ARTICLES OF INCORPORATION
 
                                       OF
 
                        PENNFED FINANCIAL SERVICES, INC.
 
      The undersigned, Joseph L. LaMonica, whose address is 622 Eagle Rock
Avenue, West Orange, New Jersey 07052, being at least eighteen years of age,
acting as incorporator, does hereby form a corporation under the general laws of
the State of Maryland, having the following Articles:
 
      ARTICLE 1. Name. The name of the corporation is PennFed Financial
Services, Inc. (herein the "Corporation").
 
      ARTICLE 2. Principal Office. The address of the principal office of the
Corporation in the State of Maryland is c/o The Corporation Trust Incorporated,
300 East Lombard Street, Baltimore, Maryland 21202.
 
      ARTICLE 3. Purpose. The purpose for which the Corporation is formed is to
engage in any lawful act or activity for which corporations may be organized
under the general laws of the State of Maryland as now or hereafter in force.
 
      ARTICLE 4. Resident Agent. The name and address of the registered agent of
the Corporation in the State of Maryland is The Corporation Trust Incorporated,
300 East Lombard Street, Baltimore, Maryland 21202. Said resident agent is a
Maryland corporation.
 
      ARTICLE 5.
 
            A. Capital Stock. The total number of shares of capital stock of all
classes which the Corporation has authority to issue is twenty-two million
(22,000,000) shares, consisting of:
 
            1. Seven million (7,000,000) shares of preferred stock, par value
      one cent ($.01) per share (the "Preferred Stock"); and
 
            2. Fifteen million (15,000,000) shares of common stock, par value
      one cent ($.01) per share (the "Common Stock").
 
      The aggregate par value of all the authorized shares of capital stock is
two hundred twenty thousand dollars ($220,000). Except to the extent required by
governing law, rule or regulation, the shares of capital stock may be issued
from time to time by the Board of Directors without further approval of the
stockholders of the Corporation. The Corporation shall have the authority to
purchase its capital stock out of funds lawfully available therefor which funds
shall include, without limitation, the Corporation's unreserved and unrestricted
capital surplus.
 
 
                                      C-1
<PAGE>
 
            B. Common Stock. Except as provided under the terms of any series of
Preferred Stock and as limited by Section D of this Article 5, the exclusive
voting power shall be vested in the Common Stock, the holders thereof being
entitled to one vote for each share of such Common Stock standing in the
holder's name on the books of the Corporation. Subject to any rights and
preferences of any series of Preferred Stock, holders of Common Stock shall be
entitled to such dividends as may be declared by the Board of Directors out of
funds lawfully available therefor. Upon any liquidation, dissolution or winding
up of the affairs of the Corporation, whether voluntary or involuntary, holders
of Common Stock shall be entitled to receive pro rata the remaining assets of
the Corporation after payment or provision for payment of all debts and
liabilities of the Corporation and payment or provision for payment of any
amounts owed to the holders of any series of Preferred Stock having preference
over the Common Stock on distributions on liquidation, dissolution or winding up
of the Corporation.
 
            C. Preferred Stock. The Board of Directors is hereby expressly
authorized, subject to any limitations prescribed by law, to provide for the
issuance of the shares of Preferred Stock in series, to establish from time to
time the number of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each such series
and any qualifications, limitations or restrictions thereof. The number of
authorized shares of the Preferred Stock may be increased or decreased (but not
below the number of shares thereof then outstanding) by the affirmative vote of
the holders of a majority of the Common Stock, without a vote of the holders of
the Preferred Stock, or of any series thereof, unless a vote of any such holders
is required by law or pursuant to the terms of such Preferred Stock.
 
            D. Restrictions on Voting Rights of the Corporation's Equity
Securities.
 
            1. Notwithstanding any other provision of the Charter, in no event
      shall any record owner of any outstanding Common Stock which is
      beneficially owned, directly or indirectly, by a person who, as of any
      record date for the determination of stockholders entitled to vote on any
      matter, beneficially owns in excess of 10% of the then-outstanding shares
      of Common Stock (the "Limit"), be entitled, or permitted to any vote in
      respect of the shares held in excess of the Limit. The number of votes
      which may be cast by any record owner by virtue of the provisions hereof
      in respect of Common Stock beneficially owned by such person owning shares
      in excess of the Limit shall be a number equal to the total number of
      votes which a single record owner of all Common Stock owned by such person
      would be entitled to cast after giving effect to the provisions hereof,
      multiplied by a fraction, the numerator of which is the number of shares
      of such class or series beneficially owned by such person and owned of
      record by such record owner and the denominator of which is the total
      number of shares of Common Stock beneficially owned by such person owning
      shares in excess of the Limit.
 
            2. The following definitions shall apply to this Section D of this
      Article 5.
 
                  (a) An "affiliate" of a specified person shall mean a person
            that directly, or indirectly through one or more intermediaries,
            controls, or is controlled by, or is under common control with, the
            person specified.
 
 
                                      C-2
<PAGE>
 
                  (b) "Beneficial ownership" shall be determined pursuant to
            Rule 13d-3 of the General Rules and Regulations under the Securities
            Exchange Act of 1934 (or any successor rule or statutory provision),
            or, if said Rule 13d-3 shall be rescinded and there shall be no
            successor rule or statutory provision thereto, pursuant to said Rule
            13d-3 as in effect on June 30, 2003; provided, however, that a
            person shall, in any event, also be deemed the "beneficial owner" of
            any Common Stock:
 
                        (1) which such person or any of its affiliates
                  beneficially owns, directly or indirectly; or
 
                        (2) which such person or any of its affiliates has (i)
                  the right to acquire (whether such right is exercisable
                  immediately or only after the passage of time), pursuant to
                  any agreement, arrangement or understanding (but shall not be
                  deemed to be the beneficial owner of any voting shares solely
                  by reason of an agreement, contract, or other arrangement with
                  the Corporation to effect any transaction which is described
                  in any one or more of the clauses of Section A of Article 9
                  hereof) or upon the exercise of conversion rights, exchange
                  rights, warrants, or options or otherwise, or (ii) sole or
                  shared voting or investment power with respect thereto
                  pursuant to any agreement, arrangement, understanding,
                  relationship or otherwise (but shall not be deemed to be the
                  beneficial owner of any voting shares solely by reason of a
                  revocable proxy granted for a particular meeting of
                  stockholders, pursuant to a public solicitation of proxies for
                  such meeting, with respect to shares of which neither such
                  person nor any such affiliate is otherwise deemed the
                  beneficial owner); or
 
                        (3) which are beneficially owned, directly or
                  indirectly, by any other person with which such first
                  mentioned person or any of its affiliates acts as a
                  partnership, limited partnership, syndicate or other group
                  pursuant to any agreement, arrangement or understanding for
                  the purpose of acquiring, holding, voting or disposing of any
                  shares of capital stock of the Corporation;
 
            and provided further, however, that (i) no director or officer of
            the Corporation (or any affiliate of any such director or officer)
            shall, solely by reason of any or all of such directors or officers
            acting in their capacities as such, be deemed, for any purposes
            hereof, to beneficially own any Common Stock beneficially owned by
            any other such director or officer (or any affiliate thereof), and
            (ii) neither any employee stock ownership or similar plan of the
            Corporation or any subsidiary of the Corporation nor any trustee
            with respect thereto (or any affiliate of such trustee) shall,
            solely by reason of such capacity of such trustee, be deemed, for
            any purposes hereof, to beneficially own any Common Stock held under
            any such plan. For purposes of computing the percentage beneficial
            ownership of Common Stock of a person, the outstanding Common Stock
            shall include shares deemed owned by such person through application
            of this subsection but shall not include any other Common Stock
            which may be issuable by the Corporation pursuant to any agreement,
            or upon exercise of conversion rights, warrants or options, or
            otherwise. For all other
 
 
                                      C-3
<PAGE>
 
            purposes, the outstanding Common Stock shall include only Common
            Stock then outstanding and shall not include any Common Stock which
            may be issuable by the Corporation pursuant to any agreement, or
            upon the exercise of conversion rights, warrants or options, or
            otherwise.
 
                  (c) A "person" shall mean any individual, firm, corporation,
            or other entity.
 
                  (d) The Board of Directors shall have the power to construe
            and apply the provisions of this Section D and to make all
            determinations necessary or desirable to implement such provisions,
            including but not limited to matters with respect to (i) the number
            of shares of Common Stock beneficially owned by any person, (ii)
            whether a person is an affiliate of another, (iii) whether a person
            has an agreement, arrangement, or understanding with another as to
            the matters referred to in the definition of beneficial ownership,
            (iv) the application of any other definition or operative provision
            of this Section D to the given facts, or (v) any other matter
            relating to the applicability or effect of this Section.
 
            3. The Board of Directors shall have the right to demand that any
      person who is reasonably believed to beneficially own Common Stock in
      excess of the Limit (or holds of record Common Stock beneficially owned by
      any person in excess of the Limit) (a "Holder in Excess") supply the
      Corporation with complete information as to (i) the record owner(s) of all
      shares beneficially owned by such Holder in Excess, and (ii) any other
      factual matter relating to the applicability or effect of this section as
      may reasonably be requested of such Holder in Excess. The Board of
      Directors shall further have the right to receive from any Holder in
      Excess reimbursement for all expenses incurred by the Board in connection
      with its investigation of any matters relating to the applicability or
      effect of this section on such Holder in Excess, to the extent such
      investigation is deemed appropriate by the Board of Directors as a result
      of the Holder in Excess refusing to supply the Corporation with the
      information described in the previous sentence.
 
            4. Except as otherwise provided by law or expressly provided in this
      Section D, the presence, in person or by proxy, of the holders of record
      of shares of capital stock of the Corporation entitling the holders
      thereof to cast one-third of the votes (after giving effect, if required,
      to the provisions of this Section D) entitled to be cast by the holders of
      shares of capital stock of the Corporation entitled to vote shall
      constitute a quorum at all meetings of the stockholders, and every
      reference in the Charter to a majority or other proportion of capital
      stock (or the holders thereof) for purposes of determining any quorum
      requirement or any requirement for stockholder consent or approval shall
      be deemed to refer to such majority or other proportion of the votes (or
      the holders thereof) then entitled to be cast in respect of such capital
      stock.
 
            5. Any constructions, applications, or determinations made by the
      Board of Directors, pursuant to this Section D in good faith and on the
      basis of such information and assistance as was then reasonably available
      for such purpose, shall be conclusive and binding upon the Corporation and
      its stockholders.
 
 
                                      C-4
<PAGE>
 
            6. In the event any provision (or portion thereof) of this Section D
      shall be found to be invalid, prohibited or unenforceable for any reason,
      the remaining provisions (or portions thereof) of this Section D shall
      remain in full force and effect, and shall be construed as if such
      invalid, prohibited or unenforceable provision had been stricken herefrom
      or otherwise rendered inapplicable, it being the intent of the Corporation
      and its stockholders that each such remaining provision (or portion
      thereof) of this Section D remain, to the fullest extent permitted by law,
      applicable and enforceable as to all stockholders, including stockholders
      owning an amount of stock over the Limit, notwithstanding any such
      finding.
 
            E. Majority Vote. Notwithstanding any provision of law requiring the
authorization of any action by a greater proportion than a majority of the total
number of shares of all classes of capital stock or of the total number of
shares of any class of capital stock, such action shall be valid and effective
if authorized by the affirmative vote of the holders of a majority of the total
number of shares of all classes outstanding and entitled to vote thereon, except
as otherwise provided in the Charter.
 
      ARTICLE 6. Preemptive Rights. No holder of the capital stock of the
Corporation or series of stock or of options, warrants or other rights to
purchase shares of any class or series of stock or of other securities of the
Corporation shall have any preemptive right to purchase or subscribe for any
unissued capital stock of any class or series, or any unissued bonds,
certificates of indebtedness, debentures or other securities convertible into or
exchangeable for capital stock of any class or series, or carrying any right to
purchase stock of any class or series, except such as may be established by the
Board of Directors.
 
      ARTICLE 7. Directors. The following provisions are inserted for the
management of the business and the conduct of the affairs of the Corporation,
and for further definition, limitation and regulation of the powers of the
Corporation and of its directors and stockholders:
 
            A. Management of the Corporation. The business and affairs of the
Corporation shall be managed under the direction of the Board of Directors. All
powers of the Corporation may be exercised by or under the authority of the
Board of Directors, except as conferred on or as reserved to the stockholders by
law or by the Charter or the Bylaws of the Corporation.
 
            B. Number, Class and Terms of Directors; Cumulative Voting. The
number of directors constituting the Board of Directors of the Corporation shall
initially be six, which number may be increased or decreased in the manner
provided in the Bylaws of the Corporation; provided, however, that such number
shall never be less than the minimum number of directors required by the
Maryland General Corporation Law (the "MGCL") now or hereafter in force. The
directors, other than those who may be elected by the holders of any series of
Preferred Stock, shall be divided into three classes, as nearly equal in number
as reasonably possible, with the term of office of the first class ("Class I")
to expire at the conclusion of the first annual meeting of stockholders, the
term of office of the second class ("Class II") to expire at the conclusion of
the annual meeting of stockholders one year thereafter and the term of office of
the third class ("Class III") to expire at the conclusion of the annual meeting
of stockholders two years thereafter, with each director to hold office until
his or her successor shall have been duly elected and qualified. At each annual
meeting of stockholders, directors elected to succeed those directors whose
terms expire shall be elected for
 
 
                                      C-5
<PAGE>
 
a term of office to expire at the third succeeding annual meeting of
stockholders after their election, with each director to hold office until his
or her successor shall have been duly elected and qualified.
 
      The names of the individuals who will serve as directors of the
Corporation until their successors are elected and qualify are as follows:
 
                  (1) Class I directors:
 
                              Name             Term to Expire in
                              ----             -----------------
 
                      William C. Anderson            2004
 
                      Amadeu L. Carvalho             2004
 
                  (2) Class II directors:
 
                              Name             Term to Expire in
                              ----             -----------------
 
                      Patrick D. McTernan            2005
 
                      Marvin D. Schoonover           2005
 
                  (3) Class III directors:
 
                              Name             Term to Expire in
                              ----             -----------------
 
                      Joseph L. LaMonica             2006
 
                      Mario Teixeira, Jr.            2006
 
      Stockholders shall not be permitted to cumulate their votes in the
election of directors.
 
            C. Vacancies. Any vacancies in the Board of Directors may be filled
in the manner provided in the Bylaws of the Corporation.
 
            D. Removal. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, any director, or the entire Board of
Directors, may be removed from office at any time, but only for cause and only
by the affirmative vote of the holders of at least 80% of the voting power of
all of the then-outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors (after giving effect to the
provisions of Article 5 hereof) voting together as a single class.
 
            E. Stockholder Proposals and Nominations of Directors. Advance
notice of stockholder nominations for the election of directors and of business
to be brought by stockholders before any meeting of the stockholders of the
Corporation shall be given in the manner provided in the Bylaws of the
Corporation.
 
 
                                      C-6
<PAGE>
 
      ARTICLE 8. Bylaws. The Board of Directors is expressly empowered to adopt,
amend or repeal the Bylaws of the Corporation. Any adoption, amendment or repeal
of the Bylaws of the Corporation by the Board of Directors shall require the
approval of a majority of the total number of directors the Corporation would
have if there were no vacancies on the Board of Directors. The stockholders
shall also have power to adopt, amend or repeal the Bylaws of the Corporation.
In addition to any vote of the holders of any class or series of stock of the
Corporation required by law or by the Charter, the affirmative vote of the
holders of at least 80% of the voting power of all of the then-outstanding
shares of the capital stock of the Corporation entitled to vote generally in the
election of directors (after giving effect to the provisions of Article 5
hereof), voting together as a single class, shall be required for the adoption,
amendment or repeal of any provisions of the Bylaws of the Corporation by the
stockholders.
 
      ARTICLE 9. Approval of Certain Business Combinations.
 
            A. Super-majority Voting Requirement; Business Combination Defined.
In addition to any affirmative vote required by law or by the Charter, and
except as otherwise expressly provided in this Section:
 
            1. any merger or consolidation of the Corporation or any Subsidiary
      (as hereinafter defined) with (a) any Interested Stockholder (as
      hereinafter defined) or (b) any other corporation (whether or not itself
      an Interested Stockholder) which is, or after such merger or consolidation
      would be, an Affiliate (as hereinafter defined) of an Interested
      Stockholder; or
 
            2. any sale, lease, exchange, mortgage, pledge, transfer or other
      disposition (in one transaction or a series of transactions) to or with
      any Interested Stockholder, or any Affiliate of any Interested
      Stockholder, of any assets of the Corporation or any Subsidiary having an
      aggregate Fair Market Value (as hereafter defined) equaling or exceeding
      25% or more of the combined assets of the Corporation and its
      Subsidiaries; or
 
            3. the issuance or transfer by the Corporation or any Subsidiary (in
      one transaction or a series of transactions) of any securities of the
      Corporation or any Subsidiary to any Interested Stockholder or any
      Affiliate of any Interested Stockholder in exchange for cash, securities
      or other property (or a combination thereof) having an aggregate Fair
      Market Value equaling or exceeding 25% of the combined assets of the
      Corporation and its Subsidiaries except pursuant to an employee benefit
      plan of the Corporation or any Subsidiary thereof; or
 
            4. the adoption of any plan or proposal for the liquidation or
      dissolution of the Corporation proposed by or on behalf of any Interested
      Stockholder or any Affiliate of any Interested Stockholder; or
 
            5. any reclassification of securities (including any reverse stock
      split), or recapitalization of the Corporation, or any merger or
      consolidation of the Corporation with any of its Subsidiaries or any other
      transaction (whether or not with or into or otherwise involving an
      Interested Stockholder) which has the effect, directly or indirectly, of
      increasing
 
 
                                      C-7
<PAGE>
 
      the proportionate share of the outstanding shares of any class of equity
      or convertible securities of the Corporation or any Subsidiary which is
      directly or indirectly owned by any Interested Stockholder or any
      Affiliate of any Interested Stockholder (a "Disproportionate
      Transaction"); provided, however, that no such transaction shall be deemed
      a Disproportionate Transaction if the increase in the proportionate
      ownership of the Interested Stockholder or Affiliate as a result of such
      transaction is no greater than the increase experienced by the other
      stockholders generally;
 
shall require the affirmative vote of the holders of at least 80% of the voting
power of the then-outstanding shares of stock of the Corporation entitled to
vote in the election of directors (the "Voting Stock"), voting together as a
single class. Such affirmative vote shall be required notwithstanding the fact
that no vote may be required, or that a lesser percentage may be specified, by
law or by any other provisions of the Charter (including those applicable to any
class or series of capital stock) or in any agreement with any national
securities exchange or quotation system or otherwise.
 
      The term "Business Combination" as used in this Article 9 shall mean any
transaction which is referred to in any one or more of paragraphs 1 through 5 of
Section A of this Article 9.
 
            B. Exception to Super-majority Voting Requirement. The provisions of
Section A of this Article 9 shall not be applicable to any particular Business
Combination, and such Business Combination shall require only the affirmative
vote of the majority of the outstanding shares of capital stock entitled to
vote, or such vote as is required by law or by the Charter, if, in the case of
any Business Combination that does not involve any cash or other consideration
being received by the stockholders of the Corporation solely in their capacity
as stockholders of the Corporation, the condition specified in the following
paragraph 1 is met or, in the case of any other Business Combination, all of the
conditions specified in either of the following paragraphs 1 and 2 are met:
 
            1. The Business Combination shall have been approved by a majority
      of the Disinterested Directors (as hereinafter defined).
 
            2. All of the following conditions shall have been met:
 
                  (a) The aggregate amount of the cash and the Fair Market Value
            as of the date of the consummation of the Business Combination of
            consideration other than cash to be received per share by the
            holders of Common Stock in such Business Combination shall at least
            be equal to the higher of the following:
 
                        (i) (if applicable) the Highest Per Share Price,
                  including any brokerage commissions, transfer taxes and
                  soliciting dealers' fees, paid by the Interested Stockholder
                  or any of its Affiliates for any shares of Common Stock
                  acquired by it (x) within the two-year period immediately
                  prior to the first public announcement of the proposal of the
                  Business Combination (the "Announcement Date"), or (y) in the
                  transaction in which it became an Interested Stockholder,
                  whichever is higher; and
 
 
                                      C-8
<PAGE>
 
                        (ii) the Fair Market Value per share of Common Stock on
                  the Announcement Date or on the date on which the Interested
                  Stockholder became an Interested Stockholder (such latter date
                  is referred to in this Article 9 as the "Determination Date"),
                  whichever is higher.
 
                  (b) The aggregate amount of the cash and the Fair Market Value
            as of the date of the consummation of the Business Combination of
            consideration other than cash to be received per share by holders of
            shares of any class of outstanding Voting Stock other than Common
            Stock shall be at least equal to the highest of the following (it
            being intended that the requirements of this subparagraph (b) shall
            be required to be met with respect to every such class of
            outstanding Voting Stock, whether or not the Interested Stockholder
            has previously acquired any shares of a particular class of Voting
            Stock):
 
                        (i) (if applicable) the Highest Per Share Price (as
                  hereinafter defined), including any brokerage commissions,
                  transfer taxes and soliciting dealers' fees, paid by the
                  Interested Stockholder for any shares of such class of Voting
                  Stock acquired by it (x) within the two-year period
                  immediately prior to the Announcement Date, or (y) in the
                  transaction in which it became an Interested Stockholder,
                  whichever is higher;
 
                        (ii) (if applicable) the highest preferential amount per
                  share to which the holders of shares of such class of Voting
                  Stock are entitled in the event of any voluntary or
                  involuntary liquidation, dissolution or winding up of the
                  Corporation; and
 
                        (iii) the Fair Market Value per share of such class of
                  Voting Stock on the Announcement Date or on the Determination
                  Date, whichever is higher.
 
                  (c) The consideration to be received by holders of a
            particular class of outstanding Voting Stock (including Common
            Stock) shall be in cash or in the same form as the Interested
            Stockholder has previously paid for shares of such class of Voting
            Stock. If the Interested Stockholder has paid for shares of any
            class of Voting Stock with varying forms of consideration, the form
            of consideration to be received per share by holders of shares of
            such class of Voting Stock shall be either cash or the form used to
            acquire the largest number of shares of such class of Voting Stock
            previously acquired by the Interested Stockholder. The price
            determined in accordance with Section B.2. of this Article 9 shall
            be subject to appropriate adjustment in the event of any stock
            dividend, stock split, combination of shares or similar event.
 
                  (d) After such Interested Stockholder has become an Interested
            Stockholder and prior to the consummation of such Business
            Combination: (i) except as approved by a majority of the
            Disinterested Directors, there shall have been no failure to declare
            and pay at the regular date therefor any full quarterly dividends
 
 
                                      C-9
<PAGE>
 
            (whether or not cumulative) on any outstanding stock having
            preference over the Common Stock as to dividends or liquidation;
            (ii) there shall have been (X) no reduction in the annual rate of
            dividends paid on the Common Stock (except as necessary to reflect
            any subdivision of the Common Stock), except as approved by a
            majority of the Disinterested Directors, and (Y) an increase in such
            annual rate of dividends as necessary to reflect any
            reclassification (including any reverse stock split),
            recapitalization, reorganization or any similar transaction which
            has the effect of reducing the number of outstanding shares of
            Common Stock, unless the failure to so increase such annual rate is
            approved by a majority of the Disinterested Directors; and (iii)
            neither such Interested Stockholder nor any of its Affiliates shall
            have become the beneficial owner of any additional shares of Voting
            Stock except as part of the transaction which results in such
            Interested Stockholder becoming an Interested Stockholder.
 
                  (e) After such Interested Stockholder has become an Interested
            Stockholder, such Interested Stockholder shall not have received the
            benefit, directly or indirectly (except proportionately as a
            stockholder), of any loans, advances, guarantees, pledges or other
            financial assistance or any tax credits or other tax advantages
            provided by the Corporation, whether in anticipation of or in
            connection with such Business Combination or otherwise.
 
                  (f) A proxy or information statement describing the proposed
            Business Combination and complying with the requirements of the
            Securities Exchange Act of 1934 and the rules and regulations
            thereunder (or any subsequent provisions replacing such Act, rules
            or regulations) shall be mailed to stockholders of the Corporation
            at least 30 days prior to the consummation of such Business
            Combination (whether or not such proxy or information statement is
            required to be mailed pursuant to such Act or subsequent
            provisions).
 
            C. Certain Definitions. For the purposes of this Article 9:
 
            1. A "Person" shall include an individual, a group acting in
      concert, a corporation, a partnership, an association, a joint venture, a
      pool, a joint stock company, a trust, an unincorporated organization or
      similar company, a syndicate or any other group or entity formed for the
      purpose of acquiring, holding or disposing of securities.
 
            2. "Interested Stockholder" shall mean any Person (other than the
      Corporation or any holding company or Subsidiary thereof) who or which:
 
                  (a) is the beneficial owner, directly or indirectly, of more
            than 10% of the voting power of the outstanding Voting Stock; or
 
                  (b) is an Affiliate of the Corporation and at any time within
            the two-year period immediately prior to the date in question was
            the beneficial owner, directly or indirectly, of more than 10% of
            the voting power of the then-outstanding Voting Stock; or
 
 
                                      C-10
<PAGE>
 
                  (c) is an assignee of or has otherwise succeeded to any shares
            of Voting Stock which were at any time within the two-year period
            immediately prior to the date in question beneficially owned by any
            Interested Stockholder, if such assignment or succession shall have
            occurred in the course of a transaction or series of transactions
            not involving a public offering within the meaning of the Securities
            Act of 1933.
 
            3. A Person shall be a "beneficial owner" of any Voting Stock:
 
                  (a) which such Person or any of its Affiliates or Associates
            (as hereinafter defined) beneficially owns, directly or indirectly
            within the meaning of Rule 13d-3 under the Securities Exchange Act
            of 1934, as in effect on June 30, 2003; or
 
                  (b) which such Person or any of its Affiliates or Associates
            has (i) the right to acquire (whether such right is exercisable
            immediately or only after the passage of time), pursuant to any
            agreement, arrangement or understanding or upon the exercise of
            conversion rights, exchange rights, warrants or options, or
            otherwise, or (ii) the right to vote pursuant to any agreement,
            arrangement or understanding (but neither such Person nor any such
            Affiliate or Associate shall be deemed to be the beneficial owner of
            any shares of Voting Stock solely by reason of a revocable proxy
            granted for a particular meeting of stockholders, pursuant to a
            public solicitation of proxies for such meeting, and with respect to
            which shares neither such Person nor any such Affiliate or Associate
            is otherwise deemed the beneficial owner); or
 
                  (c) which are beneficially owned, directly or indirectly
            within the meaning of Rule 13d-3 under the Securities Exchange Act
            of 1934, as in effect on June 30, 2003, by any other Person with
            which such Person or any of its Affiliates or Associates has any
            agreement, arrangement or understanding for the purposes of
            acquiring, holding, voting (other than solely by reason of a
            revocable proxy as described in Subparagraph (b) of this Paragraph
            3) or in disposing of any shares of Voting Stock;
 
            provided, however, that, in the case of any employee stock ownership
            or similar plan of the Corporation or of any Subsidiary in which the
            beneficiaries thereof possess the right to vote any shares of Voting
            Stock held by such plan, no such plan nor any trustee with respect
            thereto (nor any Affiliate of such trustee), solely by reason of
            such capacity of such trustee, shall be deemed, for any purposes
            hereof, to beneficially own any shares of Voting Stock held under
            any such plan.
 
            4. For the purpose of determining whether a Person is an Interested
      Stockholder pursuant to Paragraph 2 of this Section C, the number of
      shares of Voting Stock deemed to be outstanding shall include shares
      deemed owned through application of Paragraph 3 of this Section C but
      shall not include any other shares of Voting Stock which may be issuable
      pursuant to any agreement, arrangement or understanding, or upon exercise
      of conversion rights, warrants or options, or otherwise.
 
 
                                      C-11
<PAGE>
 
            5. "Affiliate" and "Associate" shall have the respective meanings
      ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
      under the Securities Exchange Act of 1934, as in effect on June 30, 2003.
 
            6. "Subsidiary" means any corporation of which a majority of any
      class of equity security is owned, directly or indirectly, by the
      Corporation; provided, however, that for the purposes of the definition of
      Interested Stockholder set forth in Paragraph 2 of this Section C, the
      term "Subsidiary" shall mean only a corporation of which a majority of
      each class of equity security is owned, directly or indirectly, by the
      Corporation.
 
            7. "Disinterested Director" means any member of the Board of
      Directors who is unaffiliated with the Interested Stockholder and was a
      member of the Board of Directors prior to the time that the Interested
      Stockholder became an Interested Stockholder, and any director who is
      thereafter chosen to fill any vacancy on the Board of Directors or who is
      elected and who, in either event, is unaffiliated with the Interested
      Stockholder, and in connection with his or her initial assumption of
      office is recommended for appointment or election by a majority of
      Disinterested Directors then on the Board of Directors.
 
            8. "Fair Market Value" means: (a) in the case of stock, the highest
      closing sale price of the stock during the 30-day period immediately
      preceding the date in question of a share of such stock on the Nasdaq
      System or any system then in use, or, if such stock is admitted to trading
      on a principal United States securities exchange registered under the
      Securities Exchange Act of 1934, Fair Market Value shall be the highest
      sale price reported during the 30-day period preceding the date in
      question, or, if no such quotations are available, the Fair Market Value
      on the date in question of a share of such stock as determined by the
      Board of Directors in good faith, in each case with respect to any class
      of stock, appropriately adjusted for any dividend or distribution in
      shares of such stock or in combination or reclassification of outstanding
      shares of such stock into a smaller number of shares of such stock, and
      (b) in the case of property other than cash or stock, the Fair Market
      Value of such property on the date in question as determined by the Board
      of Directors in good faith.
 
            9. Reference to "Highest Per Share Price" shall in each case with
      respect to any class of stock reflect an appropriate adjustment for any
      dividend or distribution in shares of such stock or any stock split or
      reclassification of outstanding shares of such stock into a greater number
      of shares of such stock or any combination or reclassification of
      outstanding shares of such stock into a smaller number of shares of such
      stock.
 
            10. In the event of any Business Combination in which the
      Corporation survives, the phrase "consideration other than cash to be
      received" as used in Sections B.2.(a) and B.2.(b) of this Article 9 shall
      include the shares of Common Stock and/or the shares of any other class of
      outstanding Voting Stock retained by the holders of such shares.
 
            D. Construction and Interpretation. A majority of the Disinterested
Directors of the Corporation shall have the power and duty to determine for the
purposes of this Article 9, on the basis of information known to them after
reasonable inquiry, (a) whether a person is an Interested
 
 
                                      C-12
<PAGE>
 
Stockholder; (b) the number of shares of Voting Stock beneficially owned by any
person; (c) whether a person is an Affiliate or Associate of another; and (d)
whether the assets which are the subject of any Business Combination have, or
the consideration to be received for the issuance or transfer of securities by
the Corporation or any Subsidiary in any Business Combination has, an aggregate
Fair Market Value equaling or exceeding 25% of the combined assets of the
Corporation and its Subsidiaries. A majority of the Disinterested Directors
shall have the further power to interpret all of the terms and provisions of
this Article 9.
 
            E. Fiduciary Duty. Nothing contained in this Article 9 shall be
construed to relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
 
            F. Maryland Business Combination Statute. Notwithstanding any
contrary provision of law, the provisions of Sections 3-601 through 3-604 of the
MGCL, as now and hereafter in force, shall not apply to any "business
combination" (as defined in Section 3-601(e) of the MGCL, as now and hereafter
in force), of the Corporation.
 
      ARTICLE 10. Evaluation of Certain Offers. The Board of Directors, when
evaluating (i) any offer of another Person (as defined in Article 9 hereof) to
(A) make a tender or exchange offer for any equity security of the Corporation,
(B) merge or consolidate the Corporation with another corporation or entity, or
(C) purchase or otherwise acquire all or substantially all of the properties and
assets of the Corporation or (ii) any other actual or proposed transaction which
would or may involve a change in control of the Corporation (whether by
purchases of shares of stock or any other securities of the Corporation in the
open market, or otherwise, tender offer, merger, consolidation, share exchange,
dissolution, liquidation, sale of all or substantially all of the assets of the
Corporation, proxy solicitation or otherwise), may, in connection with the
exercise of its business judgment in determining what is in the best interests
of the Corporation and its stockholders and in making any recommendation to the
Corporation's stockholders, give due consideration to all relevant factors,
including, but not limited to: (A) the economic effect, both immediate and
long-term, upon the Corporation's stockholders, including stockholders, if any,
who do not participate in the transaction; (B) the social and economic effect on
the present and future employees, creditors and customers of, and others dealing
with, the Corporation and its subsidiaries and on the communities in which the
Corporation and its subsidiaries operate or are located; (C) whether the
proposal is acceptable based on the historical, current or projected future
operating results or financial condition of the Corporation; (D) whether a more
favorable price could be obtained for the Corporation's stock or other
securities in the future; (E) the reputation and business practices of the other
entity to be involved in the transaction and its management and affiliates as
they would affect the employees of the Corporation and its subsidiaries; (F) the
future value of the stock or any other securities of the Corporation or the
other entity to be involved in the proposed transaction; (G) any antitrust or
other legal and regulatory issues that are raised by the proposal; (H) the
business and historical, current or expected future financial condition or
operating results of the other entity to be involved in the transaction,
including, but not limited to, debt service and other existing financial
obligations, financial obligations to be incurred in connection with the
proposed transaction, and other likely financial obligations of the other entity
to be involved in the proposed transaction; and (I) the ability of the
Corporation to fulfill its objectives as a financial institution holding company
and on the ability of its subsidiary financial institution(s) to fulfill the
objectives of a federally insured financial institution under applicable
statutes and regulations. If the Board of Directors determines that any
 
 
                                      C-13
<PAGE>
 
proposed transaction of the type described in clause (i) or (ii) of the
immediately preceding sentence should be rejected, it may take any lawful action
to defeat such transaction, including, but not limited to, any or all of the
following: advising stockholders not to accept the proposal; instituting
litigation against the party making the proposal; filing complaints with
governmental and regulatory authorities; acquiring the stock or any of the
securities of the Corporation; selling or otherwise issuing authorized but
unissued stock, other securities or granting options or rights with respect
thereto; acquiring a company to create an antitrust or other regulatory problem
for the party making the proposal; and obtaining a more favorable offer from
another individual or entity. This Article 10 does not create any inference
concerning factors that may be considered by the Board of Directors regarding
any proposed transaction of the type described in clause (i) or (ii) of the
first sentence of this Article 10.
 
      ARTICLE 11. Acquisitions of Equity Securities from Interested Persons.
 
            A. Super-majority Voting Requirement. Except as set forth in Section
B of this Article 11, in addition to any affirmative vote of stockholders
required by law or the Charter, any direct or indirect purchase or other
acquisition by the Corporation of any Equity Security (as hereinafter defined)
of any class from any Interested Person (as hereinafter defined) shall require
the affirmative vote of the holders of at least 80% of the Voting Stock of the
Corporation that is not beneficially owned (for purposes of this Article 11
beneficial ownership shall be determined in accordance with Section D.2(b) of
Article 5 hereof) by such Interested Person, voting together as a single class.
Such affirmative vote shall be required notwithstanding the fact that no vote
may be required, or that a lesser percentage may be specified, by law or by any
other provisions of the Charter (including those applicable to any class or
series of capital stock) or in any agreement with any national securities
exchange or quotation system, or otherwise. Certain defined terms used in this
Article 11 are as set forth in Section C below.
 
            B. Exceptions. The provisions of Section A of this Article 11 shall
not be applicable with respect to:
 
            1. any purchase or other acquisition of securities made as part of a
      tender or exchange offer by the Corporation or a Subsidiary (which term,
      as used in this Article 11, is as defined in the first clause of Section
      C.6 of Article 9 hereof) of the Corporation to purchase securities of the
      same class made on the same terms to all holders of such securities and
      complying with the applicable requirements of the Securities Exchange Act
      of 1934 and the rules and regulations thereunder (or any subsequent
      provision replacing such Act, rules or regulations);
 
            2. any purchase or acquisition made pursuant to an open market
      purchase program approved by a majority of the Board of Directors,
      including a majority of the Disinterested Directors (which term, as used
      in this Article 11, is as defined in Article 9 hereof); or
 
            3. any purchase or acquisition which is approved by a majority of
      the Board of Directors, including a majority of the Disinterested
      Directors, and which is made at no more than the Market Price (as
      hereinafter defined), on the date that the understanding between the
 
 
                                      C-14
<PAGE>
 
      Corporation and the Interested Person is reached with respect to such
      purchase (whether or not such purchase is made or a written agreement
      relating to such purchase is executed on such date), of shares of the
      class of Equity Security to be purchased.
 
            C. Certain Definitions. For the purposes of this Article 11:
 
            (i) The term Interested Person shall mean any Person (other than the
      Corporation, Subsidiaries of the Corporation, pension, profit sharing,
      employee stock ownership or other employee benefit plans of the
      Corporation and its Subsidiaries, entities organized or established by the
      Corporation or any of its Subsidiaries pursuant to the terms of such plans
      and trustees and fiduciaries with respect to any such plan acting in such
      capacity) that is the direct or indirect beneficial owner of 5% or more of
      the Voting Stock of the Corporation, and any Affiliate or Associate of any
      such person. For purposes of this Article 11, the terms "Affiliate" and
      "Associate" shall have the definitions given them in Article 9 hereof.
 
            (ii) The Market Price of shares of a class of Equity Security on any
      day shall mean the highest sale price of shares of such class of Equity
      Security on such day, or, if that day is not a trading day, on the trading
      day immediately preceding such day, on the national securities exchange or
      the Nasdaq System or any other system then in use on which such class of
      Equity Security is traded.
 
            (iii) The term Equity Security shall mean any security described in
      Section 3(a)(11) of the Securities Exchange Act of 1934, as in effect on
      June 30, 2003, which is traded on a national securities exchange or the
      Nasdaq System or any other system then in use.
 
            (iv) For purposes of this Article 11, all references to the term
      Interested Stockholder in the definition of Disinterested Director shall
      be deemed to refer to the term Interested Person.
 
      ARTICLE 12. Indemnification, etc. of Directors and Officers.
 
            A. Indemnification. The Corporation shall indemnify (1) its current
and former directors and officers, whether serving the Corporation or at its
request any other entity, to the fullest extent required or permitted by the
MGCL now or hereafter in force, including the advancement of expenses under the
procedures and to the fullest extent permitted by law, and (2) other employees
and agents to such extent as shall be authorized by the Board of Directors and
permitted by law; provided, however, that, except as provided in Section B
hereof 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 by the Board of Directors of the Corporation.
 
            B. Procedure. If a claim under Section A of this Article 12 is not
paid in full by the Corporation within 60 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 20 days, the indemnitee
may at any time thereafter bring suit against the Corporation to recover the
unpaid
 
 
                                      C-15
<PAGE>
 
amount of the claim. If 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
reimbursed the expense of prosecuting or defending such suit. It shall be a
defense to any action for advancement of expenses that the Corporation has not
received both (i) an undertaking as required by law to repay such advances in
the event it shall ultimately be determined that the standard of conduct has not
been met and (ii) a written affirmation by the indemnitee of his good faith
belief that the standard of conduct necessary for indemnification by the
Corporation has been met. In (i) 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,
and (ii) 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 for indemnification set forth in the MGCL. Neither the
failure of the Corporation (including its Board of Directors, independent legal
counsel, or its 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 MGCL, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
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 a 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 12 or otherwise shall be on the Corporation.
 
            C. Non-Exclusivity. The rights to indemnification and to the
advancement of expenses conferred in this Article 12 shall not be exclusive of
any other right which any person may have or hereafter acquire under any
statute, the Charter, the Corporation's Bylaws, any agreement, any vote of
stockholders or the Board of Directors, or otherwise.
 
            D. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the MGCL.
 
            E. Miscellaneous. The Corporation shall not be liable for any
payment under this Article 12 in connection with a claim made by any indemnitee
to the extent such indemnitee has otherwise actually received payment under any
insurance policy, agreement, or otherwise, of the amounts otherwise
indemnifiable hereunder. The rights to indemnification and to the advancement of
expenses conferred in Sections A and B of this Article 12 shall be contract
rights and such rights shall continue as to an indemnitee who has ceased to be a
director or officer and shall inure to the benefit of the indemnitee's heirs,
executors and administrators.
 
      Any repeal or modification of this Article 12 shall not in any way
diminish any rights to indemnification or advancement of expenses of such
director or officer or the obligations of the
 
 
                                      C-16
<PAGE>
 
Corporation arising hereunder with respect to events occurring, or claims made,
while this Article 12 is in force.
 
      ARTICLE 13. Limitation of Liability. An officer or director of the
Corporation, as such, shall not be liable to the Corporation or its stockholders
for money damages, except (i) to the extent that it is proved that the person
actually received an improper benefit or profit in money, property or services
for the amount of the benefit or profit in money, property or services actually
received; (ii) to the extent that a judgment or other final adjudication adverse
to the person is entered in a proceeding based on a finding in the proceeding
that the person's action, or failure to act, was the result of active and
deliberate dishonesty and was material to the cause of action adjudicated in the
proceeding; or (iii) to the extent otherwise provided by the MGCL. If the MGCL
is amended to further eliminate or limit the personal liability of officers and
directors, then the liability of officers and directors of the Corporation shall
be eliminated or limited to the fullest extent permitted by the MGCL, as so
amended.
 
      Any repeal or modification of the foregoing paragraph by the stockholders
of the Corporation shall not adversely affect any right or protection of a
director or officer of the Corporation existing at the time of such repeal or
modification.
 
      ARTICLE 14. Amendment of the Charter. The Corporation reserves the right
to amend or repeal any provision contained in the Charter in the manner
prescribed by the MGCL, including any amendment altering the terms or contract
rights, as expressly set forth in the Charter, of any of the Corporation's
outstanding stock by classification, reclassification or otherwise, and all
rights conferred upon stockholders are granted subject to this reservation;
provided, however, that, notwithstanding any other provision of the Charter or
any provision of law which might otherwise permit a lesser vote or no vote, but
in addition to any vote of the holders of any class or series of the stock of
the Corporation required by law or by the Charter, the affirmative vote of the
holders of at least 80% of the voting power of all of the then-outstanding
shares of the capital stock of the Corporation entitled to vote generally in the
election of directors (after giving effect to the provisions of Article 5),
voting together as a single class, shall be required to amend or repeal this
Article 14, Section C, D or E of Article 5, Article 7, Article 8, Article 9,
Article 11, Article 12 or Article 13.
 
 
                                      C-17
<PAGE>
 
      IN WITNESS WHEREOF, I have signed these Articles of Incorporation,
acknowledging the same to be my act, on September 11, 2003.
 
Witness:
 
/s/ Patrick D. McTernan                     /s/Joseph L. LaMonica
--------------------------------            -----------------------------------
Patrick D. McTernan                         Joseph L. LaMonica