**Exhibit
      3.2**























**BYLAWS
      OF**








**SOUTHERN
      COMMUNITY FINANCIAL CORPORATION**


























**BYLAWS**


**OF**


**SOUTHERN
      COMMUNITY FINANCIAL CORPORATION**





**Index**





**ARTICLE
      I**





Offices


Section
                1.
            Principal
                OfficesSection
                2.
            Registered
                OfficeSection
                3.
            Other
                Offices





**ARTICLE
      II**





Meetings
      of Shareholders


Section
                1.
            Annual
                MeetingSection
                2.
            Substitute
                Annual MeetingSection
                3.
            Special
                MeetingsSection
                4.
            Place
                of MeetingsSection
                5.
            Notice
                of MeetingsSection
                6.
            Waiver
                of NoticeSection
                7.
            Voting
                ListsSection
                8.
            QuorumSection
                9.
            VotingSection
                10.
            Proxies





**ARTICLE
      III**





Board
      of Directors


Section
                1.
            General
                PowersSection
                2.
            Number,
                Term of Office and QualificationsSection
                3.
            Election
                of DirectorsSection
                4.
            Directors'
                ImmunitySection
                5.
            Removal
                of DirectorsSection
                6.
            VacanciesSection
                7.
            Compensation
                of DirectorsSection
                8.
            CommitteesSection
                9.
            Chairman
                of BoardSection
                10.
            Nominations








**ARTICLE
      IV**





Meetings
      of Directors


Section
                1.
            Regular
                MeetingsSection
                2.
            Special
                MeetingsSection
                3.
            Place
                of MeetingsSection
                4.
            Notice
                of MeetingsSection
                5.
            Quorum;
                Manner of ActingSection
                6.
            Presumption
                of AssentSection
                7.
            Informal
                Action of DirectorsSection
                8.
            ResignationsSection
                9.
            Minutes





**ARTICLE
      V**





Officers


Section
                1.
            Number
                of OfficersSection
                2.
            Election,
                Term of Office and QualificationsSection
                3.
            Subordinate
                Officers and AgentsSection
                4.
            RemovalSection
                5.
            ResignationsSection
                6.
            VacanciesSection
                7.
            President/Chief
                Executive OfficerSection
                8.
            Vice
                PresidentSection
                9.
            SecretarySection
                10.
            Assistant
                SecretarySection
                11.
            TreasurerSection
                12.
            Duties
                of Officers May Be DelegatedSection
                13.
            Salaries
                of OfficersSection
                14.
            Bonds





**ARTICLE
      VI**





Contracts,
      Loans, Deposits, Checks, Drafts, Etc.


Section
                1.
            ContractsSection
                2.
            LoansSection
                3.
            DepositsSection
                4.
            Checks,
                Drafts, Etc.











**ARTICLE
      VII**





Share
      Certificates and Their Transfer


Section
                1.
            Share
                CertificatesSection
                2.
            Transfers
                of SharesSection
                3.
            Lost
                or Destroyed CertificatesSection
                4.
            RegulationsSection
                5.
            Fixing
                Record DateSection
                6.
            Holder
                of RecordSection
                7.
            Reacquired
                Shares





**ARTICLE
      VIII**





General
      Provisions


Section
                1.
            Corporate
                SealSection
                2.
            DistributionsSection
                3.
            Fiscal
                YearSection
                4.
            Waiver
                of NoticeSection
                5.
            AmendmentsSection
                6.
            IndemnificationSection
                7.
            Interpretation
                of Bylaws







**CODE
      OF BYLAWS**








**ARTICLE
      I**





**Offices**





Section
      1. Principal Office .
      The
      Corporation's principal office shall be located in Winston-Salem, North
      Carolina, or at such other place(s) as the Board may designate from time to
      time.





Section
      2. Registered Office .
      The
      Corporation's registered office, which by law is required to be maintained
      within the State, shall be located at such place or places within the State
      of
      North Carolina as the Board may designate from time to time.





Section
      3. Other Offices .
      The
      Corporation may have offices at such places, either within or outside the State,
      as the Board may determine from time to time.








**ARTICLE
      II**





**Meeting
      of Shareholders**





Section
      1. Annual Meeting .
      The
      annual meeting of shareholders shall be held within 180 days of the close of
      the
      fiscal year, as set by the Board, for the purpose of electing directors of
      the
      Corporation and for the transaction of such other business as properly may
      be
      brought before the meeting.





Section
      2. Substitute Annual Meeting .
      If the
      annual meeting shall not be held on the day designated by these Bylaws, a
      substitute annual meeting may be called in the manner provided for the call
      of a
      special meeting in accordance with the provisions of Section 3 of this Article
      and a substitute annual meeting so called shall be designated as and shall
      be
      treated, for all purposes, as the annual meeting.





Section
      3. Special Meetings .
      Special
      meetings of the shareholders may be called at any time by (a) the President
      of
      the Corporation, (b) the Chairman of the Corporation, (c) the Secretary of
      the
      Corporation or (d) the Board.





Section
      4. Place of Meetings .
      All
      meetings of shareholders shall be held at the principal office of the
      Corporation or at such other place, either within or without the State of North
      Carolina, as shall be designated in the notice of the meeting or agreed upon
      by
      a majority of the shareholders entitled to vote thereat.





1


Section
      5. Notice of Meetings .
      Written
      or printed notice stating the time and place of a shareholders' meeting shall
      be
      delivered, personally or by mail, by or at the direction of the Chief Executive
      Officer, the President, the Board or by such other person or persons calling
      such meeting, to each shareholder of record entitled to vote at such meeting,
      not less than ten or more than sixty days prior to the date of such meeting.
      If
      mailed, such notice shall be deemed to be delivered when deposited in the United
      States mail addressed to the shareholder to the address determined in the manner
      indicated below, with postage thereon prepaid. A statement of the business
      to be
      transacted at an annual or substitute annual meeting of shareholders need not
      be
      set forth in the notice of such meeting except that if any matter is to be
      considered or acted upon, other than the election of directors, on which the
      vote of shareholders is required under the provisions of the Act then a specific
      statement thereof shall be set forth in such notice. In the case of a special
      meeting, the notice shall set forth the nature of the business to be transacted.
      If any meeting of shareholders is adjourned to a different date, time, or place,
      notice need not be given of the new date, time, or place if the new date, time,
      or place is announced at the meeting before adjournment and if a new record
      date
      is not fixed for the adjourned meeting. If a new record date for the adjourned
      meeting is or must be fixed pursuant to the Act, notice of the adjourned meeting
      must be given as provided in this Section to persons who are shareholders as
      of
      the new record date. Any notice which shall be mailed shall be directed to
      each
      shareholder at its address as set forth on the Corporation's share books, except
      that if any shareholder shall have filed with the Secretary a written request
      that notices intended for such shareholder be mailed to some other address,
      then
      notice to such shareholder shall be mailed to the address set forth in such
      written request.





Section
      6. Waiver of Notice .
      Any
      shareholder may waive notice of any meeting before or after the meeting. The
      waiver must be in writing, signed by the shareholder, and delivered to the
      Corporation for inclusion in the minutes or filing with the corporate records.
      A
      shareholder's attendance, in person or by proxy, at a meeting (a) waives
      objection to lack of notice or defective notice of the meeting, unless the
      shareholder or the shareholder's proxy at the beginning of the meeting objects
      to holding the meeting or transacting business thereat, and (b) waives objection
      to consideration of a particular matter at the meeting that is not within the
      purpose or purposes described in the meeting notice, unless the shareholder
      or
      the shareholder's proxy objects to considering the matter before it is voted
      upon.





Section
      7. Voting Lists .
      No
      later than two days after notice of a shareholder is given, the Secretary shall
      prepare an alphabetical list of the shareholders entitled to notice of such
      meeting. The Secretary shall maintain such list and make it available as
      provided by the Act.





Section
      8. Quorum .
      Except
      as otherwise provided by the Act, the Articles or these Bylaws, the presence
      in
      person or by proxy of holders of record of a majority of the shares entitled
      to
      vote shall be necessary to constitute a quorum for action on such matters;
      provided, however, that at any substitute annual shareholders' meeting called
      in
      accordance with Section 2 of this Article, the shares entitled to vote there
      represented, in person or by proxy, shall constitute a quorum. In the absence
      of
      a quorum, a majority of the shares entitled to vote there represented, in person
      or by proxy, may adjourn the meeting from time to time. At any such adjourned
      meeting, at which a quorum shall be present, any business may be transacted
      which might have been transacted at the meeting as originally called if a quorum
      had been there present. Once a share is represented for any purpose at a
      meeting, it is deemed present for quorum purposes for the remainder of the
      meeting and for any adjournment of that meeting unless a new record date is
      or
      must be set for that adjourned meeting.





2


Section
      9. Voting .
      At each
      shareholders' meeting, every holder of record of shares entitled to vote shall
      be entitled to one vote for every share standing in his name on the
      Corporation's books, unless otherwise provided by the terms of such shares,
      and
      all questions, except as otherwise provided by the Act, the Articles, or these
      Bylaws, shall be determined by a majority of the votes so cast. Any provision
      in
      these Bylaws prescribing the vote required for any purpose as permitted by
      law
      may not itself be amended by a vote less than the vote prescribed therein.
      Persons holding shares in a fiduciary capacity shall be entitled to vote the
      shares so held. Shares owned by the Corporation, directly or indirectly, through
      a subsidiary corporation or otherwise, or held directly or indirectly in a
      fiduciary capacity by it or by a subsidiary corporation, shall not be voted
      at
      any shareholders' meeting and shall not be counted in determining the total
      number of outstanding shares at a given time entitled to vote, except to the
      extent permitted by the Act. Voting on all matters, except the election of
      Directors, shall be by voice vote or by show of hands except that if prior
      to
      voting on any particular matter demand shall be made by or on behalf of the
      holders of not less than one-tenth (1/10th) of the shares represented, in person
      or by proxy, at such meeting and entitled to vote on such matter that the vote
      thereon be taken by ballot, then the vote on such matter shall be taken by
      ballot.





Section
      10. Proxies .
      Any
      shareholder entitled to vote may vote by proxy, provided that the instrument
      authorizing such proxy to act shall have been executed in writing by the
      shareholder or his duly authorized attorney. No proxy shall be valid after
      the
      expiration of eleven months from the date of its execution, unless the person
      executing it shall have specified therein the length of time it is to continue
      in force or limits its use to a particular meeting. Each instrument designating
      a proxy shall be exhibited to the Secretary and shall be filed with the
      Corporation's records.








**ARTICLE
      III**





**Board
      of Directors**





Section
      1. General Powers .
      All
      corporate powers shall be exercised by or under the authority of and the
      business and affairs of the Corporation manage under the direction of, the
      Board, except as otherwise provided in the Articles.





Section
      2. Number, Term of Office and Qualifications .(a)
      The
      number of directors shall be not less than six (6) nor more than fourteen (14)
      shareholders. The exact number of directors, within the minimum and maximum
      limitations of the preceding sentence, shall be fixed from time to time by
      the
      Board pursuant to a resolution adopted by a majority of the entire Board prior
      to the annual meeting of shareholders at which such directors are to be elected.
      In addition to the foregoing relating to the determination of the number and
      election of directors, the shareholders, at any meeting thereof, may authorize
      not more than two (2) additional directorships, which may be left unfilled
      by
      the shareholders at such meeting, to be filled in the discretion of the
      directors during the interval between meetings of the shareholders.





3


(b)
      At
      the first annual meeting of shareholders, the Board shall be divided into three
      classes, containing as nearly equal a number of directors as possible, with
      the
      term of office for the first class to expire at the first annual meeting of
      shareholders after their election, the term of office for the second class
      to
      expire at the second annual meeting of shareholders after their election, and
      the term of office for the third class to expire at the third annual meeting
      of
      the shareholders after their election. At each annual meeting of shareholders
      following such initial classification and election, directors elected to succeed
      those directors whose terms expire shall be selected for a term of office to
      expire the third succeeding annual meeting of shareholders after their election.
      In the event of any increase or decrease in the number of directors, the
      additional or eliminated directorships shall be so classified or chosen so
      that
      all classes of directors shall remain and become as nearly equal in number
      as
      possible. Each director shall continue in office until the expiration of his
      term as specified above and until his successor shall have been elected and
      qualified, or until his death or until he shall resign or shall have become
      disqualified or shall have been removed in the manner hereinafter provided.





(c)
      No
      one may be eligible for election as a director after the date on which he or
      she
      attains the age of seventy-two (72) years.





Section
      3. Election of Directors .
      Except
      as provided in Section 6 of this Article, the Directors shall be elected at
      the
      shareholders' annual meeting of shareholders and the persons who shall receive
      the highest number of votes shall be the elected directors. If prior to voting
      for the election of Directors demand therefor shall be made by or on behalf
      of
      any share entitled to vote at such meeting, the election of directors shall
      be
      by ballot.





Section
      4. Directors' Immunity .
      To the
      fullest extent permitted by law, each Director shall be immune from personal
      liability of each Director arising out of an action whether by or in the right
      of the Corporation or otherwise for monetary damages for breach of any duty
      as a
      Director.





Section
      5. Removal of Directors .
      Any
      director may be removed from office at any time with or without cause by either
      (i) a two-thirds (2/3) vote of all the directors, or (ii) a vote of shareholders
      whenever the number of votes cast in favor of removal of the director exceeds
      the number of votes cast against such removal. A director may not be removed
      by
      the shareholders at a meeting unless the notice of the meeting states that
      the
      purpose, or one of the purposes, of the meeting is removal of the director.
      If
      any directors are so removed, new directors may be elected at the same meeting
      to fill the unexpired term of the removed director.





Section
      6. Vacancies .
      Except
      as provided in Section 2 of this Article, a vacancy in the Board created by
      an
      increase in the authorized number of Directors shall be filled only by election
      at an annual meeting of shareholders or at a special meeting of shareholders
      called for that purpose; provided, however, that prior to the issuance of the
      Corporation's shares any such vacancy may be filled by the then existing Board.
      Any vacancy in the Board created other than by an increase in the authorized
      number of Directors may be filled by a majority of the remaining Directors,
      even
      though less than a quorum, or by the sole remaining Director. The shareholders
      may elect a Director at any time to fill any vacancy not filled by the
      Directors. In the event of the resignation of a Director to take effect at a
      future date either the Board or the shareholders, at any time after tender
      of
      such resignation, may elect a successor to such Director to take office as
      of
      the effective date of such resignation. Any Director elected to fill a vacancy
      shall be elected for the unexpired term of his predecessor.





4


Section
      7. Compensation of Directors .
      The
      Board may cause the Corporation to compensate Directors for their services
      as
      Directors and may provide for the payment by the Corporation of all expenses
      incurred by directors in attending regular and special meetings of the
      Board.





Section
      8. Committees .
      The
      Board, by resolution of a majority of the number of directors in office, may
      designate two or more directors to constitute an Executive Committee and such
      other committees as the Board shall deem advisable, each of which, to the extent
      authorized by law and provided in such resolution, shall have and may exercise
      all of the authority of the Board in the management of the Corporation. The
      designation of any committee and the delegation thereto of authority shall
      not
      operate to relieve the Board, or any member thereof, of any responsibility
      or
      liability imposed upon the Board, or any member thereof, by law.





Section
      9. Chairman of Board .
      The
      Directors shall elect a Chairman from their number at any meeting of the Board.
      The Chairman shall preside at all meetings of the Board and perform such other
      duties as the Board may direct.





Section
      10. Nominations .  Only
      persons who are nominated in accordance with the provisions set forth in these
      bylaws shall be eligible to be elected as directors at an annual or special
      meeting of shareholders. Nomination for election to the Board shall be made
      by
      or at the direction of the Nominating Committee appointed by the Board.
      Nomination for election of any person to the Board may also be made by a
      shareholder entitled to vote on such election if written notice of the
      nomination of such person shall have been received by the Secretary of the
      Corporation at the principal office of the Corporation on a day which is at
      least seven business days and not more than 60 days prior to the date of the
      meeting. Each such notice shall set forth: (a) the name and address of the
      shareholder who intends to make the nomination; (b) a representation that such
      shareholder is a holder of the record of shares of the Corporation entitled
      to
      vote at such meeting and intends to appear in person or by proxy at the meeting
      to nominate the person or persons specified in the notice; (c) as to each person
      to be nominated (i) such person’s name and address, employment history for the
      past five years, affiliations, if any, with the Corporation and other
      corporations, the number of shares of the Corporation that are owned of record
      or beneficially by such person and information concerning any transactions
      in
      such shares within the prior 60 days, whether such person has been convicted
      in
      a criminal preceding (excluding traffic violations or similar misdemeanors)
      within the past five years and the details thereof, whether such person has
      been
      a party to any proceeding or subject to any judgment, decree or final order
      with
      respect to violations of federal or state securities laws within the past five
      years and the details thereof, and the details of any contract, arrangement,
      understanding or relationships with any person with respect to any securities
      of
      the Corporation; (ii) such person’s written consent to being named as a nominee
      and to serving as a director if elected; and (iii) a description of all
      arrangements or understanding between the shareholder and each nominee and
      any
      other person or persons (naming such person or persons) pursuant to which the
      nomination or nominations are to be made by the shareholder. Recommendations
      and
      nominations not made in accordance herewith may, in his or her discretion,
      be
      disregarded by the Chairman of the meeting, and upon his or her instruction,
      the
      voting inspectors may disregard all votes cast for each such nominee.





5


**ARTICLE
      IV**





**Meetings
      of Directors**





Section
      1. Regular Meetings .
      A
      regular annual meeting of the Board may be held immediately after the
      shareholders' annual meeting and if not then held shall be held within a
      reasonable time thereafter. In addition, the Board may provide, by resolution,
      the time and place, within or without the State, for the holding of additional
      regular meetings. The Board shall meet at least quarterly, including the regular
      meeting to be held immediately or shortly after the annual meeting of
      shareholders.





Section
      2. Special Meetings .
      Special
      Board meetings may be called by or at the request of the Chief Executive
      Officer, the President or any two Directors.





Section
      3. Place of Meetings .
      All
      Board meetings shall be held at the Corporation's principal office except that
      such meetings may be held at such other place, within or without the State,
      as
      may be designated in a duly executed waiver of notice of such meeting or as
      may
      be otherwise agreed upon in advance of the meeting by a majority of
      Directors.





Section
      4. Notice of Meetings .
      Regular
      meetings of the Board may be held without notice. Special meetings shall be
      called on not less than three (3) days' prior notice. Notice of a special
      meeting need not state the purpose thereof, unless otherwise required by the
      Act
      or these Bylaws, and such notice shall be directed to each Director at his
      residence or usual place of business by mail, cable or telegram, or may be
      delivered personally. A Director's presence at a meeting shall constitute a
      waiver of notice of that meeting except when such Director attends the meeting
      solely for the purpose of objecting to the transaction of any business thereat,
      on the grounds that the meeting has not been lawfully called, and does not
      otherwise participate in such meeting.





Section
      5. Quorum; Manner of Acting .
      A
      majority of the number of Directors then authorized as the number of Directors
      of the Corporation shall constitute a quorum for the transaction of any business
      at any meeting. Except as otherwise expressly provided in the Articles or these
      Bylaws, the act of a majority of the Directors present at a meeting at which
      a
      quorum is present shall be the act of the Board. The vote of a majority of
      the
      Directors then holding office shall be required to adopt, amend or repeal a
      Bylaw or to dissolve the Corporation pursuant to the Act without shareholder
      consent.





6


Section
      6. Presumption of Assent .
      A
      Director who is present at a Board meeting at which action on any matter is
      taken shall be presumed to have assented to the action taken on any such matter
      unless (a) his contrary vote is recorded or his dissent or abstention is
      otherwise entered in the minutes of the meeting, (b) the Director files his
      written dissent or abstention to such action with a person acting as the
      secretary of the meeting before the adjournment thereof or (c) the Director
      forwards such dissent or abstention by registered mail to such secretary
      immediately after the adjournment of the meeting. Such right to dissent or
      abstention shall not apply to a Director who voted in favor of such action.





Section
      7. Informal Action of Directors .
      Action
      taken without a meeting shall constitute action of the Board if written consent
      to the action in question is signed by a majority of (or of a committee
      appointed by the Board in accordance with these Bylaws) the Directors then
      holding office or members of the committee, as the case may be, and filed with
      the minutes of the proceedings of the Board or such committee, whether done
      before or after the action so taken. Any one or more Directors may participate
      in any Board or committee meeting by means of a conference telephone or similar
      communications device which allows all persons participating in the meeting
      simultaneously to hear each other, and such participation in a meeting shall
      be
      deemed presence in person at such meeting.





Section
      8. Resignations .
      A
      Director may resign at any time by communicating his resignation to the Board,
      its chairman, or the Corporation. A resignation is effective when it its
      communicated unless it specifies in writing a later effective date or subsequent
      event upon which it will become effective. Unless otherwise specified therein,
      the acceptance of any such resignation shall not be necessary to make it
      effective.





Section
      9. Minutes .
      The
      Secretary or an Assistant Secretary shall keep minutes of all Board meetings,
      and the same shall be recorded in a book or books which shall be kept for that
      purpose, which book of books shall be kept on file in the Corporation. The
      minutes shall show a record of all action taken by the Board concerning the
      Corporation's conduct, management, and welfare. The minutes of any meeting
      of a
      Board committee, showing the actions taken by such committee since the last
      meeting, shall be submitted to the Board at each Board meeting. All minutes
      must
      be signed by either the chairman or the secretary of the meeting.





7





**ARTICLE
      V**





**Officers**





Section
      1. Number of Officers .
      The
      Corporation's officers shall be a Chief Executive Officer, a President, one
      or
      more Vice Presidents, a Secretary and a Treasurer, and such other officers
      as
      may be appointed in accordance with the provisions of Section 3 of this Article.
      Any two offices or more may be held by one person, except the offices of
      President and Secretary, but no officer shall sign or execute any document
      in
      more than one capacity.





Section
      2. Election, Term of Office and Qualifications .
      Each
      officer, except such officers as may be appointed in accordance with the
      provisions of Section 3 of this Article, shall be chosen by the Board and shall
      hold office until the annual meeting of the Board held next after his election
      or until his successor shall have been duly chosen and qualified or until his
      death or until he shall resign or shall have been disqualified or shall have
      been removed from office.





Section
      3. Subordinate Officers and Agents .
      The
      Board from time to time may appoint other officers or agents, each of whom
      shall
      hold office for such period, have such authority, and perform such duties as
      the
      Board from time to time may determine. The Board may delegate to any officer
      or
      agent the power to appoint any subordinate officer or agent and to prescribe
      his
      respective authority and duties.





Section
      4. Removal .
      The
      officers specifically designated in Section 1 of this Article may be removed,
      either with or without cause, by vote of a majority of the whole Board at a
      special meeting of the Board called for that purpose. The officers appointed
      in
      accordance with the provisions of Section 3 of this Article may be removed,
      either with or without cause, by a majority vote of the Directors present at
      any
      meeting, or by any officer or agent upon whom the Board may confer such power
      of
      removal. The removal of any person from office shall be without prejudice to
      the
      contract rights, if any, of the person so removed.





Section
      5. Resignations .
      Subject
      to any contract obligations or provisions in this regard, any officer may resign
      at any time by giving written notice to the Board or to the President or
      Secretary, or if he were appointed by an officer or agent in accordance with
      Section 3 of this Article, by giving written notice to the officer or agent
      who
      appointed him. Any such resignation shall take effect upon its being accepted
      by
      the Board or by the officer or agent appointing the person so
      resigning.





Section
      6. Vacancies .
      A
      vacancy in any office because of death, resignation, removal, or
      disqualification, or any other cause, shall be filled for the unexpired portion
      of the term in the manner prescribed by these Bylaws for regular appointments
      or
      elections to such offices.





Section
      7. President/Chief Executive Officer .
      The
      President shall be the Chief Executive Officer of the Corporation unless
      otherwise designated by the Board of Directors. Subject to the instructions
      of
      the Board of Directors, the President shall have general charge of the business,
      affairs and property of the Corporation and control over its other officers,
      agents and employees. The President shall perform such other duties as from
      time
      to time may be assigned by the Board of Directors. If the Board of Directors
      designates a Chief Executive Officer separate from the President, the Chief
      Executive Officer shall be the highest officer of the Corporation and, subject
      to the control of the Board of Directors, shall in general supervise and control
      all business and affairs of the Corporation, shall preside at all meetings
      of
      shareholders at which he may be present and shall perform such other duties
      as
      from time to time may be assigned by the Board of Directors.





8


Section
      8. Vice President .
      At the
      Chief Executive Officer’s request, or in the absence or disability of the Chief
      Executive Officer and/or the President, the Vice President, and if there be
      more
      than one (1) Vice President, the Vice President designated by the Board, or
      in
      the absence of such designation, the Vice President designated by the Chief
      Executive Officer, or absent such designation, in order of length of service,
      shall perform all the duties of the Chief Executive Officer, in the absence
      or
      disability of the Chief Executive Officer and the President, in the absence
      or
      disability of the President, and when so acting shall have all the powers of
      and
      be subject to all the restrictions upon such office. The Vice Presidents shall
      perform such other duties and have such authority as the Chief Executive Officer
      or the Board may from time to time assign to them.





Section
      9. Secretary .
      The
      Secretary shall keep the minutes of the meetings of shareholders and of the
      Board, and shall see that all notices are duly given in accordance with the
      provisions of these Bylaws or the Act. He shall be custodian of the
      Corporation's records, books, reports, statements, certificates and other
      documents and of the Corporation's seal, and see that the seal is affixed to
      all
      share certificates prior to their issuance and to all documents requiring such
      seal. In general, he shall perform all duties and possess all authority incident
      to the office of Secretary, and he shall perform such other duties and have
      such
      other authority as the Chief Executive Officer or the Board may from time to
      time assign to him.





Section
      10. Assistant Secretary .
      In the
      absence of the Secretary or in the event of his death, inability, or refusal
      to
      act, any Assistant Secretary, if such an officer is appointed by the Board,
      shall, unless otherwise determined by the Board, perform the duties of the
      Secretary, and when so acting shall have all the powers of and be subject to
      all
      the restrictions upon the Secretary. An Assistant Secretary shall perform such
      other duties as may be assigned to him by the Secretary, by the Chief Executive
      Officer, or by the Board.





Section
      11. Treasurer .
      The
      Treasurer shall have supervision over the Corporation's funds, securities,
      receipts and disbursements of the Corporation. He shall keep full and accurate
      accounts of the Corporation's finances in books especially provided for that
      purpose, and he shall cause a true statement of its assets and liabilities,
      as
      of the close of each fiscal year, and of the results of its operations and
      of
      changes in surplus for such fiscal year, all in reasonable detail, to be made
      and filed at the Corporation's principal office within four months after the
      end
      of such fiscal year. The statement so filed shall be kept available for
      inspection by any shareholder for a period of ten years and the Treasurer shall
      mail or otherwise deliver a copy of the latest such statement to any shareholder
      upon his written request for the same. He shall in general perform all duties
      and have all authority incident to the office of Treasurer and shall perform
      such other duties and have such other authority as the Chief Executive Officer
      or the Board may from time to time assign or grant to him.





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Section
      12. Duties of Officers May Be Delegated .
      In case
      of the absence of any officer of the Corporation or for any other reason that
      the Board may deem sufficient, the Board may delegate the powers or duties
      of
      such officer to any other officer or to any Director for the time being provided
      a majority of the entire Board concurs therein.





Section
      13. Salaries of Officers .
      No
      officer shall be prevented from receiving a salary as such officer or from
      voting thereon by reason of the fact that he is also a Director. The Board
      shall
      from time to time fix the salaries of the Corporation's officers, including
      such
      officers as may be Directors, except that the Board may delegate to any officer
      who has been given power to appoint subordinate officers or agents, as provided
      in Section 3 of this Article, the authority to fix the salaries or other
      compensation of any such officers or agents appointed by him.





Section
      14. Bonds .
      Each
      officer and employee of the Corporation shall give bond to the Corporation,
      in a
      suitable amount to be approved by the Board, conditioned upon the faithful
      performance of the duties of his respective office or position, and to comply
      with such other conditions as may from time to time be required by the
      Board.





**ARTICLE
      VI**





**Contracts,
      Loans, Deposits, Checks, Drafts, Etc.**





Section
      1. Contracts .
      The
      Board may authorize any officer or officers, agent or agents to enter into
      any
      contract or to execute or deliver any instrument on behalf of the Corporation,
      and such authority may be general or confined to specific
      instances.





Section
      2. Loans .
      No
      loans shall be contracted on the Corporation's behalf and no evidences of
      indebtedness shall be issued in its name, unless and except as authorized by
      resolution of the Board. Any officer or agent of the Corporation thereunto
      so
      authorized may effect loans or advances for the Corporation and for such loans
      and advances may make, execute and deliver promissory notes, bonds, or other
      evidences of indebtedness of the Corporation. Any such officer or agent, when
      thereunto so authorized, may mortgage, pledge, hypothecate or transfer as
      security for the payment of any and all loans, advances, indebtedness and
      liabilities of the Corporation any real property and all stocks, bonds, other
      securities and other personal property at any time held by the Corporation,
      and
      to that end may endorse, assign and deliver the same, and do every act and
      thing
      necessary or proper in connection therewith. Such authority may be general
      or
      confined to specific instances.





Section
      3. Deposits .
      All
      corporate funds shall be deposited from time to time to the Corporation's credit
      in such banks or trust companies or with such bankers or other depositories
      as
      the Board may select, or as may be selected by any corporate officer or
      officers, agent or agents to whom the Board may give such power from time to
      time.





10


Section
      4. Checks, Drafts, Etc .
      All
      notes, drafts, acceptances, checks and endorsements or other evidences of
      indebtedness shall be signed by the President or a Vice President and by the
      Secretary or the Treasurer, or in such other manner as the Board from time
      to
      time may determine. Endorsements for deposit to the Corporation's credit in
      any
      of its duly authorized depositories shall be made by the President or Treasurer
      or by any officer or agent who may be designated by Board resolution in such
      manner as such resolution may provide.








**ARTICLE
      VII**





**Share
      Certificates and Their Transfer**





Section
      1. Share Certificates .
      Share
      certificates of the Corporation shall be in such form as the Board may approve
      from time to time. The Corporation shall issue and deliver to each shareholder
      certificates representing all fully paid shares owned by him. They shall be
      signed by the Chief Executive Officer, the President or a Vice President and
      by
      the Secretary, Assistant Secretary, or the Treasurer and sealed with the
      Corporation's seal, which seal may be a facsimile, engraved or printed. All
      shares shall be consecutively numbered or otherwise identified.





Section
      2. Transfers of Shares .
      The
      Secretary shall keep books containing the names, alphabetically arranged, of
      all
      shareholders of the Corporation, and showing their address, the number and
      class
      of shares held by them respectively, the date of issue of such shares, the
      time
      when they respectively became the owners thereof and the amount paid thereon.
      Transfers of the Corporation's shares shall be made on such books at the
      direction of the record holder thereof or his attorney thereunto duly authorized
      by a power of attorney thereunto duly executed and filed with the Secretary,
      or
      with the transfer agent, if any, for such shares, and the surrender of the
      certificate or certificates for such shares properly endorsed.





Section
      3. Lost or Destroyed Certificates .
      The
      Board may authorize the issuance of a new share certificate in place of a
      certificate theretofore issued by the Corporation claimed to have been lost
      or
      destroyed, upon receipt of an affidavit to such fact from the person claiming
      the loss or destruction. The Board in its discretion may require the owner
      of
      the certificate alleged to have been lost, destroyed, stolen or mutilated,
      or
      his legal representative, to give the Corporation and its transfer agent and
      its
      registrar, if any, before the issuance of such new certificate, a bond of
      indemnity in such sum and in such form and with such surety or sureties as
      the
      Board may direct or the Board, by resolution reciting that the circumstances
      justify such action, may authorize the issuance of such new certificate without
      requiring such bond.





Section
      4. Regulations .
      The
      Board may make such rules and regulations as it may deem expedient concerning
      the issuance and transfer of certificates for the Corporation's shares and
      may
      appoint transfer agents or registrars, or both, and may require all certificates
      of stock to bear the signature of either or both.





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Section
      5. Fixing Record Date .
      (a) The
      Board may fix a future date as the record date in order to determine (i) the
      shareholders entitled to notice of a meeting of shareholders, (ii) the
      shareholders entitled to demand a special meeting, (iii) the shareholders
      entitled to vote, or (iv) the shareholders entitled to take any other action.
      A
      record date fixed under this Section may not be more than seventy (70) days
      before the meeting or action requiring a determination of
      shareholders.





(b)
      A
      determination of shareholders entitled to notice of or to vote at a meeting
      of
      shareholders is effective for any adjournment of the meeting unless the Board
      fixes a new record date for the adjourned meeting, which it must do if the
      meeting is adjourned to a date more than one hundred twenty (120) days after
      the
      date fixed for the original meeting.





Section
      6. Holder of Record .
      The
      Corporation may treat as absolute owner of shares the person in whose name
      the
      shares stand of record on its books just as if that person has full competency,
      capacity and authority to exercise all rights of ownership irrespective of
      any
      knowledge or notice to the contrary or any description indicating a
      representative, pledge or other fiduciary relation or any reference to any
      other
      instrument or to the rights of any other person appearing upon its record or
      upon the share certificate, except that any person furnishing to the Corporation
      proof of his appointment as a fiduciary shall be treated as if he were a holder
      of record of its shares, and except as may otherwise by expressly provided
      by
      the laws of the State.





Section
      7. Reacquired Shares .
      Shares
      of the Corporation that have been issued and thereafter reacquired by the
      Corporation shall constitute authorized but unissued shares.








**ARTICLE
      VIII**





**General
      Provisions**





Section
      1. Corporate Seal .
      The
      corporate seal shall be in such form as the Board may approve from time to
      time.





Section
      2. Distributions .
      The
      Board from time to time may authorize, and the Corporation may pay,
      distributions and share dividends on the Corporation's outstanding shares in
      the
      manner and upon the terms and conditions provided by law and by the
      Articles.





Section
      3. Fiscal Year .
      The
      Corporation's fiscal year shall be the year ending December 31 of each
      year.





Section
      4. Waiver of Notice .
      Whenever any notice is required to be given to any shareholder or director
      under
      the Act, the Articles or these Bylaws, a waiver thereof in writing signed by
      the
      person or persons entitled to such notice, whether before or after the time
      stated therein, shall be equivalent to the giving of such notice.





12


Section
      5. Amendments .
      Except
      as otherwise herein provided, these Bylaws may be amended or repealed and new
      Bylaws may be adopted by the affirmative vote of a majority of the directors
      then holding office at any regular or special Board meeting. The Board shall
      not
      have power to adopt a Bylaw: (a) requiring more than a majority of the voting
      shares for a quorum at a shareholders' meeting or more than a majority of the
      votes cast to constitute action by the shareholders, except where higher
      percentages are required by law; or (b) providing for the management of the
      Corporation other than by the Board or its Executive Committee. The shareholders
      may make, alter, amend or repeal the Corporation's Bylaws at any annual meeting
      or at a special meeting called for such purpose, and Bylaws adopted by the
      directors may be altered or repealed by the shareholders. No Bylaw adopted
      or
      amended by the shareholders shall be altered or repealed by the Board, unless
      specific authority to do so is provided to the Board by the shareholders.





Section
      6. Indemnification .
      The
      Corporation shall, to the fullest extent from time to time permitted by law,
      indemnify (a) all directors, officers, employees or agents of the
      Corporation and (b) any person who, at the Corporation's request, is or was
      serving as a director, officer, partner, trustee, employee or agent of another
      Corporation, partnership, joint venture, trust or other enterprise or as a
      trustee or administrator under an employee benefit plan, against liability
      and
      expenses in any proceeding (including without limitation a proceeding brought
      by
      or on behalf of the Corporation itself) arising out of their status as such
      or
      their activities in any of the foregoing capacities ("Indemnified Person");
      provided, however, that the Corporation shall not indemnify or agree to
      indemnify an Indemnified Person against liability or expenses he may incur
      on
      account of his activities which were at the time taken known or believed by
      him
      to be clearly in conflict with the Corporation's best interests.





The
      term
      "Indemnified Person" shall specifically include all persons who were initial
      directors, officers or employees of the Corporation prior to its incorporation
      and the Corporation shall, to the fullest extent from time to time permitted
      by
      law, indemnify such Indemnified Persons against liability and expenses in any
      proceeding arising out of their status as such or their activities on behalf
      of
      the Corporation prior to its incorporation.





The
      Corporation may pay in advance expenses incurred by an Indemnified Person in
      defending a proceeding in advance of the final disposition of such proceeding
      as
      authorized by the Board in the specific case or as authorized or required under
      any provision in the Articles or these bylaws or by any applicable resolution
      or
      contract, upon receipt of an undertaking by or on behalf of such Indemnified
      Person to repay such amount unless it shall ultimately be determined that he
      is
      entitled to be indemnified by the Corporation against such
      expenses.





The
      Corporation shall also pay or indemnify an Indemnified Person for such person's
      reasonable costs, expenses and reasonable attorney's fees in connection with
      the
      enforcement of rights to indemnification granted herein.





The
      Board
      shall take all such action as may be necessary and appropriate to authorize
      the
      Corporation to pay the indemnification required by this bylaw, including without
      limitation a determination by a majority vote of disinterested directors that
      the activities giving rise to the liability or expense for which indemnification
      is requested were not, at the time taken, known or believed by the person
      requesting indemnification to be clearly in conflict with the best interests
      of
      the Corporation.





13


The
      Corporation may purchase and maintain insurance on behalf of an Indemnified
      Person against liability asserted against or incurred by him in that capacity
      or
      arising from his status, whether or not the Corporation would have the power
      to
      indemnify him against the same liability under any provision of these
      Bylaws.





The
      provisions of this section are subject to the following provisions:





(a)  the
      termination of any action, suit, or proceeding by judgment, order, settlement,
      conviction, or upon a plea of nolo contendere or its equivalent, shall not,
      of
      itself, create a presumption that any such Indemnified Person did not meet
      any
      requisite standard of conduct imposed by law in order to be entitled to such
      indemnification;





(b)  in
      the
      event of such Indemnified Person's death, the rights to indemnification
      hereunder shall extend to his or her legal representative; and





(c)  the
      rights to indemnification hereunder shall be in addition to and not exclusive
      of
      any other rights to which any such Indemnified Person may be entitled under
      any
      statute, agreement, insurance policy, or otherwise.








For
      the
      purposes of this section, "liability" means any obligation to pay a judgment,
      settlement, penalty, fine (including an excise tax assessed with respect to
      an
      employee benefit plan), or reasonable expenses incurred with respect to a
      proceeding, "expenses" means expenses of every kind incurred in defending a
      proceeding, including counsel fees, and "proceeding" means any threatened,
      pending, or completed action, suit or proceeding, whether civil, criminal,
      administrative or investigative and whether formal or informal.





Section
      7. Interpretation of Bylaws .





(a)  All
      references in these Bylaws to directors, officers, shares and shareholders
      are
      references to directors, officers, shares and shareholders of the Corporation
      and the Board, unless the context clearly indicates otherwise.





(b)  The
      following terms, as used in these Bylaws, shall have the following meanings,
      unless the context clearly indicates otherwise:





"Act"
      means the North Carolina Business Corporation Act, North Carolina General
      Statutes, Chapter 55.





14


"Articles"
      means the Corporation's Articles of Incorporation.





"Corporation"
      shall mean Southern Community Financial Corporation, a North Carolina
      corporation.





"Board"
      means the Corporation's Board of Directors.





"State"
      shall mean the state of North Carolina.





15