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                                                                    Exhibit 3.2

                              ANDOVER BANCORP, INC.


                                     BY-LAWS
                            (as amended and restated)


                                    ARTICLE I
                                    ---------

                                  Stockholders
                                  ------------

     SECTION 1. ANNUAL MEETING. The annual meeting of stockholders shall be held
on the third Thursday in April in each year after 1987 (or if that be a legal
holiday in the place where the meeting is to be held, on the next succeeding
full business day) at the principal office of the Corporation in Massachusetts
at ten o'clock a.m., unless a different hour, date or place within or without
the United States is fixed by the Board of Directors, the Chairman of the Board,
if one is elected, or the President. If no annual meeting has been held on the
date fixed as above provided, a special meeting in lieu thereof may be held, and
such special meeting shall have, for the purposes of these By-laws or otherwise,
all the force and effect of an annual meeting.

     SECTION 2. MATTERS TO BE CONSIDERED AT ANNUAL MEETING. At an annual meeting
of stockholders, only such business shall be conducted, and only such proposals
shall be acted upon, as shall have been properly brought before the annual
meeting (a) by, or at the direction of, a majority of the Board of Directors
(unless at the time of such action there is an Interested Stockholder, in which
case the affirmative vote of a majority of the Continuing Directors then in
office shall also be required) or (b) by any stockholder of the Corporation who
complies with the notice procedures set forth in this Section 2. For a proposal
to be properly brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary of
the Corporation. To be timely, a stockholder's notice must be delivered to, or
mailed and received at, the principal executive offices of the Corporation not
less than 60 days nor more than 150 days prior to the scheduled annual meeting,
regardless of any postponements, deferrals or adjournments of that meeting to a
later date; provided, however, that if less than 70 days' notice or prior public
disclosure of the date of the scheduled annual meeting is given or made, notice
by the stockholder to be timely must be so delivered or received not later than
the close of business on the 10th day following the earlier of (a) the day on
which such notice of the date of the scheduled annual meeting was mailed or (b)
the day on which public disclosure was made. A stockholder's notice to the
Secretary shall set forth as to each matter the stockholder proposes to bring
before the annual meeting (a) a brief description of the proposal desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, (b) the name and address, as they appear on the
Corporation's stock transfer books, of the stockholder proposing such business
and of the beneficial owners (if any) of the stock registered in such
stockholder's name and the name and address of other stockholders known by such
stockholder to be supporting such proposal, (c) the class and number of shares
of the Corporation's capital stock which are beneficially owned by the
stockholder and beneficial owners (if any) on the date of such stockholder's
notice and by any other stockholders known by such


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stockholder to be supporting such proposal on the date of such stockholder's
notice, and (d) any financial interest of the stockholder in such proposal.

     If the Board of Directors determines that any stockholder proposal was not
timely made in accordance with the terms of this Section 2, the Board of
Directors may determine that such stockholder proposal will not be acted upon at
the annual meeting. If the Board of Directors, or a designated committee
thereof, determines that the information provided in a stockholder's notice does
not satisfy the informational requirements of this Section in any material
respect, the Secretary of the Corporation shall promptly notify such stockholder
of the deficiency in the notice. The stockholder shall have an opportunity to
cure the deficiency by providing additional information to the Secretary within
such period of time, not to exceed 5 days from the date such deficiency notice
is given to the stockholder, as the Board of Directors or such committee shall
reasonably determine. If the deficiency is not cured within such period, or if
the Board of Directors or such committee determines that the additional
information provided by the stockholder, together with the information
previously provided, does not satisfy the requirements of this Section 2 in any
material respect, then the Board of Directors may determine that such
stockholder proposal will not be acted upon at the annual meeting. If there is
an Interested Stockholder, any determination to be made by the Board of
Directors or a designated committee thereof pursuant to the provisions of this
Section 2 shall also require the concurrence of a majority of the Continuing
Directors then in office. The Secretary of the Corporation shall notify a
stockholder in writing whether his proposal has been made in accordance with the
time and informational requirements of this Section 2.

     Notwithstanding the procedure set forth in the preceding paragraph, if
neither the Board of Directors nor such committee makes a determination as to
the validity of any stockholder proposal, the presiding officer of the annual
meeting shall determine and declare at the annual meeting whether the
stockholder proposal was made in accordance with the terms of this Section 2. If
the presiding officer determines that a stockholder proposal was made in
accordance with the terms of this Section 2, he shall so declare at the annual
meeting and ballots shall be provided for use at the meeting with respect to any
such proposal. If the presiding officer determines that a stockholder proposal
was not made in accordance with the terms of this Section 2, he shall so declare
at the annual meeting and any such proposal shall not be acted upon at the
annual meeting.

     This provision shall not prevent the consideration and approval or
disapproval at the annual meeting of reports of officers, Directors and
committees of the Board of Directors, but in connection with such reports, no
new business shall be acted upon at such annual meeting unless stated, filed and
received as herein provided.

     SECTION 3. SPECIAL MEETINGS. Special meetings of the stockholders of the
Corporation may be called only in the manner provided in the Certificate of
Incorporation.


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     SECTION 4. MATTERS TO BE CONSIDERED AT SPECIAL MEETINGS. Only those matters
set forth in the notice of the special meeting may be considered or acted upon
at such special meeting, unless otherwise provided by law.

     SECTION 5. NOTICE OF MEETINGS; ADJOURNMENTS. Written notice of annual
meetings of stockholders stating the hour, date and place of such annual meeting
shall be given by the Secretary or an Assistant Secretary (or other person
authorized by these By-laws or by law) not less than 10 days nor more than 60
days before the meeting, to each stockholder entitled to vote thereat or to each
stockholder who, under the Certificate of Incorporation or under these By-laws,
is entitled to such notice, by delivering such notice to him or by mailing it,
postage prepaid, addressed to such stockholder at the address of such
stockholder as it appears on the Corporation's stock transfer books. Such notice
shall be deemed to be delivered when hand delivered to such address or deposited
in the mail so addressed, with postage prepaid.

     Notice of special meetings of stockholders shall be given in the same
manner as provided for annual meetings of the stockholders, except that the
written notice of any special meeting shall state the purpose or purposes for
which the meeting has been called.

     Notice of an annual or special meeting of stockholders need not be given to
a stockholder if a written waiver of notice is executed before or after such
meeting by such stockholder or such stockholder's authorized attorney, if
communication with such stockholder is unlawful, or if such stockholder attends
such meeting, unless such attendance was for the express purpose of objecting at
the beginning of the meeting, to the transaction of any business because the
meeting was not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any annual or special meeting of stockholders
need be specified in any written waiver of notice.

     When any annual or special meeting of stockholders is adjourned to another
hour, date or place, notice need not be given of the adjourned meeting other
than an announcement at the meeting at which the adjournment is taken of the
hour, date and place to which the meeting is adjourned; provided, however, that
if the adjournment is for more than 30 days, or if after the adjournment a new
record date is fixed for the adjourned meeting, notice of the adjourned meeting
shall be given to each stockholder of record entitled to vote thereat.

     SECTION 6. QUORUM. The holders of a majority in interest of all stock
issued, outstanding and entitled to vote, represented in person or by proxy,
shall constitute a quorum at any annual or special meeting of stockholders; but
if less than a quorum is present at a meeting, a majority in interest of the
stockholders present or the presiding officer may adjourn the meeting from time
to time, and the meeting may be held as adjourned without further notice, except
as provided in Section 5 of this Article I. At such adjourned meeting at which a
quorum is present, any business may be transacted which might have been
transacted at the meeting as originally noticed. The stockholders present at a
duly constituted meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.

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     SECTION 7. VOTING AND PROXIES. Stockholders shall have one vote for each
share of stock entitled to vote owned by them of record according to the books
of the Corporation, unless otherwise provided by law or by the Certificate of
Incorporation. Stockholders may vote either in person or by written proxy, but
no proxy shall be voted or acted upon after three years from its date, unless
the proxy provides for a longer period. Proxies shall be filed with the
Secretary of the meeting, or of any adjournment thereof, before being voted.
Except as otherwise limited therein, proxies shall entitle the persons
authorized thereby to vote at any adjournment of such meeting, but they shall
not be valid after final adjournment of such meeting. A proxy with respect to
stock held in the name of two or more persons shall be valid if executed by or
on behalf of any one of them unless at or prior to the exercise of the proxy the
Corporation receives a specific written notice to the contrary from any one of
them. A proxy purporting to be executed by or on behalf of a stockholder shall
be deemed valid unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger.

     SECTION 8. ACTION AT MEETING. When a quorum is present, any matter before
any annual or special meeting of stockholders shall be decided by vote of the
holders of a majority of the shares of stock voting on such matter, except where
a larger vote is required by law, by the Certificate of Incorporation or by
these By-laws. Any election by stockholders shall be determined by a plurality
of the votes cast, except where a larger vote is required by law, by the
Certificate of Incorporation or by these By-laws. The Corporation shall not
directly or indirectly vote any shares of its own stock except as to shares
which it holds in a fiduciary capacity or except as otherwise permitted by law.

     SECTION 9. ACTION BY CONSENT. Any action required or permitted to be taken
by the stockholders of the Corporation at an annual or special meeting of such
stockholders may be effected without a meeting by a consent in writing signed by
the holders of all of the outstanding shares of stock entitled to vote thereon.

     SECTION 10. STOCKHOLDER LISTS. The Secretary or an Assistant Secretary (or
the Corporation's transfer agent or other person authorized by these By-laws or
by law) shall prepare and make, at least 10 days before any annual or special
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
10 days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the hour, date and place of the
meeting during the whole time thereof, and may be inspected by any stockholder
who is present.

     SECTION 11. PRESIDING OFFICER. The presiding officer at all annual or
special meetings of stockholders shall have the power, among other things, to
adjourn such meeting at any time and from time to time, subject to Sections 5
and 6 of this Article I. The order of business and all


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other matters of procedure at any meeting of the stockholders shall be
determined by the presiding officer.


                                   ARTICLE II
                                   ----------

                                    Directors
                                    ---------

     SECTION 1. POWERS. The business, property and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors, which
shall have and may exercise all the powers of the Corporation except as
otherwise provided by the Certificate of Incorporation or required by law. In
the event of a vacancy in the Board of Directors, the remaining Directors,
except as otherwise provided by law, may exercise the powers of the full Board
until the vacancy is filled.

     SECTION 2. NUMBER AND TERMS. Except as otherwise fixed pursuant to the
provisions of Article 4 of the Certificate of Incorporation relating to the
rights of the holders of any class or series of preferred stock to elect
Directors, the number of Directors of the Corporation shall be fixed by
resolution duly adopted from time to time by the Board of Directors; provided,
however, that if at the time of such action there is an Interested Stockholder,
such action shall in addition require a majority of the Continuing Directors
then in office. The Directors, other than those who may be elected by the
holders of any class or series of preferred stock, shall be classified, with
respect to the term for which they severally hold office, into three classes, as
nearly equal in number as possible as determined by the Board of Directors, with
one class to be elected annually.

     The initial Directors of the Corporation shall hold office as follows: the
first class of Directors shall hold office initially for a term expiring at the
annual meeting of stockholders to be held in l988, the second class of Directors
shall hold office initially for a term expiring at the annual meeting of
stockholders to be held in l989, and the third class of Directors shall hold
office initially for a term expiring at the annual meeting of stockholders to be
held in l990, with the members of each class to hold office until their
respective successors are elected and qualified. At each annual meeting of the
stockholders of the Corporation, the successors to the class of Directors whose
term expires at that meeting shall be elected to hold office for a term expiring
at the annual meeting of stockholders held in the third year following the year
of their election and until their respective successors are elected and
qualified.

     SECTION 3. DIRECTOR NOMINATIONS. Nominations of candidates for election as
Directors of the Corporation at any annual meeting of stockholders may be made
(a) by, or at the direction of, a majority of the Board of Directors (unless at
the time of such action there is an Interested Stockholder in which case the
affirmative vote of a majority of the Continuing Directors shall also be
required), or (b) by any stockholder entitled to vote at such annual meeting.
Only persons nominated in accordance with the procedures set forth in this
Section 3 shall be eligible for election as Directors at an annual meeting of
stockholders.

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     Nominations, other than those made by, or at the direction of, the Board of
Directors (and by the Continuing Directors, if required), shall be made pursuant
to timely notice in writing to the Secretary of the Corporation as set forth in
this Section 3. To be timely, a stockholder's notice shall be delivered to, or
mailed and received, at the principal executive offices of the Corporation not
less than 60 days nor more than 150 days prior to the date of the scheduled
annual meeting, regardless of postponements, deferrals, or adjournments of that
meeting to a later date; provided, however, that if less than 70 days' notice or
prior public disclosure of the date of the scheduled annual meeting is given or
made, notice by the stockholder to be timely must be so delivered or received
not later than the close of business on the 10th day following the earlier of
(a) the day on which such notice of the date of the scheduled annual meeting was
mailed or (b) the day on which such public disclosure was made. Such
stockholder's notice shall set forth (a) as to each person whom the stockholder
proposes to nominate for election or re-election as a Director (i) the name,
age, business address and residence address of such person, (ii) the principal
occupation or employment of such person, (iii) the class and number of shares of
the Corporation's capital stock which are beneficially owned by such person on
the date of such stockholder notice and (iv) any other information relating to
such person that is required to be disclosed in solicitations of proxies with
respect to nominees for election as Directors, pursuant to Regulation 14A
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended (or any subsequent provisions replacing such
Act or the rules and regulations promulgated thereunder); and (b) as to the
stockholder giving the notice (i) the name and address, as they appear on the
Corporation's stock transfer books, of such stockholder and of the beneficial
owners (if any) of the stock registered in such stockholder's name and the name
and address of other stockholders known by such stockholder to be supporting
such nominees and (ii) the class and number of shares of the Corporation's
capital stock which are beneficially owned by such stockholder and beneficial
owners (if any) on the date of such stockholder notice and by any other
stockholders known by such stockholder to be supporting such nominees on the
date of such stockholder notice. At the request of the Board of Directors, any
person nominated by, or at the direction of, the Board of Directors for election
as a Director at an annual meeting shall furnish to the Secretary of the
Corporation that information required to be set forth in a stockholder's notice
of nomination which pertains to the nominee.

     No person shall be elected by the stockholders as a Director of the
Corporation unless nominated in accordance with the procedures set forth in this
Section 3. Election of Directors at the annual meeting need not be by written
ballot, unless otherwise provided by the Board of Directors or presiding officer
at such annual meeting. If written ballots are to be used, ballots bearing the
names of all the persons who have been nominated for election as Directors at
the annual meeting in accordance with the procedures set forth in this Section 3
shall be provided for use at the annual meeting.

     The Board of Directors may reject any nomination by a stockholder not
timely made in accordance with the requirements of this Section 3. If the Board
of Directors, or a designated committee thereof, determines that the information
provided in a stockholder's notice does not satisfy the informational
requirements of this Section 3 in any material respect, the Secretary of

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the Corporation shall promptly notify such stockholder of the deficiency in the
notice. The stockholder shall have an opportunity to cure the deficiency by
providing additional information to the Secretary within such period of time,
not to exceed 5 days from the date such deficiency notice is given to the
stockholder, as the Board of Directors or such committee shall reasonably
determine. If the deficiency is not cured within such period, or if the Board of
Directors or such committee reasonably determines that the additional
information provided by the stockholder, together with the information
previously provided, does not satisfy the requirements of this Section 3 in any
material respect, then the Board of Directors may reject such stockholder's
nomination. If there is an Interested Stockholder, any determinations to be made
by the Board of Directors or a designated committee thereof pursuant to the
provisions of this Section 3 shall also require the concurrence of a majority of
the Continuing Directors then in office. The Secretary of the Corporation shall
notify a stockholder in writing whether his nomination has been made in
accordance with the time and informational requirements of this Section 3.

     Notwithstanding the procedure set forth in the preceding paragraph, if
neither the Board of Directors nor such committee makes a determination as to
the validity of any nominations by a stockholder, the presiding officer of the
annual meeting shall determine and declare at the annual meeting whether a
nomination was made in accordance with the terms of this Section 3. If the
presiding officer determines that a nomination was made in accordance with the
terms of this Section 3, he shall so declare at the annual meeting and ballots
shall be provided for use at the meeting with respect to such nominee. If the
presiding officer determines that a nomination was not made in accordance with
the terms of this Section 3, he shall so declare at the annual meeting and such
nomination shall be disregarded.

     SECTION 4. QUALIFICATION. No Director need be a stockholder of the
Corporation. Unless waived by a vote of the Board of Directors, no individual
may be nominated as a Director of the Corporation if he or she will have
attained the age of 70 at the time of election.

     SECTION 5. VACANCIES. Any vacancy occuring on the Board of Directors,
including any newly created directorships resulting from an increase in the
number of Directors or any vacancy resulting from death, resignation,
disqualification, removal or other cause, shall be filled in the manner provided
in the Certificate of Incorporation.

     SECTION 6. REMOVAL. Any Director may be removed from office in the manner
provided in the Certificate of Incorporation.

     SECTION 7. RESIGNATION. A Director may resign at any time by giving written
notice to the Chairman of the Board, if one is elected, the President or the
Secretary. A resignation shall be effective upon receipt, unless the resignation
otherwise provides.

     SECTION 8. REGULAR MEETINGS. The first meeting of the Board of Directors
next following the annual meeting of stockholders of the Corporation shall be
designated as the annual meeting of the Board. Other regular meetings of the
Board of Directors may be held at such hour,

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date and place as the Board of Directors may by resolution from time to time
determine without other notice than such resolution.

     SECTION 9. SPECIAL MEETINGS. Special meetings of the Board of Directors may
be called, orally or in writing, by or at the request of a majority of the
Directors, the Chairman of the Board, if one is elected, or the President. The
person or persons calling any such special meeting of the Board of Directors may
fix the hour, date and place thereof.

     SECTION 10. NOTICE OF MEETINGS. Notice of the hour, date and place of
special meetings of the Board of Directors shall be given to each Director by
the Secretary or an Assistant Secretary, or in case of the death, absence,
incapacity or refusal of such persons, by the Chairman of the Board, if one is
elected, or the President or such other officer designated by the Chairman of
the Board, if one is elected, by the President or by one of the Directors
calling the meeting. Notice of any special meeting of the Board of Directors
shall be given to each Director in person or by telephone or by telegram sent to
his business or home address at least 24 hours in advance of the meeting, or by
written notice mailed to his business or home address at least 48 hours in
advance of the meeting. Such notice shall be deemed to be delivered when hand
delivered to such address, read to such Director by telephone, deposited in the
mail so addressed, with postage thereon prepaid if mailed, or when delivered to
the telegraph company if sent by telegram.

     When any Board of Directors meeting, either regular or special, is
adjourned for more than 30 days, notice of the adjourned meeting shall be given
as in the case of an original meeting. It shall not be necessary to give any
notice of the hour, date or place of any meeting adjourned for 30 days or less
or of the business to be transacted at such meeting, other than an announcement
at the meeting at which such adjournment is taken of the hour, date and place to
which the meeting is adjourned.

     A written waiver of notice executed before or after a meeting by a Director
and filed with the records of the meeting shall be deemed to be equivalent to
notice of the meeting. The attendance of a Director at a meeting shall
constitute a waiver of notice of such meeting, except where a Director attends a
meeting for the express purpose of objecting at the beginning of the meeting to
the transaction of any business because such meeting is not lawfully called or
convened. Except as otherwise required by law, by the Certificate of
Incorporation or by these By-laws, neither the business to be transacted at, nor
the purpose of, any meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.

     SECTION 11. QUORUM. At any meeting of the Board of Directors, a majority of
the Directors then in office shall constitute a quorum for the transaction of
business, but if less than a quorum is present at a meeting, a majority of the
Directors present may adjourn the meeting from time to time, and the meeting may
be held as adjourned without further notice, except as provided in Section 10 of
this Article II. Any business which might have been transacted at the meeting as
originally noticed may be transacted at such adjourned meeting at which a quorum
is present.

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     SECTION 12. ACTION AT MEETING. At any meeting of the Board of Directors at
which a quorum is present, a majority of the Directors present may take any
action on behalf of the Board of Directors, unless otherwise required by law, by
the Certificate of Incorporation or by these Bylaws.

     SECTION 13. ACTION BY CONSENT. Any action required or permitted to be taken
at any meeting of the Board of Directors may be taken without a meeting if all
members of the Board of Directors consent thereto in writing. Such written
consent shall be filed with the records of the meetings of the Board of
Directors and shall be treated for all purposes as a vote at a meeting of the
Board of Directors.

     SECTION 14. MANNER OF PARTICIPATION. Members of the Board of Directors or
of committees elected by the Board pursuant to Section 15 of this Article II may
participate in meetings of the Board of Directors by means of conference
telephone or similar communications equipment by means of which all Directors
participating in the meeting can hear each other, and participation in a meeting
in accordance herewith shall constitute presence in person at such meeting for
purposes of these By-laws.

     SECTION 15. COMMITTEES. The Board of Directors, by the affirmative vote of
a majority of the Directors then in office, may elect from its number one or
more committees, including an Executive Committee and an Audit Committee, and
may delegate thereto some or all of its powers except those which by law, by the
Certificate of Incorporation or by these By-laws, may not be delegated. Except
as the Board of Directors may otherwise determine, any such committee may make
rules for the conduct of its business, but unless otherwise provided by the
Board of Directors or in such rules, its business shall be conducted so far as
possible in the same manner as is provided by these By-laws for the Board of
Directors. All members of such committees shall hold such offices at the
pleasure of the Board of Directors. The Board of Directors may abolish any such
committee at any time. Any committee to which the Board of Directors delegates
any of its powers or duties shall keep records of its meetings and shall report
its action to the Board of Directors. The Board of Directors shall have power to
rescind any action of any committee, but no such rescission shall have
retroactive effect. With approval of the Board of Directors, the Chief Executive
Officer may appoint such other committees consisting of such Directors as the
Chief Executive Officer shall select. Any recommendations of such committees
appointed by the Chief Executive Officer shall be submitted to the Board of
Directors.

     SECTION 16. COMPENSATION OF DIRECTORS. Directors shall receive such
compensation for their services as shall be determined by a majority of the
Board of Directors, provided that Directors who are serving the Corporation as
officers or employees and who receive compensation for their services as such,
shall not receive any salary or other compensation for their services as
Directors of the Corporation.



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                                   ARTICLE III
                                   -----------

                                    Officers
                                    --------

     SECTION 1. ENUMERATION. The officers of the Corporation shall consist of a
President, a Treasurer, a Secretary and such other officers, including without
limitation a Chairman of the Board, one or more Vice-Presidents (including
Executive Vice Presidents or Senior Vice Presidents), Assistant Vice Presidents,
Assistant Treasurers and Assistant Secretaries, as the Board of Directors may
determine.

     SECTION 2. ELECTION. At the regular annual meeting of the Board following
the annual meeting of stockholders, the Board of Directors shall elect the
President, the Treasurer and the Secretary. Other officers may be elected by the
Board of Directors at such regular annual meeting of the Board of Directors or
at any other regular or special meeting.

     SECTION 3. QUALIFICATION. No officer need be a stockholder or a Director;
provided, however, that the Chairman of the Board, if one is elected, and the
President shall be Directors. Any person may occupy more than one office of the
Corporation at any time. Any officer may be required by the Board of Directors
to give bond for the faithful performance of his duties in such amount and with
such sureties as the Board of Directors may determine.

     SECTION 4. TENURE. Except as otherwise provided by the Certificate of
Incorporation or by these By-laws, each of the officers of the Corporation shall
hold office until the regular annual meeting of the Board of Directors following
the next annual meeting of stockholders and until his successor is elected and
qualified or until his earlier resignation or removal. Election or appointment
of an officer, employee or agent shall not of itself create contract rights. The
Board of Directors may, however, authorize the Corporation to enter into an
employment contract with any officer in accordance with law, but no such
contract right shall impair the right of the Board of Directors to remove any
officer at any time in accordance with Section 6 of this Article III.

     SECTION 5. RESIGNATION. Any officer may resign by delivering his written
resignation to the Corporation addressed to the Chairman of the Board, if one is
elected, the President or the Secretary, and such resignation shall be effective
upon receipt unless it is specified to be effective at some other time or upon
the happening of some other event.

     SECTION 6. REMOVAL. Except as otherwise provided by law, the Board of
Directors may remove any officer with or without cause by the affirmative vote
of a majority of the Directors then in office; provided, however, that if at the
time of such removal there is an Interested Stockholder, the affirmative vote of
a majority of the Continuing Directors then in office shall also be required,
and provided further that, if an officer is to be removed for cause, he may only
be removed after reasonable notice and an opportunity to be heard by the Board
of Directors.


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     SECTION 7. ABSENCE OR DISABILITY. In the event of the absence or disability
of any officer, the Board of Directors may designate another officer to act
temporarily in place of such absent or disabled officer.

     SECTION 8. VACANCIES. Any vacancy in any office may be filled for the
unexpired portion of the term by the Board of Directors.

     SECTION 9. CHAIRMAN OF THE BOARD. The Chairman of the Board, if one is
elected, shall preside, when present, at all meetings of the Board of Directors
and, if so designated by the Board of Directors, shall be the Chief Executive
Officer of the Corporation. If a Chairman of the Board is not elected or is
absent, the President shall preside at meetings of the Board of Directors. If
the Chairman of the Board is the Chief Executive Officer, he shall, subject to
the direction of the Board of Directors, have general supervision and control of
the Corporation's business and shall preside, when present, at all meetings of
the stockholders. The Chairman of the Board shall have such other powers and
shall perform such other duties as the Board of Directors may from time to time
designate. If the Chairman of the Board is not the Chief Executive Officer, he
shall also have such powers and perform such duties as the Chief Executive
Officer may from time to time designate.

     SECTION 10. PRESIDENT. Unless the Board of Directors shall elect a Chairman
of the Board and designate such Chairman the Chief Executive Officer of the
Corporation, the President shall be the Chief Executive Officer of the
Corporation and shall, subject to the direction of the Board of Directors, have
general supervision and control of the Corporation's business and shall preside,
when present, at all meetings of the stockholders. If there is no Chairman of
the Board or if he is absent, the President shall preside, when present, at
meetings of the Board of Directors. If the President is not the Chief Executive
Officer, he shall have such powers and perform such duties as the Chief
Executive Officer may from time to time designate.

     SECTION 11. VICE PRESIDENTS AND ASSISTANT VICE PRESIDENTS. Any Vice
President (including any Executive Vice President or Senior Vice President) and
Assistant Vice President shall have such powers and shall perform such duties as
the Board of Directors or the Chief Executive Officer may from time to time
designate.

     SECTION 12. TREASURER AND ASSISTANT TREASURERS. The Treasurer shall,
subject to the direction of the Board of Directors and except as the Board of
Directors or the Chief Executive Officer may otherwise provide, have general
charge of the financial affairs of the Corporation and shall cause to be kept
accurate books of account. He shall have custody of all funds, securities, and
valuable documents of the Corporation. He shall have such other duties and
powers as may be designated from time to time by the Board of Directors or the
Chief Executive Officer.

     Any Assistant Treasurer shall have such powers and perform such duties as
the Board of Directors or the Chief Executive Officer may from time to time
designate.


                                       11

<PAGE>   12


     SECTION 13. SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall record
all the proceedings of the meetings of the stockholders and the Board of
Directors (including committees of the Board) in books kept for that purpose. In
his absence from any such meeting, a temporary secretary chosen at the meeting
shall record the proceedings thereof. The Secretary shall have charge of the
stock ledger (which may, however, be kept by any transfer or other agent of the
Corporation). He shall have custody of the seal of the Corporation, and he, or
an Assistant Secretary, shall have authority to affix it to any instrument
requiring it, and, when so affixed, the seal may be attested by his signature or
that of an Assistant Secretary. He shall have such other duties and powers as
may be designated from time to time by the Board of Directors or the Chief
Executive Officer. In the absence of the Secretary, any Assistant Secretary may
perform his duties and responsibilities.

     Any Assistant Secretary shall have such powers and perform such duties as
the Board of Directors or the Chief Executive Officer may from time to time
designate.

     SECTION 14. OTHER POWERS AND DUTIES. Subject to these By-laws and to such
limitations as the Board of Directors may from time to time prescribe, the
officers of the Corporation shall each have such powers and duties as generally
pertain to their respective offices, as well as such powers and duties as from
time to time may be conferred by the Board of Directors or the Chief Executive
Officer.


                                   ARTICLE IV
                                   ----------

                                  Capital Stock
                                  -------------

     SECTION 1. CERTIFICATES OF STOCK. Unless otherwise provided by the Board of
Directors, each stockholder shall be entitled to a certificate of the capital
stock of the Corporation in such form as may from time to time be prescribed by
the Board of Directors. Such certificate shall bear the Corporation seal and
shall be signed by the Chairman of the Board, President or a Vice President and
by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary. The Corporation seal and the signatures by Corporation officers may
be facsimiles if the certificate is manually countersigned by an authorized
person on behalf of a transfer agent or registrar other than the Corporation or
its employee. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed on such certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if he were
such officer, transfer agent or registrar at the time of its issue. Every
certificate for shares of stock which are subject to any restriction on transfer
and every certificate issued when the Corporation is authorized to issue more
than one class or series of stock shall contain such legend with respect thereto
as is required by law.


                                       12

<PAGE>   13


     SECTION 2. TRANSFERS. Subject to any restrictions on transfer and unless
otherwise provided by the Board of Directors, shares of stock may be transferred
only on the books of the Corporation by the surrender to the Corporation or its
transfer agent of the certificate therefor properly endorsed or accompanied by a
written assignment or power of attorney properly executed, with transfer stamps
(if necessary) affixed, and with such proof of the authenticity of signature as
the Corporation or its transfer agent may reasonably require.

     SECTION 3. RECORD HOLDERS. Except as may otherwise be required by law, by
the Certificate of Incorporation or by these By-laws, the Corporation shall be
entitled to treat the record holder of stock as shown on its books as the owner
of such stock for all purposes, including the payment of dividends and the right
to vote with respect thereto, regardless of any transfer, pledge or other
disposition of such stock, until the shares have been transferred on the books
of the Corporation in accordance with the requirements of these By-laws.

     It shall be the duty of each stockholder to notify the Corporation of his
post office address and any changes thereto.

     SECTION 4. RECORD DATE. In order that the Corporation may determine the
stockholders entitled to receive notice of or to vote at any meeting of
stockholders or any adjournments thereof, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than 60 days nor less than 10
days before the date of such meeting, nor more than 60 days prior to any other
action. In such case, only stockholders of record on such record date shall be
so entitled, notwithstanding any transfer of stock on the stock transfer books
of the Corporation after the record date.

     If no record date is fixed: (a) the record date for determining
stockholders entitled to receive notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; and (b) the record
date for determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.

     SECTION 5. REPLACEMENT OF CERTIFICATES. In case of the alleged loss,
destruction or mutilation of a certificate of stock, a duplicate certificate may
be issued in place thereof, upon such terms as the Board of Directors may
prescribe.


                                       13

<PAGE>   14


                                    ARTICLE V
                                    ---------

                                 Indemnification
                                 ---------------

     SECTION 1. RIGHT TO INDEMNIFICATION. Each person who was or is made a party
or is threatened to be made a party to or is otherwise involved in any action,
suit or proceeding, whether civil, criminal, administrative, investigative or
otherwise (hereinafter a "Proceeding"), by reason of the fact that he or she is
or was (a) a Director of the Corporation, (b) an officer of the Corporation
elected or appointed by the stockholders or the Board of Directors, or (c)
serving, at the request of the Corporation as evidenced by a vote of the Board
of Directors prior to the occurrence of the event to which the indemnification
relates, as a director, officer, employee or agent of another corporation or of
a partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan (such persons described in (a), (b) and (c)
are sometimes hereinafter referred to as an "Indemnitee"), whether the basis of
such Proceeding is alleged action in an official capacity as such a Director or
officer of the Corporation or as such other director, officer, employee or agent
or in any other capacity while serving as such a Director or officer of the
Corporation or as such other director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the General Corporation Law of Delaware, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than permitted prior thereto), against all expense, liability and loss
(including, but not limited to, attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such Indemnitee in connection therewith, and such indemnification
shall continue as to an Indemnitee who has ceased to be such a Director or
officer of the Corporation or as such other director, officer, employee or agent
and shall inure to the benefit of the Indemnitee's heirs, executors and
administrators; provided, however, that, except as provided in Section 3 of this
Article V with respect to Proceedings to enforce rights to indemnification, the
Corporation shall indemnify any such Indemnitee in connection with a Proceeding
(or part thereof) initiated by such Indemnitee only if such Proceeding (or part
thereof) was authorized or ratified by the Board of Directors of the
Corporation. The right to indemnification conferred in this Article V shall be a
contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any Proceeding in advance of its final
disposition (hereinafter an "Advancement of Expenses"); provided, however, that,
if the General Corporation Law of Delaware requires, an Advancement of Expenses
incurred by an Indemnitee in his or her capacity as a Director or officer of the
Corporation (but not in any other capacity in which service was or is rendered
by such Indemnitee, including, without limitation, service to an employee
benefit plan) shall be made only upon delivery to the Corporation of an
undertaking (hereinafter an "Undertaking"), by or on behalf of such Indemnitee,
to repay all amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right to appeal (hereinafter a
"Final Adjudication") that such Indemnitee is not entitled to be indemnified for
such expenses under this Article V or otherwise.


                                       14

<PAGE>   15


     SECTION 2. INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION. The
Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification, and to an Advancement of Expenses,
to any employee or agent of the Corporation to the fullest extent of the
provisions of this Article V.

     SECTION 3. RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under this Article
V is not paid in full by the Corporation within sixty days after a written claim
has been received by the Corporation, except in the case of a claim for an
Advancement of Expenses, in which case the applicable period shall be twenty
days, the Indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim. If the Indemnitee is
successful in whole or in part in any such suit, or in a suit brought by the
Corporation to recover an Advancement of Expenses pursuant to the terms of an
Undertaking, the Indemnitee shall also be entitled to be paid the expense of
prosecuting or defending such suit. In any suit brought by the Indemnitee to
enforce a right to indemnification hereunder (but not in a suit brought by the
Indemnitee to enforce a right to an Advancement of Expenses) it shall be a
defense that the Indemnitee has not met the applicable standard of conduct set
forth in the General Corporation Law of Delaware. In addition, in any suit by
the Corporation to recover an Advancement of Expenses pursuant to the terms of
an Undertaking, the Corporation shall be entitled to recover such expenses upon
a Final Adjudication that the Indemnitee has not met the applicable standard of
conduct set forth in the General Corporation Law of Delaware. Neither the
failure of the Corporation (including its Board of Directors, independent legal
counsel, or stockholders) to have made a determination prior to the commencement
of such suit that indemnification of the Indemnitee is proper in the
circumstances because the Indemnitee has met the applicable standard of conduct
set forth in the General Corporation Law of Delaware, nor an actual
determination by the Corporation (including its Board of Directors, independent
legal counsel, or stockholders) that the Indemnitee has not met such applicable
standard of conduct, shall create a presumption that the Indemnitee has not met
the applicable standard of conduct or, in the case of such suit brought by the
Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to
enforce a right to indemnification or to an Advancement of Expenses hereunder,
or by the Corporation to recover an Advancement of Expenses pursuant to the
terms of an Undertaking, the burden of proving that the Indemnitee is not
entitled to be indemnified, or to such Advancement of Expenses, under this
Article V or otherwise shall be on the Corporation.

     SECTION 4. NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification and to
an Advancement of Expenses conferred in this Article V shall not be exclusive of
any other right which any person may have or hereafter acquire under these
By-laws, the Certificate of Incorporation, or any statute, agreement, vote of
stockholders or disinterested Directors or otherwise.

     SECTION 5. INSURANCE. The Corporation may maintain insurance, at its
expense, to protect itself and any Director, officer, employee or agent of the
Corporation or any director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss, whether or not the Corporation would have the

                                       15

<PAGE>   16


power to indemnify such person against such expense, liability or loss under the
General Corporation Law of Delaware.


                                   ARTICLE VI
                                   ----------

                            Miscellaneous Provisions
                            ------------------------

     SECTION 1. FISCAL YEAR. The fiscal year of the Corporation shall end on
December 31 of each year.

     SECTION 2. SEAL. The Board of Directors shall have power to adopt and alter
the seal of the Corporation.

     SECTION 3. EXECUTION OF INSTRUMENTS. All deeds, leases, transfers,
contracts, bonds, notes and other obligations to be entered into by the
Corporation in the ordinary course of its business without Director action may
be executed on behalf of the Corporation by the Chairman of the Board, if one is
elected, the President or the Treasurer or any other officer, employee or agent
of the Bank as the Board of Directors or Executive Committee may authorize.

     SECTION 4. VOTING OF SECURITIES. Unless the Board of Directors otherwise
provides, the Chairman of the Board, if one is elected, the President or the
Treasurer may waive notice of and act on behalf of this Corporation, or appoint
another person or persons to act as proxy or attorney in fact for this
Corporation with or without discretionary power and/or power of substitution, at
any meeting of stockholders or shareholders of any other corporation or
organization, any of whose securities are held by this Corporation.

     SECTION 5. RESIDENT AGENT. The Board of Directors may appoint a resident
agent upon whom legal process may be served in any action or proceeding against
the Corporation.

     SECTION 6. CORPORATE RECORDS. The original or attested copies of the
Certificate of Incorporation, By-laws and records of all meetings of the
incorporators, stockholders and the Board of Directors and the stock transfer
books, which shall contain the names of all stockholders, their record addresses
and the amount of stock held by each, may be kept outside the State of Delaware
and shall be kept at the principal office of the Corporation, at the office of
its counsel or at an office of its transfer agent or at such other place or
places as may be designated from time to time by the Board of Directors.

     SECTION 7. DEFINITIONS. As used in these By-laws, the terms "Interested
Stockholder" and "Continuing Director" shall have the same respective meanings
assigned to them in the Certificate of Incorporation. Any determination of
beneficial ownership of securities under these By-laws shall be made in the
manner specified in the Certificate of Incorporation.


                                       16

<PAGE>   17


     SECTION 8. CERTIFICATE OF INCORPORATION. All references in these By-laws to
the Certificate of Incorporation shall be deemed to refer to the Certificate of
Incorporation of the Corporation, as amended and in effect from time to time.

     SECTION 9. AMENDMENTS. These By-laws may be altered, amended or repealed,
or new by-laws may be adopted, by the Board of Directors or by the stockholders
in the manner provided in the Certificate of Incorporation.


Adopted:  February 11, l987
As amended:  March 3, l987
As amended:  April 21, 1988
As amended:  July 21, 1994
As amended:  January 23, 1997



                                       17