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                                                     ARTICLES OF AMENDMENT

                                                               OF

                                                           ARTICLES OF

                                                          INCORPORATION

                                                               OF

                                                    DEVELOPMENT BANCORP, LTD.


               1.      The name of the Corporation is Development Bancorp, Ltd.

               2.      The following  amendment to the Articles of Incorporation
                       of the  Corporation  was duly  approved  by the  Board of
                       Directors  and by the required vote of the holders of the
                       Series A Preferred  Stock  pursuant to Section  23B.10.30
                       and  Section   23B.10.40  of  the   Washington   Business
                       Corporation Act. The approval of the common  shareholders
                       of the Corporation was not required.

               3.      Section 3 of Article IV of the Articles of Incorporation
of the Corporation is hereby
                       amended in its entirety to read as follows:

               "                                               IV.

               3. There is hereby created a class of preferred stock denominated
Series A Preferred Stock, with the following  relative rights,  designations and
limitations:

                       (a)      Number.  The number of shares constituting the 
Series A Preferred Stock shall
                       be 2,000.

                       (b)      Dividend.  Holders of the Series A Preferred 
Stock are not entitled to receive
                       dividends.

                       (c)      Redemption.  The Series A Preferred Stock shall
 not be redeemable.

                       (d) Liquidation  Rights. In the event of any voluntary or
                       involuntary liquidation, dissolution or winding up of the
                       Corporation,  the  holders  of Series A  Preferred  Stock
                       shall be  entitled  to  receive  from the  assets  of the
                       Corporation $.01 per share, all of which shall be paid or
                       set apart for payment before the payment or setting apart
                       for payment of any amount for, or the distribution of any
                       assets of the Corporation to, the holders of common stock
                       in  connection  with such  liquidation,  dissolution,  or
                       winding up. Each share of Series A Preferred  Stock shall
                       rank on a  parity  with  each  other  share  of  Series A
                       Preferred   Stock,   with   respect  to  the   respective
                       preferential  amounts fixed for such series  payable upon
                       any   distribution  of  assets  by  way  of  liquidation,
                       dissolution, or winding up of the Corporation.  After the
                       payment or the setting apart of payment to the holders of
                       Series A Preferred Stock of the preferential amount so

                                                              

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                       payable to them,  the  holders of common  stock  shall be
                       entitled to receive, ratably, all remaining assets of the
                       Corporation.

                       (e) Voting Rights.  Except as otherwise  provided by law,
                       the holders of Series A  Preferred  Stock shall vote as a
                       class with the  holders  of common  stock.  However,  the
                       holders  of  the  Series  A   Preferred   Stock,   voting
                       separately as a class, shall have the right, by unanimous
                       vote of the  class,  to  elect  two-thirds  (2/3)  of the
                       members  of the Board of  Directors,  provided,  however,
                       that if the number of directors is not divisible by three
                       (3), it shall be increased by one (1)  additional  member
                       of the Board of  Directors,  entitling in such a case the
                       Series  A   Preferred   Stock   holders  to  election  of
                       two-thirds (2/3) of the members of the Board of Directors
                       plus one (1) additional director.

                       If the office of any  director  elected by the holders of
                       the Series A Preferred  Stock  voting as a class  becomes
                       vacant  by  reason  of  death,  resignation,  retirement,
                       disqualification,  removal from office or otherwise,  the
                       remaining director elected by the holders of the Series A
                       Preferred  Stock voting as a class may choose a successor
                       who shall hold office for the  unexpired  term in respect
                       of which such vacancy occurred.

                       If the  office of any  director  elected by the holder of
                       the Series A Preferred Stock as a class becomes vacant by
                       any of the reasons  specified  above, and if there are no
                       remaining  directors on the Board of Directors elected by
                       the holders of the Series A Preferred  Stock  voting as a
                       class,  then the  directors  elected  by the  holders  of
                       common stock voting as a class may choose a successor who
                       shall hold office  until he is  reappointed  or until his
                       successor  is  chosen  by  the  director  elected  by the
                       holders  of the  Series A  Preferred  Stock  voting  as a
                       class.

                       (f)      No Conversion Rights.  The Series A Preferred 
Stock shall not be convertible
                       into any other class or series of shares of the
 Corporation.

                       (g)      Right of First Refusal.

                                A. Restriction on Sales. If a holder of Series A
                       Preferred  Stock  desires  to sell all or any part of his
                       shares of Series A Preferred Stock in the Corporation and
                       has  received a bona fide offer,  such holder of Series A
                       Preferred Stock (the "Selling  Shareholder") shall notify
                       the remaining holders of record of the Series A Preferred
                       Stock  (the   "Non-selling   Shareholders")  in  writing,
                       stating  the  number of shares  desired  to be sold,  the
                       amount  of the  bona  fide  offer,  and  the  name of the
                       offeror.  For 15 days following  delivery of such notice,
                       the  Non-selling  Shareholders  shall,  on a proportional
                       basis  according  to the  number  of  Series A  Preferred
                       Shares owned by each of them,  have an option to purchase
                       the  Selling  Shareholder's  shares of Series A Preferred
                       Stock  for  the  amount  of  the  bona  fide  offer.  The
                       Non-selling  Shareholders  may  exercise  this  option by
                       delivering  written  notice  to the  Selling  Shareholder
                       within  the  15-day  period.  If any  holder  of Series A
                       Preferred  Stock  declines  to  exercise  its option with
                       respect  to its  proportional  share,  then the  purchase
                       option  rights  of the  remaining  holders  of  Series  A
                       Preferred Stock shall proportionately be increased.

                                                              

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                       If the  Non-selling  Shareholders  do not  exercise  said
                       option,  the Selling  Shareholder  may sell his shares of
                       Series A Preferred  Stock in the Corporation on the terms
                       disclosed   to  the   original   offeror.   The   Selling
                       Shareholder  must sell his  shares of Series A  Preferred
                       Stock in the  Corporation  on the terms  disclosed to the
                       original  offeror  within 45 days after  delivery  of the
                       original  notice  from  the  Selling  Shareholder  to the
                       Non-selling   Shareholders,   otherwise  the  Non-selling
                       Shareholders  shall have  another  right to purchase  the
                       Shares for the 15 days  following  the  expiration of the
                       45-day period.

                       B.  Restriction on Other Transfer of Shares.  If a holder
                       of  Series  A  Preferred   Stock   desires  to  transfer,
                       hypothecate,  assign or otherwise  transfer  ("Transfer")
                       all or any part of his shares of Series A Preferred Stock
                       in the  Corporation  and  Section A does not apply,  such
                       holder of Series A  Preferred  Stock  (the  "Transferring
                       Shareholder") shall deliver notice thereof (the "Transfer
                       Notice")  to the other  holders of the Series A Preferred
                       Stock (the "Non-transferring Shareholders"),  stating the
                       shares  desired  to  be  Transferred,  the  name  of  the
                       proposed  Transferee,  the  manner of and reason for such
                       Transfer,  and the consideration (if any) to be received.
                       For 15  days  following  the  determination  of the  fair
                       market   value   pursuant   to  this   Section   B,   the
                       Non-transferring  Shareholders  shall  have an  option to
                       purchase  such  shares for their fair market  value.  The
                       Non-transferring Shareholders may exercise this option by
                       delivering written notice to the Transferring Shareholder
                       within  the  15-day  period.  If any  holder  of Series A
                       Preferred  Stock  declines  to  exercise  its option with
                       respect  to its  proportional  share,  then the  purchase
                       option  rights  of the  remaining  holders  of  Series  A
                       Preferred Stock shall proportionately be increased.

                       If the Transferring  Shareholder and the Non-transferring
                       Shareholders  cannot  agree on the fair  market  value of
                       such  shares  within  thirty (3) days after the  Transfer
                       Notice is given  pursuant  to Section C hereof,  the fair
                       market value shall be determined by three appraisers, one
                       to  be  chosen  by  the   Transferring   Shareholder  and
                       announced in writing to the Non-transferring Shareholders
                       within 45 days after the  Transfer  notice is  delivered,
                       one to be chosen by the Non-transferring Shareholders and
                       announced  in  writing  to the  Transferring  Shareholder
                       within  15  days  after  the   selection   of  the  first
                       appraiser,  and the  third to be  chosen by the first two
                       appraisers  within  15 days  after the  selection  of the
                       second  appraiser.  If the Transferring  Shareholder does
                       not  select  an  appraiser   within  the  15-day   period
                       described   above,   the  fair  market   value  shall  be
                       determined   by  two   appraisers,   one  chosen  by  the
                       Non-transferring  Shareholders  and the second  chosen by
                       the first  appraiser.  The  decision of a majority of the
                       appraisers  as to fair  market  value shall be binding on
                       all parties.

                       If the  Non-transferring  Shareholders  do  not  exercise
                       their  option  under  this  Section  B, the  Transferring
                       Shareholder may Transfer his shares of Series A Preferred
                       Stock in the  Corporation  on the terms  disclosed in the
                       original notice sent to the Non-transferring Shareholders
                       for a period of 45 days  after  expiration  of the 15-day
                       period, otherwise the Non-selling Shareholders shall have
                       the  right to  purchase  the  Shares  at such  price  for
                       another 15 days.


                                                              

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                       C. Notice.  Any notice given under Sections A and B shall
                       be in  writing  and  either  (1) hand  delivered,  or (2)
                       mailed by registered or certified  mail,  return  receipt
                       requested  and  postage  prepaid,  to the  address of the
                       Shareholder  or the  Corporation  as the case may be. The
                       Corporation or any  Shareholder may change his address by
                       giving notice of the change.  Any hand  delivered  notice
                       shall be  considered  given  upon  delivery.  Any  mailed
                       notice shall be  considered  given on the third  business
                       day after being mailed by U.S.  certified  mail,  postage
                       prepaid."

               IN  WITNESS  WHEREOF,  these  Articles  of  Amendment  have  been
executed this 14th day of February, 1997.

DEVELOPMENT BANCORP, LTD.




Dempsey K. Mork
Secretary/Treasurer

ATTEST:


Jehu Hand
Assistant Secretary


















































                                                         

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