BY-LAWS
 
                                    ARTICLE I
                              SHAREHOLDERS' MEETING
 
Section 1 - Annual Meeting
 
     The Annual Meeting of  Shareholders  for the election of Directors and such
     other business as may properly come before the meeting shall be held on the
     last Wednesday in April each year at the principal place of business of the
     Corporation; or at such other date and place as shall be fixed by the Board
     of Directors  (hereinafter referred to as the "Board").  The Annual Meeting
     shall be held upon not less than ten,  nor more than  sixty,  days  written
     notice of the hours,  date, place and purposes of the meeting.
 
 Section 2 - Special Meetings
 
     A Special  Meeting of  shareholders  may be called  for any  purpose by the
     Chairman  of the  Board,  the  President,  a  majority  of the Board or the
     Executive  Committee.  A special  meeting  shall be held upon not less than
     ten, nor more than sixty days written notice of the hour,  date,  place and
     purposes of the meeting.
 
Section 3 - Quorum
 
     A majority of the  outstanding  common  stock  represented  in person or by
     proxy shall constitute a quorum at any meeting of shareholders. If a quorum
     is not present at a meeting,  the meeting may be adjourned  and the meeting
     may be held, as adjourned, without further notice, in the event a quorum is
     present.
 
Section 4 - Shareholder Action
 
     A  majority  of the  votes  cast  shall  decide  every  question  or matter
     submitted  to  the  shareholders  at  any  meeting,  except  as to  matters
     requiring a greater  proportion of shares as provided by the Certificate of
     Incorporation or the New Jersey Business Corporation Act.
 
Section 5 - Record Date
 
     The Board shall fix a record date for each meeting of shareholders  and for
     other corporate  action for purposes of determining the shareholders of the
     Corporation  who are entitled to: (i) notice of, or to vote at, any meeting
     of  shareholders;  (ii)  give a written  consent  to any  action  without a
     meeting;  or  (iii)  receive  payment  of  any  dividend,  distribution  or
     allotment of any right.  The record date shall not be more than sixty days,
     nor  less  than  ten  days,  prior to the  shareholders  meeting,  or other
     corporate action or event to which it relates.
 
Section 6 - Mailing or Delivering Notice
 
     All notices,  dividends or distributions to which a shareholder is entitled
     shall be mailed to the most recent address  listed for each  shareholder of
     record on the books of the corporation.
 
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Section 7 - Inspectors of Election
 
     At meetings of  shareholders,  three  Inspectors  shall be appointed by the
     Board to manage the  election  of  directors  and to act as tellers for any
     other vote taken by ballot.  The  Inspectors of Election shall tabulate the
     proxies and ballots for the election of Directors and other votes and shall
     file with the Secretary of the meeting,  a  Certificate  under their hands,
     certifying  the results  thereof,  including in the case of the election of
     directors,  the names of the directors elected.  Upon his/her  appointment,
     each inspector shall take and sign an oath faithfully to execute the duties
     of  inspector  with strict  impartiality  and  according to the best of his
     ability.  Inspectors  shall perform all the duties imposed upon them by the
     New Jersey Business Corporation Act, Section 14A:5-26.
 
Section 8 - Proxies
 
     Shareholders  may vote at any meeting of the  shareholders  by proxies duly
     authorized in writing.
 
                                   ARTICLE II
                                    DIRECTORS
 
Section 1 - Board of Directors
 
     The Board  shall have  power to manage  and  administer  the  business  and
     affairs of the Corporation.  Except as expressly limited by law, all powers
     of the Corporation shall be vested in, and may be exercised by, the Board.
 
Section 2 - Number & Term of Office
 
     The number of  directors  shall be not less than five (5) and not more than
     fifteen (15). The exact number shall be determined by the Board.  Directors
     shall be  elected  according  to the class as  determined  by a  resolution
     adopted  by the Board and for such  terms as set forth in such  resolution.
     Three  classes  will be created in the  resolution  at the  initial  annual
     meeting at which directors are elected by class.  One class will be elected
     for a term of one  year,  the  second  class  for a term of two years and a
     third  class for a term of three  years.  Each class will  thereafter  hold
     office  until its  successors  are  elected and  qualified.  At each annual
     meeting  thereafter the  successors of the classes of Directors  whose term
     expires in that year  shall be  elected to hold  office for a term of three
     years and thereafter  until the  successors are elected and qualified.  The
     Board  shall have the right to  increase  the number of  Directors  between
     annual meetings and to fill the vacancies so created.
 
Section 3 - Regular Meetings
 
     The  regular  organizational  meeting  of the Board  shall be held  without
     notice  immediately  following  the annual  shareholders'  meeting  for the
     purpose of electing  officers and conducting any other business as may come
     before  the  meeting  and at such  place  as  determined  by the  Board  by
     resolution.  The Board  shall  hold  other  regular  meetings  on the third
     Thursday  of each month at such time and place as fixed by the  Board.  Any
     regular  meeting  may be omitted  entirely.  Each  Director  shall be given
     notice of all regular meetings by telephone,  in person, by regular mail or
     by hand delivery of the notice.
 
Section 4 - Special Meetings
 
     A special meeting of the Board may be called for any purpose at any time by
     the Chairman of the Board,  the  President  or a majority of the Board.  At
     least  24 hours  notice  shall be given  if  delivered  orally  (either  by
     telephone,  in person or by  telegraph),  or at least  three days notice if
     such notice shall be given by mail
 
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     to the business or  residence  address of each  Director.  The notice shall
     specify the hour, date and place of the meeting.
 
Section 5 - Action Without Meeting
 
     The Board,  and any committees of the Board,  may act without a meeting if,
     prior or  subsequent  to the  action,  each  member of the  Board,  or such
     committee  thereof,  shall  consent in writing to the  action.  The written
     consent or consents shall be filed in the minutes book.
 
Section 6 - Participation at Meetings by Conference Telephone Calls
 
     Any or all  directors  may  participate  in a  meeting  of the  Board  or a
     committee  thereof by means of telephone  conference call,  speakerphone or
     any other means of communication by which all persons  participating in the
     meeting are able to hear each other.
 
Section 7 - Quorum
 
     A majority of the Directors then in office shall constitute a quorum at any
     meeting,  except  when  otherwise  provided by law or these  By-Laws.  If a
     quorum is not present at a meeting,  the meeting may be  adjourned by those
     directors  present and the adjourned  meeting may be held,  without further
     notice,  when a quorum is  present.  The act of the  majority  present at a
     meeting at which a quorum is present shall be the act of the Board,  unless
     otherwise provided by law or these By-Laws.
 
Section 8 - Removal
 
     Any director, or the entire Board of Directors,  may be removed at any time
     by the  shareholders,  with or without cause,  but only by the  affirmative
     vote of the  holders  of at  least  80% of the  shares  of the  Corporation
     entitled to vote for the  election  of  Directors  generally.  The Board of
     Directors may remove any director for cause or suspend a Director pending a
     final determination that cause exists for removal, but in either case, only
     by a majority vote of the entire Board.
 
Section 9 - Vacancies on Board of Directors
 
     Newly created  directorships  resulting  from any increase in the number of
     directors may be filled by the Board.  Any vacancies on the Board resulting
     from death,  resignation,  disqualification,  retirement,  removal or other
     cause may be filled:  (i) by the Board;  (ii) by the affirmative  vote of a
     majority of the remaining directors in the event the vacancies have reduced
     the remaining directors to less than a quorum; or (iii) by a sole remaining
     director. Any director elected by The Board in accordance with this section
     shall  hold  office  until the next  annual  meeting  of  shareholders  and
     thereafter  until his successor  shall have been elected and qualified.  No
     decrease in the number of  directors  constituting  the Board of  Directors
     shall shorten the term of any incumbent Director.
 
Section 10 - Director Qualifications - 9/26/02
 
     A person is not  qualified to serve as a director if he or she is (a) under
     indictment for, or has ever been convicted of, a criminal offense involving
     dishonesty  or breach of trust and the  penalty for such  offense  could be
     imprisonment for more than one year; (b) is a person against whom a federal
     or state bank regulatory  agency has,  within the past ten years,  issued a
     cease and desist order for conduct involving  dishonesty or breach of trust
     and that  order is final and not  subject  to  appeal;  (c) has been  found
     either by any federal or state  regulatory  agency whose  decision is final
     and not  subject to appeal or by a court to have (i)  breached a  fiduciary
     duty involving personal profit or (ii) committed a willful violation of any
     law, rule or  regulation  governing  banking,  securities,  commodities  or
     insurance,  or any  final  cease and  desist  order  issued  by a  banking,
     securities,  commodities or insurance  regulatory  agency;  or (d) has been
 
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     nominated by a person who would be disqualified  from serving as a director
     of this  Corporation  under  subsection  (a),  (b) or (c) or (e) is a party
     (either   directly  or  through  an   affiliate)   to   litigation   or  an
     administrative   proceeding   adverse  to  the   Corporation  or  its  bank
     subsidiary,  except (i)  derivative  litigation  brought in the name of the
     Corporation  or its bank  subsidiary by the director in his or her capacity
     as a shareholder  of the  Corporation or (ii)  litigation  arising out of a
     proxy fight  concerning the election of directors of the Corporation or its
     bank  subsidiary or otherwise  involving  control of the Corporation or its
     bank  subsidiary.  Each director of the  Corporation is obligated to inform
     the   Corporation   immediately  of  any  occurrence   which  comes  within
     subsections (a), (b), (c), (d) or (e) of the prior sentence.  A director of
     the Corporation who becomes  unqualified to serve as a director pursuant to
     this  Section  shall  forthwith  cease  to  serve  as  a  director  of  the
     Corporation  without  the  necessity  of  action  by the Board to remove or
     suspend the director.  In case of a director who becomes  unqualified under
     subsection (e) of the first  sentence of this section,  the director may be
     considered  for  re-election  to the  Board  after  the  conclusion  of the
     litigation or administrative  proceeding.  The Corporation shall confirm in
     writing to any director who becomes  unqualified  to serve as a director of
     the Corporation as set forth in this Section,  that the director has become
     unqualified  and  shall  forthwith  cease  to serve  as a  director  of the
     Corporation.  In addition, notice of said disqualification and cessation of
     service shall be given to the  directors as well as to the Regional  Office
     of  the  Board  of  Governors  of  the  Federal  Reserve  System,   and  as
     appropriate, to the Commission of Banking and Insurance of the State of New
     Jersey.
                                   ARTICLE III
                             COMMITTEES OF THE BOARD
 
Section 1 - Executive Committee - 10/24/02
 
     The  Board,  at its  organizational  meeting  each  year,  may  appoint  an
     Executive Committee of at least eight (8) Directors, including the Chairman
     of the Board and the  President  and  directors  who  presently  serve,  or
     previously  served  as  chairmen  of  standing  committees.  The  Executive
     Committee  shall have the power to conduct the  affairs of the  Corporation
     between regular meetings of the full Board.  The Executive  Committee shall
     be bound to carry out the policies and  philosophies  of the full Board, as
     expressed by the Board at its regular  meetings,  and as set forth in these
     By-Laws.  Where  sufficient  policy  guidelines  are  not  available,   the
     Executive Committee shall, except in emergent matters, await discussions by
     and  policy  guidance  from the full  Board at a  meeting.  Subject  to any
     limitations  imposed  by the  New  Jersey  Business  Corporation  Act,  the
     Certificate of Incorporation,  these By-Laws or any resolution duly adopted
     by the Board, the Executive Committee may exercise all of the powers of the
     Board except the Executive Committee shall not:
 
     (a) Make, alter or repeal  any  By-Law
     (b) Elect, appoint or remove any officer of the corporation,  any directors
     or any member of the Executive Committee
     (c) Submit to shareholders any action that requires shareholders' approval;
     or
     (d) Amend or repeal any resolution previously adopted by the Board
 
     The Executive Committee shall keep minutes of its meetings and such minutes
     shall be submitted  to the next regular or special  meeting of the Board at
     which a quorum is present. The Executive Committee may make rules governing
     its meetings and  procedures as are  consistent  with these By-Laws and the
     New Jersey  Business  Corporation  Act. A  majority  of the  members of the
     Executive  Committee  shall  constitute  a quorum  for the  transaction  of
     business and the  Executive  Committee may act by the vote of a majority of
     the  directors  voting at any  meeting  at which a quorum is  present.  The
     Executive Committee shall select one of its members to serve as chairman of
     the committee.
 
Section 2 - Other Committees
 
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     The  Board  may  appoint,  from  time to time,  other  committees  for such
     purposes and with such powers as the Board may  determine.  A Director must
     serve a minimum of three years before being considered for the chairmanship
     of a committee.
 
                                   ARTICLE IV
                                    OFFICERS
Section 1
 
     At the first  meeting of the Board  following  each  annual  meeting of the
     shareholders of the  Corporation,  the Directors shall elect a Chairman and
     Vice  Chairman  of the  Board and  elect a  President  and one or more Vice
     Presidents who shall hold their  respective  offices from the time of their
     election  until the first  meeting of the Board  following  the next annual
     meeting of  shareholders  at which such  officers are elected or appointed.
     The elected or appointed  officers  shall hold office subject to removal by
     the Board at its pleasure. Other officers may hold more than one office.
 
Section 2
 
     The Chairman of the Board shall preside at the annual shareholders' meeting
     and all  shareholders'  meetings and at the annual meeting of the Board and
     all regular and special  meetings of the Board. The Chairman shall have all
     powers of the directors as defined in these  By-Laws,  the  Certificate  of
     Incorporation  and the Statutes of the State of New Jersey.  He shall cause
     to have  prepared  an agenda for each of the  Directo'  meetings.  The Vice
     Chairman  of the Board shall  preside  over the meeting of the Board in the
     absence of the Chairman.  The Chairman shall be an ex-officio member of all
     Board committees to which he is not appointed.  The Chairman shall exercise
     such  specific  additional  powers  and  duties as from time to time may be
     assigned by the Board.
 
Section 3
 
     The President shall be the Chief Executive  Officer of the corporation and,
     in addition to  statutory  duties,  shall,  during the recess of the Board,
     have  general  control and  management  of the affairs and  business of the
     Corporation;  he shall be a member  ex-officio of all standing  committees,
     and  shall  perform  such  other  duties as  shall,  from time to time,  be
     assigned to him by the Board or the Executive  Committee,  if any. He shall
     execute the  policies  and  instructions  of the Board and may delegate the
     duties and functions imposed upon him to other officers of the Corporation.
     In the  absence  of the  Chairman  and  Vice  Chairman  of the  Board,  the
     President  shall  preside at the  meetings of the Board and at  shareholder
     meetings.
 
     The President shall, from time to time,  engage other personnel,  employees
     and agents for the  Corporation  as the President and Board deem  necessary
     and advisable for the  transaction of business who shall hold their offices
     respectively  during  the  pleasure  of the  Board and the  President;  and
     perform  such duties as may be  designated  or assigned to them by the said
     Board or the President.
 
Section 4
 
     The  Vice  Presidents  shall  perform  such  duties  as  designated  by the
     President or the Board, and if the Office of the President  becomes vacant,
     the  Executive  Vice  President  shall  perform the duties of the President
     until such time as the Board elects a President.
 
Section 5
<PAGE>
 
     The Board may appoint one or more  assistant Vice  Presidents,  one or more
     Assistant  Secretaries,  one or more Assistant  Treasurers;  and such other
     officers  as, from time to time,  may appear to the Board to be required or
     desirable to transact the business of the corporation.  Such officers shall
     exercise  such powers and perform  such duties as pertain to their  several
     offices,  or as may be  conferred  upon or assigned to them by the Board or
     the President.
 
Section 6
 
     The Secretary,  in addition to statutory duties,  shall act as Secretary of
     all meetings of the  shareholders  and shall record the minutes of all such
     meetings in books  provided  for that  purpose;  shall attend to giving and
     serving of all  notices of the  Corporation  and shall have  charge of such
     books,  documents  and papers as the Board may direct:  shall  perform such
     other duties as shall,  from time to time,  be assigned by the Board or The
     Executive  Committee,  if any, and shall be sworn to the faithful discharge
     of duties.
 
 
Section 7
 
     The  Treasurer,  in  addition  to  statutory  duties,  shall  keep full and
     accurate  accounts of the receipts and disbursements of the funds belonging
     to the  Corporation,  shall disburse the funds of the corporation as may be
     ordered by the Board or by the Executive  Committee,  if any, taking proper
     vouchers  for such  disbursements,  and shall render to the  President  and
     Directors  whenever  they may require,  an account of all  transactions  as
     Treasurer and of the financial condition of the Corporation;  shall perform
     such other duties as shall be assigned by the Board or Executive Committee,
     if any.
 
Section 8
 
     If the office of any  Director or of the  Chairman or Vice  Chairman of the
     Board, the President, Vice President, Secretary or Treasurer or one or more
     of them becomes vacant for any reason whatsoever,  the remaining Directors,
     at any duly convened meeting, may by a majority vote of those present, fill
     such  vacancy and the person  chosen  shall hold office for the  un-expired
     term of such office and until his successor shall be chosen.
 
Section 9
 
     All officers  and agents  chosen or appointed by the Board shall be subject
     to removal by the Board at any time, with or without cause;  and in case of
     the  absence of any  officers or agent of the Board may,  without  removal,
     delegate that officer's  powers and duties to any other officer or suitable
     person for such period as it shall deem proper.
 
Section 10
 
     The  Corporation  shall  indemnify its officers,  directors,  employees and
     agents and former officers,  directors,  employees and agents and any other
     persons serving at the request of the Corporation as an officer,  director,
     employee or agent of another corporation,  association,  partnership, joint
     venture,  trust or other enterprise against expenses  (including  attorneys
     fees,  judgments,  fines  and  amounts  paid  in  settlement)  incurred  in
     connection  with any  pending or  threatened  action,  suit or  proceeding,
     whether civil, criminal,  administrative or investigative,  with respect to
     such officer,  director,  employee,  agent or other person is a party or is
     threatened  to be made a party  to the  full  extent  permitted  by the New
     Jersey Business corporation Act. The indemnification  provided herein shall
     not be deemed  exclusive  of any other  right to which any  person  seeking
     indemnification  may be  entitled  under any By-Law,  agreement  or vote of
     shareholders  or  disinterested   directors  or  vote  of  shareholders  or
     otherwise, both as to action in their official capacity and as to action in
     another capacity and shall inure to the benefit of the heirs, executors and
     the  administrators of any such person. The Corporation shall advance legal
     fees and
 
<PAGE>
 
     expenses pursuant to this Indemnification provision whenever any officer or
     director  has been sued or  brought  into an  administrative  hearing  as a
     result  of  actions  taken  on  behalf  of  the  Corporation  or any of its
     subsidiaries,  subject,  however,  to  receipt  of an  undertaking  by  the
     officer,  director  or agent to repay  such  advances  if it be  ultimately
     determined  that  such  person  is not  entitled  to  indemnification.  The
     Corporation  shall have the power to purchase  and  maintain  insurance  on
     behalf of any  persons  enumerated  above  against any  liability  asserted
     against him and  incurred by him in any such  capacity,  arising out of his
     status as such,  whether  or not the  Corporation  would  have the power to
     indemnify him against such liability under the provisions of this Article.
 
Section 11
 
     Signature  powers of officers and  employees  and the authority of officers
     and  employees  to affix the  corporate  seal of the  corporation  shall be
     designated by the Board or the Executive Committee, if any.
 
                                    ARTICLE V
                                WAIVERS OF NOTICE
 
     Any notice required by these By-Laws,  by the Certificate of  Incorporation
     or by the New Jersey Business Corporation act may be waived in writing by a
     person  entitled to notice.  The waiver or waivers  may be executed  either
     before or after the event with respect to which the notice is waived.  Each
     director or shareholder attending a meeting without protesting prior to its
     conclusion,  the lack of proper notice shall be deemed conclusively to have
     waived notice of the meeting.
 
     The shares of the  corporation  shall be represented by Certificates of the
     Corporation  signed by, or in the name of, the  corporation in such form as
     authorized  by law and approved by the Board;  and shall be sealed with the
     seal of the corporation. The seal may be reproduced by facsimile.
 
     Nothing  contained  in this  Article VII shall be  construed to relieve any
     interested shareholder from any fiduciary obligation imposed by law.
 
                                   ARTICLE VI
                AMENDMENTS TO AND EFFECT OF BY-LAWS; FISCAL YEAR
 
     1. Force and Effect of By-Laws These By-Laws are subject to the  provisions
     of  the  New  Jersey  Business   Corporation  Act  and  the   Corporation's
     Certificate  of  Incorporation,  as it may be amended from time to time. If
     any provision in these By-Laws is inconsistent  with a provision of the Act
     or the  Certificate  of  Incorporation,  the  provisions  of the Act or the
     Certificate of Incorporation shall govern.
 
     2. Amendments to By-Laws: These By-Laws may be altered,  amended,  repealed
     by the shareholders, but only by the affirmative vote of the holders of 80%
     or more of the then  outstanding  voting  stock,  or by a  majority  of the
     entire Board.  Any By-Law adopted,  or repealed by the  shareholders may be
     amended or repealed by the Board, unless the resolution of the shareholders
     adopting such By-Laws  expressly  reserves to the shareholders the right to
     amend or repeal it.
 
 
     3. Fiscal Year: The fiscal year of the Corporation shall begin on the first
     day of January each year.
 
     4.  Records:  The  Certificate  of  Incorporation,   the  By-Laws  and  the
     proceedings  of all  meetings of the  shareholders,  the Board and standing
     committees  of the Board,  shall be recorded in  appropriate
 
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     minute books provided for the purpose. The minutes of each meeting shall be
     signed by the Secretary or other  officer  appointed to act as secretary of
     the meeting.
 
     5. Inspection: A copy of the By-Laws, with all amendments thereto, shall at
     all times be kept in a convenient  place at the principal place of business
     of the Corporation,  and for a proper purpose, shall be open for inspection
     to any shareholder during business hours.