BYLAWS

                                       OF

                          Smith River Bankshares, Inc.

                             MARTINSVILLE, VIRGINIA


                             Adopted August 5, 1999

                            Amended February 20, 2001



<PAGE>

                             ARTICLE I. SHAREHOLDERS


         SECTION 1.1. Annual Meeting.  The annual meeting of the shareholders to
elect  directors and for the  transaction of such other business as may properly
come  before the  meeting  shall be held on the third  Thursday of April of each
year or, if such date falls on a legal holiday, the next business day.

         SECTION 1.2. Special Meetings.  Special meetings of shareholders may be
called by the Chairman of the Board of Directors, the President or by a majority
of the Board of Directors.  Business transacted at all special meetings shall be
confined to the purpose(s) stated in the notice.

         SECTION 1.3. Place of Meeting. The Board of Directors (the "Board") may
designate any place inside or outside Virginia for any annual or special meeting
of the  shareholders.  If no  designation  is made,  the meeting  will be at the
principal office of the Corporation.

         SECTION 1.4.  Notice of Meeting.  Except as  otherwise  required by the
Virginia Stock  Corporation Act, as now in effect or hereafter from time to time
amended  (the  "Act"),  written  notice  stating  the time and  location  of the
meeting, and, in case of a special meeting, the purpose(s) of the meeting, shall
be delivered not less than ten nor more than sixty days before the meeting date,
either  personally or by mail, to each shareholder of record entitled to vote at
such  meeting.  If  mailed,  the  notice  will be  deemed to be  delivered  when
deposited  in  the  United  States  mail,  postage  prepaid,  addressed  to  the
shareholder  at his  address as it appears  on the stock  transfer  books of the
Corporation.

         SECTION 1.5.  Closing of Transfer  Books or Fixing of Record Date.  For
the  purpose of  determining  shareholders  entitled to notice of or vote at any
shareholders'  meeting,  or any  adjournment  thereof,  or  entitled  to receive
payment of any  dividend,  or in order to determine  shareholders  for any other
proper purpose, the Board may close the stock transfer books for a stated period
not to exceed  seventy days. If the stock transfer books are closed to determine
shareholders  entitled  to notice of or vote at a  shareholders'  meeting,  such
books shall be closed for at least ten days immediately  preceding such meeting.
In lieu of closing the stock transfer books, the Board may fix in advance a date
as the record date for a determination of shareholders, such date to be not more
than seventy days,  and in case of a  shareholders'  meeting,  not less than ten
days, prior to the date on which the particular action requiring a determination
of  shareholders  is to be taken. If the stock transfer books are not closed and
no record date is fixed for the determination of shareholders entitled to notice
of or vote at a  shareholders'  meeting,  or  shareholders  entitled  to receive
payment of a dividend, the day before the notice of the meeting is mailed or the
date on which the resolution of the Board declaring such dividend is adopted, as
the case may be, shall be the record date for the determination of shareholders.
Any  determination of shareholders  entitled to vote at a shareholders'  meeting
made as provided in this Section shall apply to any adjournment thereof,  unless
the Board fixes a new record date, which it shall do if the meeting is adjourned
to a date more than 120 days after the date fixed for the original meeting.

          SECTION 1.6. Presiding Officer and the Secretary. The President or, in
his  absence,  an  officer  designated  by  the  Board,  shall  preside  at  all
shareholder meetings,  and the Secretary shall serve as secretary.  Otherwise, a
chairman or secretary  shall be elected by a majority  vote of the  shareholders
present to act in the absence of those officers.

          SECTION 1.7. Voting Lists. The Secretary or other person having charge
of the stock  transfer  books of the  Corporation  shall make, at least ten days
before each shareholders'  meeting, a complete list of the shareholders entitled
to vote at such meeting, or any adjournment thereof, with the address of and the
number of shares  held by each,  which  list,  for a period of ten days prior to
such meeting,  shall be kept on file at the registered office of the Corporation
and shall be subject to inspection by any  shareholder  at any time during usual
business hours,  subject to any limitations on such right provided by the Act or
other  provisions  of law. Such list shall also be produced and kept open at the
time and place of the meeting for inspection by any shareholder during the whole
time of the meeting for the purposes  thereof.  The original stock transfer book
is prima facie evidence as to the  shareholders who are entitled to examine such
list or transfer books or to vote at any shareholders' meeting.

<PAGE>

          SECTION 1.8. Quorum.  Unless otherwise  provided in the  Corporation's
Articles of Incorporation (the "Articles"), a majority of the outstanding shares
of the Corporation  entitled to vote,  represented in person or by proxy,  shall
constitute a quorum at a shareholders' meeting. If less than a quorum is present
at a meeting,  a majority of the shares so  represented  may adjourn the meeting
from time to time without further notice.  At such adjourned  meeting at which a
quorum is present or  represented,  any business may be  transacted  which might
have been transacted at the original  meeting.  If a quorum exists,  action on a
matter by a voting  group is approved if the votes cast within the voting  group
favoring the action exceed the votes cast  opposing the action,  unless the vote
of a greater  number is required by the Act or the Articles,  and except that in
the election of directors  those  receiving the greatest number of votes cast by
the shares entitled to vote shall be deemed elected, even though not receiving a
majority.

          SECTION 1.9. Proxies.  At all meetings of shareholders,  a shareholder
may  vote by  proxy  executed  in  writing  by the  shareholder  or by his  duly
authorized attorney in fact. Such proxy shall be filed with the Secretary before
or at the meeting.  No proxy shall be valid after eleven months from the date of
its execution, unless otherwise provided in the proxy.

          SECTION  1.10  Action by  Shareholders  Without a Meeting.  Any action
required to be taken at a meeting of the shareholders of the Corporation, or any
action which may be taken at a meeting of the shareholders, may be taken without
a meeting if a consent in writing,  setting forth the action so taken,  shall be
signed by all of the  shareholders  entitled to vote with respect to the subject
matter thereof.

          SECTION 1.11 Shareholder Proposals. No business shall be transacted at
any meeting of  shareholders,  except such business as shall be (a) specified in
the notice of meeting  given as provided  in Section 1.4 of this  Article I; (b)
otherwise brought before the meeting by or at the direction of the Board; or (c)
otherwise  brought  before  the  meeting  by a  shareholder  of  record  of  the
Corporation entitled to vote at the meeting in compliance with the procedure set
forth in this Section  1.11.  For  business to be brought  before a meeting by a
shareholder pursuant to (c) above, the shareholder must have given timely notice
in writing to the President of the  Corporation.  To be timely,  a shareholder's
notice shall be delivered to, or mailed and received at, the principal executive
offices of the  Corporation  not less than sixty days nor more than  ninety days
prior to the  meeting;  provided,  however,  in the event that less than seventy
days' notice or prior public  disclosure  of the date of the meeting is given or
made to shareholders, notice by the shareholder to be timely must be so received
not later than the close of business on the tenth day following the day on which
such  notice of the date of the  meeting  or such  public  disclosure  was made.
Notice  shall be deemed to have been given more than  seventy days in advance of
an annual  meeting of  shareholders  if the annual meeting is called on the date
indicated  by  Section  1.1 of this  Article  I without  regard  to when  public
disclosure  thereof is made.  Notice of  actions to be brought  before a meeting
pursuant  to (c) above  shall  set  forth,  as to each  matter  the  shareholder
proposes  to bring  before the  meeting:  a brief  description  of the  business
desired to be brought  before the  meeting and the  reasons  for  bringing  such
business before the meeting;  and as to the shareholder  giving the notice,  (i)
the name  and  address,  as they  appear  on the  Corporation's  books,  of such
shareholder,  (ii) the classes and number of shares of the Corporation which are
owned of record and  beneficially  by such  shareholder,  and (iii) any material
interest  of such  shareholder  in such  business  other than his  interest as a
shareholder of the Corporation.  Notwithstanding anything in these Bylaws to the
contrary, no business shall be conducted on a shareholder proposal or nomination
except in accordance  with the  provisions  set forth in this Section 1.11.  The
requirements  of  this  Section  are  in  addition  to  any  other  requirements
established by law and do not impair the effect of the  requirements  of Section
1.2 of these Bylaws  relating to business  permitted to be transacted at special
shareholders' meetings. The chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that any business was not properly  brought
before the meeting in accordance with the provisions  prescribed by these Bylaws
and, if he should so determine,  he shall so declare to the meeting and any such
business not so properly brought before the meeting shall not be transacted.



                         ARTICLE II. BOARD OF DIRECTORS

         SECTION  2.1.   General  Powers.   The  business  and  affairs  of  the
Corporation shall be managed and administered by the Board of Directors.  Except
as limited by the Act, all corporate  powers shall be vested in and exercised by
the Board.

         SECTION 2.2. Number, Tenure and Qualifications. The number of directors
of the Corporation shall be twelve.  The number of directors may be increased or
decreased  from time to time by amendment  of these  Bylaws  within the variable
range established by the Articles.  At each annual meeting of shareholders,  the
number of  directors  equal to the number of the class whose term expires at the
time of such meeting shall be elected to hold office until the third  succeeding
annual meeting and until their successors shall have been elected and qualify.


<PAGE>

         SECTION  2.3.  Regular  Meetings.  A meeting of the Board shall be held
immediately after each annual meeting of shareholders  without notice other than
that given by these  Bylaws,  at which meeting there shall be elected at least a
President,  a Secretary,  a Treasurer  and a Chairman of the Board of Directors,
who shall hold such offices until the first  meeting of the Board  following the
next annual meeting of shareholders  and until their successors shall be elected
and qualify or until their earlier  resignation or removal.  The Chairman of the
Board of Directors  shall be elected  from the Board of Directors  for a term of
one year and is not  subject to  re-election  within five years from the date on
which his or her most recent term of office as Chairman ended.  Regular meetings
of the Board shall be held as provided by resolution of the Board.

         SECTION 2.4.  Special  Meetings.  Special  meetings of the Board may be
called by or at the request of the  Chairman,  the President or by a majority of
the Board.  The person or persons calling a special meeting of the Board may fix
any place  inside or outside  Virginia  as the place for  holding  that  special
meeting.

         SECTION  2.5.  Action  by  Directors  Without  a  Meeting;   Telephonic
Attendance.  Any action of the Board,  or of any committee of the Board,  may be
taken  without a meeting if a consent in  writing,  setting  forth the action so
taken, shall be signed by all of the directors,  or by all of the members of the
committee,  as the case may be.  Directors  may  participate  in meetings of the
Board and  committees  of the  Board  by,  and such  meetings  may be  conducted
through,  the  use  of  any  means  of  communication  by  which  all  directors
participating may simultaneously  hear each other during the meeting.  Directors
so  participating  are deemed to be present in person at the meeting and will be
counted in determining whether a quorum is present.

         SECTION 2.6.  Notice.  Notice of any special meeting (which notice need
not state the purpose of or business to be conducted  at the  meeting)  shall be
given by written notice  delivered  personally or mailed to each director at his
business  address,  or by  telephone,  facsimile  or  telegram.  If notice is by
personal delivery,  facsimile or telephone, the delivery, facsimile transmission
or telephone  call shall be at least two days prior to the special  meeting.  If
notice is given by mail or  telegram,  such  notice  shall be  deposited  in the
United States mail, postage prepaid,  addressed to each director at his business
address or delivered to the telegraph company, as the case may be, at least five
days prior to the special meeting.

         SECTION  2.7.  Quorum.  Except  as may  otherwise  be  provided  in the
Articles  or in  these  Bylaws,  a  majority  of the  full  Board or of the full
membership  of  any  committee   thereof  shall  constitute  a  quorum  for  the
transaction  of business at any meeting of the Board or such  committee,  as the
case may be. If less than such  majority is present at a meeting,  a majority of
directors  present may adjourn the  meeting  from time to time  without  further
notice.

         SECTION 2.8. Committees. By resolution,  the Board shall designate from
among Board  members an  Executive  Committee,  which shall  exercise all of the
authority  of the Board  except as limited  by law,  the  Articles  or the Board
itself. The Board may designate from among its members other committees for such
purposes and with such powers as the Board may determine.  All committees  shall
keep regular  minutes of their  meetings  and shall report their  actions to the
Board at its next regular meeting.

         SECTION 2.9. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present  shall be the act of the Board
or any committee  thereof,  unless the Articles or these Bylaws require the vote
of a greater number of directors.

         SECTION 2.10. Vacancies.  Any vacancy occurring on the Board, including
a vacancy  resulting from an increase in the number of directors,  may be filled
by the affirmative  vote of a majority of the remaining  directors,  though less
than a quorum of the Board. If a vacancy is filled by the shareholders, a vacant
office held by a director  elected by a voting  group of  shareholders  shall be
filled by a vote of only the holders of that voting group.

         SECTION 2.11.  Compensation.  Payment to the directors for the expense,
if  any,  of  attendance  at  meetings  of the  Board,  and of a  fixed  sum for
attendance  at  meetings  of the  Board or a stated  salary as  director  may be
authorized by Board resolution. Members of special or standing committees may be
authorized  by Board  resolution  to receive  like  compensation  for  attending
meetings.

         SECTION 2.12. Retirement. Except when consented to by unanimous vote of
the other  Directors,  no person shall stand for election or  re-election to the
Board  who has  reached  the age of 75 years  prior  to the date of the  regular
annual  meeting of the  shareholders  at which an election of directors is held,
and no  person  who has  reached  the age of 75 years may be  elected  to fill a
vacancy on or as an addition to the Board.

         SECTION  2.13.  Honorary  Directors.  The Board  shall not  appoint any
Honorary Director, Honorary Chairman, Honorary President, or Honorary Officer.

<PAGE>
                              ARTICLE III. OFFICERS



         SECTION 3.1. Generally. The officers of the Corporation shall include a
President, a Secretary and a Treasurer.  Except as provided in these Bylaws, all
such  officers  shall be  elected  by the  Board of  Directors.  Any one or more
offices may be held by the same person.

         SECTION  3.2.  President.  The Board shall  appoint a President  of the
Corporation to serve at the pleasure of the Board. The President shall supervise
the carrying  out of the policies  adopted or approved by the Board and shall be
the Chief Executive Officer of the Corporation. The President shall have general
executive powers, as well as the specific powers conferred by these Bylaws.  The
President  shall also have and may exercise  such  further  powers and duties as
from time to time may be conferred upon or assigned to him by the Board.

          SECTION 3.3.  Secretary.  The Board shall appoint a Secretary to serve
at the pleasure of the Board.  The Secretary  shall: (a) keep the minutes of the
shareholders',  Board and committee  meetings in one or more books  provided for
that  purpose;  (b) see that all notices are duly given in  accordance  with the
provisions  of these  Bylaws and as required  by law;  (c) be  custodian  of the
corporate records and the Corporation's seal and see that the Corporation's seal
is  affixed  to all  documents  for  which it is  required;  (d)  sign  with the
President or other  designated  officer stock  certificates  of the  Corporation
issued as authorized by resolution of the Board;  (e) have general charge of the
stock transfer books and shareholder list of the Corporation; and (f) in general
perform all duties  incident to the office of Secretary and such other duties as
may from time to time be assigned to him by the President or the Board.

          SECTION 3.4.  Treasurer.  The Board shall appoint a Treasurer,  and if
required  by the  Board,  the  Treasurer  shall  give a bond  for  the  faithful
discharge  of his  duties in such sum and with such  surety or  sureties  as the
Board  shall  determine.  He  shall:  (a)  have  charge  and  custody  of and be
responsible  for all funds and  securities of the  Corporation;  (b) receive and
give  receipts  for monies due and  payable to the  Corporation  from any source
whatsoever,  and deposit all such monies in the name of the  Corporation in such
banks,  trust companies or other depositories as shall be selected by the Board;
and (c) in general perform all of the duties incident to the office of Treasurer
and  such  other  duties  as from  time to time  may be  assigned  to him by the
President or the Board.

          SECTION 3.5.  Other  Officers.  The Board may appoint one or more Vice
Presidents (including Senior Vice Presidents,  Assistant Vice Presidents and the
like), one or more Assistant  Secretaries,  one or more Assistant Treasurers and
such  other  officers  and  assistant   officers  as  it  deems  appropriate  to
transacting the business of the  Corporation.  Such officers shall exercise such
powers and perform  such duties as pertain to their  offices or are  assigned to
them by the President, any other superior officer or the Board. The Board may by
resolution  authorize any duly appointed officer to appoint one or more officers
or assistant officers.

         SECTION 3.6. Removal.  Any officer or agent may be removed by the Board
at any time,  with or without cause,  whenever the Board in its sole  discretion
shall  consider  that the  best  interests  of the  Corporation  will be  served
thereby,  but such removal shall be without prejudice to the contract rights, if
any, of the person so removed. Any officer or agent appointed by another officer
may be  removed  at any time,  with or  without  cause,  by the Board or by such
appointing officer whenever the Board or such appointing  officer, in its or his
sole discretion, shall consider that the best interests of the Corporation shall
be served thereby.

         SECTION 3.7. Vacancies. The Board may fill any vacancy occurring in the
offices of the  Corporation at any regular  meeting of the Board or at a special
meeting of the Board  called  for that  purpose.  An  officer  elected to fill a
vacancy shall be elected for the unexpired term of his predecessor in office.

         SECTION 3.8. Salaries. The salaries of the officers shall be fixed from
time to time by the Board.  The President,  or any other officer duly authorized
by the Board or the President, may fix the salaries of the employees who are not
officers, subject to the approval of the Board.


<PAGE>

                ARTICLE IV. STOCK CERTIFICATES AND THEIR TRANSFER

         SECTION 4.1. Certificates for Shares. The Board will determine the form
of certificates representing shares of the Corporation.  Such certificates shall
bear  the  signature  (or  a  facsimile   thereof  if  such   certificates   are
countersigned  by an  appropriate  party  in  accordance  with  the  Act) of the
President or a Vice  President and the  Secretary or an Assistant  Secretary and
shall bear the corporate  seal or a facsimile  thereof.  All stock  certificates
shall be consecutively numbered or otherwise identified. The name and address of
the person to whom the shares represented  thereby are issued, and the number of
shares and date of issue,  shall be entered on the stock  transfer  books of the
Corporation.  All certificates surrendered to the Corporation for transfer shall
be canceled, and no new certificates will be issued until the former certificate
for a like number of shares has been  surrendered  and  canceled,  except that a
replacement  for a lost,  destroyed or mutilated  certificate may be issued upon
such terms and indemnity to the  Corporation as the Board  prescribes.  No stock
certificate will be issued, and no dividend payment will be made, for fractional
shares of common stock.

         SECTION 4.2. Transfer of Shares.  Transfer of shares shall be made only
on the stock transfer books of the Corporation by the holder of record or by his
legal representative, who must furnish evidence of authority satisfactory to the
Corporation,  and on surrender  for  cancellation  of the  certificate  for such
shares. The Corporation may treat the holder of record of any share or shares of
stock as the holder in fact  thereof and  accordingly  is not bound to recognize
any  equitable  or other  claim to or interest in such shares on the part of any
other person,  whether or not it shall have notice thereof,  except as expressly
provided by the laws of the Commonwealth of Virginia.


                          ARTICLE V. CONTRACTS, LOANS,
                               CHECKS AND DEPOSITS

         The  President  shall  have  by  virtue  of his  office  "full  signing
authority"  and shall  have the power to sign,  countersign,  attest,  affix the
corporate seal, to acknowledge,  endorse,  guarantee signatures upon and deliver
checks,   drafts,   agreements,   contracts,   indentures,   mortgages,   deeds,
conveyances,  transfers,  certificates,   declarations,   receipts,  discharges,
releases,   satisfactions,    settlements,   petitions,   schedules,   accounts,
affidavits, bonds, undertakings, proxies and other documents, securities, chases
in  action  and  instruments  of every  kind and  description  on  behalf of the
Corporation in its corporate or any fiduciary  capacity.  The President shall be
authorized  to grant in writing to  individual  officers and  employees  signing
authority  on  behalf  of the  Corporation  in its  corporate  or any  fiduciary
capacity, limited as he in his discretion deems necessary.

                          ARTICLE VI. BOOKS AND RECORDS

         The Board shall  determine from time to time whether,  and, if allowed,
when and under what  conditions and  regulations,  the accounts and books of the
Corporation   (except  such  as  may  by  statute  be  specifically   opened  to
inspection),  or  any  of  them,  shall  be  opened  to  the  inspection  of the
shareholders,  and the  shareholders'  rights in this  respect  are and shall be
restricted and limited accordingly.

                                ARTICLE VII. SEAL

         The Board may authorize the use of a corporate seal, but failure to use
the seal shall not affect the validity of any instrument. The use of a facsimile
of a seal,  or the affixing of a scroll by way of a seal,  or the execution of a
document containing words importing a sealed document shall be of the same force
as if actually sealed by physically affixing an impression of a seal.

                         ARTICLE VIII. WAIVER OF NOTICE

         Whenever  any  notice is  required  to be given to any  shareholder  or
director of the Corporation  under the provisions of these Bylaws,  the Articles
or the Act,  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  deemed   equivalent  to  the  giving  of  such  notice.   Attendance  at  or
participation in any shareholders' meeting by a shareholder,  or at any Board or
Board  committee  meeting by a  director,  waives  any  required  notice  unless
objection is timely made as provided by the Act.


(SEAL)
                         ------------------------------------------
                                    Secretary