<SUBMISSION>
<ACCESSION-NUMBER>0000882377-03-000185
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>4
<PERIOD>20030121
<ITEMS>5
<ITEMS>7
<FILING-DATE>20030127
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>AF BANKSHARES INC
<CIK>0001064025
<ASSIGNED-SIC>6021
<IRS-NUMBER>562098545
<FISCAL-YEAR-END>0630
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>000-24479
<FILM-NUMBER>03526356
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<BUSINESS-ADDRESS>
<STREET1>21 EAST ASHE STREET
<CITY>WEST JEFFERSON
<STATE>NC
<ZIP>28694
<PHONE>3362464344
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>206 SOUTH JEFFERSON AVENUE
<STREET2>PO BOX 26
<CITY>WEST JEFFERSON
<STATE>NC
<ZIP>28694
</MAIL-ADDRESS>
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<TYPE>8-K
<SEQUENCE>1
<FILENAME>d3131281.txt
<DESCRIPTION>AF FINANCIAL GROUP
<TEXT>
================================================================================


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                         ______________________________


                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                         ______________________________


       Date of report (Date of earliest event reported): January 21, 2003



                               AF FINANCIAL GROUP
                         (FORMERLY AF BANKSHARES, INC.)
             (Exact name of registrant as specified in its charter)



      FEDERALLY CHARTERED            000-24479                 56-2098545
(State or other jurisdiction        (Commission               (IRS Employer
      of incorporation)             File  Number)            Identification No.)


21 EAST ASHE STREET
WEST JEFFERSON, NORTH CAROLINA                                    28694
(Address of principal executive offices)                        (Zip Code)


       Registrant's telephone number, including area code: (336) 246-4344


                                 NOT APPLICABLE
          (Former name or former address, if changed since last report)



<PAGE>



ITEMS 1 THROUGH 4. Not Applicable.

ITEM 5.

NAME CHANGE.

     The Office of Thrift Supervision has approved the amendment to the Federal
Stock Charter of AF Bankshares, Inc. (the "Registrant") to change the name of
the Registrant from "AF Bankshares, Inc." to "AF Financial Group" The change in
the Registrant's corporate title was approved by the shareholders of the
Registrant at the Annual Meeting of Shareholders held on November 4, 2002.

APPOINTMENT OF NEW DIRECTOR.

     The Board of Directors amended Section 2.F of the Bylaws of the Company to
expand the number of directors of the Company from nine to ten and appointed
Claudia Kelley, Ph.D. as a director of the Registration for a term to expire at
the 2003 Annual Meeting of Shareholders. Dr. Kelley is a CPA and an Associate
Professor of Accounting at Appalachian State University. She has a number of
years experience in tax, audit, and industry. Dr. Kelley received the Bachelor
of Science in accounting from Waynesburg College, the Masters of Accountancy
from the University of Illinois, and the Ph.D. and Masters of Taxation from the
University of Alabama. The Registrant believes that Dr. Kelley qualifies as an
"Audit Committee Financial Expert" as that term is defined by new SEC
regulations.

ITEM 6.  Not applicable.

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS

         (b)    Exhibits

                The following Exhibits are filed as part of this report:

                EXHIBIT NO.:

                (3.1)  Amended Federal Stock Charter of the Company.
                (3.2)  Amended Bylaws of the Company.
                (4.1)  Form of Stock Certificate of AF Financial Group

ITEMS 8 THROUGH 9.     Not Applicable.




<PAGE>




                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                             AF FINANCIAL GROUP


                                             By:   /s/ James A. Todd
                                                  ------------------------------
                                                  James A. Todd
                                                  President and Chief Executive
                                                  Officer




Date: January 22, 2003


<PAGE>





                                  EXHIBIT INDEX



       EXHIBIT                    DESCRIPTION
       -------                    -----------
         3.1      Amended Federal Stock Charter of the Company
         3.2      Amended Bylaws of the Company
         4.1      Form of Stock Certificate of AF Financial Group




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>3
<FILENAME>d3132209.txt
<DESCRIPTION>BY-LAWS, ARTICLES OF INCORPORATION
<TEXT>
                                                                Charter No. 6735

                              FEDERAL STOCK CHARTER
                              ---------------------

                               AF FINANCIAL GROUP


          Section 1. CORPORATE TITLE. The fill corporate title of the Mutual
Holding Company subsidiary holding company is AF Financial Group (the "Stock
Holding Company").

          Section 2. OFFICE. The domicile of the Stock Holding Company shall be
in West Jefferson, in the county of Ashe, State of North Carolina.

          Section 3. DURATION. The duration of the Stock Holding Company is
perpetual.

          Section 4. PURPOSE AND POWERS. The purpose of the Stock Holding
Company is to pursue any or all of the lawful objectives of a federal mutual
holding company chartered under Section 10(o) of the Home Owners' Loan Act, 12
USC 1467a(o), and to exercise all of the express, implied, and incidental powers
conferred thereby and by all acts amendatory thereof and supplemental thereto,
subject to the Constitution and laws of the United States as they are now in
effect, or as they may hereafter be amended, and subject to all lawful and
applicable rules, regulations, and orders of the Office of Thrift Supervision
(the "Office").

          Section 5. CAPITAL STOCK. The total number of shares of all classes of
the capital stock that the Stock Holding Company has the authority to issue is
6,000,000, of which 5,000,000 shares shall be common stock, par value $.01 per
share, and of which 1,000,000 shares shall be serial preferred stock, no par
value per share. The shares may be issued from time to time as authorized by the
Board of Directors without the approval of the stockholders, except as otherwise
provided in this Section 5 or to the extent that such approval is required by
governing law, rule, or regulation. The consideration for the issuance of the
shares shall be paid in fill before their issuance and shall not be less than
the par or stated value. Neither promissory notes nor future services shall
constitute payment or part payment for the issuance of shares of the Stock
Holding Company. The consideration for the shares shall be cash, tangible or
intangible property (to the extent direct investment in such property would be
permitted to the Stock Holding Company), labor or services actually performed
for the Stock Holding Company, or any combination of the foregoing. In the
absence of actual fraud in the transaction, the value of such property, labor,
or services, as determined by the Board of Directors of the Stock Holding
Company, shall be conclusive. Upon payment of such consideration, such shares
shall be deemed to be fully paid and nonassessable. In the case of a stock
dividend, that part of the retained earnings of the Stock Holding Company which
is transferred to common stock or paid-in capital accounts upon the issuance of
shares as a stock dividend shall be deemed to be the consideration for their
issuance.

          Except for the initial offering of shares of the Stock Holding
Company, no shares of capital stock (including shares issuable upon conversion,
exchange or exercise of other securities) shall be issued, directly or
indirectly, to officers, directors, or controlling persons (except for shares
issued to AsheCo, M.H.C., the parent mutual holding company (the "Mutual Holding
Company")) of the Stock Holding Company other than as part of a general public
offering or as qualifying shares to a director, unless their issuance or the
plan under which they would be issued has been approved by a majority of the
total votes eligible to be cast at a legal meeting.


<PAGE>

          Nothing contained in this Section 5 (or in any supplementary sections
hereto) shall entitle the holders of any class or series of capital stock to
vote as a separate class or series or to more than one vote per share except as
to the cumulation of votes for the election of directors unless the Charter
provides that there shall be no such cumulative voting; provided, that this
restriction on voting separately by class or series shall not apply:

               (i) To any provision which would authorize the holders of
preferred stock, voting as a class or series, to elect some members of the Board
of Directors, less than a majority thereof, in the event of default in the
payment of dividends on any class or series of preferred stock;

               (ii) To any provision which would require the holders of
preferred stock, voting as a class or series, to approve the merger or
consolidation of the Stock Holding Company with another corporation or the sale,
lease or conveyance (other than by mortgage or pledge) of properties or business
in exchange for securities of a corporation other than the Stock Holding Company
if the preferred stock is exchanged for securities of such other corporation;
provided, that no provision may require such approval for transactions
undertaken with the assistance or pursuant to the direction of the Office, the
Federal Deposit Insurance Corporation, or the Resolution Trust Corporation;

               (iii) To any amendment which would adversely change the specific
terms of any class or series of capital stock as set forth in this Section 5 (or
in any supplementary sections hereto), including any amendment which would
create or enlarge any class or series ranking prior thereto in rights and
preferences. An amendment which increases the number of authorized shares of any
class or series of capital stock, or substitutes the surviving savings bank in a
merger or consolidation for the Stock Holding Company, shall not be considered
to be such an adverse change.

          A description of the different classes and series (if any) of the
Stock Holding Company's capital stock and a statement of the designations, and
the relative rights, preferences and limitations of the shares of each class of
and series (if any) of capital stock are as follows:

          A. Common Stock. Except as provided in this Section 5 (or in any
supplementary sections hereto) the holders of the common stock shall exclusively
possess all voting power. Each holder of shares of common stock shall be
entitled to one vote for each share held by such holder.

          Whenever there shall have been paid, or declared and set aside for
payment, to the holders of the outstanding shares of any class of stock having
preference over the common stock as to payment of dividends, the fill amount of
dividends and of sinking fund, retirement fund or other retirement payments, if
any, to which such holders are respectively entitled in preference to the common
stock, then dividends may be paid on the common stock and on any class or series
of stock entitled to participate therewith as to dividends out of any assets
legally available for the payment of dividends.

          In the event of any liquidation, dissolution, or winding up of the
Stock Holding Company, the holders of the common stock (and the holders of any
class or series of stock entitled to participate with the common stock in the
distribution of assets) shall be entitled to receive, in cash or in kind, the
assets of the Stock Holding Company available for distribution remaining after:
(i) payment or provision for payment of the Stock Holding Company's debts


<PAGE>


and liabilities; (ii) distributions or provisions for distributions in
settlement of any liquidation account and (iii) distributions or provisions for
distributions to holders of any class or series of stock having preference over
the common stock in the liquidation, dissolution, or winding up of the Stock
Holding Company. Each share of common stock shall have the same relative rights
as and be identical in all respects with all the other shares of common stock.

          B. Preferred Stock. The Stock Holding Company may provide in
supplementary sections to its charter for one or more classes of preferred
stock, which shall be separately identified. The shares of any class may be
divided into and issued in series, with each series separately designated so as
to distinguish the shares thereof from the shares of all other series and
classes. The terms of each series shall be set forth in a supplementary section
to the charter. All shares of the same class shall be identical except as to the
following relative rights and preferences, as to which there may be variations
between different series:

          (a) The distinctive serial designation and the number of shares
constituting such series;

          (b) The dividend rate or the amount of dividends to be paid on the
shares of such series, whether dividends shall be cumulative and, if so, from
which date(s), the payment date(s) for dividends, and the participating or other
special rights, if any, with respect to dividends;

          (c) The voting powers, full or limited, if any, of shares of such
series;

          (d) Whether the shares of such series shall be redeemable and, if so,
the price(s) at which, and the terms and conditions on which, such shares may be
redeemed;

          (e) The amount(s) payable upon the shares of such series in the event
of voluntary or involuntary liquidation, dissolution, or winding up of the Stock
Holding Company;

          (f) Whether the shares of such series shall be entitled to the benefit
of a sinking or retirement fund to be applied to the purchase or redemption of
such shares, and if so entitled, the amount of such fund and the manner of its
application, including the price(s) at which such shares may be redeemed or
purchased through the application of such fund;

          (g) Whether the shares of such series shall be convertible into, or
exchangeable for, shares of any other class or classes of stock of the Stock
Holding Company and, if so, the conversion price(s) or the rate(s) of exchange,
and the adjustments thereof, if any, at which such conversion or exchange may be
made, and any other terms and conditions of such conversion or exchange;

          (h) The price or other consideration for which the shares of such
series shall be issued; and

          (i) Whether the shares of such series which are redeemed or converted
shall have the status of authorized but unissued shares of serial preferred
stock and whether such shares may be reissued as shares of the same or any other
series of serial preferred stock.

          Each share of each series of serial preferred stock shall have the
same relative rights as and be identical in all respects with all the other
shares of the same series.

          The Board of Directors shall have authority to divide, by the adoption
of supplementary charter sections, any authorized class of preferred stock into
series and, within the


<PAGE>

limitations set forth in this section and the remainder of this charter, fix and
determine the relative rights and preferences of the shares of any series so
established.

          Prior to the issuance of any preferred shares of a series established
by a supplementary charter section adopted by the Board of Directors, the Stock
Holding Company shall file with the Secretary of the Office a dated copy of that
supplementary section of this charter establishing and designating the series
and fixing and determining the relative rights and preferences thereof.

          Section 6. PREEMPTIVE RIGHTS. Holders of the capital stock of the
Stock Holding Company shall not be entitled to preemptive rights with respect to
any shares of the Stock Holding Company which may be issued.

          Section 7. DIRECTORS. The Stock Holding Company shall be under the
direction of a Board of Directors. The authorized number of directors, as stated
in the Stock Holding Company's bylaws, shall not be fewer than five nor more
than fifteen, except when a greater number is approved by the Director of the
Office, or his or her delegate.

          Section 8. BENEFICIAL OWNERSHIP. Limitation. Notwithstanding anything
contained in the Stock Holding Company's charter or bylaws to the contrary, for
a period of five years from the date of the Bank's reorganization into a Mutual
Holding Company no person, other than the Mutual Holding Company, shall directly
or indirectly offer to acquire or acquire the beneficial ownership of more than
10 percent of any class of an equity security of the Stock Holding Company. This
limitation shall not apply to a transaction in which the Stock Holding Company
forms a holding company without change in the respective beneficial ownership
interests of its stockholders other than pursuant to the exercise of any
dissenter and appraisal rights, the purchase of shares by underwriters in
connection with a public offering, or the purchase of shares by a tax-qualified
employee stock benefit plan which is exempt from the approval requirements under
574.3(c)(l)(vii) of the Office's regulations.

          In the event shares are acquired in violation of this Section 8, all
shares beneficially owned by any person in excess of 10% shall be considered
"excess shares" and shall not be counted as shares entitled to vote and shall
not be voted by any person or counted as voting shares in connection with any
matters submitted to the stockholders for a vote.

          For the purposes of this Section 8, the following definitions apply:

          (1) The term "person" includes an individual, a group acting in
concert, a corporation, a partnership, an association, a joint stock company, a
trust, an unincorporated organization or similar company, a syndicate or any
other group formed for the purpose of acquiring, holding or disposing of the
equity securities of the Stock Holding Company.

          (2) The term "offer" includes every offer to buy or otherwise acquire,
solicitation of an offer to sell, tender offer for, or request or invitation for
tenders of, a security or interest in a security for value.

          (3) The term "acquire" includes every type of acquisition, whether
affected by purchase, exchange, operation of law or otherwise.

          (4) The term "acting in concert" means (a) knowing participation in a
joint activity or conscious parallel action towards a common goal whether or not
pursuant to an express agreement, or (b) a combination or pooling of voting or
other interests in the securities of


<PAGE>


an issuer for a common purpose pursuant to any contract, understanding,
relationship, agreement or other arrangements, whether written or otherwise.

          Section 9. CUMULATIVE VOTING. Limitation. Stockholders shall not be
permitted to cumulate their votes for election of directors for a period of five
years from the effective date of the Bank's reorganization into the Mutual
Holding Company.

          Section 10. CALL FOR SPECIAL MEETING. For a period of five years from
the effective date of the Bank's reorganization into the Mutual Holding Company,
special meetings of stockholders relating to changes in control of the Stock
Holding Company or amendments to its charter shall be called only upon direction
of the Board of Directors.

          Section 11. AMENDMENT OF CHARTER. Except as provided in Section 5
hereof, no amendment addition, alteration, change, or repeal of this charter
shall be made, unless such is first proposed by the Board of Directors of the
Mutual Holding Company subsidiary holding company, approved by the stockholders
by a majority of the total votes eligible to be cast at a legal meeting, unless
a higher vote is otherwise required, and approved or preapproved by the Office.

                                        AF FINANCIAL GROUP


Attest:  /s/ Melanie Paisley Miller     By:/s/ James A. Todd
         --------------------------        -------------------------------------
         Melanie Paisley Miller            James A. Todd
         Secretary                         President and Chief Executive Officer


                                        OFFICE OF THRIFT SUPERVISION


Attest:_____________________________    By:_____________________________________

Date:_______________________________


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>4
<FILENAME>d3132216.txt
<DESCRIPTION>BY-LAWS, ARTICLES OF INCORPORATION
<TEXT>


                                     BYLAWS

                               AF FINANCIAL GROUP


                             ARTICLE I - HOME OFFICE

          The domicile of AF Financial Group (the "Stock Holding Company") shall
be located in West Jefferson, County of Ashe, State of North Carolina.

                            ARTICLE II- STOCKHOLDERS

          SECTION 1. PLACE OF MEETINGS. All annual and special meetings of
stockholders shall be held at the domicile of the Stock Holding Company or at
such other place in the State of North Carolina as the Board of Directors may
determine.

          SECTION 2. ANNUAL MEETING. A meeting of the stockholders of the Stock
Holding Company for the election of directors and for the transaction of any
other business of the Stock Holding Company shall be held annually within 150
days after the end of the Stock Holding Company's fiscal year on the third
Monday of October, if not a legal holiday, and if a legal holiday, then on the
next day following which is not a legal holiday, or at such other date and time
within the 150-day period as the Board of Directors may determine.

          SECTION 3. SPECIAL MEETINGS. Special meetings of the stockholders for
any purpose or purposes, unless otherwise prescribed by the Federal Stock
Charter of the Stock Holding Company, may be called at any time by the chairman
of the board, the president, or a majority of the Board of Directors, and shall
be called by the chairman of the board, the president, or the secretary upon the
written request of the holders of not less than 10% of all of the outstanding
capital stock of the Stock Holding Company entitled to vote at the meeting. Such
written request shall state the purpose or purposes of the meeting and shall be
delivered to the home office of the Stock Holding Company addressed to the
chairman of the board, the president or the secretary.

          SECTION 4. CONDUCT OF MEETINGS. Annual and special meetings shall be
conducted in accordance with the most current edition of Robert's Rules of Order
unless otherwise prescribed by regulations of the Office or these bylaws or the
board of directors adopts another written procedure for the conduct of meetings.
The board of directors shall designate, when present, either the chairman of the
board or president to preside at such meetings.

          SECTION 5. NOTICE OF MEETINGS. Written notice stating the place, day,
and hour of the meeting and the purpose(s) for which the meeting is called shall
be delivered not fewer than 20 nor more than 50 days before the date of the
meeting, either personally or by mail, by or at the direction of the chairman of
the board, the president, or the secretary, directors or other persons calling
the meeting, to each stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the mail,
addressed to the stockholder at the address as it appears on the stock transfer
books or records of the Stock Holding Company as of the record date prescribed
in Section 6 of this Article II with postage thereon prepaid. When any
stockholders' meeting, either annual or special, is adjourned for 30 days or
more, 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 time and
place of any meeting


<PAGE>


adjourned for less than 30 days or of the business to be transacted at the
meeting, other than an announcement at the meeting at which such adjournment is
taken.

          SECTION 6. FIXING OF RECORD DATE. For the purpose of determining
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment, or stockholders entitled to receive payment of any dividend, or
in order to make a determination of stockholders for any other proper purpose,
the Board of Directors shall fix in advance a date as the record date for any
such determination of stockholders. Such date in any case shall be not more than
60 days and, in case of a meeting of stockholders, not fewer than 10 days prior
to the date on which the particular action, requiting such determination of
stockholders, is to be taken. When a determination of stockholders entitled to
vote at any meeting of stockholders has been made as provided in this Section,
such determination shall apply to any adjournment thereof.

          Section 7. VOTING LIST. At least 20 days before each meeting of the
stockholders, the officer or agent having charge of the stock transfer books for
shares of the Stock Holding Company shall make a complete list of the
stockholders entitled to vote at such meeting, or any adjournment thereof,
arranged in alphabetical order, with the address and the number of shares held
by each. This list of stockholders shall be kept on file at the home office of
the Stock Holding Company and shall be subject to inspection by any stockholder
of record or such stockholders' agent at any time during usual business hours
for a period of 20 days prior to such meeting. Such list shall also be produced
and kept open at the time and place of the meeting and shall be subject to
inspection by any stockholder of record during the entire time of the meeting.
The original stock transfer book shall constitute prima facie evidence of the
stockholders entitled to examine such list or transfer books or to vote at any
meeting of stockholders.

          In lieu of making the shareholder list available for inspection by
shareholders as provided in the preceding paragraph, the board of directors may
elect to follow the procedures prescribed in ss. 552.6(d) of the Office's
regulations as now or hereafter in effect.

          SECTION 8. QUORUM. A majority of the outstanding shares of the Stock
Holding Company entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders. If less than a majority of the
outstanding shares is represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to constitute less than a quorum. If a quorum is present,
the affirmative vote of the majority of the shares represented at the meeting
and entitled to vote on the subject matter shall be the act of the shareholders,
unless the vote of a greater number of shareholders voting together or voting by
classes is required by law or the charter.  Directors, however, are elected by
a plurality of the votes cast at an election of directors.

          SECTION 9. PROXIES. At all meetings of stockholders, a stockholder may
vote by proxy executed in writing by the stockholder or by his or her duly
authorized attorney in fact. Proxies solicited on behalf of the management shall
be voted as directed by the stockholder or, in the absence of such direction, as
determined by a majority of the Board of Directors. No proxy shall be valid more
than eleven months from the date of its execution except for a proxy coupled
with an interest.


                                       2
<PAGE>


          SECTION 10. VOTING OF SHARES IN THE NAME OF TWO OR MORE PERSONS. When
ownership stands in the name of two or more persons, in the absence of written
directions to the Stock Holding Company to the contrary, at any meeting of the
stockholders of the Stock Holding Company, any one or more of such stockholders
may cast, in person or by proxy, all votes to which such ownership is entitled.
In the event an attempt is made to cast conflicting votes, in person or by
proxy, by the several persons in whose names shares of stock stand, the vote or
votes to which those persons are entitled shall be cast as directed by a
majority of those holding such stock and present in person or by proxy at such
meeting, but no votes shall be cast for such stock if a majority cannot agree.

          SECTION 11. VOTING OF SHARES OF CERTAIN HOLDERS. Shares standing in
the name of another corporation may be voted by any officer, agent, or proxy as
the bylaws of such corporation may prescribe, or, in the absence of such
provision, as the Board of Directors of such corporation may determine. Shares
held by an administrator, executor, guardian, or conservator may be voted by him
or her, either in person or by proxy, without a transfer of such shares into his
or her name. Shares standing in the name of a trustee may be voted by him or
her, either in person or by proxy, but no trustee shall be entitled to vote
shares held by him or her without a transfer of such shares into his or her
name. Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority to do so is
contained in an appropriate order of the court or other public authority by
which such receiver was appointed.

          A stockholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

          Neither treasury shares of its own stock held by the Stock Holding
Company nor shares held by another corporation, if a majority of the shares
entitled to vote for the election of directors of such other corporation are
held by the Stock Holding Company, shall be voted at any meeting, or counted in
determining the total number of outstanding shares at any given time for
purposes of any meeting.

          SECTION 12. NO CUMULATIVE VOTING. Stockholders shall not be entitled
to cumulate their votes for election of directors.

          SECTION 13. INSPECTORS OF ELECTION. In advance of any meeting of
stockholders, the Board of Directors may appoint any persons other than nominees
for office as inspectors of election to act at such meeting or any adjournment
thereof. The number of inspectors shall be either one or three. Any such
appointment shall not be altered at the meeting. If inspectors of election are
not so appointed, the chairman of the board or the president may, or on the
request of not fewer than 10 percent of the votes represented at the meeting
shall, make such appointment at the meeting. If appointed at the meeting, the
majority of the votes present shall determine whether one or three inspectors
are to be appointed. In case any person appointed as inspector fails to appear
or fails or refuses to act, the vacancy may be filled by appointment by the
Board of Directors in advance of the meeting or at the meeting by the chairman
of the board or the president.

          Unless otherwise prescribed by regulations of the Office, the duties
of such inspectors shall include: determining the number of shares of stock and
the voting power of each share, the shares represented at the meeting, the
existence of a quorum, and the authenticity,


<PAGE>

validity and effect of proxies; receiving votes, ballots, or consents; hearing
and determining all challenges and questions in any way arising in connection
with the rights to vote; counting and tabulating all votes or consents;
determining the result; and such acts as may be proper to conduct the election
or vote with fairness to all stockholders.

          SECTION 14. NOMINATING COMMITTEE. The board of directors shall act as
a nominating committee for selecting the management nominees for election as
directors. Except in the case of a nominee substituted as a result of the death
or other incapacity of a management nominee, the nominating committee shall
deliver written nominations to the secretary at the principal executive offices
of the Stock Holding Company at least 20 days prior to the date of the annual
meeting. Upon delivery, such nominations shall be posted in a conspicuous place
in each office of the Stock Holding Company. No nominations for director except
those made by the nominating committee shall be voted upon at the annual meeting
unless other nominations by stockholders are made in writing and delivered to
the secretary at the principal executive offices of the Stock Holding Company at
least five (5) days prior to the date of the annual meeting. Such stockholder's
notice shall set forth (a) as to each person whom the stockholder proposes to
nominate for election or reelection as a director, (i) the name, age, business
address and residence address of such person, (ii) the principal occupation or
employment of such person, and (iii) such person's written consent to serve as a
director, if elected; and (b) as to the stockholder giving the notice (i) the
name and address of such stockholder and (ii) the class and number of shares of
the Stock Holding Company which are owned of record by such stockholder. At the
request of the board of directors, any person nominated by the board of
directors for election as a director shall find to the secretary that
information required to be set forth in a stockholder's notice of nomination
which pertains to the nominee together with the required written consents. Upon
delivery, such nominations shall be posted in a conspicuous place in each office
of the Stock Holding Company. Ballots bearing the names of all the persons
nominated by the nominating committee and by stockholders shall be provided for
use at the annual meeting. However, if the nominating committee shall fail or
refuse to act at least 20 days prior to the annual meeting, nominations for
directors may be made at the annual meeting by any stockholder entitled to vote
and shall be voted upon.

          SECTION 15. NEW BUSINESS. 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 meeting. For any business
proposed by management to be properly brought before the annual meeting, such
business shall be approved by the Board of Directors, either directly or through
its approval of proxy solicitation materials related thereto, and shall be
stated in writing and filed with the secretary at least 5 days before the date
of the annual meeting, and all business so stated, proposed and filed shall be
considered at the annual meeting. Any stockholder may make any other proposal at
the annual meeting and the same may be discussed and considered but unless
stated in writing and filed with the secretary at least five (5) days before the
meeting, such proposal shall be laid over for action at an adjourned, special or
annual meeting of the stockholders taking place 30 days or more thereafter. This
provision shall not prevent the consideration and approval or disapproval at the
annual meeting of reports of officers, directors, and committees; but in
connection with such reports, no new business shall be acted upon at such annual
meeting unless stated and filed as herein provided. 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 (b) the business, as well as the
name and address of such stockholder and the class and


<PAGE>


number of shares of the Stock Holding Company which are owned of record by such
stockholder.

          SECTION 16. INFORMAL ACTION BY STOCKHOLDERS. Any action required to be
taken at a meeting of the stockholders, or any other action which may be taken
at a meeting of the stockholders, may be taken without a meeting if consent in
writing, setting forth the action so taken, shall be given by all of the
stockholders entitled to vote with respect to the subject matter thereof.

                        ARTICLE III - BOARD OF DIRECTORS

          SECTION 1. GENERAL POWERS. The business and affairs of the Stock
Holding Company shall be under the direction of its Board of Directors. The
Board of Directors shall annually elect a chairman of the board and a president
from among its members and shall designate, when present, either the chairman of
the board or the president to preside at its meetings.

          SECTION 2. NUMBER AND TERM. The Board of Directors shall consist of
ten members and shall be divided into three classes as nearly equal in number as
possible. The members of each class shall be elected for a term of three years
and until their successors are elected and qualified. One class shall be elected
by ballot annually.

          SECTION 3. REGULAR MEETINGS. A regular meeting of the Board of
Directors shall be held without other notice than this bylaw immediately after,
and at the same place as, the annual meeting of stockholders. The Board of
Directors may provide, by resolution, the time and place, within the Stock
Holding Company's normal lending territory, for the holding of additional
regular meetings without other notice than such resolution.

          Members of the Board of Directors may participate in special meetings
by means of conference telephone or similar communications equipment by which
all persons participating in the meeting can hear each other. Such participation
shall constitute presence in person for all purposes, including the purpose of
compensation pursuant to Section 12 of this Article.

          SECTION 4. QUALIFICATION. Each director shall at all times be the
beneficial owner of not less than 100 shares of capital stock of the Stock
Holding Company unless the Stock Holding Company is a wholly owned subsidiary of
a holding company.

          SECTION 5. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by or at the request of the chairman of the board, the
president, or one-third of the directors. The persons authorized to call special
meetings of the Board of Directors may fix any place, within the Stock Holding
Company's normal lending territory, as the place for holding any special meeting
of the Board of Directors called by such persons.

          Directors may participate in special meetings by means of a conference
telephone or similar communications device through which all persons
participating can hear each other. Such participation shall constitute presence
in person for all purposes, including the purpose of compensation pursuant to
Section 12 of this Article.

          SECTION 6. NOTICE. Written notice of any special meeting shall be
given to each director at least twenty-four (24) hours prior thereto when
delivered personally or by telegram or at least five days prior thereto when
delivered by mail at the address at which the director is most likely to be
reached. Such notice shall be deemed to be delivered when deposited


<PAGE>

in the mail so addressed, with postage thereon prepaid if mailed or when
delivered to the telegraph company if sent by telegram. Any director may waive
notice of any meeting by a writing filed with the secretary. 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
to the transaction of any business because the meeting is not lawfully called or
convened. 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 7. QUORUM. A majority of the number of directors fixed by
Section 2 of this Article III shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors; but if less than such
majority is present at a meeting, a majority of the directors present may
adjourn the meeting from time to time. Notice of any adjourned meeting shall be
given in the same manner as prescribed by Section 6 of this Article III.

          SECTION 8. MANNER OF ACTING. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors, unless a greater number is prescribed by regulation of the Office
or by these bylaws.

          SECTION 9. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken by the Board of Directors at a meeting may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the directors.

          SECTION 10. RESIGNATION. Any director may resign at any time by
sending a written notice of such resignation to the home office of the Stock
Holding Company addressed to the chairman of the board or the president. Unless
otherwise specified, such resignation shall take effect upon receipt thereof by
the chairman of the board or the president More than three consecutive absences
from regular meetings of the Board of Directors, unless excused by resolution of
the Board of Directors, shall automatically constitute a resignation, effective
when such resignation is accepted by the Board of Directors.

          SECTION 11. VACANCIES. Any vacancy occurring on the Board of Directors
may be filled by the affirmative vote of a majority of the remaining directors
although less than a quorum of the Board of Directors. A director elected to
fill a vacancy shall be elected to serve until the next election of directors by
the stockholders. Any directorship to be filled by reason of an increase in the
number of directors may be filled by election by the Board of Directors for a
term of office continuing only until the next election of directors by the
stockholders.

          SECTION 12. COMPENSATION. Directors, as such, may receive a stated
salary for their services. By resolution of the Board of Directors, a reasonable
fixed sum, and reasonable expenses of attendance, if any, may be allowed for
actual attendance at each regular or special meeting of the Board of Directors.
Members of either standing or special committees may be allowed such
compensation for actual attendance at committee meetings as the Board of
Directors may determine.

          SECTION 13. PRESUMPTION OF ASSENT. A director of the Stock Holding
Company who is present at a meeting of the Board of Directors at which action on
any Stock Holding Company matter is taken shall be presumed to have assented to
the action taken unless his or her dissent or abstention shall be entered in the
minutes of the meeting or unless he or she shall file a written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to the
secretary



                                       6
<PAGE>


of the Stock Holding Company within five days after the date a copy of the
minutes of the meeting is received. Such right to dissent shall not apply to a
director who voted in favor of such action.

          SECTION 14. REMOVAL OF DIRECTORS. At a meeting of stockholders called
expressly for that purpose, any director may be removed for cause by a vote of
the holders of a majority of the shares then entitled to vote at an election of
directors. Whenever the holders of the shares of any class are entitled to elect
one or more directors by the provisions of the charter or supplemental sections
thereto, the provisions of this Section shall apply, in respect to the removal
of a director or directors so elected, to the vote of the holders of the
outstanding shares of that class and not to the vote of the outstanding shares
as a whole.

                   ARTICLE IV - EXECUTIVE AND OTHER COMMITTEES

          SECTION 1. APPOINTMENTS. The board of directors, by resolution adopted
by a majority of the full board, may designate the chief executive officer and
two or more of the other directors to constitute an executive committee. The
designation of any committee pursuant to this Article IV and the delegation of
authority shall not operate to relieve the board of directors, or any director,
of any responsibility imposed by law or regulation.

          SECTION 2. AUTHORITY. The executive committee, when the board of
directors is not in session, shall have and may exercise all of the authority of
the board of directors except to the extent, if any, that such authority shall
be limited by the resolution appointing the executive committee; and except also
that the executive committee shall not have the authority of the board of
directors with reference to: the declaration of dividends; the amendment of the
charter or bylaws of the Stock Holding Company, or recommending to the
shareholders a plan of merger, consolidation, or conversion; the sale, lease, or
other disposition of all or substantially all of the property and assets of the
Stock Holding Company otherwise than in the usual and regular course of its
business; a voluntary dissolution of the Stock Holding Company; a revocation of
any of the foregoing; or the approval of a transaction in which any member of
the executive committee, directly or indirectly, has any material beneficial
interest.

          SECTION 3. TENURE. Subject to the provisions of section 8 of this
article IV, each member of the executive committee shall hold office until the
next regular annual meeting of the board of directors following his or her
designation and until a successor is designated as a member of the executive
committee.

          SECTION 4. MEETINGS. Regular meetings of the executive committee may
be held without notice at such times and places as the executive committee may
fix from time to time by resolution. Special meetings of the executive committee
may be called by any member thereof upon not less than one day's notice stating
the place, date, and hour of the meeting, which notice may be written or oral.
Any member of the executive committee may waive notice of any meeting and no
notice of any meeting need be given to any member thereof who attends in person.
The notice of a meeting of the executive committee need not state the business
proposed to be transacted at the meeting.

          SECTION 5. QUORUM. A majority of the members of the executive
committee shall constitute a quorum for the transaction of business at any
meeting thereof, and action of the executive committee must be authorized by the
affirmative vote of a majority of the members present at a meeting at which a
quorum is present.



                                       7
<PAGE>

          SECTION 6. ACTION WITHOUT A MEETING. Any action required or permitted
to be taken by the executive committee at a meeting may be taken without a
meeting if a consent in writing, selling forth the action so taken, shall be
signed by all of the members of the executive committee.

          SECTION 7. VACANCIES. Any vacancy in the executive committee may be
filled by a resolution adopted by a majority of the full board of directors.

          SECTION 8. RESIGNATIONS AND REMOVAL. Any member of the executive
committee may be removed at any time with or without cause by resolution adopted
by a majority of the full board of directors. Any member of the executive
committee may resign from the executive committee at any time by giving written
notice to the president or secretary of the Stock Holding Company. Unless
otherwise specified, such resignation shall take effect upon its receipt; the
acceptance of such resignation shall not be necessary to make it effective.

          SECTION 9. PROCEDURE. The executive committee shall elect a presiding
officer from its members and may fix its own rules of procedure which shall not
be inconsistent with these bylaws. It shall keep regular minutes of its
proceedings and report the same to the board of directors for its information at
the meeting held next after the proceedings shall have occurred.

          SECTION 10. OTHER COMMITTEES. The board of directors may by resolution
establish an audit, loan, or other committee composed of directors as they may
determine to be necessary or appropriate for the conduct of the business of the
Stock Holding Company and may prescribe the duties, constitution, and procedures
thereof.

                              ARTICLE V - OFFICERS

          SECTION 1. POSITIONS. The officers of the Stock Holding Company shall
be a president, one or more vice presidents, a secretary, and a treasurer, each
of whom shall be elected by the Board of Directors. The Board of Directors also
may designate the chairman of the board as an officer. The president shall be
the chief executive officer, unless the Board of Directors designates the
chairman of the board as chief executive officer. The president shall be a
director of the Stock Holding Company. The offices of the secretary and
treasurer may be held by the same person and a vice president may also be either
the secretary or the treasurer. The Board of Directors may designate one or more
vice presidents as executive vice president or senior vice president. The Board
of Directors also may elect or authorize the appointment of such other officers
as the business of the Stock Holding Company may require. The officers shall
have such authority and perform such duties as the Board of Directors may from
time to time authorize or determine.

          In the absence of action by the Board of Directors, the officers shall
have such powers and duties as generally pertain to their respective offices.

          SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the Stock
Holding Company shall be elected annually at the first meeting of the Board of
Directors held after each annual meeting of the stockholders. If the election of
officers is not held at such meeting, such election shall be held as soon
thereafter as possible. Each officer shall hold office until a successor has
been duly elected and qualified or until the officer's death, resignation, or
removal in the manner hereinafter provided. Election or appointment of an
officer, employee, or agent shall not of itself create contractual rights. The
Board of Directors may authorize the Stock



                                       8
<PAGE>


Holding Company to enter into an employment contract with any officer and in
accordance with regulations of the Office; but no such contract shall impair the
right of the Board of Directors to remove any officer at any time in accordance
with Section 3 of this Article V.

          SECTION 3. REMOVAL. Any officer may be removed by the Board of
Directors whenever, in its judgment, the best interests of the Stock Holding
Company will be served thereby, but such removal, other than for cause, shall be
without prejudice to any contractual rights, if any, of the person so removed.

          SECTION 4. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification, or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.

          SECTION 5. REMUNERATION. The remuneration of the officers shall be
fixed from time to time by the Board of Directors.

               ARTICLE VI- CONTRACTS, LOANS, CHECKS, AND DEPOSITS

          SECTION 1. CONTRACTS. To the extent permitted by regulations of the
Office, and except as otherwise prescribed by these bylaws with respect to
certificates for shares, the Board of Directors may authorize any officer,
employee or agent of the Stock Holding Company to enter into any contract or
execute and deliver any instrument in the name of and on behalf of the Stock
Holding Company. Such authority may be general or confined to specific
instances.

          SECTION 2. LOANS. No loans shall be contracted on behalf of the Stock
Holding Company and no evidence of indebtedness shall be issued in its name
unless authorized by the Board of Directors. Such authority may be general or
confined to specific instances.

          SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts, or other orders
for the payment of money, notes, or other evidences of indebtedness issued in
the name of the Stock Holding Company shall be signed by one or more officers,
employees, or agents of the Stock Holding Company in such manner as shall from
time to time be determined by the Board of Directors.

          SECTION 4. DEPOSITS. All funds of the Stock Holding Company not
otherwise employed shall be deposited from time to time to the credit of the
Stock Holding Company in any duly authorized depositories as the Board of
Directors may select.

            ARTICLE VII - CERTIFICATES FOR SHARES AND THEIR TRANSFER

          SECTION 1. CERTIFICATES FOR SHARES. Certificates representing shares
of capital stock of the Stock Holding Company shall be in such form as shall be
determined by the Board of Directors and approved by the Office. Such
certificates shall be signed by the chief executive officer or by any other
officer of the Stock Holding Company authorized by the Board of Directors,
attested by the secretary or an assistant secretary, and sealed with the
corporate seal or a facsimile thereof. The signatures of such officers upon a
certificate may be facsimiles if the certificate is manually signed on behalf of
a transfer agent or a registrar, other than the Stock Holding Company itself or
one of its employees. Each certificate for shares of capital stock shall be
consecutively numbered or otherwise identified. The name and address of the
person to whom the shares are issued, with the number of shares and date of
issue, shall be entered on the stock transfer books of the Stock Holding
Company. All certificates surrendered to the Stock Holding Company for transfer
shall be canceled and no new certificate shall be issued until the former




                                       9
<PAGE>

certificate for a like number of shares has been surrendered and canceled,
except that in the case of a lost or destroyed certificate, a new certificate
may be issued upon such terms and indemnity to the Stock Holding Company as the
Board of Directors may prescribe.

          SECTION 2. TRANSFER OF SHARES. Transfer of shares of capital stock of
the Stock Holding Company shall be made only on its stock transfer books.
Authority for such transfer shall be given only by the holder of record thereof
or by his legal representative, who shall furnish proper evidence of such
authority, or by his attorney thereunto authorized by a duly executed power of
attorney and filed with the Stock Holding Company. Such transfer shall be made
only on surrender for cancellation of the certificate for such shares. The
person in whose name the shares of capital stock stand on the books of the Stock
Holding Company shall be deemed by the Stock Holding Company to be the owner for
all purposes.

                     ARTICLE VIII- FISCAL YEAR; ANNUAL AUDIT

          The fiscal year of the Stock Holding Company shall end on the 30th day
of June of each year. The Stock Holding Company shall be subject to an annual
audit as of the end of its fiscal year by independent public accountants
appointed by and responsible to the Board of Directors. The appointment of such
accountants shall be subject to annual ratification by the stockholders.

                             ARTICLE IX - DIVIDENDS

          Subject only to the terms of the Stock Holding Company's charter arid
the regulations and orders of the Office, the Board of Directors may, from time
to time, declare, and the Stock Holding Company may pay, dividends on its
outstanding shares of capital stock.

                           ARTICLE X - CORPORATE SEAL

          The Board of Directors shall provide a Stock Holding Company seal
which shall be two concentric circles between which shall be the name of the
Stock Holding Company. The year of incorporation or an emblem may appear in the
center.

                             ARTICLE XI - AMENDMENTS

          These bylaws may be amended in a manner consistent with regulations of
the Office and shall be effective after (i) approval of the amendment by a
majority vote of the authorized board of directors, or by a majority vote of the
votes cast by the shareholders of the Stock Holding Company at any legal
meeting, and (ii) receipt of any applicable regulatory approval. When the Stock
Holding Company fails to meet its quorum requirements, solely due to vacancies
on the board, then the affirmative vote of a majority of the sitting board will
be required to amend the bylaws.

                          ARTICLE XII - INDEMNIFICATION

          The Stock Holding Company shall indemnify its directors, officers and
employees in accordance with the following requirements:

          SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION. (a) The following
definitions apply for purposes of this Article X:

          (i) Action. The term "action" means any judicial or administrative
proceeding, or threatened proceeding, whether civil, criminal or otherwise,
including any appeal or other proceeding for review.



                                       10
<PAGE>

          (ii) Court The term "court" includes, without limitation, any court to
which or in which any appeal or any proceeding for review is brought.

          (iii) Final judgment. The term "final judgment means a judgment,
decree or order that is not appealable or as to which the period for appeal has
expired with no appeal taken.

          (iv) Settlement. The term "settlement" includes entry of a judgment by
consent or confession or a plea of guilty or nob contendere.

          (b) References in this Article X to any individual or other person,
including any savings bank, shall include legal representatives, successors and
assigns thereof.

          SECTION 2. INDEMNIFICATION. Subject to Sections 3 and 7 of this
Article XII, the Stock Holding Company shall indemnify any person against whom
an action is brought or threatened because that person is or was a director,
officer or employee of the Stock Holding Company for:

          (a) Any amount for which that person becomes liable under a judgment
in such action; and

          (b) Reasonable costs and expenses, including reasonable attorneys'
fees, actually paid or incurred by that person in defending or settling such
action, or in enforcing his or her rights under this Article XII if he or she
attains a favorable judgment in such enforcement action.

          SECTION 3. REQUIREMENTS FOR INDEMNIFICATION. Indemnification shall be
made to such person under Section 2 of this Article XII only if:

          (a)  Final judgment on the merits is in his or her favor, or

          (b)  In case of:

               (i)  settlement;

               (ii) final judgment against him or her; or

               (iii) final judgment in his or her favor, other than on the
                    merits,

          if a majority of the disinterested directors of the Stock Holding
          Company determines that he or she was acting in good faith within the
          scope of his or her employment or authority as he or she could have
          reasonably perceived it under the circumstances and for a purpose he
          or she could reasonably have believed under the circumstances was in
          the best interests of the Stock Holding Company or its shareholders.

However, no indemnification shall be made unless the Stock Holding Company gives
the Office at least 60 days notice of its intention to make such
indemnification. Such notice shall state the facts on which the action arose,
the terms of any settlement and any disposition of the matter by a court. Such
notice, a copy thereof and a certified copy of the resolution containing the
required determination by the Board shall be sent to the Regional Director of
the Office, who shall promptly acknowledge receipt thereof. The notice period
shall run from the date of such receipt. No such indemnification shall be made
if the Office advises the Stock Holding Company in writing, within such notice
period, of his or her objection thereto.



                                       11
<PAGE>

          SECTION 4. INSURANCE. The Stock Holding Company may obtain insurance
to protect it and its directors, officers and employees from potential losses
arising from claims against any of them for alleged wrongful acts, or wrongful
acts committed in their capacity as directors, officers or employees. However,
the Stock Holding Company may not obtain insurance that provides for payment of
losses of any person incurred as a consequence of his or her willful or criminal
misconduct.

          SECTION 5. PAYMENT OF EXPENSES. If a majority of the directors of the
Stock Holding Company concludes that, in connection with an action, any person
ultimately may become entitled to indemnification under this Article XII, the
directors may authorize payment of reasonable costs and expenses, including
reasonable attorneys' fees, arising from the defense or settlement of such
action. Nothing in this Section 5 shall prevent the directors of the Stock
Holding Company from imposing such conditions on a payment of expenses as they
deem warranted and in the interests of the Stock Holding Company. Before making
advance payment of expenses under this Section 5, the Stock Holding Company
shall obtain an agreement that the Stock Holding Company will be repaid if the
person on whose behalf payment is made is later determined not to be entitled to
such indemnification.

          SECTION 6. EXCLUSIVENESS OF PROVISIONS. The Stock Holding Company
shall not indemnify any person referred to in Section 2 of this Article XII or
obtain insurance referred to in Section 4 of this Article XII other than in
accordance with this Article XI.

          SECTION 7. STATUTORY LIMITATIONS. The indemnification provided for in
Section 2 of this Article XII is subject to and qualified by 12 U.S.C. section
182 1(k).

          SECTION 8. SUBSEQUENT LEGISLATION OR REGULATION. If law and
regulations thereunder applicable to federal stock savings banks are amended to
expand the indemnifications permitted to directors and officers of the Stock
Holding Company, then the Stock Holding Company shall indemnify such persons to
the extent permitted by such applicable law and regulations, as so amended.

                                       AF FINANCIAL GROUP


Attest:/s/ Melanie Paisley Miller      By:/s/ James A. Todd
       --------------------------         ---------------------------------
        Melanie Paisley Miller             James A. Todd
        Secretary                          President and Chief Executive Officer

                                       OFFICE OF THRIFT SUPERVISION


Attest:_____________________           By:_________________________________

Date:_______________________



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>5
<FILENAME>d3132211.txt
<DESCRIPTION>INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS
<TEXT>
                    [FORM OF STOCK CERTIFICATE - FRONT SIDE]

NUMBER                                                                    SHARES
                               AF FINANCIAL GROUP
                         WEST JEFFERSON, NORTH CAROLINA

COMMON STOCK                                                   CUSIP 001046 10 1
                                                                     -----------
                                             See reverse for certain definitions


This certifies that ____________________________________ is the record holder of
 FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, $0.01 PAR VALUE PER
                          SHARE, OF AF FINANCIAL GROUP

a corporation incorporated under the laws of the United States (the
"Corporation"). The shares evidenced by this Certificate are transferable only
on the stock-transfer books of the Corporation by the holder of record hereof,
in person or by attorney or legal representative, upon surrender of this
Certificate properly endorsed. THE STOCK EVIDENCED HEREBY IS NOT AN ACCOUNT OF
AN INSURABLE TYPE AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY. This Certificate is not valid unless
countersigned and registered by the Transfer Agent and Registrar.

     IN WITNESS HEREOF, the Corporation has caused this Certificate to be
executed by the facsimile signatures of its duly authorized officers and has
caused its facsimile seal to be affixed hereto.

Dated:


_______________________________            _____________________________________
Secretary                                  President and Chief Executive Officer

                                     (SEAL)

                                        Countersigned and Registered:
                                        MELLON INVESTOR SERVICES
                                        By:                       Transfer Agent
                                                                   and Registrar


<PAGE>


                     (FORM OF STOCK CERTIFICATE - BACK SIDE)

     The shares represented by this certificate are issued subject to all the
provisions of the Charter and Bylaws of AF FINANCIAL GROUP (the "Corporation"),
as from time to time amended (copies of which are on file at the principal
office of the Corporation), to all of which the holder by acceptance hereof
assents. The following description constitutes a summary of certain provisions
of, and is qualified in its entirety by reference to, the Charter.

     The Charter of the Corporation contains certain provisions, applicable for
a period of five years from the date of the AF Bank's reorganization into a
Mutual Holding Company, that restrict persons, other than the Mutual Holding
Company, from directly or indirectly acquiring or holding, or attempting to
acquire or hold, the beneficial ownership of in excess of 10% of the outstanding
shares of capital stock of the Corporation entitled to vote generally in the
election of directors ("Voting Stock"). The Charter contains a provision
pursuant to which the shares beneficially held in excess of 10% the Voting Stock
of the Corporation are considered "excess shares" and shall not be counted as
shares entitled to vote and shall not be voted by any person or counted as
voting shares in connection with any matters submitted to the stockholders for a
vote. These restrictions are not applicable to underwriters in connection with a
public offering of the common stock, certain reorganization transactions
described in the Charter or to acquisitions of Voting Stock by the Corporation,
any majority-owned subsidiary of the Corporation, or any tax-qualified employee
stock benefit plan which is exempt from the approval requirements under
574.3(c)(1)(vi) of the Office's regulations. AsheCo, M.H.C., the federally
chartered mutual holding company of the Corporation ("Mutual Holding Company")
will own in excess of 50% of the Common Stock of the Corporation so long as the
Mutual Holding Company remains in mutual form.

     The Corporation is authorized to issue more than one class of stock,
including a class of Preferred Stock which may be issued in one or more series.
The Corporation will furnish to any stockholder, upon written request and
without charge, within five days after receipt of such request, a full statement
of the designations, preferences, limitations or relative rights of the shares
of each class authorized to be issued and, as to shares of Preferred Stock, the
variations in the relative rights and preferences between the shares of each
series so far as the same have been fixed and determined and the authority of
the Board of Directors to fix and determine the relative rights and preferences
of subsequent series.

     The following abbreviations when used in the inscription on the face of
this certificate shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S>                                                   <C>
TEN COM - as tenants in common                        UNIF GIFT MIN ACT - ..........Custodian..........
TEN ENT - as tenants by the entireties                                       (Cust)        (Minor)
JT TEN - as joint tenants with right of survivorship                      under Uniform Gifts to Minors
          and not as tenants in common                                    Act..........................
                                                                                        (State)
</TABLE>

    Additional abbreviations may also be used though not in the above list.

         For value received, ___________________________________________________
hereby sell, assign and transfer unto shares of Common Stock evidenced by this
Certificate, and do hereby irrevocably constitute and appoint __________________
_______________ as Attorney, to transfer the said shares on the books of the
herein named Corporation, with full power of substitution.

Date:___________________              __________________________________________
                            Signature

                                      __________________________________________
                            Signature
                                      NOTICE: The signature to this assignment
                                      must correspond with the name as written
                                      upon the face of the Certificate, in every
                                      particular, without alteration or
                                      enlargement, or any change whatsoever.


</TEXT>
</DOCUMENT>
</SUBMISSION>
