10-Q

CONFORMED COPY

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q

Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934

For Six Months Ended June 30, 2000
Commission File Number 000-16435

COMMUNITY BANCORP.

(Exact Name of Registrant as Specified in its Chapter)


Vermont                        03-0284070
(State of Incorporation)      (IRS Employer Identification Number)

Derby Road, Derby, Vermont                   05829
(Address of Principal Executive Offices)          (zip code)


Registrant's Telephone Number: (802) 334-7915
Not Applicable
Former Name, Former Address and Formal Fiscal Year
(If Changed Since Last Report)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file for such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ( X ) No ( )

At July 27, 2000 there were 3,356,343 shares outstanding of the Corporation's
common stock.

Total Pages - 23 Pages

 


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

COMMUNITY BANCORP. AND SUBSIDIARIES
Consolidated Balance Sheets
( Unaudited )	June 30	December 31
	2000	1999
Assets
Cash and due from banks	6,103,876	9,928,586
Federal funds sold and overnight deposits	151,646	2,787,558
Total cash and cash equivalents	6,255,522	12,716,144
Securities held-to-maturity (fair value $42,647,462
at 06/30/00 and $29,502,766 at 12/31/99)	43,057,756	29,887,821
Securities available-for-sale	20,938,438	28,982,188
Restricted equity securities	1,141,650	1,141,650
Loans held-for-sale	580,941	660,423
Loans	167,354,034	152,618,876
Allowance for loan losses	(1,805,932)	(1,714,763)
Unearned net loan fees	(897,819)	(891,114)
Net loans	164,650,283	150,012,999
Bank premises and equipment, net	4,501,342	4,322,697
Accrued interest receivable	1,875,933	1,484,192
Other real estate owned, net	393,040	434,694
Other assets	2,583,037	2,572,994
Total assets	$245,977,942	$232,215,802
Liabilities and Stockholders' Equity
Liabilities
Deposits:
Demand, non-interest bearing	26,218,657	25,727,709
NOW and money market accounts	47,635,682	52,094,860
Savings	33,506,278	32,854,357
Time deposits, $100,000 and over	15,965,541	15,894,363
Other time deposits	75,732,466	75,271,591
Total deposits	$199,058,624	$201,842,880
Borrowed funds	13,055,000	4,055,000
Repurchase agreements	9,914,497	2,623,282
Accrued interest and other liabilities	1,135,237	1,493,486
Subordinated convertible debentures	20,000	20,000
Total liabilities	$223,183,358	$210,034,648
Stockholders' Equity
Common stock - $2.50 par value;
6,000,000 shares authorized and 3,445,718 shares
issued at 06/30/00 and 3,388,394 issued at 12/31/99	8,614,294	8,470,985
Additional paid-in capital	11,277,332	10,942,510
Retained earnings	4,003,306	3,462,966
Accumulated other comprehensive income	(215,040)	(247,086)
Less: treasury stock, at cost;
73,978 shares at 06/30/00 and 29,887 shares at 12/31/99	(885,308)	(448,221)
Total stockholders' equity	$22,794,584	$22,181,154
Total liabilities and stockholders' equity	$245,977,942	$232,215,802

COMMUNITY BANCORP. AND SUBSIDIARIES
Consolidated Statements of Income
( Unaudited )
For The Second Quarter Ended June 30,	2000	1999	1998
Interest income
Interest and fees on loans	3,521,222	3,275,786	3,390,922
Interest and dividends on investment securities
U.S. Treasury securities	357,309	585,169	530,696
U.S. Government agencies	359,362	139,754	20,660
States and political subdivisions	162,925	138,058	148,978
Dividends	21,888	19,127	18,840
Interest on federal funds sold and overnight deposits	34,696	45,386	97,326
Total interest income	$4,457,402	$4,203,280	$4,207,422
Interest expense
Interest on deposits	1,823,342	1,832,086	2,001,602
Interest on borrowed funds	92,366	50,172	49,443
Interest on repurchase agreements	96,391	6,676	395
Interest on subordinated debentures	550	550	1,590
Total interest expense	$2,012,649	$1,889,484	$2,053,030
Net interest income	2,444,753	2,313,796	2,154,392
Provision for loan losses	(96,000)	(150,000)	(160,000)
Net interest income after provision	$2,348,753	$2,163,796	$1,994,392
Other operating income
Trust department income	86,153	56,030	35,141
Service fees	203,130	178,513	171,032
Security (losses) gains	0	0	0
Other	229,310	215,548	307,600
Total other operating income	$518,593	$450,091	$513,773
Other operating expenses
Salaries and wages	733,497	691,829	700,956
Pension and other employee benefits	237,766	221,398	177,422
Occupancy expenses, net	361,076	305,077	322,297
Trust department expenses	26,649	16,713	19,399
Other	612,946	593,698	541,167
Total other operating expenses	$1,971,934	$1,828,715	$1,761,241
Income before income taxes	895,412	785,172	746,924
Applicable income taxes (credit)	246,748	218,683	188,982
Net Income	$648,664	$566,489	$557,942
Earnings per share on weighted average	$0.19	$0.17	$0.17
Weighted average number of common shares
Used in computing earnings per share	3,391,495	3,310,283	3,214,624
Dividends per share	$0.16	$0.16	$0.15
Per share data for 1998 restated to reflect a 5% stock dividend paid on February 1, 1999.
COMMUNITY BANCORP. AND SUBSIDIARIES
Consolidated Statements of Income
( Unaudited )
For the First Six Months Ended June 30,	2000	1999	1998
Interest income
Interest and fees on loans	6,826,051	6,453,188	6,869,308
Interest and dividends on investment securities
U.S. Treasury securities	828,379	1,130,449	987,892
U.S. Government agencies	567,895	268,053	41,079
States and political subdivisions	305,670	251,589	292,161
Dividends	42,459	38,849	37,404
Interest on federal funds sold and overnight deposits	64,172	111,533	204,028
Total interest income	$8,634,626	$8,253,661	$8,431,872
Interest expense
Interest on deposits	3,556,635	3,652,030	3,942,624
Interest on borrowed funds	145,854	99,072	96,243
Interest on repurchase agreements	139,687	9,310	395
Interest on subordinated debentures	1,100	1,100	3,818
Total interest expense	$3,843,276	$3,761,512	$4,043,080
Net interest income	4,791,350	4,492,149	4,388,792
Provision for loan losses	(258,000)	(300,000)	(360,000)
Net interest income after provision	$4,533,350	$4,192,149	$4,028,792
Other operating income
Trust department income	157,503	105,509	65,840
Service fees	385,917	343,263	332,543
Security (losses) gains	(11,507)	0	0
Other	388,976	374,791	412,153
Total other operating income	920,889	823,563	810,536
Other operating expenses
Salaries and wages	1,452,601	1,407,288	1,408,907
Pension and other employee benefits	460,952	398,450	351,736
Occupancy expenses, net	726,460	643,796	643,930
Trust department expenses	50,343	28,002	27,416
Other	1,290,352	1,198,654	1,138,864
Total other operating expenses	$3,980,708	$3,676,190	$3,570,853
Income before income taxes	1,473,531	1,339,522	1,268,475
Applicable income taxes (credit)	391,242	362,236	302,855
Net Income	$1,082,289	$977,286	$965,620
Earnings per share on weighted average	$0.32	$0.30	$0.30
Weighted average number of common shares
Used in computing earnings per share	3,389,337	3,273,034	3,202,155
Book value per share on shares outstanding	$6.76	$6.68	$6.53
Per share data for 1998 restated to reflect a 5% stock dividend paid on February 1, 1999.

COMMUNITY BANCORP. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the First Six Months Ended June 30,	2000	1999	1998
Reconciliation of net income to net cash provided by operating activities:
Net Income	$1,082,289	$977,286	$965,620
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation	299,100	209,439	201,563
Provisions for loan losses	258,000	300,000	360,000
Provisions for deferred income taxes	(14,943)	(12,281)	(65,717)
(Gain) loss on sale of loans	(16,094)	(60,392)	(88,853)
Securities losses	11,507	0	0
(Gain) loss on sales of OREO	(61,922)	(4,587)	(2,112)
OREO writedowns	0	19,590	26,592
Amortization of bond premium, net	90,639	163,816	(11,304)
Proceeds from sales of loans held for sale	1,218,779	7,128,347	3,459,535
Originations of loans held for sale	(1,123,203)	(7,338,986)	(4,600,524)
Increase (decrease) in taxes payable	106,185	90,538	66,572
(Increase) decrease in interest receivable	(391,741)	(356,702)	(156,255)
Decrease (Increase) in mortgage service rights	15,373	(27,648)	(38,174)
Decrease (Increase) in other assets	(27,647)	253,871	(54,573)
(Decrease) increase in unamortized loan fees	6,705	7,635	(9,689)
(Decrease) increase in interest payable	(6,045)	(9,667)	(7,847)
(Decrease) increase in accrued expenses	(916)	(41,436)	(24,182)
Increase (decrease) in other liabilities	84,630	49,587	99,885
Net cash provided by operating activities	$1,530,696	$1,348,410	$120,537
Cash Flows from investing activities:
Investments - held to maturity
Sales and maturities	6,814,129	9,338,378	7,023,652
Purchases	(19,988,829)	(15,487,110)	(5,414,330)
Investments - available for sale
Sales and maturities	7,994,923	0	2,000,000
Purchases	0	(9,291,211)	(11,115,703)
Purchase of restricted equity securities	0	0	(41,900)
Investment in limited partnership	(4,078)	(14,130)	(40,312)
Increase in Loans, Net of Payments	(15,264,429)	(2,315,420)	(92,628)
Capital Expenditures	(477,745)	(1,585,656)	(78,027)
Recoveries of loans charged off	78,520	46,170	127,967
Proceeds from sales of other real estate owned	387,496	140,735	425,706
Net Cash Used in Investing Activities	($20,460,013)	($19,168,244)	($7,205,575)
Cash Flows from Financing Activities:
Net (decrease) increase in demand deposits, NOW, Money Mkt and savings	(3,316,309)	7,387,405	4,188,224
Net increase (decrease) in certificates of deposit	532,053	(517,718)	2,910,110
Net increase in short-term borrowings and repurchase agreements	7,291,215	626,710	0
Net increase in borrowed funds	9,000,000	0	0
Payments to acquire treasury stock	(437,087)	(2,698)	(108)
Dividends paid	(601,177)	(551,439)	(468,463)
Net cash provided by financing activities	$12,468,695	$6,942,260	$6,629,763
Net increase in cash and cash equivalents	($6,460,622)	($10,877,574)	($455,275)
Cash and cash equivalents:
Beginning	$12,716,144	$20,424,088	$14,307,610
Ending	$6,255,522	$9,546,514	$13,852,335
Supplemental Schedule of Cash Paid During the Year
Interest paid	$3,849,321	$3,770,445	$4,050,132
Income Taxes Paid	$300,000	$283,980	$302,000
Supplemental schedule of noncash investing and financing activities:
Net change in securities valuation	$48,554	($492,436)	($1,488)
OREO acquired in settlements of loans	$283,920	$346,809	$126,466
Debentures converted to common stock	$0	$0	$53,000
Stock dividends	$0	$1,851,338	$3,823,576
Dividends paid
Dividends payable	$1,079,309	$1,024,004	$908,153
Dividends reinvested	($478,132)	($472,565)	($439,690)
	$601,177	$551,439	$468,463

		AVERAGE BALANCES AND INTEREST RATES
The table below presents the following information:
Average earning assets (including non-accrual loans)
Average interest bearing liabilities supporting earning assets
Interest income and interest expense as a rate/yield
		For the First Six Months Ended:
			2000			1999
		Average	Income/	Rate/	Average	Income/	Rate/
		Balance	Expense	Yield	Balance	Expense	Yield
EARNING ASSETS
Loans (gross)		157,566,760	6,826,051	8.71%	148,999,833	6,453,188	8.73%
Taxable Investment Securities		49,548,124	1,396,274	5.67%	50,152,224	1,379,225	5.55%
Tax Exempt Investment
Securities (1)		12,738,393	459,635	7.26%	10,974,783	376,918	6.93%
Federal Funds Sold		667,033	18,739	5.65%	2,799,862	56,684	4.08%
Sweep Account		1,684,996	45,432	5.42%	2,205,556	54,849	5.01%
Other Securities (2)		1,230,276	44,770	7.32%	1,261,210	41,672	6.66%
TOTAL		223,435,582	8,790,901	7.91%	216,393,468	8,362,536	7.79%
INTEREST BEARING LIABILITIES
Savings Deposits		33,226,467	380,379	2.30%	31,710,130	366,206	2.33%
NOW & Money Market Funds		49,938,951	868,934	3.50%	49,254,424	784,878	3.21%
Time Deposits		90,577,037	2,307,322	5.12%	95,890,866	2,500,946	5.26%
Other Borrowed Funds		5,106,670	145,854	5.74%	4,060,000	99,072	4.92%
Repurchase Agreements		6,124,131	139,687	4.59%	477,205	9,310	3.93%
Subordinated Debentures		20,000	1,100	11.06%	20,000	1,100	11.09%
TOTAL		184,993,256	3,843,276	4.18%	181,412,625	3,761,512	4.18%
Net Interest Income			4,947,625			4,601,024
Net Interest Spread(3)				3.73%			3.61%
Interest Differential(4)				4.47%			4.29%
	(1) Income on investment securities of state and political subdivisions is stated on a fully taxable
	basis (assuming a 34 percent tax rate).
	(2) Included in other securities are taxable industrial development bonds (VIDA, with income
	of $2,311 for 2000 and $2,823 for 1999.
	(3) Net interest Spread is the difference between the yield on earning assets and the rate paid on
	interest bearing liabilities.
	(4) Interest differential is net interest income divided by average earning assets.

CHANGES IN INTEREST INCOME AND INTEREST EXPENSE
	The following table summarizes the variances in income
	for the first six months of 2000 and 1999 resulting from
	volume changes in assets and liabilities and fluctuations
	in rates earned and paid.
		Variance	Variance
RATE / VOLUME		Due to	Due to	Total
		Rate(1)	Volume(1)	Variance
INCOME EARNING ASSETS
Loans		1,990	370,873	372,863
Taxable Investment Securities		34,082	(17,033)	17,049
Tax Exempt Investment Securities (2)		22,110	60,607	82,717
Federal Funds Sold		21,978	(59,923)	(37,945)
Sweep Account		4,613	(14,030)	(9,417)
Other Securities		4,224	(1,126)	3,098
Total Interest Earnings		88,997	339,368	428,365
INTEREST BEARING LIABILITIES
Savings Deposits		(3,347)	17,520	14,173
NOW & Money Market Funds		73,160	10,896	84,056
Time Deposits		(58,333)	(135,291)	(193,624)
Other Borrowed Funds		21,246	25,536	46,782
Repurchase Agreements		20,327	110,050	130,377
Subordinated Debentures		0	0	0
Total Interest Expense		53,053	28,711	81,764
(1) Items which have shown a year-to-year increase in volume have
variances allocated as follows:
	Variance due to rate = Change in rate x new volume
	Variance due to volume = Change in volume x old rate
Items which have shown a year-to-year decrease in volume have
variances allocated as follows:
	Variance due to rate = Change in rate x old volume
	Variances due to volume = Change in volume x new rate
(2) Income on tax exempt securities is stated on a fully taxable basis.
The assumed rate is 34%.

COMMUNITY BANCORP.
PRIMARY EARNINGS PER SHARE
For The Second Quarter Ended June 30,	2000	1999	1998
Net Income	$648,664	$566,489	$557,942
Average Number of Common Shares Outstanding.	3,391,495	3,310,283	3,214,624
Earnings Per Common Share	$0.19	$0.17	$0.17
FULLY DILUTED EARNINGS PER SHARE
For The Second Quarter Ended June 30,	2000	1999	1998
Net Income	$648,664	$566,489	$557,942
Adjustments to Net Income (Assuming Conversion
of Subordinated Convertible Debentures).	363	363	1,049
Adjusted Net Income	$649,027	$566,852	$558,991
Average Number of Common Shares Outstanding.	3,391,495	3,310,283	3,214,624
Increase in Shares (Assuming Conversion of
Subordinated Convertible Debentures).	8,557	8,557	22,422
Average Number of Common Shares Outstanding
(Fully Diluted).	3,400,052	3,318,840	3,237,046
Earnings Per Common Share Assuming Full Dilution.	$0.19	$0.17	$0.17
Per share data for 1998 restated to reflect a 5% stock dividend paid on February 1, 1999.
COMMUNITY BANCORP.
PRIMARY EARNINGS PER SHARE
For the First Six Months Ended June 30,	2000	1999	1998
Net Income	$1,082,289	$977,286	$965,620
Average Number of Common Shares Outstanding.	3,389,337	3,273,034	3,202,155
Earnings Per Common Share	$0.32	$0.30	$0.30
FULLY DILUTED EARNINGS PER SHARE
For the First Six Months Ended June 30,	2000	1999	1998
Net Income	$1,082,289	$977,286	$965,620
Adjustments to Net Income (Assuming Conversion
of Subordinated Convertible Debentures).	726	726	2,520
Adjusted Net Income	$1,083,015	$978,012	$968,140
Average Number of Common Shares Outstanding.	3,389,337	3,273,034	3,202,155
Increase in Shares (Assuming Conversion of
Subordinated Convertible Debentures).	8,557	8,557	24,404
Average Number of Common Shares Outstanding
(Fully Diluted).	3,397,894	3,281,591	3,226,559
Earnings Per Common Share Assuming Full Dilution.	$0.32	$0.30	$0.30
Per share data for 1998 restated to reflect a 5% stock dividend paid on February 1, 1999.

PART I.

Item 2

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
THE RESULTS OF OPERATIONS

For the Six Months Ended June 30, 2000

   Community Bancorp. (the "Company") is a bank holding company whose
subsidiaries include Community National Bank and Liberty Savings Bank.
Community National Bank ("the Bank") is a full service institution operating in
the state of Vermont. The Bank has seven offices, five of which are located in
Orleans County, one in Essex County, and one in Caledonia County. Liberty
Savings Bank ("Liberty") is a New Hampshire guaranty savings bank acquired
by Community Bancorp. on December 31, 1997. Currently this bank is inactive
and shares the mailing address of Community Bancorp. Management is working
with the board of directors to find a suitable location in the northern part of New
Hampshire to operate Liberty as a lending facility, and may expand in the future
into a full service financial institution. Most of the Bancorp's business is
conducted through the Bank, therefore, the following narrative is based
primarily on this Bank's operations. The various spreadsheets preceding this
section are consolidated figures for Community Bancorp. and subsidiaries
("the Company"), and can be used to provide a more detailed comparison of the
information disclosed in the following narrative.

OVERVIEW

Net income for the second quarter ended June 30, 2000 was $648,664,
representing an increase of 14.5% and 16.2%, respectively, over the net
income figures of $566,489 for the second quarter ended June 30, 1999,
and $557,942 for the same period in 1998. The results of this are earnings
per share of $0.19 for the second quarter of 2000 and $0.17 for the second
quarters of 1999 and 1998. The Company declared a cash dividend of $0.16
per share payable May 1, 2000 to shareholders of record as of April 15, 2000.
Additionally, a two-for-one stock split was declared in 1998, and was
accomplished by a 100% stock dividend, payable June 1, 1998, to shareholders
of record as of May 15, 1998. As a result of the stock split, all per share data
has been restated for the first six months of 1998. Net income for the first six
month of 2000 was $1,082,289 compared to $977,286 for the first six months
of 1999, and $965,620 for the first six months of 1998, representing an increase
of 10.7% for 2000 versus 1999, and 1.2% for 1999 versus 1998. Earnings per
share for the first six months were $0.32 for 2000 compared to $0.30 for 1999
and 1998. The second quarter of 2000 was better than both the second quarter of
1999 and 1998 due in part to increases in the Bank's loan portfolio and
investment portfolio. These increases helped to generate more interest income,
contributing to the overall increase in net income. Net income for the six months
comparison periods followed similar patterns with interest income accounting for
the biggest increase with substantial decreases in interest expense on deposit
accounts contributing to the increase in net income.

   Net interest income, the difference between interest income and expense,
represents the largest portion of the Company's earnings, and is affected by
the volume, mix, rate sensitivity of earning assets as well as interest bearing
liabilities, market interest rates and the amount of non-interest bearing funds
which support earning assets.

   Net interest income for the second quarter comparison period started at $2.15
million for 1998, increased to $2.3 million for 1999, and then increased to $2.4
million for 2000, resulting in an increase of 7.4% for 1999 versus 1998, and an
increase of 5.7% for 2000 versus 1999. Total interest income for the second
quarter of 2000 increased $254,122 or by 6.1%, compared to the same quarter
in 1999, while the second quarter of 1999 decreased slightly compared to 1998,
with a decrease of $4,142 or .10%. Interest expense increased $123,165 or by
6.5% for the second quarter of 2000 compared to the same quarter in 1999,
while a decrease of $163,546 or just under 8%, is noted for the 1999 and 1998
comparison period. Net interest income started at $4.39 million as of the end
of the first six months of 1998, increased $103,357 or 2.4% to $4.5 million as
of the end the first six months of 1999, and then increased $299,201 or 6.7%
to end the first six months of 2000 at a figure of $4.8 million. Total interest
income for the first six months decreased $178,211 or 2.1% for 1999 versus
1998, while an increase of $$380,965 or 4.6% is noted for 2000 versus 1999.
Total interest expense decreased $281,568 or 7% for the first six months of
1999 versus 1998, while an increase of $81,764 or 2.2% is recognized for the
first six months of 2000 versus 1999. A review of the six month figures for
interest earned on loans, the major source of interest income, reveals a
decrease of 6.1% for 1999 compared to 1998, and an increase of 5.8% for 2000
compared to 1999. In comparison, interest paid on deposits, the major source of
interest expense, show decreases of 7.4% and 2.6%, respectively. Additionally,
the Bank sold some of the U.S. Treasury securities and replaced these investments
with higher yielding U.S. Government Agency bonds. As the loan portfolio
matures or reprices, increases are noted in the rates for these earning assets.
Interest bearing deposit accounts are repricing at a lower rate creating less
expense on these liabilities. The result is a tax equivalent spread for the first
six months equaling 3.7% for 2000 versus 3.6% for 1999 and 3.7% for 1998.

CHANGES IN FINANCIAL CONDITION

   The Company had total assets of $246 million at June 30, 2000 and $232
million at December 31, 1999. Average earning assets were $223 million for
the first six months ended June 30, 2000, including average loans of $158
million and average investment securities of $64 million. Average earning
assets were $220 million for the year ended December 31, 1999 including
average loans of $150 million and average investment securities of $65
million. The Company attributes the desire to increase the loan portfolio for the
increase in average loan volume.

   Average interest bearing liabilities at June 30, 2000 were $185 million,
with average time deposits reported totaling $91 million and NOW & money
market funds of $50 million. At December 31, 1999, average interest bearing
liabilities of $185 million were reported including average time deposits of $95
million and NOW & money market funds at an average volume of $52 million.

   Repurchase agreements have experienced a steady increase starting at an
average volume of $1.3 million at December 31, 1999, and increasing $4.8
million to end at a six month average balance of $6.1 million. These accounts
have been well received since they were introduced in 1998, and have been
successful in attracting new business customers, and retaining current business
customers.

RISK MANAGEMENT

Liquidity Risk - Liquidity management refers to the ability of the Company to
adequately cover fluctuations in assets and liabilities. Meeting loan demand
(assets) and covering the withdrawal of deposit funds (liabilities) are two key
components of the liquidity management process. The repayment of loans and
growth in deposits are two of the major sources of liquidity. Our time deposits
greater than $100,000 increased $71,178 or .5% to end the first six months of
2000 at a volume of $15.97 million compared to $15.89 million at the end of
the 1999 calendar year. Other time deposits increased $460,875 from December
31, 1999 to June 30, 2000. A review of these deposits, primarily the time
deposits over $100,000 indicates that they are primarily generated locally
and regionally and are established customers of the Company. The Company
has no brokered deposits. Now and money market funds decreased $4.5 million
to end the first six months of 2000 at $47.6 million compared to $52.1 million
as of the end 1999. The positive response to the repurchase agreements is a key
factor to the decrease in now and money market funds. Our gross loan portfolio
increased 9.7% from $152.6 million at the end of 1999 to $167.4 million at the
end of the first six months of 2000. The Bank has purchased approximately $4.4
million in loans from other institutions contributing to the increase in the loan
portfolio. Federal funds sold and overnight deposits decreased dramatically to
end the first six months of 1999 at $151,646 compared to $2.8 million as of the
end of the 1999 calendar year. An increase in the Company's investment portfolio
also helped to increase assets for the first six months of 2000. As of June 30,
2000, the Company held in it's investment portfolio treasuries classified as
"Available for Sale" at a fair value of $20.9 million, compared to $29 million
as of December 31, 1999, a decrease of $8.1 million or 27.8%. Treasuries
classified as "Held to Maturity" ended the first six months of 2000 at a book
value of $43.1 million compared to $29.9 million as of the end of the 1999
calendar year. Both of these types of investments mature at monthly intervals
as shown on the gap report at the end of this section. Securities classified as
"Restricted Equity Securities" are made up of equity securities the Company is
required to maintain in the form Federal Home Loan Bank of Boston (FHLB)
and Federal Reserve stock. These securities remain at a balance totaling $1.14
million as of June 30, 2000. The Company currently has an advance of just over
$13 million against an available line of $105.6 million, with an additional $2
million and $4.1 million, respectively, at First Boston and FHLB.

Credit Risk - Management follows strict underwriting guidelines, and has
established a thorough loan-by-loan review policy. These measures help to insure
the adequacy of the loan loss coverage. The Executive Officers and the Board of
Directors conduct periodic reviews of the loan portfolio. Topics discussed include
potential exposures existing within the portfolio. Factors considered are each
borrower's financial condition, the industry or sector for the economy in which
the borrower operates, and overall economic conditions. Existing or potential
problems are noted and addressed by senior management in order to assess the risk
of probable loss or delinquency. A variety of loans are reviewed periodically
by an independent firm in order to assure accuracy and compliance with various
policies and procedures set by the regulatory authorities. The Company also
employs a Credit Administration Officer whose duties include, among others, a
review of the loan portfolio including delinquent and non-performing loans.

   Specific allocations are made in situations management feels are at a greater
risk for loss. A quarterly review of the qualitative factors including "Levels of,
and Trends in, Delinquencies and Non-Accruals" and "National and Local
Economic Trends and Conditions", help to ensure that areas with potential risk
are noted and coverage increased or decreased to reflect the trends in
delinquencies and non-accruals. Residential first mortgage loans make up the
largest part of the loan portfolio and have the lowest historical loss ratio
helping to alleviate the overall risk.

Allowance for loan losses and provisions - The valuation allowance for loan
losses of $1.8 million as of June 30, 2000 composed 1.1% of the total gross
loan portfolio. A primary concern of management is to reduce the exposure of
credit loss within the portfolio. The Company maintains a residential loan
portfolio of approximately $102 million and a commercial real estate portfolio
of approximately $32 million accounting for 60% and 20%, respectively, of the
total loan portfolio. This large loan volume together with the low historical
loan loss experience helps to support our basis for loan loss coverage.

   Non-Performing assets for the company are made up of three different types
of loans, "90 Days or More Past Due", "Non-Accruing Loans", and "Other Real
Estate Owned" (OREO). A comparison of these non-performing assets revealed a
decrease in non-accruing loans of $389,897 or 22.2%, and the OREO portfolio
decreased $41,654 or by 9.6%, while a modest increase of $5,295 or just under
1% was noted in loans 90 days or more past due. The portfolio of non-accruing
loans makes up the biggest portion of the non-performing assets and consists of
$1.3 million or 92% of real estate secured mortgage loans at the end of the first
six months of 2000, thereby reducing the exposure to loss.

Non-performing assets as of June 30, 2000 and December 31, 1999 were as follows:

	06/30/2000	12/31/1999
Loans past due 90 day or more and still accruing	637,753	632,458
Non-Accruing loans	$1,368,652	$1,758,549
Other real estate owned	393,040	434,694
Total	$2,399,445	$2,825,701

   Other real estate owned is made up of property that the Company owns in lieu
of foreclosure or through normal foreclosure proceedings, and property that the
Company does not hold title to but is in actual control of, known as in-substance
foreclosure. The value of the property is determined prior to transferring the
balance to other real estate owned. The balance transferred to OREO is the
lesser of the appraised value of the property, or book value of the loan. A write-
down may be deemed necessary to bring the book value of the loan equal to the
appraised value. Appraisals are then done periodically thereafter charging any
additional write-downs to the appropriate expense account.

Market Risk and Asset and Liability Management - Market risk is the risk of
loss in a financial instrument arising from adverse changes in market prices
and rates, foreign currency exchange rates, commodity prices and equity prices.
The Company's market risk arises primarily from interest rate risk inherent in
its lending and deposit taking activities. To that end, management actively
monitors and manages its interest rate risk exposure. The Company does not
have any market risk sensitive instruments acquired for trading purposes. The
Company attempts to structure its balance sheet to maximize net interest income
while controlling its exposure to interest rate risk. The Company's Asset/
Liability Committee formulates strategies to manage interest rate risk by
evaluating the impact on earnings and capital of such factors as current
interest rate forecasts and economic indicators, potential changes in such fore-
casts and indicators, liquidity, and various business strategies. The Asset/-
Liability Committee's methods for evaluating interest rate risk include an
analysis of the Company's interest rate sensitivity "gap", which provides a
static analysis of the maturity and repricing characteristics of the entire
balance sheet, and a simulation analysis which calculates projected net
interest income based on alternative balance sheet and interest rate scenarios,
including "rate shock" scenarios involving immediate substantial increases or
decreases in market rates of interest.

Interest Rate Sensitivity "Gap" Analysis - An interest rate sensitivity "gap"
is defined as the difference between the interest-earning assets and interest-
bearing liabilities maturing or repricing within a given time period. A gap
is considered positive when the amount of interest rate sensitive assets exceeds
the amount of interest rate sensitive liabilities. A gap is considered negative
when the amount of interest rate sensitive liabilities exceeds the amount of
interest rate sensitive assets. During a period of rising interest rates, a
negative gap would tend to adversely affect net interest income, while a
positive gap would tend to result in an increase in net interest income.
During a period of falling interest rates, a negative gap would tend to result
in an increase in net interest income, while a positive gap would tend to affect
net interest income adversely. Because different types of assets and liabilities
with the same or similar maturities may react differently to changes in overall
market interest rates or conditions, changes in interest rates may affect net
interest income positively or negatively even if an institution were perfectly
matched in each maturity category.

   The following tables set forth the estimated maturity or repricing of the
Company's interest-earning assets and interest-bearing liabilities at June 30,
2000, and December 31, 1999. The Company prepares its interest rate
sensitivity "gap" analysis by scheduling assets and liabilities into periods
based upon the next date on which such assets and liabilities could mature
or reprice. The amounts of assets and liabilities shown within a particular
period were determined in accordance with the contractual term of the assets
and liabilities, except that:

Adjustable-rate loans and certificates of deposit are included in the period
when they are first scheduled to adjust and not in the period in which they
mature;

Fixed-rate loans reflect scheduled contractual amortization, with no
estimated prepayments;
and

NOW, money markets, and savings deposits, which do not have contractual
maturities, reflect estimated levels of attrition, which are based on detailed
studies by the Company of the sensitivity of each such category of deposit,
to changes in interest rates.

   Management believes that these assumptions approximate actual experience
and considers them reasonable. However, the interest rate sensitivity of the
Company's assets and liabilities in the tables could vary substantially if
different assumptions were used or actual experience differs from the historical
experiences on which the assumptions are based.

GAP ANALYSYS
Community Bancorp. & Subsidiaries
June 30, 2000
Cumulative repriced within

Dollars in thousands,	3 Months	4 to 12	1 to 3	3 to 5	Over 5
by repricing date	or less	Months	Years	Years	Years	Total
Interest sensitive assets:
Federal funds sold	0	0	0	0	0	0
Overnight deposits	152	0	0	0	0	152
Investments -						0
Available for Sale(1)	0	7,976	12,962	0	0	20,938
Held to Maturity	2,498	8,458	14,863	2,538	14,701	43,058
Restricted equity securities	0	0	0	0	1,142	1,142
Loans(2)	26,279	51,767	42,931	11,396	34,193	166,566
Total interest sensitive assets	28,929	68,201	70,756	13,934	50,036	231,856
Interest sensitive liabilities:
Certificates of deposit	16,177	63,165	10,884	1,472	0	91,698
Money markets	32,194	0	0	0	0	32,194
Regular savings	0	3,006	0	0	30,500	33,506
Now accounts	0	0	0	0	15,442	15,442
Borrowed funds	5,000	8,000	15	0	40	13,055
Repurchase agreements	9,914	0	0	0	0	9,914
Subordinated debentures	0	0	0	20	0	20
Total interest sensitive liabilities	63,285	74,171	10,899	1,492	45,982	195,829
Net interest rate sensitivity gap	(34,356)	(5,970)	59,857	12,442	4,054
Cumulative net interest rate
sensitivity gap	(34,356)	(40,326)	19,531	31,973	36,027
Cumulative net interest rate
sensitivity gap as a
percentage of total assets	-13.97%	-16.39%	7.94%	13.00%	14.65%
Cumulative interest sensitivity
gap as a percentage of total
interest-earning assets	-14.82%	-17.39%	8.42%	13.79%	15.54%
Cumulative interest earning assets
as a percentage of cumulative
interest-bearing liabilities	45.71%	70.66%	113.17%	121.34%	118.40%
(1) The Company may sell investments available for sale with a fair value of $20,938,438 at any time.
(2) Loan totals exclude non-accruing loans amounting to $1,368,652.

GAP ANALYSYS
Community Bancorp. & Subsidiaries
December 31, 1999
Cumulative repriced within:

Dollars in thousands,	3 Months	4 to 12	1 to 3	3 to 5	Over 5
by repricing date	Or less	Months	Years	Years	Years	Total
Interest sensitive assets:
Federal funds sold	600	0	0	0	0	600
Overnight deposits	2,188	0	0	0	0	2,188
Investments -
Available for Sale(1)	0	9,993	18,989	0	0	28,982
Held to Maturity	3,057	6,680	14,910	1,426	3,814	29,887
Restricted equity securities	0	0	0	0	1,142	1,142
Loans(2)	23,254	51,250	41,673	8,317	27,027	151,521
Total interest sensitive assets	29,099	67,923	75,572	9,743	31,983	214,320
Interest sensitive liabilities:
Certificates of deposit	13,405	65,237	11,072	1,452	0	91,166
Money markets	32,299	0	0	0	0	32,299
Regular savings	0	2,854	0	0	30,000	32,854
Now accounts	0	0	0	0	19,796	19,796
Borrowed funds	0	0	15	0	4,040	4,055
Repurchase agreements	2,623	0	0	0	0	2,623
Subordinated debentures	0	0	0	20	0	20
Total interest sensitive liabilities	48,327	68,091	11,087	1,472	53,836	182,813
Net interest rate sensitivity gap	(19,228)	(168)	64,485	8,271	(21,853)
Cumulative net interest rate
sensitivity gap	(19,228)	(19,396)	45,089	53,360	31,507
Cumulative net interest rate
Sensitivity gap as a
Percentage of total assets	-8.28%	-8.35%	19.42%	22.98%	13.57%
Cumulative interest sensitivity
Gap as a percentage of total
Interest-earning assets	-8.97%	-9.05%	21.04%	24.90%	14.70%
Cumulative interest earning assets
as a percentage of cumulative
Interest-bearing liabilities	60.21%	83.34%	135.36%	141.37%	117.23%

(1) The Company may sell investments available for sale with a fair value of
$28,982,188 at any time.
(2) Loan totals exclude non-accruing loans amounting to $1,758,549.
 
OTHER OPERATING INCOME AND EXPENSES

   Total other operating income for the second quarter of 2000 was $518,593
compared to $450,091 for the second quarter of 1999 and $513,773 for the second
quarter of 1998, an increase of $68,502 or 15.2% for 2000 versus 1999, and a
decrease of $63,682 or 12.4% for 1999 versus 1998. Trust department income
reports the biggest increase for the second quarter of 2000 versus the same
period in 1999. A decrease is noted in other income for both 2000 versus 1998
and 1999 versus 1998 at a reported $78,290, and $92,052, respectively. Income
from sold loans accounts for a portion of the decreases with figures for the
second quarter of 2000 of $8,508 compared to $36,700 for 1999 and $101,344
for the same quarter in 1998. Total other operating income for the first six
months of 2000 ended at $920,889 compared to $823,563 as of the end of the
first six months of 1999 and $810,536 for the same period in 1998. The results
are an increase of $97,326 or 11.8% for 2000 versus 1999 and an increase of
$13,027 or 1.6% for 1999 versus 1998. Trust department income continues to
note the biggest increase throughout the comparison period reporting increases
of $51,994 or 49.3% for 2000 versus 1999, and $39,669 or 60.3% for 1999
versus 1998. Our trust department has expanded in all aspects from employees
to customers, with the end result showing an increase in income over the last
few years. A loss of $11,507 was taken during the first six months of 2000 as
the result of the sale of some low yielding treasuries. These treasuries were
replaced with higher yielding agencies, anticipating that the higher yield would
soon make up for the loss on the sale of the treasuries. Other income recognized
the only decrease for 1999 versus 1998 reported at $37,362 or 9.1%. This
decrease offset most of the increase in trust department income for the six
months comparison period of 1999 versus 1998, resulting in a modest $13,027
increase for that time period.

   Total other operating expenses followed a different path for the second
quarter comparisons with figures of almost $2 million for 2000, and increase
of $143,219 or 7.8% over the 1999 figure of $1.83 million, which increased
$67,474 over the 1998 figure of $1.76 million. Occupancy expense notes the
biggest increase for the second quarter of 2000 versus 1999, due to significant
increases in depreciation, taxes on bank property, and service contracts.
Expenses associated with the Company's non-performing assets were higher for
the second quarter of 1999 compared to the same quarter in 1998, contributing
$31,299 to the increase in other expenses for this comparison period. Total
other operating expense for the six month comparison periods increased from
$3.6 million for 1998 to $3.7 million for 1999, and then increased to $4 million
for 2000, resulting in increases of 3% for 1999 versus 1998, and 8.3% for 2000
versus 1999. Other expenses for the first six months reported the biggest
increase of $91,698 or 7.7%, followed closely by occupancy expense with a
reported increase for 2000 versus 1999 of $82,664 or 12.8%. Expenses of $61,500
on non-accrual loans for the first six months of 1999 supported the increase in
other expenses for the 1999 versus 1998 period.

   All components of other operating expenses are monitored by management,
however, a quarterly review is performed on crucial components to assure that
the accruals for these expenses are accurate. This helps alleviate the need to
make drastic adjustments to these accounts that in turn effect the net income
of the Company.

APPLICABLE INCOME TAXES

   Income before taxes increased from $746,924 for the second quarter of 1998
to $785,172 for the second quarter of 1999, and then increased to $895,412 for
the second quarter of 2000. The results are increases of just over 5% for 1999
versus 1998 and 14% for 2000 versus 1999. As a result, provisions for income
taxes increased $29,701 or 15.7% for the 1999 versus 1998 comparison period,
and an increase of $28,065 or 12.8% is noted for the 2000 versus 1999 period
ending the second quarter of 2000 at $246,748. Income before taxes for the
first six months increased from $1.27 million for 1998 to $1.34 million for
1999 to $1.47 million as of June 30, 2000, with income taxes calculated at
$302,855, $362,236, and $391,242, respectively.

EFFECTS OF INFLATION

   Rates of inflation affect the reported financial condition and results of
operations of all industries, including the banking industry. The effect of
monetary inflation is generally magnified in bank financial and operating
statements. As costs and prices rise during periods of monetary inflation,
cash and credit demands of individuals and businesses increase, and the
purchasing power of net monetary assets declines. The Company depends
primarily on a strong net interest income to enable their purchasing power
to remain aggressive.

CAPITAL RESOURCES

   The Company's stockholders' equity started the year at $22,181,154,
increased through earnings of $1,082,289 and sales of common stock of
$478,131 through dividend reinvestment, and adjustments totaling $32,046
for valuation allowance for securities. It was decreased by dividends totaling
$1,079,309, the purchase of treasury stock of $97 and the purchase of stock
through the Stock Buyback Plan of $436,991. The Company announced plans to
buy up to 6% or 205,000 shares of its outstanding common stock at current
market prices. To date, the price per share was in the range of $9.50 to $10.25.
The Company declared a dividend in December of 1999, payable in February of
2000. As a result, the Company had to accrue the dividend, decreasing
stockholders' equity by $537,361 as of December 31, 1999. Stockholders'
equity ended the first six months of 2000 at $22,794,584 with a book value
of $6.76 per share. All stockholders' equity is unrestricted. Additionally, it
is noted that the net unrealized loss on valuation allowance for securities has
decreased since the beginning of the year. A review of this activity shows that
as the maturity date of the investments gets closer, the market price becomes
favorably better, therefore, material loss is greatly reduced.

   The Company is required to maintain minimum amounts of capital to "risk
weighted" assets, as defined by the banking regulators. The minimum requirements
for Tier I and Total Capital are 4% and 8%, respectively. As of June 30, 2000,
the Company continued to maintain ratios far above the minimum requirements
with reported ratios of approximately 18% for Tier I and 19% for Total Capital.

   The Company intends to continue maintaining a strong capital resource
position to support its asset size and level of operations. Consistent with that
policy, management will continue to anticipate the Company's future capital
needs.

   From time to time the Company may make contributions to the capital of its
subsidiaries, Community National Bank and Liberty Savings Bank. At present,
regulatory authorities have made no demand on the Company to make additional
capital contributions to either Bank's capital.

FORWARD-LOOKING STATEMENTS

   When used herein, the terms "expect, plan, anticipate, believe" or similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements.

   The Company has included certain forward-looking statements in this
Management's Discussion and Analysis of Results of Operations, Cash Flow
and Financial Condition. These statements are based on current expectations,
estimates and projections about the industries in which the Company operates,
management's beliefs and various assumptions made by management which are
difficult to predict. Among the factors that could affect the outcome of the
statements are general industry and market conditions and growth rates. There-
fore, actual outcomes and their impact on the Company may differ materially
from what is expressed or forecasted. The Company undertakes no obligation
to update publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.


                                            PART II.

Item 1

Legal Proceedings

   Community National Bank is currently involved in a lawsuit filed on March
23, 1998, in the Orleans Superior Court against the State of Vermont. The issue
involves OREO property that is on "filled land" on the shores of Lake
Memphremagog in the City of Newport. According to a so-called "public trust
doctrine", the State of Vermont might have ownership of any lands created by
filling any portion of the navigable waters of the state. The result of this is that
the Bank has been unable to sell these properties for fair value because some
attorneys will not clear title to the property. The suit filed is an attempt to
clear title to said properties by seeking judicial clarification of the public
trust doctrine. The Bank received documents in mid April pertaining to the
ruling of the lawsuit. The judgement was not in the Bank's favor. On June 23,
2000, The Bank filed an appeal to the Vermont Supreme Court, but it may take
up to six months to have it set for oral arguments. Regardless of the outcome
of the suit, is not likely to have a material impact on the financial statements
of the Bank or consolidated Company.


   There are no other pending legal proceedings to which the Company is a
party or of which any of its property is the subject, other than routine
litigation incidental to its banking business.

 
Item 4

Submission of Matters to a Vote of Security Holders

   The following matters were submitted to a vote of security holders, at the
Annual Meeting of Shareholders of Community Bancorp. on May 2, 2000:

 

1. To elect three directors to serve until the Annual Meeting of Shareholders
   in 2003;
2. To consider and vote on an amendment to the Company's Articles of
   Association to limit the liability of directors, except for certain breaches of
   duty, as specified by Vermont law;
3. To consider and vote on an amendment to Article Eleven of the company's
   Articles of Association to modify existing language relating to indemnification
   of directors, officers and others;
4. To ratify the selection of the independent public accounting firm of A.M.
   Peisch & Company as the Corporation's external auditors for the fiscal year
   ending December 31, 2000;

 
The results are as follows:

			AUTHORITY
			WITHHELD/	BROKER
MATTER	FOR	AGAINST	ABSTAIN	NON-VOTE
Election of Directors:
Elwood Duckless	2,675,890.6326	5,610.9759	12,342.8672	-0-
Rosemary M. Lalime	2,658,767.6533	22,733.9552	12,342.8672	-0-
Anne T. Moore	2,671,577.6129	9,923.9956	12,342.8672	-0-
Amendment to limit liability	2,590,279.7342	42,920.0441	60,644.6974	-0-
Amendment RE: Indemnification	2,579,191.2744	40,438.7072	74,214.4941	-0-
Selection of Auditors
A.M. Peisch & Company	2,668,165.6682	1,620.4613	24,058.3462	-0-

Item 5

Other Information

NONE

Item 6

Exhibits and Reports on Form 8-K

The following exhibits are filed as part of this report:
Exhibit 2.1 - Amendments to article 11 and new article 16 of the Community Bancorp.,
amended and restated articles of association
Exhibit 2.2 - Amended By-laws for Community Bancorp. including new Article 9
(Indemnification)
Exhibit 27 - Financial Data Schedule

Reports on Form 8-K

Form 8-K dated April 11, 2000, announcing a stock buyback plan for Community Bancorp.,
was filed on the same date.

                                 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 thereunto duly authorized.

COMMUNITY BANCORP.

DATED: August 4, 2000                     By: /s/ Richard C. White
                                           Richard C. White, President

 
DATED: August 4, 2000                     By: /s/ Stephen P. Marsh
                                           Stephen P. Marsh,
                                           Vice President & Treasurer

                                                          Exhibit 2.1

The following two amendments to the Amended and Restated Articles of Association
of Community Bancorp. were adopted by the requisite vote of the shareholders at
the Annual Meeting of Shareholders held on May 2, 2000 and became effective on
May 12, 2000, upon filing in the Office of the Vermont Secretary of State:

Article Eleven is amended to read in its entirety as follows:

                             ARTICLE ELEVEN
                            INDEMNIFICATION

The Board of Directors is authorized to adopt such By-laws and other
regulations or arrangements (including contracts) providing for indemnification
of, and advancement of expenses to, any person who is or was a director,
officer, employee or agent of the Corporation, as the Directors may deem
advisable, to the extent not inconsistent with applicable law.

Article Sixteen is added, reading in its entirety as follows:

                             ARTICLE SIXTEEN
                 LIMITATION OF DIRECTOR LIABILITY

A Director of the Corporation shall have no personal liability to the Corporation
or to its shareholders for money damages for any action taken, or any failure to
take any action, solely as a director, based on a failure to discharge his or her
own duties in accordance with Section 8.30 of Title 11A of the Vermont Statutes
Annotated, except for (a) the amount of a financial benefit received by the
Director to which the Director is not entitled; (b) an intentional reckless
infliction of harm on the Corporation or its shareholders; (c) a violation
of Section 8.33 of Title 11A of the Vermont Statutes Annotated; or (d) an
intentional or reckless criminal act. This Article Sixteen shall not be deemed
to eliminate or limit the liability of a Director for any act or omission
occurring prior to the date this Article becomes effective. No amendment or
repeal of this Article Sixteen shall apply to or have any effect on the liability
or alleged liability of any Director of the Corporation for or with respect to
any acts or omissions of such Director occurring prior to such amendment or
repeal.

EX-27

 

<ARTICLE> 9
<MULTIPLIER> 1000

                             
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          DEC-31-2000
<PERIOD-END>                               JUN-30-2000
<CASH>                                            6104
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<FED-FUNDS-SOLD>                                     0
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<INVESTMENTS-HELD-FOR-SALE>                      20938
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<LOANS>                                         167935
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EX-2

                                  BY-LAWS

                                    OF

                           COMMUNITY BANCORP.


                            A Vermont Corporation

                    Amended and Restated as of April 5, 1994
                   and further Amended through June 13, 2000


                          TABLE OF CONTENTS

	Page
ARTICLE ONE: OFFICES	1
1.01   Registered Office and Agent	1
1.02   Other Offices	1
ARTICLE TWO: SHAREHOLDERS	1
2.01   Annual Meetings	1
2.02   Special Meetings	1
2.03   Place of Meetings	1
2.04   Notice	1
2.05   Voting List	2
2.06   Voting of Shares	2
2.07   Quorum	2
2.08   Majority Vote; Withdrawal of Quorum	3
2.09   Method of Voting; Proxies	3
2.10   Acceptance of Votes	3
2.11   Record Date	4
2.12   Presiding Officials at Meetings	5
2.13   Inspection of Corporate Records	5
ARTICLE THREE: DIRECTORS	6
3.01   Management	6
3.02   Number; Election; Term; Qualifications	6
3.03   Classification	6
3.04   Vacancies	7
3.05   Mandatory Retirement	7
3.06   Removal	7
3.07   Inconsistency	7
3.08   Nominations	7
3.09   First Meeting	7
3.10   Regular Meetings	8
3.11   Special Meetings	8
3.12   Quorum; Majority Vote	8
3.13   Procedure; Minutes	8
3.14   Presumption of Assent	8
3.15   Compensation	8
ARTICLE FOUR: COMMITTEES	9
4.01   Designation	9
4.02   Number; Qualification; Term	9
4.03   Authority	9
4.04   Committee Changes	10
4.05   Meetings	10
4.06   Quorum; Majority; Vote	10
4.07   Minutes	10
4.08   Compensation	10
4.09   Responsibility	10
ARTICLE FIVE: GENERAL PROVISIONS RELATING TO MEETINGS	10
5.01   Notice	10
5.02   Waiver of Notice	11
5.03   Telephone and Similar Meetings	11
5.04   Action Without Meeting	11
ARTICLE SIX: OFFICERS AND OTHER AGENTS	11
6.01   Number; Titles; Election; Term	11
6.02   Removal	12
6.03   Vacancies	12
6.04   Authority	12
6.05   Compensation	12
6.06   Chairman of the Board	12
6.07   President	12
6.08   Vice President	13
6.09   Treasurer	13
6.10   Assistant Treasurers	13
6.11   Secretary	13
6.12   Assistant Secretaries	14
ARTICLE SEVEN: CERTIFICATES AND SHAREHOLDERS	14
7.01   Certificates for Shares	14
7.02   Issuance	14
7.03   Shares Without Certificates	14
7.04   Consideration for Shares	15
7.05   Lost, Stolen or Destroyed Certificates	15
7.06   Transfer of Shares	15
7.07   Registered Shareholders	16
ARTICLE EIGHT: MISCELLANEOUS PROVISIONS	16
8.01   Distributions	16
8.02   Reserves	16
8.03   Books and Records	16
8.04   Fiscal Year	16
8.05   Seal	16
8.06   Resignation	16
8.07   Securities of Other Corporations	17
8.08   Amendment	17
8.09   Invalid Provisions	17
8.10   Headings	17
ARTICLE NINE: INDEMNIFICATION	17
9.01   Definitions	17
9.02   Authority to Indemnify	17
9.03   Mandatory Indemnification in Certain Circumstances	18
9.04   Advance for Expenses	18
9.05   Court Ordered Indemnification	19
9.06   Determination and Authorization of Indemnification	19
9.07   Indemnification of Officers, Employees and Agents	20
9.08   Insurance	20
9.09   Contract Right	21
9.10   Enforcement of Rights	21
9.11   Non-Exclusive Rights; Survival	21
9.12   Severability	21
9.13   Application of this Article	21

                                        BY-LAWS

                                          OF

                                COMMUNITY BANCORP.

                                 A Vermont Corporation
                       (Amended and Restated as of April 5, 1994 and
                          further Amended through June 13, 2000)

ARTICLE ONE: OFFICES

1.01  Registered Office and Agent. The registered office and registered agent
of Community Bancorp. (the "Corporation") shall be as designated from time to
time by the appropriate filing by the Corporation in the office of the Secretary
of State of Vermont.

1.02  Other Offices. The Corporation may also have offices at such other places,
both within and without the State of Vermont, as the Board of Directors may from
time to time determine or the business of the Corporation may require.

ARTICLE TWO: SHAREHOLDERS

2.01  Annual Meetings. The regular annual meeting of shareholders of the
Corporation shall be held on the first Tuesday of May of each year, at such time
and place as shall be designated by the Board of Directors and stated in the
notice of the meeting. At such meeting, the shareholders shall elect directors
and transact such other business as may properly be brought before the meeting.
(As amended November 15, 1983).

2.02  Special Meetings. A special meeting of the shareholders may be called at
any time by the President, or by the Board of Directors, or by the Secretary
upon the petition of the holders of not less than ten percent of all shares
entitled to vote on any issue at such meeting. Only such business shall be
transacted at a special meeting as may be stated or indicated in the notice
of such meeting.

2.03  Place of Meetings. The annual meeting of shareholders may be held at
any place within or without the State of Vermont as may be designated by the
Board of Directors. Special meetings of shareholders may be held at any place
within the State of Vermont as may be designated by the person or persons
calling such special meeting as provided in Section 2.02. If no place for a
meeting is designated, it shall be held at the registered office of the
Corporation.

2.04  Notice. Written or printed notice stating the place, day, and hour of each
meeting of shareholders, and, in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than ten
nor more than 60 days before the date of the meeting, either personally or by
mail, by or at the direction of the Board of Directors, the President, the
Secretary, or the persons calling the meeting, to each shareholder of record
entitled to vote at such meeting.

2.05  Voting List. Beginning two business days after the notice of meeting is
given, and continuing through the meeting, the Secretary shall make available
for inspection by any shareholder a complete list of shareholders entitled to
notice of and to vote at such meeting, arranged in alphabetical order, including
the address of each shareholder and the number of voting shares held by each
shareholder. Such list shall be kept on file during the time specified at the
principal office of the Corporation or at a place identified in the notice in
the city in which the meeting is to be held. The list shall be subject to
inspection during usual business hours, and upon written demand, by any
shareholder of record entitled to vote at that meeting, or his or her agent or
attorney, who shall be entitled to copy the list at his or her own expense.
Such list shall be produced at such meeting, and at all times during such
meeting shall be subject to inspection by any shareholder of record entitled
to vote at that meeting, or his or her agent or attorney. The original stock
transfer books shall be prima facie evidence as to who are the shareholders
entitled to examine such list or stock transfer books.

2.06  Voting of Shares. Treasury shares, and shares of the Corporation's
own stock owned, directly or indirectly by another corporation (other than
shares held in a fiduciary capacity) the majority of the voting stock of which
is owned or controlled by the Corporation, shall not be shares entitled to vote
or to be counted in determining the total number of outstanding shares. Shares
held by an administrator, executor, guardian, or conservator may be voted by
him, either in person or by proxy, without transfer of such shares into his name
so long as such shares form a part of the estate and are in the possession of the
estate being served by him. Shares standing in the name of a trustee may be
voted by him, either in person or by proxy, only after the shares have been
transferred into his name as trustee. 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 transfer of such shares into
his name if authority to do so is contained in the court order by which such
receiver was appointed. Shares standing in the name of another domestic or
foreign corporation of any type or kind may be voted by such officer, agent,
or proxy as the By-laws of such corporation may provide or, in the absence of
such provision, as the Board of Directors of such corporation shall determine.
A shareholder whose shares are pledged shall be entitled to vote such shares
until they have been transferred into the name of the pledgee, and thereafter,
the pledgee shall be entitled to vote such shares.

2.07  Quorum. The holders of a majority of the outstanding shares entitled to
vote on a matter, present in person or represented by proxy, shall constitute a
quorum for action on that matter at any meeting of shareholders, except as
otherwise provided by law or the Articles of Incorporation. If a quorum shall
not be present or represented at any meeting of shareholders, a majority of the
shareholders who are present in person or represented by proxy and who are
entitled to vote on any issue at the meeting, may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present or represented. At any reconvening of an adjourned
meeting any business as to which a quorum is present or represented by proxy
may be transacted which could have been transacted at the original meeting,
had a quorum been present or represented.

2.08  Majority Vote; Withdrawal of Quorum. Except as otherwise provided
by law or the Articles of Incorporation, if a quorum on a matter is present in
person or represented by proxy at any meeting, the action on such matter will
be approved if the number of votes cast in favor of the matter exceeds the
number of votes cast opposing the matter. The shareholders present at a duly
convened meeting may continue to transact business until adjournment, not-
withstanding any withdrawal of shareholders which may leave less than a
quorum remaining.

2.09  Method of Voting; Proxies. Every shareholder of record shall be entitled
at every meeting of shareholders to one vote on each matter submitted to a vote,
for every share standing in his name on the original stock transfer books of the
Corporation except to the extent that the voting rights of the shares of any
class or classes are limited or denied by the Articles of Incorporation or by
law. Such books shall be prima facie evidence as to the identity of shareholders
entitled to vote. At any meeting of shareholders, every shareholder having the
right to vote may vote either in person or by a proxy executed in writing by the
shareholder or by his duly authorized secretary-in-fact. Each such proxy shall
be filed with the Secretary of the Corporation or other officer or agent
authorized to tabulate votes before or at the time of the meeting and shall
become effective upon such filing. No proxy shall be valid after 11 months
from the date of its execution, unless otherwise expressly provided in the
proxy. If no date is stated on a proxy, such proxy shall be presumed to have
been executed on the date of the meeting at which it is to be voted. Each proxy
shall be revocable unless expressly and conspicuously provided therein to be
irrevocable and the appointment as proxy is coupled with an interest, or unless
otherwise made irrevocable by law.

2.10  Acceptance of Votes. If the name signed on a vote, consent, waiver, or
proxy appointment corresponds to the name of a shareholder, the Corporation if
acting in good faith shall be entitled to accept the vote, consent, waiver, or
proxy appointment and give it effect as the act of the shareholders. If the name
signed on a vote, consent, waiver, or proxy appointment does not correspond to
the name of its shareholder, the Corporation if acting in good faith shall
nevertheless be entitled to accept the vote, consent, waiver, or proxy
appointment and give it effect as the act of the shareholder if:

(1)   the shareholder is an entity as defined in the Vermont Business
     Corporation Act and the name signed purports to be that of an
     officer or agent of the entity;

(2)   the name signed purports to be that of an administrator, executor,
     guardian, or conservator representing the shareholder and, if the
     Corporation requests, evidence of fiduciary status acceptable to the
     Corporation has been presented with respect to the vote, consent,
     waiver, or proxy appointment;

(3)   the name signed purports to be that of a receiver or trustee in bankruptcy
     of the shareholder and, if the Corporation requests, evidence of this
     status acceptable to the Corporation has been presented with respect to
     the vote, consent, waiver, or proxy appointment;

(4)   the name signed purports to be that of a pledgee, beneficial owner, or
     attorney-in-fact of the shareholder and, if the Corporation requests,
     evidence acceptable to the Corporation of the signatory's authority to
     sign for the shareholder has been presented with respect to the vote,
     consent, waiver, or proxy appointment; or

(5)   two or more persons are the shareholder as co-tenants or fiduciaries
     and the name signed purports to be the name of at least one of the co-
     owners and the person signing appears to be acting on behalf of all the
     co-owners.

The Corporation shall be entitled to reject a vote, consent, waiver, or proxy
appointment if the Secretary or other officer or agent authorized to tabulate
votes, acting in good faith, has reasonable basis for doubt about the validity
of the signature on it or about the signatory's authority to sign for the
shareholder. The Corporation and its officer or agent who accepts or rejects
a vote, consent, waiver, or proxy appointment in good faith and in accordance
with the standards of this section are not liable in damages to the shareholder
for the consequences of the acceptance or rejection. Corporate action based on
the acceptance or rejection of a vote, consent, waiver, or proxy appointment
under this section is valid unless a court of competent jurisdiction determines
otherwise.

2.11  Record Date. For the purpose of determining shareholders entitled to
notice of or to vote at any meeting of shareholders or any reconvening thereof
or entitled to receive payment of any dividend or in order to make a determin-
ation of shareholders for any other proper purpose, the Board of Directors may
fix in advance a date as the record date. Such record date shall not be more
than 70 days prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If no record date is so fixed by
the Board for the determination of shareholders entitled to notice of, or to
vote at a meeting of shareholders, or shareholders entitled to receive a share
dividend or other distribution, the record date for determination of such
shareholders shall be at the close of business on:

(a)   With respect to an annual shareholder meeting or any special shareholder
     meeting called by the Board or any person specifically authorized by the
     Board or these bylaws to call a meeting, the day before the first notice
     is delivered to shareholders;

(b)   With respect to a special shareholder's meeting demanded by the
      shareholders, the date the first shareholder signs the demand;
(c)   With respect to the payment of a share dividend, the date the
     Board authorizes the share dividend;
(d)   With respect to actions taken in writing without a meeting, the
     date the first shareholder signs a consent;
(e)   And with respect to a distribution to shareholders, other than one
     involving a repurchase or reacquisition of shares, the date the
     Board authorizes the distribution.

When a determination of shareholders entitled to vote at any meeting
of shareholders has been made as provided in this section, such determination
shall apply to any adjournment thereof unless the Board of Directors fixes a
new record date. The Board of Directors shall fix a new record date if the
meeting is adjourned to a date more than 120 days after the date fixed for
the original meeting.

2.12  Presiding Officials at Meetings. Unless some other person is elected
by a vote of a majority of the shares then entitled to vote at a meeting of
shareholders, or is designated by the Board of Directors, the President shall
preside at and the Secretary shall prepared minutes of each meeting of
shareholders.

2.13  Inspection of Corporate Records.
(a)   Minutes and Accounting Records. The Corporation shall keep as
     permanent records minutes of all meetings of its shareholders and
     Board of Directors, a record of all actions taken by the shareholders
     or Board of Directors without a meeting, and a record of all actions
     taken by a committee of the Board of Directors in place of the Board of
     Directors on behalf of the Corporation. The Corporation shall maintain
     appropriate accounting records.

(b)   Absolute Inspection Rights of Records Required at Principal Office.
     Upon written demand to the Corporation made at least five business days
     before the date on which he wishes to inspect and copy, a shareholder
     (or his agent or attorney) shall be entitled to inspect and copy, during
     regular business hours, any of the following records, all of which the
     Corporation is required to keep at its principal office:

  (1)   its Articles or Restated Articles of Incorporation and all amendments
       to them currently in effect;
  (2)   its bylaws or restated bylaws and all amendments to them currently
       in effect;
  (3)   the minutes of all shareholders' meetings, and records of all action
       taken by shareholders without a meeting, for the past three years;
  (4)   all written communications to shareholders generally within the past
       three years, including the financial statements furnished for the past
       three years to the shareholders;
  (5)   a list of the names and business addresses of its current directors
       and officers; and
  (6)   its most recent annual report delivered to the Secretary of State.

(c)   Conditional Inspection Right. A shareholder (or his agent or attorney)
     shall be entitled to inspect and copy, during regular business hours at a
     reasonable location specified by the Corporation, any of the records
     specified below in this paragraph (c), provided that (i) such shareholder
     older gives the Corporation a written demand made in good faith, at least
     five business days before the date on which he wishes to inspect and copy,
     (ii) the demand is for a proper purpose and the written demand describes
     with reasonable particularity the purpose for the request and the records
     he or she desires to inspect, and (iii) the records are directly connected
     with the shareholder's purpose. The right of inspection specified in this
     paragraph (c) shall apply to the following records of the Corporation:

  (1)   accounting records of the Corporation; and
  (2)   the record of shareholders (compiled no earlier than the date of the
       shareholder's demand).

(d)   Copy Costs. The right to copy records includes, if reasonable, the right
     to receive copies made by photocopy or other means. The Corporation may
     impose a reasonable charge, covering the costs of labor and material, for
     copies of any documents provided to the shareholder. The charge may not
     exceed the estimated cost of production or reproduction of the records.

(e)   Shareholder Includes Beneficial Owner. For purposes of this section
     2.13, the term "shareholder" shall include a beneficial owner whose shares
     are held in a voting trust or by a nominee on the beneficial owner's behalf.

ARTICLE THREE: DIRECTORS

3.01  Management. The business and affairs of the Corporation shall be managed
by the Board of Directors, subject to the restrictions imposed by law, the Articles
of Incorporation, or these By-laws.

3.02  Number; Election; Term; Qualification. Subject to Section 3.06 below, the
Board of Directors shall consist of not less than 9 nor more than 25 shareholders,
the exact number and the terms of office of which shall be fixed from time to
time by the Board of Directors pursuant to a resolution adopted by a majority
of the full Board of Directors. Such exact number may be increased or decreased
by the affirmative vote of the holders of at least seventy-five percent (75%)
of the combined voting power of all of the then-outstanding shares of the
Corporation's capital stock entitled to vote generally in the election of
directors, (other than directors, if any, elected under Article Fifteen of the
Articles of Incorporation). Election of directors shall be by vote of a
majority of the shares represented in person or by proxy at a meeting at
which a quorum is present.

3.03  Classification. The directors (other than directors, if any, elected
under Article Fifteen of the Articles of Incorporation) shall be classified,
with respect to the time for which they severally hold office, into three
classes, as nearly equal in number as possible. Upon their initial election,
the members of the first class shall hold office for a term expiring at the
next annual meeting of the shareholders after their election, the members
of the second class shall hold office for a term expiring at the second annual
meeting of the shareholders after their election, and the members of the
third class shall hold office for a term expiring at the third annual meeting
of shareholders after their election. At each annual meeting of shareholders
following such initial classification and election, directors elected to
succeed those directors whose terms expire shall be elected for a term of
office to expire at the third succeeding annual meeting of shareholders after
their election.

3.04  Vacancies. Subject to Section 3.06 below, any vacancies in the Board of
Directors resulting from death, resignation, retirement, or removal from office
of a director may be filled by the Board of Directors, acting by resolution of
a majority of the directors then in office (other than directors, if any, elected
under Article Fifteen of the Articles of Incorporation), although less than a
quorum. Any director chosen to fill a vacancy as provided herein shall hold
office until the next election of the class for which such director shall have
been elected and shall have qualified. No decrease in the number of directors
shall shorten the term of any incumbent director.

3.05  Mandatory Retirement. No person whether or not a director in office
shall be elected as a member of the Board of Directors after his or her
seventieth birthday. Any director who passes the age of seventy while in
office may continue to serve until the next annual meeting.

3.06  Removal. Subject to Section 3.07 below, 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 seventy-five
percent (75%) of the combined voting power of all of the then-outstanding
shares of the Corporation's capital stock entitled to vote generally in the
election of directors.

3.07  Inconsistency. Nothing contained in Sections 3.02 through 3.07 of this
Article Three shall be deemed to alter, amend or repeal any of the provisions
of Article Fifteen of the Articles of Incorporation, which confers, under
circumstances described therein, on the holders of the debentures referred
to therein, the right to elect directors in certain circumstances. During any
period in which such rights may be exercised, the provision or provisions
conferring such rights shall prevail over any provision of these By-laws
inconsistent therewith.

3.08  Nominations. Nominations for election to the Board of Directors shall be
made by the Board of Directors. One or more shareholders may submit to the
Board of Directors for consideration recommendations for persons to be
nominated as directors. Any such recommendations must be in writing,
mailed or delivered to the President of the Corporation on or before January
1 next preceding the annual shareholders meeting for which such election is
sought and must disclose the following information (to the extent known):
(a) the name and address of each proposed nominee; (b) the principal occupation
of each proposed nominee; and (c) the number of shares of the Corporations'
common stock owned by each proposed nominee.

3.09  Annual Meeting. The Board of Directors may hold its annual meeting for
the purpose of organization and the transaction of business, if a quorum is
present, immediately after the annual meeting of shareholders, and no notice
of such meeting shall be necessary.

3.10  Regular Meetings. Regular meetings of the Board of Directors shall be
held without notice at such times and places as may be designated from time to
time by resolution of the Board of Directors and communicated to all directors.

3.11  Special Meetings. A special meeting of the Board of Directors shall be
held whenever called by the President of the Corporation or by any three
directors at such time and place as the President or directors shall designate
in the notice of such special meeting. The person or persons calling any special
meeting shall cause notice of such special meeting to be given to each director
at least 24 hours before such special meeting. Neither the business to be
transacted at, nor the purpose of, any special meeting of the Board of Directors
need be specified in the notice or waiver of notice of any special meeting,
except for proposed amendments to the By-Laws.

3.12  Quorum; Majority Vote. At all meetings of the Board of Directors, a
majority of the directors fixed in the manner provided in these By-Laws shall
constitute a quorum for the transaction of business. If a quorum is not present
at a meeting, a majority of the directors present may adjourn the meeting from
time to time, without notice other than an announcement at the meeting, until
a quorum is present. The vote of a majority of the directors present at a
meeting at which a quorum is in attendance shall be the act of the board of
directors, unless the vote of a different number is required by law, the
Articles of Incorporation or these By-Laws.

3.13  Procedure; Minutes. At meetings of the Board of Directors, business shall
be transacted in such order as the Board of Directors may determine from time
to time. The President of the Corporation, or in his absence a designated Vice-
President, shall preside at each meeting of the Board of Directors provided that
in the absence of the President and any qualified Vice-President the Board of
Directors may appoint a person to preside at the meeting. The Secretary of the
Corporation or an Assistant Secretary designated by the Board shall act as
secretary of each meeting provided that in the absence of the Secretary and
any qualified Assistant Secretary, the Board of Directors shall appoint at
each meeting a person to act as Secretary of the meeting. The Secretary of the
meeting shall prepare minutes of the meeting which shall be delivered to the
Secretary of the Corporation for placement in the minutes books of the
Corporation.

3.14  Presumption of Assent. A director of the Corporation who is present at
any meeting of the Board of Directors at which action on any matter is taken
shall be presumed to have assented to the action unless (i) he shall object at
the beginning of the meeting (or promptly following his arrival) to holding
the meeting or transacting business at the meeting, or (ii) his dissent or
abstention shall be entered in the minutes of the meeting or (iii) he shall
file his written dissent or abstention to such action with the presiding officer
of the meeting before the adjournment thereof. Such right to dissent shall not
apply to a director who voted in favor of such action.

3.15  Compensation. Unless otherwise provided in the Articles of Incorporation,
by resolution of the Board of Directors, each director may be paid his expenses,
if any, of attendance at each meeting of the Board of Directors, and may be paid
a stated salary or retainer as director or a fixed sum for attendance at each
meeting of the Board of Directors, or both. No such payment shall preclude
any director from serving the Corporation in any capacity and receiving
compensation therefor.

ARTICLE FOUR: COMMITTEES

4.01  Designation. The Board of Directors, may by resolution adopted by a
majority of the entire Board of Directors, designate executive and other
committees.

4.02  Number; Qualification; Term. Each committee shall consist of two or more
directors appointed by resolution adopted by a majority of the entire Board of
Directors. The number of committee members may be increased or decreased from
time to time by resolution adopted by a majority of the entire Board of Directors.
Committee members shall serve at the pleasure of the Board of Directors.

4.03  Authority. Each committee, to the extent expressly provided for in the
resolution adopted by a majority of the entire Board of Directors establishing
such committee, shall have and may exercise all the authority of the Board of
Directors in the management of the business and affairs of the Corporation.
However, no committee shall have the authority of the Board of Directors in
reference to:

(a)   amending the Articles of Incorporation;
(b)   approving a plan of merger not requiring shareholder approval;
(c)   approving or proposing to shareholders action that the Vermont Business
     Corporation Act requires be approved by the shareholders;
(d)   amending, altering, or repealing these By-Laws or adopting new By-Laws;
(e)   filling vacancies in or removing members of the Board of Directors or of
     any committee;
(f)   electing or removing officers or committee members;
(g)   fixing the compensation of any committee member;
(h)   altering or repealing any resolution of the full Board of Directors;
(i)   declaring dividends or authorizing any other form of distribution to
     shareholders, or authorizing the issuance of shares of the Corporation; or
(j)   authorizing or approving the issuance or sale of shares or the
     reacquisition of shares, except according to a formula or method
     prescribed by the Board of Directors.

4.04  Committee changes. The Board of Directors shall have the power at any
time to fill vacancies in, to change the membership of, and to discharge any
committee.

4.05  Meetings. Regular and special meetings of any committee may be held
without notice at such times and places as may be designated from time to time
by resolution of the committee and communicated to all committee members.

4.06  Quorum; Majority; Vote. At all meetings of any committee, a majority of
the number of committee members designated by the Board of Directors shall
constitute a quorum for the transaction of business. If a quorum is not present
at a meeting of any committee, a majority of the committee members present may
adjourn the meeting from time to time, without notice other than an announcement
at the meeting, until a quorum is present. The vote of a majority of the
committee members present at any meeting at which a quorum is in attendance
shall be the act of a committee, unless the vote of a different number is
required by the Articles of Incorporation or these By-laws.

4.07  Minutes. Each committee shall cause minutes of its proceedings to be
prepared and shall report the same to the Board of Directors upon the request
of the Board of Directors. The minutes of the proceedings of each committee
shall be delivered to the Secretary of the Corporation for placement in the
minute books of the Corporation.

4.08  Compensation. Committee members may, by resolution of the Board of
Directors, be allowed a fixed sum and expenses of attendance, if any, for
attending any committee meetings or a stated salary.

4.09  Responsibility. The designation of any committee and the delegation of
authority to it shall not operate to relieve the Board of Directors or any
director of any responsibility imposed upon it or such director by law.

ARTICLE FIVE: GENERAL PROVISIONS RELATING TO MEETINGS

5.01  Notice. Whenever by law, the Articles of Incorporation, or these By-laws,
notice is required to be given to any shareholder, director, or committee
member and no provision is made as to how such notice shall be given, it shall
be construed to mean that notice may be given either (a) in person, (b) in
writing, by first class mail, postage prepaid, (c) except in the case of a
shareholder, by telephone, telegram, telex, cable, telecopier, or similar means,
or (d) by any other method permitted by law. Any notice required or permitted
to be given hereunder (other than personal notice) shall be addressed to such
shareholder, director or committee member at his address as it appears on the
books of the Corporation, or, in the case of a shareholder, on the stock
transfer records of the Corporation or at such other place as such shareholder,
director, or committee member is known to be at the time notice is mailed or
transmitted. Any notice required or permitted to be given by mail shall be
deemed to be delivered and given at the time when the same is deposited in
the United States mail, postage prepaid. Any notice required or permitted to
be given in person or by telephone, telegram, telex, cable, telecopier, or
similar means shall be deemed to be delivered and given at the time given or
transmitted.

5.02  Waiver of Notice. Whenever by law, the Articles of Incorporation, or
these By-laws, any notice is required to be given to any shareholder, director
or committee member of the Corporation, a waiver thereof in writing signed
by the person or persons entitled to such notice, whether before or after the
time notice should have been given, shall be equivalent to the giving of such
notice. 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 on the ground
that the meeting is not lawfully called or convened.

5.03  Telephone and Similar Meetings. Shareholders, directors, or committee
members may participate in and hold a meeting by means of a conference
telephone or similar communications equipment by means of which persons
participating in the meeting can hear each other. Participation in such a
meeting shall constitute presence in person at such meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.

5.04  Action Without Meeting. Any action which may be taken, or is required
by law, the Articles of Incorporation, or these By-laws to be taken, at a
meeting of directors, or committee members may be taken without a meeting if
a consent in writing, setting forth the action so taken, shall be signed by all
of the directors, or committee members, as the case may be, entitled to vote
with respect to the subject matter thereof and such consent shall have the same
force and effect as a unanimous vote of such directors or committee members,
as the case may be, and may be stated as such in any document filed with the
Secretary of State of Vermont or in any certificate or other document delivered
to any person. The consent may be in one or more counterparts so long as each
director, or committee member signs one of the counterparts. The signed consent
shall be placed in the minute books of the Corporation and shall take effect as
of the date of the last signature, unless a different date is specified in the
consent.

ARTICLE SIX: OFFICERS AND OTHER AGENTS

6.01  Number; Titles; Election; Term. The Corporation shall have a president,
one or more vice presidents (and, in the case of each vice president, with
such descriptive title, if any, as the Board of Directors shall determine),
a secretary, a treasurer, and such other officers and agents as the Board of
Directors may deem desirable. The Board of Directors shall elect one of its
members as President of the Corporation and shall also elect one or more vice-
presidents, a treasurer, and a secretary at its first meeting at which a quorum
shall be present after formation of the Corporation and after each annual
meeting of shareholders, or whenever a vacancy exists. The Board of Directors
then, or from time to time, may also elect or appoint one or more other officers
or agents as it shall deem advisable. Each officer and agent shall hold office
for the term for which he is elected or appointed and until his successor has
been elected or appointed and qualified. Unless otherwise provided in the
resolution of the Board of Directors electing or appointing an officer or agent,
his term of office shall extend to and expire at the meeting of the Board of
Directors following the next annual meeting of shareholders or, if earlier, at
his death, resignation, or removal. Any two or more offices may be held by
the same person, except that the President and the Secretary shall not be the
same person. No officer or agent except the President of the Corporation need
be a shareholder, a director, a resident of the State of Vermont, or citizen of
the United States. The President must be a shareholder and duly elected or
appointed director of the Corporation.

6.02  Removal. Any officer or agent elected or appointed by the Board of
Directors may be removed by the Board of Directors, at any time, with or
without cause, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment of an officer
or agent shall not of itself create contract rights.

6.03  Vacancies. Any vacancy occurring in any office of the Corporation may
be filled by the Board of Directors.

6.04  Authority. Officers shall have such authority and perform such duties in
the management of the Corporation as are provided in these By-laws or as may
be determined by resolution of the Board of Directors not inconsistent with
these By-laws.

6.05  Compensation. The compensation, if any, of officers shall be fixed,
increased, or decreased from time to time by the Board of Directors; provided,
that the Board of Directors may by resolution delegate to any one or more
officers of the Corporation, or to a committee of the Board, the authority to
fix such compensation.

6.06  Chairman of the Board. The President of the Corporation shall be the
Chairman of the Board and shall perform such executive, supervisory, and
management functions and duties as may be assigned to him from time to time
by the Board of Directors.

6.07  President. The President shall be the chief executive officer of the
Corporation and, subject to the supervision of the Board of Directors, shall
have general management of the business and affairs of the Corporation in
the ordinary course of its business with all such powers with respect to such
business and affairs as may be reasonably incident to such responsibilities,
including, but not limited to, the power to employ, discharge, or suspend
employees and agents of the Corporation, to fix the compensation of employees
and agents, and to suspend, with or without cause, any officer of the
Corporation pending final action by the Board of Directors with respect to
continued suspension, removal, or reinstatement of such officer. The President
shall see that all orders and resolutions of the Board of Directors are carried
into effect and shall perform such other duties and have such other authority
and powers as the Board of Directors may from time to time prescribe.

6.08  Vice President. Each vice president shall have such powers and duties as
may be prescribed from time to time by the Board of Directors or as may be
delegated from time to time by the President. The Board shall designate one
vice president to exercise the powers of the President in the event of that
officer's absence or inability to act.

6.09  Treasurer. The Treasurer shall have custody of the Corporation's funds
and securities, shall keep full and accurate accounts of receipts and disburse-
ments, and shall deposit all moneys and valuable effects in the name and to
the credit of the Corporation in such depository or depositories as may be
designated by the Board of Directors. The Treasurer shall audit all payrolls
and vouchers of the Corporation, receive, audit, and consolidate all operating
and financial statements of the Corporation and its various departments and
shall supervise the accounting and auditing practices of the Corporation.
Additionally, the Treasurer shall have the power to endorse for deposit,
collection or otherwise all checks, drafts, notes, bills of exchange, and
other commercial paper payable to the Corporation and to give proper receipts
and discharges for all payments to the Corporation. The Treasurer shall perform
such other duties as may be prescribed from time to time by the Board of
Directors or as may be delegated from time to time by the President.

6.10  Assistant Treasurers. Each Assistant Treasurer shall perform such duties
as may be prescribed from time to time by the Board of Directors or as may be
delegated from time to time by the President or Treasurer. The Assistant
Treasurer shall exercise the powers of the Treasurer during that officer's
absence or inability to act. In the event more than one Assistant Treasurer is
appointed, the President shall designate one Assistant Treasurer to exercise
the powers of the Treasurer as herein set forth.

6.11  Secretary. In addition to any other duties required by law or by the
Board of Directors from time to time, the Secretary shall perform the
following duties:

(a)   record all votes and proceedings of the shareholders and directors or
     any committee thereof;

(b)   have the custody of the corporate seal, and of the corporate records
     within this State;

(c)   keep a record book, which shall always be available for the inspection
     and copying by the shareholders, containing the names of the shareholders,
     their places of residence, the number of shares held by each, the time
     when they respectively acquired the shares, and the time of any transfers
     thereof, except that such record book may be kept by a transfer agent
     rather than the Secretary when such transfer agent is approved by the vote
     of a majority of the shareholders of the Corporation;

(d)   procure and file in his own office certified copies of all papers required by
     law to be filed with the Secretary of State.

6.12  Assistant Secretaries. Each Assistant Secretary shall perform such duties
as may be prescribed from time to time by the Board of Directors or as may be
delegated from time to time by the President or Secretary. The Assistant
Secretary shall exercise the powers of the Secretary during that officer's
absence or inability to act. In the event more than one Assistant Secretary is
appointed, the President shall designate one Assistant Secretary to exercise
the powers of the Secretary as herein set forth.

ARTICLE SEVEN: CERTIFICATES AND SHAREHOLDERS

7.01  Certificates for Shares. The certificates for shares of stock of the
Corporation shall be in such form as shall be approved by the Board of
Directors in conformity with law. The certificates shall be consecutively
numbered, shall be entered as they are issued in the books of the Corpor-
ation or in the records of the Corporation's designated transfer agent, if any,
and shall state the shareholder's name, the number of shares, and such other
matters as may be required by law. The certificates shall be signed, either
manually or by facsimile, by the President or any Vice-President and by the
Secretary or the Treasurer and shall be sealed with the seal of the Corporation
or facsimile thereof.

7.02  Issuance. Shares with or without par value may be issued for such
consideration and to such persons as the Board of Directors may from time to
time determine, except in the case of the shares with par value the consider-
ation must be at least equal to the par value of such shares. Shares may not
be issued until the full amount of the consideration has been paid.

7.03  Shares Without Certificates.

(a)   Issuing Shares Without Certificates

   Unless the Articles of Incorporation provide otherwise, the Board of
Directors may authorize the issue of some or all the shares of its capital
stock without certificates. The authorization does not affect shares already
represented by certificates until they are surrendered to the Corporation.

(b)   Information Statement Required

   Within a reasonable time after the issue or transfer of shares without
   certificates, the Corporation shall send the shareholder a written statement
   containing at a minimum:

   (1)  the name of the issuing corporation and that it is organized under
       the laws of Vermont;

   (2)  the name of the person to whom issued; and

   (3)  the number and class of shares and the designation of the series, if
       any, of the issued shares.

7.04  Consideration for Shares. The consideration for the issuance of shares
shall consist of money paid, labor done (including services actually performed
for the Corporation), or property (tangible or intangible) actually received,
including other securities of the Corporation, and, in the discretion of the
Board of Directors, one or more promissory notes. The promise of future
services shall not constitute payment for shares. In the absence of fraud in
the transaction, the judgment of the Board of Directors as to the value of
consideration received shall be conclusive. When consideration, fixed as
provided by law, has been paid, the shares shall be deemed to have been
issued and shall be considered fully paid and nonassessable. The consideration
received for shares shall be allocated by the Board of Directors, in accordance
with law, between stated capital and capital surplus accounts.

7.05  Lost, Stolen, or Destroyed Certificates. The Corporation shall issue a
new certificate in place of any certificate for shares previously issued if the
registered owner of the certificate:

(a)   Claim. Makes proof in affidavit form that a previously issued certificate
for shares has been lost, destroyed, or stolen;

(b)   Timely Request. Requests the issuance of a new certificate before the
Corporation has notice that the certificate has been acquired by a purchaser
for value in good faith and without notice of an adverse claim;

(c)   Bond. Gives a bond in such form, and with such surety or sureties, with
fixed or open penalty, as the Board of Directors may direct, in its discretion,
to indemnify the Corporation (and its transfer agent and registrar, if any)
against any claim that may be made on account of the alleged loss, destruction,
or theft of the certificate; and

(d)   Other Requirements. Satisfies any other reasonable requirements imposed
by the Corporation.

Notwithstanding the foregoing, the Corporation may waive any or all of the
foregoing requirements in its discretion. When a certificate has been lost,
destroyed, or stolen, and the shareholder of record fails to notify the
Corporation within a reasonable time after he has notice of it, and the
Corporation registers a transfer of the shares represented by the certificate
before receiving such notification, the shareholder of record is precluded
from making any claim against the Corporation for the transfer or for a new
certificate.

7.06  Transfer of Shares. Shares of stock of the Corporation shall be
transferable only on the books of the Corporation by the shareholders of
record thereof in person or by their duly authorized attorneys or legal
representatives. Upon surrender to the Corporation or the transfer agent of
the Corporation of a certificate representing shares duly endorsed or
accompanied by proper evidence of succession, assignment, or authority to
transfer, the Corporation or its transfer agent shall issue a new certificate
to the person entitled thereto, cancel the old certificate, and record the
transaction upon its books.

7.07  Registered Shareholders. The Corporation shall be entitled to treat
the shareholder of record as the shareholder in fact of any shares and,
accordingly, shall not be bound to recognize any equitable or other claim to
or interest in such shares on the part of any other person, whether or not it
shall have actual or other notice thereof, except as otherwise provided by law.

ARTICLE EIGHT: MISCELLANEOUS PROVISIONS

8.01  Distributions. Subject to provisions of the statutes and the Articles of
Incorporation, dividends or other distributions may be declared by the Board
of Directors at any meeting and may be paid in cash, in property, or in shares
of stock of the Corporation. Such declaration and payment shall be at the
discretion of the Board of Directors.

8.02  Reserves. The Board of Directors may create out of funds of the
Corporation legally available therefor such reserve or reserves as the Board
of Directors from time to time, in its discretion, considers proper to provide
for contingencies, to equalize dividends or to repair or maintain any property
of the Corporation, or for such other purposes as the Board of Directors shall
consider beneficial to the Corporation. The Board of Directors may modify or
abolish any such reserve.

8.03  Books and Records. The Corporation shall keep correct and complete
books and records of account, shall keep as permanent records the minutes of
the proceedings of its shareholders, Board of Directors, and any committee,
and shall keep at its registered office or principal place of business, or at
the office of its transfer agent or registrar, a record of its shareholders,
giving the names and addresses of all shareholders and the number and
class of the shares held by each shareholder.

8.04  Fiscal Year. The fiscal year of the Corporation shall be as provided
in the Articles of Incorporation.

8.05  Seal. The seal, if any, of the Corporation shall be in such form as may
be approved from time to time by the Board of Directors.

8.06  Resignation. A director, committee member, officer, or agent may resign
by so stating at any meeting of the Board of Directors or by giving written
notice to the Board of Directors, the President, or the Secretary, or other
officer responsible for recording the minutes of the meetings of the share-
holders and directors. Such resignation shall take effect at the time specified
therein, or immediately if no time is specified. Unless it specifies otherwise,
a resignation is effective without being accepted.

8.07  Securities of Other Corporations. The President, any Vice-President of
the Corporation shall have the power and authority to transfer, endorse for
transfer, vote, consent, or take any other action with respect to any securities
of another issuer which may be held or owned by the Corporation and to make,
execute, and deliver any waiver, proxy, or consent with respect to any such
securities.

8.08  Amendment. Except as hereinafter provided in this Section 8.08, or by
law or in the Articles of Incorporation, these By-laws may be altered, amended
or repealed by the directors acting by resolution of a majority of the directors
then in office or by resolution of the shareholders. Notwithstanding any other
provision of these By-laws or of the Articles of Incorporation and notwith-
standing the fact that some lesser percentage may be specified by law, the
affirmative vote of the holders of 75% or more of the combined voting power of
the then-outstanding shares of the Corporation's capital stock entitled to vote
generally in the election of directors shall be required to amend, alter, change,
or repeal, in whole or in part, Sections 3.02, 3.03, 3.04, 3.05, or 3.06 of
these By-laws.

8.09  Invalid Provisions. If any part of these By-laws shall be held invalid
or inoperative for any reason, the remaining parts, so far as it is possible
and reasonable, shall remain valid and operative.

8.10  Headings. The headings used in these By-laws are for convenience only
and do not constitute matter to be construed in the interpretation of these By-
laws.

ARTICLE NINE:  INDEMNIFICATION
(adopted June 13, 2000)

9.01  Definitions. Terms not otherwise defined in this Article shall have the
meaning ascribed in the Vermont Business Corporation Law, Title 11A of the
Vermont Statutes Annotated, as in effect from time to time.

9.02  Authority to Indemnify.

(a)   Except as provided in section 9.02(d) and subject to section 9.06, this
Corporation shall indemnify an individual who is made a party to a proceeding
because he is or was a director against liability incurred in the proceeding if:

  (1)   he conducted himself in good faith; and

  (2)   he reasonably believed:

     (i)  in the case of conduct in his official capacity with the Corporation,
         that his conduct was in its best interest; and

     (ii)  in all other cases, that his conduct was at least not opposed to
         its best interests; and

  (3)   in the case of any criminal proceeding, he had no reasonable cause to
       believe his conduct was unlawful.

(b)   A director's conduct with respect to an employee benefit plan for a
purpose he reasonably believed to be in the interests of the participants in
and beneficiaries of the plan is conduct that satisfies the requirement of
section 9.02(a)(2)(ii).

(c)   The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent is not, of
itself, determinative that the director did not meet the standard of conduct
described in this section.

(d)   The Corporation may not indemnify a director under this section:

  (1)   in connection with a proceeding by or in the right of the Corporation
       in which the director was adjudged liable to the Corporation; or

  (2)   in connection with any other proceeding charging improper personal
       benefit to him, whether or not involving action in his official capacity,
       in which he was adjudged liable on the basis that personal benefit was
       was improperly received by him.

(e)   Indemnification permitted under this section in connection with a
proceeding by or in the right of the Corporation is limited to reasonable
expenses incurred in connection with the proceeding.

9.03  Mandatory Indemnification in Certain Circumstances. This Corporation
shall indemnify a director who was wholly successful, on the merits or otherwise,
in the defense of any proceeding to which he was a party because he is or was a
director of the Corporation against reasonable expenses incurred by him in
connection with the proceeding.

9.04  Advance for Expenses.

(a)   The Corporation may pay for or reimburse the reasonable expenses incurred
by a director who is or was a party to a proceeding in advance of final disposition
of the proceeding if:

  (1)   the director furnishes the Corporation a written affirmation of his good
       faith belief that he has met the standard of conduct described in section
       9.02;

  (2)   the director furnishes the Corporation a written undertaking, executed
       personally or on his behalf, to repay the advance if it is ultimately
       determined that he did not meet the standard of conduct; and

  (3)   a determination is made that the facts then known to those making the
       determination would not preclude indemnification under this Article Nine.

(b)   The undertaking required by section 9.04(a)(2) must be an unlimited
general obligation of the director but need not be secured and may be accepted
without reference to financial ability to make repayment.

9.05  Court Ordered Indemnification. A director of this Corporation who is a
party to a proceeding may apply for indemnification to the court conducting the
proceeding or to another court of competent jurisdiction. On receipt of an
application, the court after giving any notice the court considers necessary
may order indemnification if it determines:

  (1)   the director is entitled to mandatory indemnification under section
       9.03, in which case the court shall also order the Corporation to pay
       the director's reasonable expenses incurred to obtain court-ordered
       indemnification; or

  (2)   the director is fairly and reasonably entitled to indemnification in
       view of all the relevant circumstances, whether or not he met the
       standard of conduct set forth in section 9.02 or was adjudged liable
       as described in section 9.02(d), but if he was adjudged so liable his
       indemnification is limited to reasonable expenses incurred.

9.06  Determination and Authorization of Indemnification.

(a)   The Corporation may not indemnify a director under section 9.02 unless
authorized in the specific case after a determination has been made that
indemnification of the director is permissible in the circumstances because
he has met the standard of conduct set forth in Section 9.02.

(b)   The determination referred to in section 9.06(a) shall be made:

  (1)   by the Board of Directors by majority vote of a quorum consisting of
       directors not at the time parties to the proceeding;

  (2)   if a quorum cannot be obtained under subdivision (1), by majority vote
       of a committee duly designated by the Board of Directors (in which
       designation directors who are parties may participate), consisting
       solely of two or more directors not at the time parties to the proceeding;

  (3)   by special legal counsel:

     (i)  selected by the Board of Directors or its committee in the manner
         prescribed in subdivision (1) or (2); or

     (ii)  if a quorum of the Board of Directors cannot be obtained under
          subdivision (1) and a committee cannot be designated under
          subdivision (2), selected by majority vote of the full Board of
          Directors (in which selection directors who are parties may
          participate);
          or

  (4)   by the shareholders, but shares owned by or voted under the control of
directors who are at the time parties to the proceeding may not be voted on the
determination;

        Notwithstanding the foregoing, if a "change in control" (as defined in
        the Federal Bank Holding Company Act of 1956, as amended) of the
        Corporation shall have occurred within the preceding two years, the
        determination shall be made by special legal counsel, unless otherwise
        expressly agreed by the person claiming indemnification.

(c)   Authorization of indemnification and evaluation as to reasonableness of
expenses shall be made in the same manner as the determination that indemnifi-
cation is permissible, except that if the determination is made by special legal
counsel, authorization of indemnification and evaluation as to reasonableness
of expenses shall be made by those entitled under section 9.06(b)(3) to select
counsel.

If it is determined under this Section 9.06 that the claimant is entitled to
indemnification, payment to the claimant shall be made within 15 days after
such determination or demand.

9.07  Indemnification of Officers, Employees and Agents.

(a)   An individual who is made a party to a proceeding because he is or was
an officer of the Corporation is entitled to mandatory indemnification under
section 9.03 and is entitled to apply for court-ordered indemnification under
section 9.05, in each case to the same extent as a director.

(b)   The Corporation shall indemnify and advance expenses under section 9.02
and 9.04 to an individual who is made a party to a proceeding because he is or
was an officer of the Corporation, subject to the same conditions and limitations
and to the same extent that these By-laws provide for indemnification and
advancement of expenses to a director.

(c)   In the discretion of the Board of Directors, the Corporation may
indemnify and advance expenses under Sections 9.02 and 9.04 to an individual
who is made a party to a proceeding because he is or was an employee or agent
of the Corporation, subject to the same conditions and limitations and to the
same extent that these By-laws provide for indemnification and advancement
of expenses to a director.

9.08  Insurance. The Corporation may purchase and maintain insurance on
behalf of an individual who is or was a director, officer, employee, or agent
of the Corporation or who, while a director, officer, employee, or agent of the
Corporation, is or was serving at the request of the Corporation as a director,
officer, partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan, or other
enterprise, against liability asserted against or incurred by him in that
capacity or arising from his status as a director, officer, employee, or agent,
whether or not the Corporation would have power to indemnify him against the
same liability under section 9.02 or 9.03.

9.09  Contract Right. The right of indemnification conferred upon directors
and officers in this By-law shall be a contract right and shall include the
right to be paid by the Corporation the expenses incurred in defending any
proceeding in advance of its final disposition. The right to indemnification
under this Section 9.09 shall be deemed to vest upon the occurrence of the
event giving rise to the claim for indemnification and no subsequent
modification or repeal of this Article Nine or other action on the part of the
Corporation or otherwise shall operate to limit or impair such right. Nothing
in this Section 9.09 shall be deemed to create any vested contract right to
indemnification or advance of expenses in favor of any person for whom
indemnification or advancement of expenses is merely permissive and not
required under applicable law or this Article Nine.

9.10  Enforcement of Rights. In any action brought by a claimant to enforce
the right to indemnification under this Article Nine, it shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the requirements of Section 9.04 have been met), that the claimant has not met
the standard of conduct which makes it permissible under the Vermont Business
Corporation Law for the Corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the Corporation.

9.11  Non-Exclusive Rights; Survival. The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article Nine shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute, other
provision of the Articles of Association or By-laws, contract, vote of stock-
holders or Directors or otherwise. No repeal or modification of this Article
Nine shall in any way diminish or adversely affect the rights of any director,
officer, employee or agent of the Corporation hereunder in respect of any
occurrence or matter arising prior to any such repeal or modification.

9.12  Severability. If any provision or provisions of this Article Nine shall
be held to be invalid, illegal or unenforceable for any reason whatsoever: (i)
the validity, legality and enforceability of the remaining provisions of this
Article Nine (including, without limitation, each portion of any section of
this Article Nine containing any such provision held to be invalid, illegal or
unenforceable, that is not itself held to be invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby; and (ii) to the fullest
extent possible, the provisions of this Article Nine shall be construed so as
to give effect to the intent manifested by the provision held invalid, illegal
or unenforceable.

9.13 Application of this Article.
(a)   These provisions do not limit the Corporation's power to pay or
reimburse expenses incurred by a director, officer or other person in
connection with his appearance as a witness in a proceeding at a time when
such individual has not been made a named defendant or respondent to the
proceeding.

(b)   It is the intent of this Article Nine that the Corporation (i) shall
indemnify and advance expenses to directors and officers of the Corporation
and (ii) shall have the right to indemnify and advance expenses to any employee
or agent, in each case, to the fullest extent permitted by applicable law. In
the event that, after this Article Nine becomes effective, any such applicable
law is amended to permit expanded powers to indemnify or advance expenses,
the Corporation shall be deemed to have and may exercise all such expanded
powers, notwithstanding any contrary provision of these By-laws.

(c)   It is the intent of this Article Nine that it shall apply to acts and
omissions that occurred prior to its adoption, even though suit is not filed
or a claim is otherwise asserted until after such adoption.

   The undersigned, the Secretary of the Corporation, hereby certifies that
   the foregoing By-laws, as amended and restated, were adopted by the
   Board of Directors of the Corporation, as of the 5^th day of April, 1994,
   and were further amended by the Board of Directors on June 13, 2000.


                                      Secretary
                                      Community Bancorp.



(Seal)