the
                        corporation, he reasonably believed his conduct to be in
                        its best interests; or

                2.      in all cases, he reasonably believed his conduct to be
                        at least not opposed to its best interests; provided
                        that no indemnification shall be made pursuant to this
                        section in respect to any proceeding in which such
                        person shall have been adjudged to be liable to the
                        corporation.

        4.      A director shall not be indemnified under subsection 9.2 or 9.3
                of this article in respect of any proceeding charging improper
                personal benefit to him, whether or not involving action in his
                official capacity, in which he shall have been adjudged to be
                liable on the basis that personal benefit was improperly
                received by him.

        5.      Unless otherwise limited by the articles of incorporation, a
                director who has been wholly successful, on the merits or
                otherwise, in the defense of any proceeding referred to in
                subsection 9.2 or 9.3 of this article shall be indemnified
                against reasonable expenses incurred by him in connection with
                the proceeding.

        6.      No indemnification under subsection 9.2 or 9.3 of this article
                shall be made by the corporation unless authorized in the
                specific case after a determination that indemnification of the
                director is permissible in the circumstances because he has met
                the standard of conduct set forth in the applicable section.
                Such determination shall be made:

                1.      by the board of directors by a majority vote of a quorum
                        consisting of directors not at the time parties to such
                        proceeding; or


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                2.      if such a quorum cannot be obtained, then by a majority
                        vote of a committee of the board of directors, duly
                        designated to act in the matter, by a majority vote of
                        the full board of directors (in which designation
                        directors who are parties may participate), consisting
                        solely of two or more directors not at the time parties
                        to such proceeding; or

                3.      in a written opinion by legal counsel other than an
                        attorney, or a firm having associated with it an
                        attorney, who has been retained by or who has performed
                        services within the past three years for the corporation
                        or any party to be indemnified, selected by the board of
                        directors or a committee thereof by vote as set forth in
                        9.6.1 or 9.6.2 of this subsection, or if the requisite
                        quorum of the full board of directors cannot be obtained
                        therefor and such committee cannot be established, by a
                        majority vote of the full board of directors (in which
                        selection directors who are parties may participate); or

                4.      by the shareholders.

                Authorization of indemnification and determination as to
                reasonableness of expenses shall be made in the same manner as
                the determination that indemnification is permissible, except
                that if the determination that indemnification is permissible is
                made by such legal counsel, authorization of indemnification and
                determination as to reasonableness of expenses shall be made in
                a manner specified in paragraph 9.6.3 of this subsection for the
                selection of such counsel.

        7.      Reasonable expenses incurred by a director who is party to a
                proceeding may be paid or reimbursed by the corporation in
                advance of the final disposition of such proceeding:

                1.      After a determination, made in the manner specified by
                        subsection 9.6 of this article, that the information
                        then known to those making the determination (without
                        undertaking further investigation for purposes thereof)
                        does not establish that indemnification would not be
                        permissible under subsection 9.2 or 9.3 of this article;
                        or

                2.      upon receipt by the corporation of (1) a written
                        affirmation by the director of his good faith belief
                        that he has met the standard of conduct necessary for
                        indemnification by the corporation as authorized in this
                        article; and (2) a written undertaking by or on behalf
                        of the director to repay such amount if it shall
                        ultimately be determined that he has not met such
                        standard of conduct.

                        The undertaking required by paragraph 9.7.2 of this
                        subsection shall be an unlimited general obligation of
                        the director but need not be secured and may be accepted
                        without reference to financial ability to make the
                        repayment. Payments pursuant to this subsection may be
                        authorized in the manner specified in subsection 9.6 of
                        this article.

        8.      No provision for the corporation to indemnify a director who is
                made a party to a proceeding, whether contained in the articles
                of incorporation, these bylaws, or resolution of shareholders or
                directors, an agreement, or otherwise (except as contemplated by
                subsection 9.11 of this article), shall be valid unless
                consistent with this article, or to the 




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<PAGE>   14

                extent that indemnity hereunder is limited by the articles of
                incorporation, consistent therewith. Nothing contained in this
                article shall limit the corporation's ability to reimburse
                expenses incurred by a director in connection with his
                appearance as a witness in a proceeding at a time when he has
                not been made a named defendant or respondent in the proceeding.

        9.      For purposes of this article the corporation shall be deemed to
                have requested a director to serve an employee benefit plan
                where the performance by him of his duties to the corporation
                also imposes duties on, or otherwise involves services by, him
                to the plan or participants or beneficiaries of the plan; excise
                taxes assessed on a director with respect to an employee benefit
                plan pursuant to applicable law shall be deemed "fines"; and
                action taken or omitted by him with respect to an employee
                benefit plan in the performance of his duties for a purpose
                reasonably believed by him to be in the interest of the
                participants and beneficiaries of the plan shall be deemed to be
                for a purpose which is not opposed to the best interests of the
                corporation.

        10.     Unless otherwise limited by the articles of incorporation:

                1.      the corporation shall provide indemnification, including
                        advances of expenses, to an officer, employee or agent
                        of the corporation to the same extent that it may
                        indemnify directors pursuant to this article except that
                        subsection 9.12 of this article shall not apply to any
                        person other than a director; and

                2.      the corporation, in addition, shall have the power to
                        indemnify an officer who is not a director, as well as
                        employees and agents of the corporation who are not
                        directors, to such further extent, consistent with law,
                        as may be provided by the articles of incorporation,
                        these bylaws, general or specific action of the board of
                        directors, or contract.

        11.     The corporation shall have the power to purchase and maintain
                insurance on behalf of any person who is or was a director,
                officer, employee or agent of the corporation or is or was
                serving at the request of the corporation as an officer,
                employee or agent of another bank, corporation, partnership,
                joint venture, trust, other enterprise, or employee benefit plan
                against any liability asserted against him and incurred by him
                in any such capacity or arising out of his status as such,
                whether or not the corporation would have the power to indemnify
                him against such liability under the provisions of this article.

        12.     Any indemnification of a director in accordance with this
                article, including any payment or reimbursement of expenses,
                shall be reported to the shareholders with the notice of the
                next shareholders meeting, or prior thereto, in a written report
                containing a brief description of the proceedings involving the
                director being indemnified and the nature and extent of such
                indemnification.


10.     LOANS AND INVESTMENTS

        The funds of the corporation may also be loaned or invested as the board
        of directors may from time to time direct, subject to applicable law.




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11.     FISCAL YEAR

        The fiscal year of the corporation shall end on the last day of
        September each year.


12.     AMENDMENTS TO BYLAWS

        These bylaws may be amended or repealed and new bylaws adopted by a
        two-thirds majority vote of the directors at any regular or special
        meeting of the board of directors or by a majority of votes eligible to
        be cast by the shareholders of the corporation at any legal meeting.


13.     MISCELLANEOUS

        Unless some other meaning and intent is apparent from the context, the
        plurals shall include the singular and vice versa, and masculine,
        feminine and neuter words shall be used interchangeably.