Exhibit 3.2

                                     BYLAWS


                                       of


                            KEYSTONE FINANCIAL, INC.


                          (a Pennsylvania corporation)


                                November 21, 1996
                         as amended to November 19, 1998

                                       1
<PAGE>


                            KEYSTONE FINANCIAL, INC.

                                     BYLAWS

                                    ARTICLE I
SHAREHOLDERS


         Section 1.01.  Annual  Meetings.  Annual  meetings of the  shareholders
shall be held on the last  Thursday  of April in each year at 2:00 p.m.,  at the
principal  business office of the  Corporation,  or at such other date, time and
place as may be fixed by the Board of  Directors.  Written  notice of the annual
meeting  shall be given at least ten days prior to the  meeting  to each share-
holder entitled to vote thereat.  Any business may  be transacted at the annual 
meeting  irrespective  of whether  or not  the notice calling such meeting shall
contain a  reference  thereto, except otherwise  expressly required herein or by
law.

     Section 1.02. Special Meetings. Special meetings of the shareholders may be
called at any time,  for the purpose or purposes  set forth in the call,  by the
Chairman of the Board, the President or the Board of Directors,  by delivering a
written  request  to the  Secretary.  Special  meetings  shall  be  held  at the
principal  business  office of the  Corporation or at such other place as may be
fixed by the Board of Directors.  Written  notice of special  meetings  shall be
given at least ten days prior to the  meeting to each  shareholder  entitled  to
vote thereat.  No business may be  transacted at any special  meeting other than
that stated in the notice of meeting and business which is germane thereto.

     Section  1.03.  Organization.  The  Chairman of the Board,  if one has been
elected and is present, or in his absence, the President, or in his absence, any
Vice President designated by the Board, shall preside, and the Secretary,  or in
his absence, any Assistant Secretary,  shall take the minutes at all meetings of
the  shareholders.  In the absence of the Secretary and an Assistant  Secretary,
the presiding  officer at the meeting  shall  designate any other person to take
the minutes of the meeting.

     Section 1.04.  Notice of Business to be Presented at Shareholder  Meetings.

     (a) Annual  Meetings  of  Shareholders.  The  proposal  of  business  to be
considered by the  shareholders at an annual meeting of shareholders may be made
(i) pursuant to the Corporation's notice of meeting, (ii) by or at the direction
of the Board of Directors or (iii) by any shareholder of the Corporation who was
a  shareholder  of record at the time of giving of notice  provided  for in this
Section,  who is entitled to vote at the meeting and who has  complied  with the
notice procedures set forth in this Section. For business to be properly brought
before  an annual  meeting  by a  shareholder  pursuant  to clause  (iii) of the
preceding  sentence,  such  business  must be a proper  matter  for  shareholder
action,  the shareholder must have given timely notice thereof in writing to the
Secretary  of the  Corporation  and such notice  must comply with the  following
requirements:

                                       2
<PAGE>
               (1) To be timely,  a shareholder's  notice given pursuant to this
               Section must be received at the  principal  executive  offices of
               the  Corporation,  addressed to the Secretary,  not less than 120
               calendar  days  before  the  date  of  the  Corporation's   proxy
               statement   released  to  shareholders  in  connection  with  the
               previous  year's  annual  meeting  or, if none,  its most  recent
               previous annual meeting.  Notwithstanding the preceding sentence,
               (A) for business to be  presented  at the 1999 annual  meeting of
               shareholders,  a shareholder's  notice shall be considered timely
               if so received by the  Corporation on or before December 19, 1998
               and (B) if the date of the annual  meeting at which such business
               is to be presented has been changed by more than 30 days from the
               date of the most recent previous annual meeting,  a shareholder's
               notice  shall  be  considered   timely  if  so  received  by  the
               Corporation  (i) on or before the later of (x) 150 calendar  days
               before the date of the annual  meeting at which such  business is
               to be  presented  or (y)  30  days  following  the  first  public
               announcement  by the  Corporation  of the  date  of  such  annual
               meeting  and (ii) not later  than 15  calendar  days prior to the
               scheduled mailing date of the  Corporation's  proxy materials for
               such annual meeting. In no event shall the public announcement of
               an adjournment  of an annual  meeting  commence a new time period
               for the giving of a shareholder's notice as described above.

               (2) A  shareholder's  notice given pursuant to this Section shall
               set forth (A) the name and address of the shareholder who intends
               to make the proposal and the classes and numbers of shares of the
               Corporation's stock beneficially owned by such shareholder; (B) a
               representation  that the  shareholder  is and will at the time of
               the  annual  meeting  be a  holder  of  record  of  stock  of the
               Corporation  entitled to vote at such meeting on the  proposal(s)
               specified  in the  notice  and  intends to appear in person or by
               proxy  at  the  meeting  to  present  such  proposal(s),   (C)  a
               description  of the  business  the  shareholder  intends to bring
               before  the  meeting,  including  the  text  of any  proposal  or
               proposals to be presented for action by the shareholders, (D) the
               name and address of any beneficial  owner(s) of the Corporation's
               stock on whose behalf such  business is to be  presented  and the
               class  and  number  of  shares  beneficially  owned by each  such
               beneficial owner and (E) the reasons for conducting such business
               at the meeting and any material interest in such business of such
               shareholder or any such beneficial owner.

     (b) Special Meetings of Shareholders. Only such business shall be conducted
at a special  meeting  of  shareholders  as shall have been  brought  before the
meeting pursuant to the Corporation's notice of meeting.

                                       3
<PAGE>

     (c)  General.

     (i) Only such business shall be conducted at a meeting of  shareholders  as
shall have been brought before the meeting in accordance with the procedures set
forth in this Section.  The Chairman of the meeting shall have the power and the
duty to determine  whether any business  proposed to be brought before a meeting
was proposed in accordance with the procedures set forth in this Section and, if
any  business  is not in  compliance  with this  Section,  to declare  that such
defective proposal shall be disregarded.

     (ii)For  purposes of this  Section,  (A) "public  announcement"  shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
Corporation with the Securities and Exchange  Commission pursuant to Section 13,
14 or 15(d) of the Securities  Exchange Act of 1934 (the "Exchange Act") and (B)
"beneficial  ownership"  shall be determined in accordance with Rule 13d-3 under
the Exchange Act or any successor rule.

Notwithstanding  the foregoing  provisions of this Section,  a shareholder shall
also comply with all applicable  requirements  of the Exchange Act and the rules
and  regulations  thereunder  with  respect  to the  matters  set  forth in this
Section.  Nothing  in this  Section  shall be deemed to affect  any  rights of a
shareholder  to request  inclusion  of a  proposal  in the  Corporation's  proxy
statement  pursuant to Rule 14a-8 under the Exchange Act, or any successor rule,
or to present for action at an annual meeting any proposal so included.

ARTICLES II

DIRECTORS

     Section 2.01. Number,  Election and Term of Office. The number of Directors
which shall  constitute the full Board of Directors  shall be fixed by the Board
of  Directors,  pursuant  to a  resolution  adopted  by a  majority  vote of the
Disinterested  Directors then in office, but shall not be less than five or more
than  twenty-five.  Between annual  meetings of the  shareholders,  the Board of
Directors by a vote of a majority of the Disinterested Directors then in office,
may increase the membership of the Board,  within the maximum above  prescribed,
by not more than three members and, by like vote,  appoint  qualified persons to
fill the vacancies  created thereby in accordance  with Section 2.10 hereof.  No
decrease in the number of  Directors  constituting  the full Board of  Directors
shall  shorten  the  term of any  incumbent  Director.  The  Directors  shall be
classified  with respect to the time for which they shall  severally hold office
by dividing them into three classes,  each class being as nearly equal in number
as possible. If such classes of Directors are not equal, the Board of Directors,
by a  majority  vote  of the  Disinterested  Directors  then  in  office,  shall
determine  which class shall  contain an unequal  number of  Directors.  At each
annual meeting of shareholders,  the  shareholders  shall elect Directors of the
class whose term then expires, to hold office until the third succeeding annual

                                       4
<PAGE>

meeting.  Each  Director of the  Corporation  shall hold office for the term for
which elected and until his or her successor shall be elected and shall qualify.
Each  Director  shall hold  office  from the time of his  election  but shall be
responsible  as a Director  from such time only if he consents to his  election;
otherwise  from the time he accepts  office or attends his first  meeting of the
Board. As used herein, the term "Disinterested  Director" shall have the meaning
provided in Article 10.1(g) of the Restated Articles.

     Section 2.02.  Regular  Meetings;Notice.  Regular  meetings of the Board of
Directors  shall be held at such  time and place as shall be  designated  by the
Board of Directors  from time to time.  Notice of such  regular  meetings of the
Board shall not be required to be given,  except as otherwise expressly required
herein or by law. However,  whenever the time or place of regular meetings shall
be  initially  fixed  and then  changed,  notice of such  action  shall be given
promptly by telephone or otherwise to each  Director not  participating  in such
action. Any business may be transacted at any regular meeting.

     Section 2.03.  Annual Meeting of the Board. The annual meeting of the Board
of Directors each year shall be held immediately after the annual meeting of the
shareholders at such place as may be fixed by the Board.

     Section 2.04. Special Meetings;  Notice.  Special meetings of the Board may
be  called  at any time by the  Board  itself  by vote at a  meeting,  or by the
Chairman, the President, or not less than one-fourth in number of the members of
the Board, to be held at such place,  day, and hour as shall be specified by the
person(s)  calling the meeting.  Notice of every special meeting of the Board of
Directors  stating  the  place,  day,  and hour  thereof  shall be given to each
Director by being mailed,  sent by  telecopier,  telex,  telegraph or electronic
mail or given personally or by telephone,  in each case at least 24 hours before
the time at which the meeting is to be held.  Any business may be  transacted at
any special  meeting  regardless  of whether  the notice  calling  such  meeting
contains a reference thereto, except as otherwise required herein or by law.

     Section  2.05.  Meetings by  Telephone.  One or more of the  Directors  may
participate  in any special  meeting of the Board of Directors or any  committee
thereof by means of conference telephone or similar communications  equipment by
means of which all  persons  participating  in the meeting are able to hear each
other.  Participation  in a special meeting in this manner by a Director will by
considered to be attendance in person for all purposes under these Bylaws.  This
Section 2.05 shall not apply to the annual meting or to the regular  meetings of
the Board of Directors.

     Section 2.06. Organization.  At all meetings of the Board of Directors, the
presence of at least a majority of the  Directors at the time in office shall be
necessary and sufficient to constitute a quorum for the transaction of business.
If a quorum is not present at any  meeting,  the meeting may be  adjourned  from
time to time by a majority of the Directors  present until a quorum as aforesaid
shall be  present;  but  notice of the time and place to which  such  meeting is
adjourned  shall be given to any Directors  not present  either by being sent by
telecopier,  telex,  telegraph,  or  electronic  mail or given  personally or by
telephone at least 8 hours prior to the hour of reconvening. Except as otherwise
provided herein, the Restated Articles or by law, resolutions of the Board shall
be adopted,  and any action of the Board at a meeting  upon any matter  shall be
valid and  effective,  with the  affirmative  vote of at least a majority of the
Directors present at a meeting duly convened.  The Chairman of the Board, if one
has been elected and is present, or if not, the President, shall preside at each
meeting of the Board. In the absence of both the Chairman and the President, the
Directors present shall designate one of their number to preside at the meeting.
The Secretary, or in his absence any Assistant Secretary, shall take the minutes
at all  meetings of the Board of  Directors. In the absence of the Secretary and
an  Assistant  Secretary,  the presiding  officer shall  designate any person to
take the minutes of the meeting.
                                       5
<PAGE>

   Section 2.07. Director Nominations and Qualifications.

         (a) The Board of Directors shall establish a Nominating  Committee from
among its  members.  This  Nominating  Committee  shall  establish  criteria for
selection of nominees to stand for election or reelection at any annual  meeting
of the  shareholders and shall report its  recommendations  to the Board for its
action.  Any  shareholder  who  desires  to have an  individual  considered  for
nomination  must submit his  recommendation  in writing to the  Secretary of the
Corporation  at least ninety (90) days prior to any annual  meeting at which the
election of Directors will occur.

         (b) Any  Director or nominee who has attained the age of 70 on or prior
to date of any annual meeting shall not stand for reelection or election at that
annual meeting.  Furthermore,  the term of any Director who has attained the age
of 70 on or prior to the date of any annual  meeting shall expire at that annual
meeting.

         (c) Any  Director  who becomes  more than 50% retired  from a principal
occupation  on or prior to the date of any  annual  meeting  shall not stand for
reelection  at that annual  meeting.  Furthermore,  the term of any Director who
becomes  more than 50% retired  from a principal  occupation  on or prior to the
date of any annual meeting, shall expire at that annual meeting.

         (d) Director who shall no longer be engaged in his usual and  customary
occupation  on or prior to the date of any  annual  meeting  shall not stand for
reelection  at that annual  meeting.  Furthermore,  the term of any Director who
shall no longer be engaged in his usual and customary  occupation on or prior to
the date of any annual  meeting shall expire at that annual  meeting.  The Board
may waive the  application  of this  subsection  (d) by a  majority  vote at any
regular or special meeting of the Board.

         (e) Any  Director who shall move his  residence  from the trade area of
the  corporation  on or prior to the date of any annual  meeting shall not stand
for reelection at that annual meeting. Furthermore, the term of any Director who
shall move his residence  from the trade area of the  corporation on or prior to
the date of any annual  meeting  shall  expire at that annual  meeting.  For the
purposes of this  subsection  (e) "trade area" shall be defined as any county in
which the Corporation or any of its banking subsidiaries has an office or branch
and any county contiguous thereto.

         (f) Any  vacancy  created  by  virtue of this  section  shall be filled
according to the provisions of Section 2.10 of these Bylaws.

     Section 2.08  Presumption  of Assent.  Minutes of each meeting of the Board
shall be made  available  to each  Director  at or  before  the next  succeeding
regular  meeting.  Each  Director  shall be  presumed  to have  assented  to the
correctness  of such minutes  unless his objection  thereto shall be made to the
Secretary within two business days after such succeeding regular meeting.

     Section  2.09.  Resignations.  Any Director may resign by submitting to the
Chairman  of the Board,  if one has been  elected,  or to the  President  or the
Secretary, his resignation which shall become effective upon its receipt by such
officer or as otherwise specified herein.

                                        6
<PAGE>

     Section 2.10.  Vacancies.  Vacancies in the Board of  Directors,  including
vacancies resulting from an increase in the number of Directors, shall be filled
only by a majority  vote of the  Disinterested  Directors (as defined in Article
10.1(g) of the  Restated  Articles)  then in office,  though less than a quorum,
except  as  otherwise  required  by law.  All  such  Directors  elected  to fill
vacancies  shall  hold  office  for a term  expiring  at the  annual  meeting of
shareholders  at which  the term of the class to which  they  have been  elected
expires.


     Section 2.11. Committees. (a) General. Standing or temporary committees may
be appointed  from its own number by the board of  Directors  from time to time,
and the Board  may from  time to time  invest  committees  with  such  power and
authority, subject to such conditions as it may see fit. Any action taken by any
committee  shall  be  subject  to  alteration  or  revocation  by the  Board  of
Directors; provided, however, that third parties shall not be prejudiced by such
alteration or revocation.

     (b)  Executive  Committee.  An  Executive  Committee  may be appointed by a
majority of the full Board;  it shall have all the powers and  exercise  all the
authority  of the Board in the  management  of the  business  and affairs of the
Corporation except as specifically limited by the Board and except as to matters
for which  action by the full Board is  required  by the  Restated  Articles  or
Section 1731(a)(2) of the Pennsylvania Business Corporation Law.

     (c) Audit Committee. An Audit Committee shall be appointed by a majority of
the full Board.  The Audit  Committee  shall be composed  of  Directors  who are
independent of management of the Corporation, are free of any relationship that,
in the opinion of the Board of Directors, would interfere with their exercise of
independent  judgment as a Committee  member and comply with the requirements of
applicable laws and regulations as to the composition of Audit Committee.

     The Audit  Committee  shall assist the Board in  fulfilling  its  oversight
responsibilities  in the areas of internal controls,  financial  reporting,  the
Corporation's internal and external audit programs,  compliance with significant
laws and  regulations in areas in which it has oversight  responsibility  and in
other related areas from time to time assigned to it.

     The Audit Committee  shall, at least once in each year, make or cause to be
made by  independent  certified  public  accountants  selected  by the  Board or
shareholders  for  the  purpose,  an  audit  of the  books  and  affairs  of the
Corporation. Such audit shall be performed in accordance with Generally Accepted
Auditing  Standards.  Upon  completion of the audit,  the Committee shall make a
report  thereof and its  recommendations  to the Board of  Directors at its next
regular meeting.

     Section 2.12. Emergency Preparedness.  Notwithstanding any other provisions
of law, the Articles or these Bylaws,  during any  emergency  period caused by a
national  catastrophe or local disaster, a majority of the surviving members (or
the sole  survivor)  of the  Board  of  Directors  who  have  not been  rendered
incapable of acting because of incapacity or the difficulty of  communication or
transportation  to the place of meeting  shall  constitute a quorum for the sole
purpose of electing Directors to fill such emergency  vacancies;  and a majority
of the  Directors  present  at such a meeting  may act to fill  such  vacancies.
Directors so elected shall serve until such absent  Directors are able to attend
meetings or until the  shareholders  act to elect  Directors  for such  purpose.
During such an emergency period, if the Board is unable to or fails to meet, any
action  appropriate  to the  circumstances  may be taken by such officers of the
Corporation  as may be present  and able.  Questions  as to the  existence  of a
national  catastrophe  or local  disaster  and the number of  surviving  members
capable of acting shall be  conclusively  determined at the time by the Board of
Directors or the officers so acting.
                                       7
<PAGE>
ARTICLE III
OFFICERS AND EMPLOYEES

     Section 3.01. Executive Officers. The Executive Officers of the Corporation
shall be the Chairman, the President,  the Secretary,  the Treasurer, and one or
more Vice Presidents as the Board may from time to time  determine,  all of whom
shall be elected by the Board of Directors.  Any two or more offices may be held
by the same person.  Each Executive Officer shall hold office at the pleasure of
the Board of Directors, or until his death or resignation.

     Section 3.02. Additional Officers; Other Agents and Employees. The Board of
Directors  may from  time to time  appoint  or hire  such  additional  officers,
assistant officers,  agents,  employees and independent contractors as the Board
deems  advisable;  the Board or the  President  shall  prescribe  their  duties,
conditions of employment and compensation; and the Board shall have the right to
dismiss them at any time,  without  prejudice to their contract rights,  if any.
Subject to the power of the Board,  the  President  may employ from time to time
such  other  agents,  employees,  and  independent  contractors  as he may  deem
advisable  for  the  prompt  and  orderly  transaction  of the  business  of the
Corporation,  and he may  prescribe  their  duties and the  conditions  of their
employment,  fix  their  compensation  and  dismiss  them at any  time,  without
prejudice to their contract rights, if any.

     Section 3.03. The Chairman. The Chairman of the Board shall be elected from
among the  Directors.  The Chairman (and in his absence,  the  President)  shall
preside at all meetings of the shareholders and of the Board and shall have such
other powers and duties as from time to time may be  prescribed  in these Bylaws
or by the Board of Directors.

     Section  3.04.  The  President.  Subject  to the  control  of the  Board of
Directors,  the President  shall have general policy  supervision of and general
management  and executive  powers over all the property,  business,  operations,
affairs and  employees of the  Corporation,  and shall see that the policies and
programs adopted or approved by the Board are carried out.

     In absence of the Chairman,  the President shall preside at all meetings of
the  shareholders  and of the Board.  The  President  shall  exercise such other
powers and duties as from time to time may be  prescribed  in these Bylaws or by
the Board of Directors.  In his absence for reasons other than  disability,  the
President may designate any officer or Director of the  Corporation  to exercise
all of the powers and duties of the President.  In case of the disability of the
President,  the Board shall  designate  an officer or Director to exercise  such
powers.

     Section 3.05.  The Vice  Presidents.  The Vice  Presidents  may be given by
resolution of the Board general executive powers,  subject to the control of the
President,  concerning  one or more or all  segments  of the  operations  of the
Corporation.  The Vice Presidents shall exercise such other powers and duties as
from time to time may be prescribed in these Bylaws or by the Board of Directors
or by the President.
                                       8
<PAGE>

     Section 3.06. The Secretary and Assistant Secretaries. It shall be the duty
of the Secretary (a) to keep or cause to be kept at the registered office of the
Corporation  an  original  or  duplicate   record  of  the  proceedings  of  the
shareholders  and the Board of  Directors  and a copy of the Articles and of the
Bylaws;  (b) to attend to the  giving of notices  of the  Corporation  as may be
required by law or these Bylaws; (c) to be responsible for the corporate records
and the  seal of the  Corporation  and see  that  the  seal is  affixed  to such
documents as may be necessary  or  advisable;  (d) to have charge of and keep at
the registered office of the Corporation, or cause to be kept at the office of a
transfer agent or registrar,  the stock books of the Corporation and an original
or  duplicate  share  register,   giving  the  names  of  the   shareholders  in
alphabetical  order and  showing  their  respective  addresses,  the  number and
classes of shares held by each, the number and date of  certificates  issued for
the shares,  and the date of cancellation of every  certificate  surrendered for
cancellation;  and (e) to exercise all powers and duties  incident to the office
of Secretary  and such other powers and duties as may be prescribed by the Board
of Directors or by the President  from time to time. The Secretary of his office
shall be an Assistant  Treasurer.  The  Assistant  Secretaries  shall assist the
Secretary in the  performance  of his duties and shall also  exercise such other
powers and duties as from time to time may be  assigned  to them by the Board of
Directors,  the President or the Secretary. At the direction of the Secretary or
in his absence or disability, an Assistant Secretary shall perform the duties of
the Secretary.

     Section 3.07. The Treasurer and Assistant  Treasurers.  The Treasurer shall
exercise  all powers and duties  incident  to the office of  Treasurer  and such
other duties as may be  prescribed by the Board of Directors or by the President
from time to time. The Treasurer, by virtue of his office, shall be an Assistant
Secretary.   The  Assistant   Treasurers  shall  assist  the  Treasurer  in  the
performance  of his duties and shall also  exercise such other powers and duties
as from  time to time may be  assigned  to them by the Board of  Directors,  the
President or the Treasurer.  At the direction of the Treasurer or in his absence
or disability, an Assistant Treasurer shall perform the duties of the Treasurer.

     Section 3.08.  Compensation.  The  compensation of all Executive  Officers,
elected  pursuant to Section 3.01 of these  Bylaws,  shall be fixed from time to
time by the Board of Directors or by any  committee  authorized  by the Board of
Directors  to do so.  The  President  may  fix  the  compensation  of all  other
officers, agent and employees. The Board may direct that additional compensation
be paid to any  officers  or  employees  for any year or years,  based  upon the
performance  of  such  persons  during  such  year,  or on  the  success  of the
operations of the  Corporation  during such year, or for any other reason deemed
appropriate.

     Section 3.09. Vacancies. Any vacancy in any office or position by reason of
death, resignation, removal, disqualification,  disability or other cause, shall
be filled in the manner  provided in this  Article  III for regular  election or
appointment to such office.

     Section  3.10.  Delegation  of Duties.  The Board of  Directors  may in its
discretion delegate for the time being the powers and duties, or any of them, of
any officer to any other person whom it may select.

                                       9
<PAGE>

ARTICLE IV
SHARES OF CAPITAL STOCK

     Section 4.01. Share  Certificates.  Every holder of fully-paid stock of the
Corporation  shall be entitled to a certificate or  certificates,  to be in such
form as the Board of Directors may from time to time  prescribe,  and signed (in
facsimile  or  otherwise,  as  permitted  by  law)  by the  President  or a Vice
President  and the  Secretary or the  Treasurer or an Assistant  Secretary or an
Assistant  Treasurer  which shall  represent and certify the number and class of
shares of stock owned by such holder.  The Board may  authorize  the issuance of
certificates for fractional shares or, in lieu thereof,  scrip or other evidence
of  ownership,  which may (or may not) as  determined  by the Board  entitle the
holder thereof to voting, dividends or other rights of shareholders.

     Section 4.02.  Transfer of Shares.  Transfers of shares of the stock of the
Corporation shall be made on the books of the Corporation only upon surrender to
the  Corporation of the  certificate or  certificates  for such shares  properly
endorsed by the shareholder or by his assignee,  agent or legal  representative,
who shall furnish proper evidence of assignment,  authority or legal succession,
or by the  agent  of  one  of the  foregoing  thereunto  duly  authorized  by an
instrument  duly  executed and filed with the  Corporation  in  accordance  with
regular commercial practice.

     Section  4.03.  Lost,  Stolen,  Destroyed  or Mutilated  Certificates.  New
certificates  for  shares of stock may be issued to replace  certificates  lost,
stolen,  destroyed or mutilated  upon such  conditions as the Board of Directors
may from time to time determine.

     Section 4.04.  Regulations Relating to Shares. The Board of Directors shall
have power and authority to make all such rules and regulations not inconsistent
with these Bylaws as it may deem expedient  concerning  the issue,  transfer and
registration of certificates representing shares of the Corporation.

     Section 4.05. Holders of Record. The Corporation shall be entitled to treat
the holder of record of any share or shares of stock of the  Corporation  as the
holder and owner in fact  thereof  for all  purposes  and shall have  express or
other  notice  thereof,  except as otherwise  expressly  provided by the laws of
Pennsylvania.

ARTICLE V

MISCELLANEOUS CORPORATE TRANSACTIONS AND DOCUMENTS

     Section 5.01. Notes,  Checks, etc. All notes, bonds,  drafts,  acceptances,
checks,  endorsements (other than for deposit) guarantees,  and all evidences of
indebtedness of the Corporation whatsoever,  shall be signed by such officers or
agents of the Corporation,  subject to such requirements as to  countersignature
or other conditions,  as the Board of Directors from time to time may determine.
Facsimile  signatures  on  checks  may be used if  authorized  by the  Board  of
Directors.
                                       10
<PAGE>

     Section 5.02.  Execution of  Instruments  Generally.  Except as provided in
Section 5.01, all deeds,  mortgages,  contracts and other instruments  requiring
execution by the Corporation may be signed by the President,  any Vice President
or the  Treasurer;  and  authority  to sign any of the  foregoing,  which may be
general or confined  to specific  instances,  may be  conferred  by the Board of
Directors upon any other person or persons.  Any person having authority to sign
on behalf of the  Corporation  may delegate  from time to time by  instrument in
writing  all or any part of such  authority  to any other  person or  persons if
authorized to do so by the Board of Directors, which authority may be general or
confined to specific instances.

     Section  5.03.  Voting  of  Investment  Securities  Owned  by  Corporation.
Investment  securities  owned by the  Corporation and having voting power in any
other  corporation  shall be voted by the President or his designee,  unless the
Board confers  authority to vote with respect  thereto,  which may be general or
confined to specific investments,  upon some other person. Any person authorized
to vote such  securities  shall have the power to appoint  proxies  with general
power of substitution.

ARTICLE VI
GENERAL PROVISIONS

     Section 6.01.  Offices.  The principal  business  office of the Corporation
shall  be at One  Keystone  Plaza,  Front  &  Market  Streets,  P.O.  Box  3660,
Harrisburg,  Pennsylvania  17105-3660.  The Corporation may also have offices at
such other places  within or without the  Commonwealth  of  Pennsylvania  as the
business of the Corporation may require.

     Section 6.02.  Corporate  Seal. The Board of Directors  shall prescribe the
form of a suitable  corporate  seal  which  shall  contain  the full name of the
Corporation and the year and state of incorporation.

     Section  6.04.  Financial  Reports to  Shareholders.  The Board  shall have
discretion to determine whether financial reports shall be sent to shareholders,
what  such reports shall  contain,  and whether they shall be  audited or accom-
panied by the report of an independent certified public accountant.

     Section  6.05.  Prior Board  Approval  of Certain  Matters.  The  following
matters or actions shall be subject to the prior  consideration  and approval of
the Board of Directors:

(1)  Proposed budget of all subsidiaries of the Corporation.

(2)  All  proposed changes  in the  duties  or title of Executive  management of
Keystone  Financial, Inc.  (Corporate CEO,  Corporate  Executive Officers,  Bank
CEOs), including any salary adjustments, promotion or demotions related thereto.

     Section 6.06.  Non-Applicability of Statute.  Subchapter 25G (Control-Share
Acquisitions)   and  Subchapter  25H   (Disgorgement   by  Certain   controlling
shareholders Following Attempts to Acquire control) of the Pennsylvania Business
Corporation  Law,  added by the Act of April 27, 1990 (P.L.  _________  No. 36),
shall not be applicable to the  Corporation.  (This By-Law provision was adopted
by action of the Board of Directors on July 26, 1990).

                                       11
<PAGE>

ARTICLE VII
VALIDATION OF CERTAIN CONTRACTS


     Section 7.01.  General.  A contract or transaction  between the Corporation
and one or more of its  Directors  or officers or between  the  Corporation  and
another person in which one or more Directors or officers of the Corporation are
directors or officers or have a financial or other  interest,  shall not be void
or voidable solely for that reason, or solely because the Director or officer is
present  at or  participants  in the  meeting  of the  Board of  Directors  that
authorizes the contract or transaction, or solely because his or their votes are
counted for that purpose, if:

(1) the material facts as to the relationship or interest and as to the contract
or transaction are disclosed  or are known  to the Board of  Directors,  and the
Board  authorizes the contract or transaction by the affirmative  votes  of  the
disinterested  Directors even though the disinterested Directors are less than a
quorum; 

(2) the material facts as to the relationship or interest and as to the contract
or  transaction are disclosed or are known  to the shareholders entitled to vote
thereon, and  the contract  or  transaction is  specifically approved by vote of
those shareholders;  

(3) or the contract or transaction  is fair as to the Corporation as of the time
it is  authorized,  approved or ratified by the Board of Directors or the share-
holders.

     Common or interested  Directors may be counted in determining  the presence
of a quorum at a meeting of the Board that  authorizes a contract or transaction
referred to in this Section. As used in this Section, the term "person" includes
a corporation for profit or not-for-profit,  partnership,  joint venture,  firm,
association, trust or other enterprise or legal entity.

ARTICLE VIII
INDEMNIFICATION OF OFFICERS AND DIRECTORS

     Section  8.01.   Indemnification   of,  and  Advancement  of  Expenses  to,
Directors,  Officers  and  Others.  

(a)  Right to Indemnification.  Except as prohibited by law, every Director  and
officer of the  Corporation  shall be entitled as of right to be indemnified by 
the Corporation  against  expenses and any actual or threatened claim,  action, 
suit or proceeding,  civil,  criminal, administrative,  investigative  or other;
whether brought by or in the right of the Corporation or otherwise,  in which he
or she may be involved in any manner, as a party,  witness or otherwise,  or is 
threatened to be made so involved,  by reason of the fact that such person is or
was serving at the request of  the Corporation as a director, officer, employee,
fiduciary  or other representative  of another corporation,  partnerships, joint

                                       12
<PAGE>

venture,  trust, employee benefit plan or other entity (such claim, action, suit
or proceeding hereinafter being referred to as an "Action");  provided,  that no
such right of indemnification shall exist with respect to an Action initiated by
an indemnitee (as hereinafter  defined)  against the Corporation (an "Indemnitee
Action")  other than an Action for  indemnity  or  advancement  of  expenses  as
provided in  Subsection  (c).  Persons who are not  Directors or officers of the
Corporation  may  be  similarly   indemnified  in  respect  of  service  to  the
Corporation or to another such entity at the request of the  Corporation to the
extent the Board of Directors at any time denominates such person as entitled to
the benefits of this Section.  As used in this Section 8.01,  "indemnitee" shall
include  each  Director  and officer of the  Corporation  and each other  person
denominated  by the Board of  Directors  as  entitled  to the  benefits  of this
Section 8.01;  "expenses" shall include fees and expenses of counsel selected by
an indemnitee; and "liability" shall include amounts of judgments, excise taxes,
finds, penalties and amounts paid in settlement.

(b) Right to  Advancement of Expenses.  Every indemnitee shall be entitled as of
right to have his or her expenses in defending any Action,  or in initiating and
pursuing any  Indemnitee  Action for indemnity or  advancement of expenses under
Subsection (c) of this Section 8.01, paid in advance by the Corporation prior to
final  disposition  of such  Action  or  Indemnitee  Action,  provided  that the
Corporation  receives a written undertaking by or on behalf of the indemnitee to
repay  the  amount  advanced  if it should  ultimately  be  determined  that the
indemnitee is not entitled to be indemnified for such expenses.

(c)  Right of Indemnitee to Initiate Action. If a written claim under Subsection
(a) or  Subsection  (b)  of  this  Section  8.01  is not  paid  in  full  by the
Corporation  within  thirty  days  after  such  claim has been  received  by the
Corporation,  the indemnitee may at any time  thereafter  initiate an Indemnitee
Action to recover the unpaid  amount of the claim and, if successful in whole or
in part,  the  indemnitee  shall  also be  entitled  to be paid the  expense  of
prosecuting such Indemnitee  Action. The only defense to an Indemnitee Action to
recover a claim for  indemnification  under  Subsection(a)  of this Section 8.01
shall be that the indemnitee's  conduct was such that under Pennsylvania law the
Corporation  is  prohibited  from  indemnifying  the  indemnitee  for the amount
claimed,  but the burden of proving  such defense  shall be on the  Corporation.
Neither  the  failure  of the  Corporation  (including  its Board of  Directors,
independent  legal counsel and its  shareholders)  to have made a  determination
prior to the commencement of such Indemnitee Action that  indemnification of the
indemnitee is proper in the  circumstances,  nor an actual  determination by the
Corporation (including its Board of Directors,  independent legal counsel or its
shareholders)  that the indemnitee's  conduct was such that  indemnification  is
prohibited by Pennsylvania  law, shall be a defense to such Indemnitee Action or
create a presumption that the indemnitee's conduct was such that indemnification
is prohibited by  Pennsylvania's  law. The only defense under  Subsection (b) of
this Section 8.01 shall be the  indemnitee's  failure to provide the undertaking
required by Subsection (b) of this Section 8.01.

(d)  Insurance and Funding.  The Corporation may purchase and maintain insurance
to protect itself and any person eligible to be indemnified hereunder against 
any liability or expense  asserted or incurred by such person in connection with
any Action,  whether or not the  Corporation  would have  the power to indemnify
such person  against such liability or expense by law or under the provisions of
this Section  8.01.  The Corporation may create a trust fund,  grant a  security
interest,  cause a letter of credit to be issued or use other means  (whether or
not similar to the  foregoing)  to ensure the payment of such sums as may become
necessary to effect indemnification as provided herein.

                                       13
<PAGE>
               (e)  Non-Exclusivity;  Nature and Extent of Rights. The rights to
               indemnification  and advancement of expenses provided for in this
               Section  8.01  shall  (I) not be  deemed  exclusive  of any other
               rights,  whether now existing or hereafter created,  to which any
               indemnitee may be entitled under any  agreement,  bylaw,  charter
               provision,  vote of shareholders or Directors or otherwise,  (ii)
               be  deemed  to  create   contractual  rights  in  favor  of  each
               indemnitee  who  serves  the  Corporation  at any time while this
               Section  8.01 is in effect  (and each  such  indemnitee  shall be
               deemed to be so serving in  reliance  on the  provisions  of this
               Section) and (iii) continue as to each  indemnitee who has ceased
               to have the status  pursuant  to which he or she was  entitled or
               was denominated as entitled to indemnification under this Section
               8.01 and  shall  inure to the  benefit  of the  heirs  and  legal
               representatives  of each  indemnitee.  Any amendment or repeal of
               this  Section 8.01 or adoption of any other Bylaw or provision of
               the Articles of  Incorporation  which limits in any way the right
               to  indemnification  or the  right  to  advancement  of  expenses
               provided  for in this Section  8.01 shall  operate  prospectively
               only and shall not affect any action taken, or failure to act, by
               an indemnitee  prior to the adoption of such  amendment,  repeal,
               Bylaw or other provision.

               (f) Partial  Indemnity.  If an indemnitee  is entitled  under any
               provision  of  this  Section  8.01  to   indemnification  by  the
               Corporation  for some or a portion of the expenses or a liability
               paid  or  incurred  by  the   indemnitee   in  the   preparation,
               investigation,  defense,  appeal or  settlement  of any Action or
               Indemnitee Action but not, however, for the total amount thereof,
               the Corporation shall indemnify the indemnitee for the portion of
               such expenses or liability to which the indemnitee is entitled.

               (g)  Applicability  of Section.  This Section 8.01 shall apply to
               every  Action  other than an Action  filed  prior to January  27,
               1987,  except  that  it  shall  not  apply  to  the  extent  that
               Pennsylvania law does not permit its application to any breach of
               performance  of duty or any failure of  performance of duty by an
               indemnitee occurring prior to January 27, 1987.

     Section 8.02.  Personal  Liability of Directors.

               (a) To the fullest  extent that the laws of the  Commonwealth  of
               Pennsylvania,  as in effect on January 27, 1987 or as  thereafter
               amended,  permit  elimination  or  limitation of the liability of
               directors,  no Director of the  Corporation  shall be  personally
               liable for monetary  damages as such for any action taken, or any
               failure to take any action, as a Director.

               (b) This  Section  8.02  shall not apply to any  action,  suit or
               proceeding  filed  prior to January 27, 1987 nor to any breach of
               performance  of duty of any failure of  performance  of duty by a
               Director of the Corporation  occurring prior to January 27, 1987.
               The  provisions  of this Section shall be deemed to be a contract
               with each Director of the  Corporation  who serves as such at any
               time while this  Section  is in  effect,  and each such  Director
               shall be deemed to be so serving in reliance on the provisions of
               this Section. Any amendment or repeal of this section or adoption
               of any  other  Bylaws or any  provision  of the  Articles  of the
               Corporation which has the effect of increasing director liability
               shall operate  prospectively only and shall not effect any action
               taken,  or any  failure  to act,  prior to the  adoption  of such
               amendment, repeal, other Bylaw or provision.


                                       14
<PAGE>

ARTICLE IX
AMENDMENTS

         Section  9.01.  Amendments.

               (a) Except with respect to those  matters  which are, by statute,
               reserved  exclusively  to the  shareholders,  these Bylaws may be
               amended,  altered and repealed, and new Bylaws may be adopted, by
               a vote of the majority of the Disinterested Directors (as defined
               in Section 10.1(g) of the Restated  Articles) then in office,  at
               any regular or special meeting of the Board.

               (b) When the Bylaws are to be amended,  altered or  repealed,  or
               new Bylaws  adopted by the Board of Directors,  written notice of
               any such proposed change shall be given to each Director at least
               ten (10) days prior to the  regular  or special  meeting at which
               the proposed change is to be considered. The notice shall include
               the  text of the  Bylaws  which  is to be  amended,  altered  or
               repealed, and the text of the change which is being proposed.

               (c) These Bylaws may also be amended,  altered and repealed,  and
               new Bylaws may be adopted,  by the shareholders at any regular or
               special  meeting  by the votes  required  by  Section  8.3 of the
               Restated  Articles of the  Corporation  or, if no special vote is
               required by Section 8.3 of the Restated  Articles or otherwise by
               law, by a majority of the votes cast thereon by all  shareholders
               entitled  to vote on the  proposal.  When  the  Bylaws  are to be
               amended,  altered,  or  repealed,  or new  Bylaws  adopted by the
               shareholders,  written  notice  that the  purpose,  or one of the
               purposes,  of the meeting is to consider the adoption,  amendment
               or repeal of the  Bylaws  shall be given to each  shareholder  at
               least ten (10) days prior to the  regular  or special  meeting at
               which the  proposed  change is to be  considered.  There shall be
               included in, or enclosed  with, the notice a copy of the proposed
               amendment or a summary of the changes to be effected thereby.

               (d) No  provision  of these  Bylaws  shall vest in any person any
               property or (except as  provided in Sections  8.01(e) and 8.02 of
               these Bylaws) any contract right.

                                       15
<PAGE>