SVB FINANCIAL SERVICES INC, 8-K, 1996-10-10

SVB FINANCIAL SERVICES INC
8-K, 1996-10-10
STATE COMMERCIAL BANKS

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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

Current Report Pursuant
to Section 13 or 15 (d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported) September 3, 1996
-----------------

SVB Financial Services, Inc.
(Exact Name of Registrant as Specified in its Charter)

New Jersey
(State or Other Jurisdiction of Incorporation)

333-3180 22-3038058
(Commission File Number) (I.R.S. Employer Identification No.)

103 West End Avenue, Somerville, NJ 08876
- -------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)

(908) 704-1188
(Registrant's Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

<PAGE>
Item 5. Other Events

On September 3, 1996 SVB Financial Services, Inc. (the Company)
acquired 100% of the outstanding shares of Somerset Valley Bank (the Bank) by
exchanging six (6) shares of the Company for every five (5) shares of the Bank.

The Company is a New Jersey business company and a bank holding
company. The Company was incorporated on February 7, 1996 for the purpose of
acquiring the Bank and thereby enabling the Bank to operate within a holding
company structure.

The Exchange Offer of SVB Financial Services, Inc. for Somerset Valley
Bank is more fully described in the Proxy Statement Prospectus that was part of
the Company's Registration Statement on Form S-4, which became effective April
24, 1996.

The shareholders of the Bank approved the acquisition at a Special
Meeting of Shareholders on May 30, 1996. The shareholders subsequently accepted
the Exchange Offer by submitting in excess of 80% of their shares for exchange
prior to August 31, 1996.

Item 7. Financial Statements and Exhibits

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited Consolidated Financial Statements of the Company

Consolidated Statement of Condition as of June 30, 1996

Consolidated Statements of Income for the Six Months Ended
June 30, 1996 and 1995

Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 1996 and 1995

Audited Consolidated Financial Statements of the Company

Consolidated Statements of Condition as of December 31, 1995
and 1994

Consolidated Statements of Operations for the Years Ended
December 31, 1995, 1994 and 1993

Consolidated Statements of Changes in Shareholders' Equity for
the Years Ended December 31, 1995, 1994 and 1993

Consolidated Statements of Cash Flows for the Years Ended
December 31, 1995, 1994 and 1993

Notes to Consolidated Financial Statements

Report of Independent Public Accountants

<PAGE>
<TABLE>
<CAPTION>
SVB Financial Services, Inc. and Subsidiary
Consolidated Statement of Condition
(Unaudited)
June 30,
1996
-------------
<S> <C>
ASSETS

Cash & Due From Banks ......................................... $ 5,639,252
Federal Funds Sold ............................................ 5,225,000
Other Short Term Investments .................................. 325,672
-------------
Total Cash and Cash Equivalents ............................... 11,189,924

Securities
Available for Sale ............................................ 3,828,786
Held to Maturity .............................................. 16,123,067
-------------
Total Investment Securities ................................... 19,951,853

Loans ......................................................... 77,310,310
Allowance for Possible Loan Losses ............................ (662,827)
Unearned Income ............................................... (100,370)
-------------
Net Loans ..................................................... 76,547,113

Premises & Equipment, Net ..................................... 792,925
Organizational Costs, Net ..................................... 20,533
Other Assets Including Deferred Income Taxes, Net ............. 1,633,445
-------------
Total Assets .................................................. $ 110,135,793
=============

LIABILITIES & SHAREHOLDERS' EQUITY
LIABILITIES
Deposits
Demand
Noninterest Bearing ........................................... $ 17,823,692
NOW Accounts .................................................. 6,829,756
Savings ....................................................... 6,943,166
Money Market Accounts ......................................... 10,272,622
Time
Greater than $100,000 ......................................... 9,618,458
Less than $100,000 ............................................ 49,331,044
-------------
TOTAL DEPOSITS ................................................ 100,818,738

Accrued Expenses & Other Liabilities .......................... 388,039
-------------
Total Liabilities ............................................. 101,206,777
-------------
<PAGE>
<CAPTION>
SVB Financial Services, Inc. and Subsidiary
Consolidated Statement of Condition
(Unaudited)
At June 30,
1996
-------------
<S> <C>
SHAREHOLDERS' EQUITY
Common Stock $4.17 PAR VALUE, 10,000,000
Authorized; 1,174,632 Shares in 1996 And 1,173,432 in 1995
Issued and Outstanding ........................................ 4,898,215
Additional Paid in Capital .................................... 3,769,507
Retained Earnings.............................................. 284,373
Unrealized Loss on Securities Available For Sale .............. (23,079)
-------------
Total Shareholders' Equity .................. 8,929,016
-------------
Total Liabilities And Shareholders' Equity .. $ 110,135,793
=============

See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SVB Financial Services, Inc.
Consolidated Statements of Income
(Unaudited)
For The Six Months Ended June 30,
1996 1995
----------- -----------
<S> <C> <C>
INTEREST INCOME
Interest on Loans ......................................... $ 3,038,992 $ 2,266,624
Interest on Investment Securities Available For Sale ...... 150,008 86,685
Interest on Investment Securities Held to Maturity ........ 476,709 506,521
Interest on Federal Funds Sold ............................ 96,874 67,631
Interest on Other Short Term Investments .................. 14,021 4,630
----------- -----------
Total Interest Income ................... 3,776,604 2,932,091

INTEREST EXPENSE
Interest on Deposits ...................................... 1,723,480 1,309,657
Interest on Federal Funds Purchased ....................... 0 170
----------- -----------
Total Interest Expense .................. 1,723,480 1,309,827

Net Interest Income ..................... 2,053,124 1,622,264

PROVISION FOR POSSIBLE LOAN LOSSES ........................ 145,000 90,000
----------- -----------
Net Interest Income After Provision
For Possible Loan Losses ................ 1,908,124 1,532,264
----------- -----------
OTHER INCOME
Service Charges on Deposit Accounts ....................... 79,009 52,461
Gain on the Sale of Investment Securities ................. (2,117) 2,336
Gain on the Sale of Loans ................................. 43,513 101,696
Other Income .............................................. 37,636 30,009
----------- -----------
Total Other Income ...................... 158,041 186,502
----------- -----------
Other Expenses
Salaries and Employee Benefits ............................ 853,241 604,201
Occupancy Expense ......................................... 188,483 113,600
Equipment Expense ......................................... 114,653 82,923
Other Expense ............................................. 493,719 426,076
----------- -----------
Total Other Expense ..................... 1,650,096 1,226,800
----------- -----------

Net Income Before Income Taxes .......... 416,069 491,966

Provision for Income Taxes .............. 167,746 190,826
----------- -----------
Net Income .............................. $ 248,323 $ 301,140
=========== ===========
Net Income Per Share ...................................... $ .21 $ .26
=========== ===========
Weighted Average Shares Outstanding ....................... 1,174,394 1,173,432
=========== ===========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SVB Financial Services, Inc.
Consolidated Statements of Cash Flows for the Six Months Ended June 30,
(unaudited)
OPERATING ACTIVITIES:
1996 1995
----------- -----------
<S> <C> <C>
Net income................................................................................ $ 248,323 $ 301,140
Adjustments to reconcile net income to
net cash from operating activities:
Provision for possible loan losses ............................................... 145,000 90,000
Depreciation and amortization .................................................... 118,103 83,017
Amortization (accretion) of investment securities premium/discount ............... (48,404) (151,579)
(Gains)/Losses on sales of investment securities, net ............................ 2,117 (2,336)

Gains on sales of loans .......................................................... (43,513) (101,696)
(Increase)/decrease in interest receivable ....................................... (93,077) (53,461)
(Increase)/decrease in other assets .............................................. (510,651) (16,038)
Increase in accrued interest payable.............................................. 34,299 11,107
Increase (decrease) in accrued expenses and other liabilities) ................... (2,143) 223,419
Increase (decrease) in unearned income) .......................................... 11,128 (2,300)
----------- -----------
Net cash provided by operating activities ............................ (138,818) 381,273
----------- ------------

INVESTING ACTIVITIES:

Proceeds from sales of securities ........................................................ 1,994,043 490,909
Proceeds from maturities of securities ........................................ .......... 7,095,727 19,282,490
Purchases of securities .................................................................. (9,589,210) (17,931,163)
Increase in loans ........................................................................ (17,131,561) (5,864,386)
Capital expenditures ..................................................................... (174,143) (71,486)
----------- -----------
Net cash used for investing activities ................................ (17,805,144) (4,093,636)
----------- -----------

FINANCING ACTIVITIES:

Net increase in demand deposits .......................................................... 5,948,327 (298,622)
Net increase (decrease) in savings deposits .............................................. 1,242,663 (1,031,627)
Net increase in money market deposits .................................................... 957,244 146,036
Net increase in time deposits ............................................................ 12,990,712 5,529,017
Proceeds from the issuance of common stock, net .......................................... 10,000 1,173,160
----------- -----------
Net cash provided by financing activities ............................. 21,148,946 5,517,964
----------- -----------

Increase in cash and cash equivalents, net ............................ 3,204,984 1,805,601

CASH AND CASH EQUIVALENTS, beginning of period ........................................... 7,984,940 6,043,304
----------- -----------
CASH AND CASH EQUIVALENTS, end of period ................................................. $11,189,924 $ 7,848,905
=========== ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest ............................................... $ 1,689,181 $ 1,298,720
Cash paid during the period for income taxes ........................................... 155,000 0
=========== ===========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
SVB FINANCIAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996 (UNAUDITED)

SVB Financial Services, Inc., (the "Company"), a bank holding
company, was incorporated on February 7, 1996 with authorized capital of
10,000,000 shares of $4.17 par value common stock. On September 3, 1996, the
Company acquired 100 percent of the shares of Somerset Valley Bank (the "Bank")
by exchanging 6 shares of its Common Stock for each 5 shares of the Bank. This
exchange has been accounted for as a reorganization of entities under common
control, similar to a pooling of interests, which resulted in no changes to the
underlying carrying amounts of assets and liabilities.

The consolidated financial statements included herein have
been prepared without audit pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been omitted pursuant to such rules and
regulations. The accompanying condensed consolidated financial statements
reflect all adjustments which are, in the opinion of management, necessary to a
fair statement of the results for the interim periods presented. Such
adjustments are of a normal recurring nature. These consolidated condensed
financial statements should be read in conjunction with the audited financial
statements and the notes thereto included elsewhere herein. The results for the
six months ended June 30, 1996 are not necessarily indicative of the results
that may be expected for the year ended December 31, 1996.

The consolidated financial statements include the accounts of
SOMERSET VALLEY BANK. All significant inter-company accounts and transactions
have been eliminated.
<PAGE>
<TABLE>
<CAPTION>
SVB FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF CONDITION

As of December 31, 1995 and 1994

1995 1994
------------ ------------
<S> <C> <C>
ASSETS
Cash & Due from Banks ............................. $ 2,814,877 $ 2,417,643
Federal Funds Sold ................................ 4,575,000 3,150,000
Other Short Term Investments ...................... 595,063 475,661
------------ ------------
Total Cash and Cash Equivalents ................... 7,984,940 6,043,304

Securities (Notes 2 and 3)
Available for Sale, at Market Value ............... 4,874,738 3,473,951
Held to Maturity, at Cost ......................... 14,580,823 18,091,163
Total Securities .................................. 19,455,561 21,565,114

Loans (Notes 2, 4 & 5) ............................ 60,144,428 45,465,027
Allowance for Possible Loan Losses ................ (527,019) (372,062)
Unearned Income ................................... (89,242) (104,496)
------------ ------------
Net Loans ......................................... 59,528,167 44,988,469

Premises & Equipment, Net (Notes 2 & 6) ........... 716,215 450,620
Other Assets ...................................... 1,059,031 1,028,178
------------ ------------
Total Assets ...................................... $ 88,743,914 $ 74,075,685
============ ============

LIABILITIES & SHAREHOLDERS' EQUITY

LIABILITIES
Deposits
Demand
Noninterest Bearing .............................. $ 12,829,836 $ 10,347,426
NOW Accounts ..................................... 5,875,285 5,892,502
Savings ........................................... 5,700,503 6,958,242
Money Market Accounts ............................. 9,315,378 7,971,793
Time
Greater than $100,000 ........................... 5,202,055 7,956,461
Less than $100,000 .............................. 40,756,735 27,927,393
------------ ------------
Total Deposits .................................... 79,679,792 67,053,817

Accrued Expenses & Other Liabilities .............. 360,946 202,469
------------ ------------
Total Liabilities ................................. 80,040,738 67,256,286
------------ ------------
<PAGE>
<CAPTION>
SVB FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF CONDITION

As of December 31, 1995 and 1994
(continued)

1995 1994
------------ ------------
<S> <C> <C>
Commitments and Contingencies (Note 8)
SHAREHOLDERS' EQUITY (Notes 2, 11 and 12)

Common Stock, $4.17 Par Value, 10,000,000 Shares
Authorized:1,173,432 Shares in 1995 and 1,032,270
Shares in 1994 Issued and Outstanding ............ 4,893,211 4,304,566
Additional Paid in Capital ........................ 3,764,511 3,179,996
Retained Earnings (Deficit) ....................... 36,050 (627,167)
Unrealized Gain (Loss) on Securities Available
for Sale, Net of Income Taxes .................... 9,404 (37,996)
------------ ------------
Total Shareholders' Equity ........................ 8,703,176 6,819,399
------------ ------------
Total Liabilities and Shareholders' Equity ........ $ 88,743,914 $ 74,075,685
============ ============

The accompanying notes to consolidated financial statements are an integral part
of these statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SVB FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 1995, 1994 and 1993

1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
INTEREST INCOME (Note 2)
Interest on Loans .......................................................... $ 4,850,687 $ 3,508,379 $ 2,221,693
Interest on Securities Available for Sale .................................. 205,413 189,260 82,255
Interest on Securities Held to Maturity .................................... 1,013,811 558,076 305,495
Interest on Other Short Term Investments ................................... 14,798 32,746 28,650
Interest on Federal Funds Sold ............................................. 211,302 107,863 65,695
----------- ----------- -----------
Total Interest Income ...................................................... 6,296,011 4,396,324 2,703,788
----------- ----------- -----------
INTEREST EXPENSE
Interest on Deposits ....................................................... 2,870,715 1,765,501 1,092,806
Interest on Federal Funds Purchased ........................................ 169 406 --
----------- ----------- -----------
Total Interest Expense ..................................................... 2,870,884 1,765,907 1,092,806
----------- ----------- -----------

Net Interest Income ........................................................ 3,425,127 2,630,417 1,610,982
----------- ----------- -----------
PROVISION FOR POSSIBLE LOAN LOSSES (Notes 2 and 6) ......................... 206,000 156,000 130,000
----------- ----------- -----------
Net Interest Income after Provision For Possible Loan Losses ............... 3,219,127 2,474,417 1,480,982
----------- ----------- -----------
OTHER INCOME
Service Charges on Deposit Accounts ........................................ 120,411 108,060 65,867
Gain on the Sale of Securities ............................................. 2,336 -- 20,486
Gain on the Sale of Loans .................................................. 181,599 59,358 38,720
Other Income ............................................................... 58,474 40,224 67,010
----------- ----------- -----------
Total Other Income ......................................................... 362,820 207,642 192,083
----------- ----------- -----------
OTHER EXPENSE
Salaries and Employee Benefits ............................................. 1,269,371 1,055,231 827,772
Occupancy Expense .......................................................... 240,049 221,109 193,979
Equipment Expense .......................................................... 174,985 152,552 142,286
Other Expenses (Note 7) .................................................... 810,935 733,765 577,859
----------- ----------- -----------
Total Other Expense ........................................................ 2,495,340 2,162,657 1,741,896
----------- ----------- -----------

Net Income (Loss) Before Provision (Benefit) for Income Taxes .............. 1,086,607 519,402 (68,831)
Provision (Benefit) for Income Taxes (Notes 2 and 10) ...................... 423,390 (307,752) --
----------- ----------- -----------

NET INCOME (LOSS) .......................................................... $ 663,217 $ 827,154 $ (68,831)
=========== =========== ===========
NET INCOME (LOSS) PER SHARE ................................................ $ .58 $ .80 $ (.07)
=========== =========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING (NOTE 2) ............................... 1,152,408 1,029,048 927,509
=========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SVB FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

For the years ended December 31, 1995, 1994 and 1993

Additional Retained Unrealized Gain Total
Common Paid in Earnings (Loss) on Securities Shareholders'
Stock Capital (Deficit) Available For Sale Equity
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1992 ................. $ 3,010,932 $ 1,929,526 $(,385,490) $ -- $ 3,554,968
----------- ----------- ----------- ----------- -----------

Issuance of Common Stock,
Net of Related Issuance Costs ............ 1,276,370 1,233,234 -- -- 2,509,604
Exercise of Warrants ....................... 250 250 500
Net Loss - 1993 ............................ -- -- (68,831) (68,831)
Change in Unrealized Gain (Loss)
on Securities Available for Sale ......... -- -- -- (7,155) (7,155)
----------- ----------- ----------- ----------- -----------

BALANCE, DECEMBER 31, 1993 ................. 4,287,552 3,163,010 (1,454,321) (7,155) 5,989,086
----------- ----------- ----------- ----------- -----------

Exercise of Warrants ....................... 17,014 16,986 -- -- 34,000
Net Income - 1994 .......................... -- -- 827,154 -- 827,154
Change in Unrealized Gain (Loss)
on Securities Available for Sale ......... -- -- -- (30,841) (30,841)
----------- ----------- ----------- ----------- -----------

BALANCE, DECEMBER 31, 1994 ................. 4,304,566 3,179,996 (627,167) (37,996) 6,819,399
----------- ----------- ----------- ----------- -----------

Exercise of Warrants ....................... 588,645 584,515 -- -- 1,173,160
Net Income - 1995 .......................... -- -- 663,217 -- 663,217
Change in Unrealized Gain (Loss)
on Securities Available for Sale ......... -- -- -- 47,400 47,400
----------- ----------- ----------- ----------- -----------

BALANCE, DECEMBER 31, 1995 ................. $ 4,893,211 $ 3,764,511 $ 36,050 $ 9,404 $ 8,703,176
=========== =========== =========== =========== ===========

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SVB FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 1995, 1994 and 1993

1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net Income (Loss) ................................... $ 663,217 $ 827,154 $ (68,831)
Adjustments to Reconcile Income (Loss) to Net
Cash Provided By Operating Activities
Provision for Possible Loan Losses .................. 206,000 156,000 130,000
Depreciation and Amortization ....................... 170,619 150,205 144,969
Amortization (Accretion) of Securities
Premium/Discount ................................... (208,496) (116,405) 27,540
Gains on Sales of Securities, Net ................... (2,336) -- (20,486)
Gains on Sales of Loans ............................. (181,599) (59,358) (38,720)
Increase in Interest Receivable ..................... (127,991) (199,507) (130,278)
(Increase) Decrease in Other Assets ................. 35,338 (482,300) 26,157
Increase in Accrued Interest Payable ................ 43,438 55,824 10,186
Increase (Decrease) in Accrued Expenses and
Other Liabilities .................................. 109,976 197,459 (13,078)
Increase (Decrease) in Unearned Income .............. (14,414) 12,823 45,431
------------ ------------ ------------
Net Cash Provided By Operating Activities ........... 693,752 541,895 112,890
------------ ------------ ------------
INVESTING ACTIVITIES
Proceeds from Sales of Securities ................... 490,909 -- 1,274,468
Proceeds from Maturities of Securities .............. 29,780,068 14,079,847 8,318,997
Purchase of Securities .............................. (27,877,668) (23,835,529) (13,266,783)
Increase in Loans ................................... (14,549,686) (10,082,582) (17,260,833)
Capital Expenditures ................................ (394,874) (75,682) (86,310)
------------ ------------ ------------
Net Cash Used for Investing Activities .............. (12,551,251) (19,913,946) (21,020,461)
------------ ------------ ------------
FINANCING ACTIVITIES
Net Increase in Demand Deposits ..................... 2,465,193 4,404,103 3,059,027
Net Increase (Decrease) in Savings Deposits ......... (1,257,739) (1,418,946) 1,977,934
Net Increase in Money Market Deposits ............... 1,343,585 629,857 4,077,137
Net Increase in Time Deposits ....................... 10,074,936 16,834,189 7,679,655
Proceeds from the Issuance of Common Stock, Net ..... 1,173,160 34,000 2,510,104
------------ ------------ ------------
Net Cash Provided by Financing Activities ........... 13,799,135 20,483,203 19,303,857
------------ ------------ ------------

Increase (Decrease) in Cash and Cash Equivalents, Net 1,941,636 1,111,152 (1,603,714)
Cash and Cash Equivalents, beginning of year ........ 6,043,304 4,932,152 6,535,866
------------ ------------ ------------
Cash and Cash Equivalents, end of year .............. $ 7,984,940 $ 6,043,304 $ 4,932,152
============ ============ ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash Paid During the Year for Interest .............. $ 2,914,732 $ 1,710,083 $ 1,082,620
============ ============ ============
Cash Paid During the Year for Income Taxes .......... $ 225,000 $ 5,675 $ --
============ ============ ============

</TABLE>
<PAGE>
SVB FINANCIAL SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 1995, 1994 and 1993

1: ORGANIZATION AND NATURE OF OPERATIONS

SVB Financial Services, Inc., (the "Company"), a bank holding company, was
incorporated on February 7, 1996 with authorized capital of 10,000,000 shares of
$4.17 par value common stock. On September 3, 1996, the Company acquired 100
percent of the shares of Somerset Valley Bank (the "Bank") by exchanging 6
shares of its common stock for each 5 shares of the Bank. This exchange of
shares has been accounted for as a reorganization of entities under common
control, similar to a pooling of interests, which resulted in no changes to the
underlying carrying accounts of assets and liabilities.

The Bank was granted a charter by the New Jersey Department of Banking and
commenced operations on December 20, 1991. The Bank is a full service community
bank and operates at one location in Somerville, New Jersey. The Bank's
customers are predominately small and middle market businesses and
professionals. The Bank's market area is primarily Somerset County.

The consolidated financial statements include the accounts of the Bank. All
significant intercompany accounts and transactions have been eliminated.

2: SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS: The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

INVESTMENT SECURITIES: A portion of the Bank's securities are carried at cost
adjusted for amortization of premiums and accretion of discounts using the
interest method. These securities are carried at amortized cost because the Bank
has the ability and intent to hold the securities to maturity.

The remainder of the Bank's securities are held for indefinite periods of time
which management intends to use as part of its asset/liability strategy, or that
may be sold in response to changes in interest rates, changes in prepayment
risk, increased capital requirements or other similar factors, are classified as
available for sale. These securities are carried at market value. Unrealized
gains and losses, net of tax effect, are reflected as a component of
shareholders' equity.

The Bank had no securities held for trading purposes at December 31, 1995 and
1994.

ALLOWANCE FOR POSSIBLE LOAN LOSSES: The Bank's process for evaluating the
adequacy of the allowance for possible loan losses has three basic elements:

First, the identification of problem loans when they occur; second, the
establishment of appropriate allowance for possible loan losses once specific
problem loans are identified; and third, a methodology for establishing general
loan loss allowances.
<PAGE>
The identification of problem loans is achieved mainly through review of
specific major loans based on delinquency criteria, size of loan and location
and value of collateral property. Specific loss reserves are established for
identified problem loans based on reviews of current operating financial
information and fair value appraisals. A range of loss allowances is estimated
based upon consideration of past experience of originated loans by loan type,
year of origination, location of collateral property and loan-to-value ratios.
Based upon this process, consideration of the current economic environment and
other factors, management determines what it considers to be an appropriate
allowance for possible loan losses. Although Bank management believes it has a
sound basis for this estimation, actual write-offs incurred in the future are
highly dependent upon future events, including the economy of the area in which
the Bank lends.

SALE OF LOANS: The Bank periodically sells certain commercial loans to other
financial institutions without recourse to the Bank. Recognition of gains on
such sales are delayed for 90 days during which time, if the borrower defaults,
the premium paid is refunded to the purchaser of the loan. The gains and losses
are recognized in an amount which approximates the present value of the
difference between the effective interest rate to the Bank and the net yield to
the purchaser, excluding normal future loan servicing fees, when applicable,
over the estimated remaining lives of the loans sold.

PREMISES AND EQUIPMENT: Premises and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation and amortization are
computed primarily on the straight-line method over the shorter of the estimated
useful lives of the assets (three to ten years) or the term of the related
lease.

INTEREST ON LOANS: Interest on loans is credited to operations primarily based
upon the principal amount outstanding. When management believes there is
sufficient doubt as to the ultimate collectability of interest on any loan, the
accrual of applicable interest is discounted.

Loan origination fees are deferred and are recognized over the estimated life of
the related loans as an adjustment of the loan yield, and are included in
interest on loans in the accompanying statements of operations.

CASH AND CASH EQUIVALENTS: Cash and cash equivalents include cash on hand,
noninterest bearing amounts due from banks, Federal funds sold and other
short-term investments. Generally, Federal funds are sold for a 60-day period or
less.

INCOME TAXES: Deferred income taxes are recognized for tax consequences of
"temporary differences" by applying enacted statutory tax rates to differences
between the financial reporting and the tax basis of existing assets and
liabilities.

NET INCOME (LOSS) PER SHARE: Net income (loss) per share is computed by dividing
net income by the weighted average shares outstanding each year, adjusted for
common stock equivalents, if dilutive.
<PAGE>
NEW FINANCIAL ACCOUNTING STANDARDS: The Financial Accounting Standards Boards
(FASB) issued SFAS No. 121, "Accounting for the Impairment of Long-lived Assets
and for Long-lived Assets to be Disposed Of." in March 1995. This statement is
effective for the year ended December 31, 1996. Statement No. 121 requires the
long-lived assets to be held and used by the company be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. The company has evaluated the impact of
Statement No. 121 on its financial statements and determined that it is not
material.

SFAS No. 123, "Accounting for Stock-Based Compensation" was issued in October
1995 and must be adopted by the Company effective January 1, 1996. SFAS No. 123,
requires entities that have employee stock option plans to estimate the value of
grants awarded to employees and disclose, in a pro forma footnote, the impact on
the entities' earnings per share as if the estimated option value were expensed
over the vesting period of the grants. Adoption of the disclosure requirements
of this new accounting standard will not have an impact on the Company's results
of operations or financial condition.
<PAGE>
3: SECURITIES

Information relative to the Bank's securities portfolio at December 31, 1995 and
1994 is as follows:
<TABLE>
<CAPTION>
Gross
Gross Unrealized Estimated
Amortized Unrealized Amortized Market
Cost Gains Losses Value
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
1995
AVAILABLE FOR SALE
U.S. Treasury Securities ........ $ 3,543,131 $ 12,088 $ -- $ 3,555,219
U.S. Government Agency Securities 791,688 -- (350) 791,338
Mortgaged-Backed Securities ..... 525,452 2,729 -- 528,181
------------ ------------ ------------ ------------
$ 4,860,271 $ 14,817 $ (350) $ 4,874,738
============ ============ ============ ============

HELD TO MATURITY
U.S. Treasury Securities ........ $ 6,263,561 $ 50,008 $ (3,412) $ 6,310,157
U.S. Government Agency Securities 6,094,722 37,156 (5,265) 6,126,613
Other Securities ................ 496,147 10,728 -- 506,875
Mortgage-Backed Securities ...... 1,726,393 -- (20,897) 1,705,496
------------ ------------ ------------ ------------
$ 14,580,823 $ 97,892 $ (29,574) $ 14,649,141
============ ============ ============ ============

1994
AVAILABLE FOR SALE
U.S. Treasury Securities ........ $ 1,244,970 $ -- $ (13,238) $ 1,231,732
U.S. Government Agency Securities 1,505,934 -- (22,841) 1,483,093
Mortgage-Backed Securities ...... 781,503 -- (22,377) 759,126
------------ ------------ ------------ ------------

$ 3,532,407 $ -- $ (58,456) $ 3,473,951
============ ============ ============ ============

HELD TO MATURITY
U.S. Treasury Securities ........ $ 10,451,824 $ -- $ (121,871) $ 10,329,953
U.S. Government Agency Securities 4,337,200 -- (24,493) 4,312,707
Other Securities ................ 1,293,804 -- (21,996) 1,271,808
Mortgage-Backed Securities ...... 2,008,335 -- (110,115) 1,898,220
------------ ------------ ------------ ------------

$ 18,091,163 $ -- $ (278,475) $ 17,812,688
============ ============ ============ ============

</TABLE>
In October, 1995, the Financial Accounting Standards Board issued an
interpretation which permitted companies to make a one-time reclassification of
any portion of the held to maturity debt security portfolio without tainting the
remaining held to maturity portfolio. In connection therewith, the Bank
transferred securities with an amortized cost of $2,051,775 from the held to
maturity portfolio to the available for sale portfolio. The Bank recorded an
unrealized holding gain of $7,444 associated with the securities transferred.
<PAGE>
The amortized cost and estimated value of securities at December 31, 1995, by
contractual maturity, are shown in the following table for securities to be held
to maturity and available for sale. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.

Amortized Estimated
Cost Market Value
------------ ------------

AVAILABLE FOR SALE
Due in 1 year or less $ 4,334,818 $ 4,346,557
Mortgage-Backed Securities 525,453 528,181
------------ ------------
$ 4,860,271 $ 4,874,738
============ ============

HELD TO MATURITY
Due in 1 year of less $ 3,352,200 $ 3,355,633
Due after 1 year through 5 years 9,502,231 9,588,012
Mortgage-Backed Securities 1,726,392 1,705,496
------------ ------------
$ 14,580,823 $ 14,649,141
============ ============

At December 31, 1995, securities having a book value of approximately $2,028,000
were pledged to secure public deposits and for other purposes as required by
law.

4: LOANS

At December 31, 1995 and 1994, the composition of outstanding loans is
summarized as follows:

1995 1994
------------ ------------

Secured by Real Estate
Residential Mortgage $ 21,466,489 $ 17,507,136
Commercial Mortgage 15,700,266 12,825,013
Construction 2,812,000 3,234,618
Commercial & Industrial 12,554,205 7,525,585
Loans to Individuals 7,611,468 4,372,675
------------ ------------

$ 60,144,428 $ 45,465,027
============ ============

There were no loans restructured during 1995 or 1994. There were no loans past
due ninety days or more as to principal or interest or in a non-accrual status
as of December 31, 1995 and 1994. Loans to Executive officers totalled $147,984
at December 31, 1995 and $144,280 at December 31, 1994, all of which were
current as to principal and interest. There were no loans to Directors or their
affiliated interests.
<PAGE>
During 1995, the Bank adopted the provisions of Statement of Financial
Accounting Standards No. 114 "Accounting by Creditors for Impairment of a Loan"
(SFAS No. 114). Under these provisions, the Bank is required to allocate the
allowance for possible loan losses to loans deemed to be impaired. A loan is
considered to be impaired when it is probable that the Bank will be unable to
collect all amounts due according to the contractual terms of the loan
agreement. As of December 31, 1995, the Bank had no loans which were deemed
impaired.

5: ALLOWANCE FOR POSSIBLE LOAN LOSSES

The allowance for possible loan losses is based on estimates and ultimate losses
may vary from the current estimates. These estimates are reviewed periodically,
and as adjustments become necessary, they are reflected in operations in the
period in which they become known. An analysis of the allowance for possible
loan losses is as follows:

1995 1994 1993
--------- --------- ---------

Balance at January 1, ................ $ 372,062 $ 231,035 $ 107,000
Provision Charged to Operations ...... 206,000 156,000 130,000
Charge Offs .......................... (51,043) (15,846) (5,965)
Recoveries ........................... -- 873 --
--------- --------- ---------

Balance at December 31, .............. $ 527,019 $ 372,062 $ 231,035
========= ========= =========

6: PREMISES AND EQUIPMENT

Premises and equipment consists of the following at December 31, 1995 and 1994:

1995 1994
----------- -----------

Premises & Improvements .................. $ 187,322 $ 188,775
Furniture & Equipment .................... 700,548 573,063
Construction in Progress ................. 227,451 --
----------- -----------

1,115,321 761,838
----------- -----------

Less: Accumulated Depreciation ........... (399,106) (311,218)
----------- -----------
$ 716,215 $ 450,620
=========== ===========

<PAGE>
7: OTHER EXPENSE

The major components of other expense are as follows:

1995 1994 1993
-------- -------- --------

Data Processing Services ................... $131,038 $111,272 $ 99,020
Marketing & Business Development ........... 94,597 73,682 49,840
Stationery Forms & Supplies ................ 80,453 62,144 60,055
Insurance .................................. 62,773 65,539 58,543
Amortization of Organizational Costs ....... 41,340 41,340 38,220
Legal, Examination & Accounting ............ 83,847 90,857 67,027
FDIC Insurance Assessment .................. 74,332 110,153 66,467
Other, Net ................................. 242,555 178,778 138,687
-------- -------- --------
$810,935 $733,765 $577,859
======== ======== ========

8: COMMITMENTS AND CONTINGENCIES

The Bank leases its banking facilities under operating leases which expire in
1996 and 2004, but which contain certain renewal options. The Somerville
facilities are leased from a partnership consisting of all but one of the Bank's
Directors and two non-director shareholders. As of December 31, 1995, future
minimum rental payments, including the renewal options under these leases for
the subsequent five years are as follows:

1996 $ 261,286
1997 $ 263,178
1998 $ 271,146
1999 $ 273,194
2000 $ 275,248

The above amounts represent minimum rentals not adjusted for possible future
increases due to escalation provisions and assumes that all option periods will
be exercised by the Bank. Rent expenses aggregated $153,618, $139,808 and
$132,734, for the years ended December 31, 1995, 1994 and 1993, respectively.

At December 31, 1995, the Bank had outstanding commitments to extend credit of
$9,177,000. Commitments to extend credit are agreements to lend to a customer as
long as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since a portion of the commitments are
expected to expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. The Bank evaluates each
customer's credit worthiness on a case-by-case basis. The amount of collateral
obtained, if deemed necessary by the Bank upon extension of credit, is based on
management's credit evaluation of the customer. There is no material difference
between the notional amount and estimated fair value of off-balance sheet
unfunded loan commitments as of December 31, 1995.

9: BENEFIT PLAN

The Bank has a 401(K) Savings Plan covering substantially all employees. Under
the terms of the Plan, the Bank will match 50% of an employee's contribution, up
to 6% of the employee's salary. Employees become fully vested in the Bank's
contribution after five years of service. The Bank contributed $19,159, $12,700
and $3,600 to the Plan in 1995, 1994 and 1993, respectively.
<PAGE>
10: INCOME TAXES

The components of the provision (benefit for income taxes in 1995 and 1994 are
as follows:

There was no provision for income taxes in 1993.

1995 1994

--------- ---------

Federal ............................ $ 239,708 $ 18,170
Current .......................... 122,338 (325,922)
Deferred ......................... 61,344 --
--------- ---------
$ 423,390 $(307,752)
========= =========

Deferred income taxes are provided for the financial differences between the
financial reporting basis and the tax basis of the Bank's assets and
liabilities. Cumulative temporary differences at December 31, 1995 and 1994 are
as follows:

1995 1994
--------- ---------

Net Operating Loss Carry Forward, Net ......... $ -- $ 160,618
Start-up and Organization Costs ............... 27,309 60,420
Depreciation .................................. 2,219 (13,176)
Accretion of Securities Discount .............. (5,708) (8,493)
Provision for Possible Loan Losses ............ 179,774 126,553
--------- ---------
Deferred Tax Asset, Net ....................... $ 203,594 $ 325,922
========= =========

The difference between the provision for income taxes computed by applying the
Federal Income Tax rate of 34% and the effective tax rates for 1995, is
primarily a result of changes in the valuation reserve relative to the Bank's
deferred tax asset.

11: COMMON STOCK

During 1995, there were no options granted under the Bank's stock option plan.
During 1994, the Bank granted an aggregate of 12,000 options each for the
purchase of its common stock to two executive officers. The options are
exercisable over a five-year period at a price of $8.33 per share. No options
were exercised in 1995 or 1994.

12: CAPITAL REQUIREMENTS

Under the FDIC Improvement Act of 1991, banks are required to maintain a minimum
ratio of total capital to risk weighted assets of 8% of which at least 4% must
be in the form of Tier 1 capital (primarily shareholders equity) and a leverage
ratio of 4%. At December 31, 1995, the Bank had a ratio of total capital to risk
weighted assets of 14.28% of which 13.46% was in the form of Tier 1 capital and
a leverage ratio of 9.50%.
<PAGE>

13: ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, "Disclosure about Fair
Value of Financial Instruments," requires the disclosure of fair value
information about financial instruments, whether or not recognized in the
balance sheet, for which it is practicable to estimate value.

The fair value of a financial instrument is the amount at which the instrument
could be exchanged in a current transaction between willing parties, other than
a forced or liquidation sale. It is the Bank's intent and general practice to
hold its financial instruments to maturity and not to engage in trading
activities. Therefore, significant estimations were used by the Bank for the
purposes of this disclosure.

Estimated fair values have been determined by the Bank using the best available
data and estimation methodology suitable for each category of financial
instruments and are as follows:

For short term investments, such as cash and cash equivalents and short term
deposits, the carrying amount is a reasonable estimate of fair value.

Fair Value Book Value

Cash and Cash Equivalents $ 7,984,940 $ 7,984,940
------------ ------------

For securities held in the Bank's investment portfolio, fair value was
determined by reference to quoted market prices as of December 31, 1995.

Fair Value Book Value

Available for Sale Securities $ 4,874,738 $ 4,860,271
------------ ------------

Held to Maturity Securities $ 14,649,141 $ 14,508,823
------------ ------------

For long term assets and liabilities, such as loans and deposits, the Bank's
policy is to hedge its interest rate exposure on deposits with earning assets
with matching maturities. Fair value of loans were estimated using the percent
value of future cash flows expected to be received. Loan rates currently offered
by the Bank were used in determining the appropriate discount rate.

Fair Value Book Value

Loans, Net $ 60,612,000 $ 60,144,428
------------ ------------

Deposits $ 80,039,000 $ 79,679,792
------------ ------------

<PAGE>
(Letterhead)
ARTHUR ANDERSEN LLP

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Board of Directors of SVB Financial Services, Inc.

We have audited the accompanying consolidated statements of condition of SVB
Financial Services, Inc. (a New Jersey corporation) and subsidiary as of
December 31, 1995 and 1994 and the related statements of operations, changes in
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of SVB Financial
Services, Inc. and subsidiary as of December 31, 1995 and 1994, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1995 in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Princeton, New Jersey
January 18, 1996
(Except with respect to the matter
discussed in Note 1, as to which
the date is September 3,1996)
<PAGE>
Item 4. Instruments Defining the Rights of Securities Holders

III. A. The aggregate number of shares of stock which the
Corporation shall have authority to issue is 10,000,000 shares of stock, with a
par value of $4.17 per share.

B. Subject to and in accordance with the provisions of Section
2 of Chapter 7 of Title 14A of the New Jersey Statutes, the Board of Directors
of the Corporation shall have authority to divide the authorized but unissued
shares of stock of the Corporation into such classes or series of stock with
such designations, in such numbers and with such relative rights, preferences
and limitations as the Board of Directors shall determine. The Board of
Directors shall also have authority to change the designation or number of
shares, or the relative rights, preferences or limitations of the shares of any
theretofore established class or series, no shares of which have been issued.
The Board shall also have power under Sections 1 and 9 of Chapter 7 of Title 14A
of the New Jersey Statutes to create from the authorized but unissued. shares of
stock of the Corporation classes or series of convertible bonds or debentures.

C. No holder of any shares of the Corporation shall have any
preemptive right to purchase, subscribe for or otherwise acquire any shares of
the Corporation of any class now or hereafter authorized, or any securities
exchangeable for or convertible into such shares, or any warrants or other
instruments evidencing rights or options to subscribe for, purchase, or
otherwise acquire such shares.

IV. The Board of Directors of the Corporation shall be
classified and the directors shall be divided into three classes, as nearly
equal in number as possible. In the election of directors at the First Annual
Meeting of Stockholders, the term of office of the first class shall expire at
the Second Annual Meeting of Stockholders, the term of office of the second
class shall expire at the Third Annual Meeting of Stockholders, and the term of
office of the third class shall expire at the Fourth Annual Meeting of
Stockholders. At each Annual Meeting of Stockholders following such initial
classification and election, the number of directors equal to the number of the
class whose term expires at the time of such meeting shall be elected to hold
office until the third succeeding Annual Meeting of Stockholders. Each director
shall hold office until his successor is elected and qualified, or until his
earlier resignation or removal.

Notwithstanding any other provisions of the Certificate of
Incorporation or ByLaws of the Corporation (and notwithstanding the fact that a
lesser percentage may be specified by law, the other provisions of this
Certificate of Incorporation, or the By-Laws of the Corporation), and in
addition to any requirement of the Business Corporation Act of New Jersey, the
affirmative vote of the stockholders holding not less than three-fourths of the
outstanding shares of common stock of the Corporation, voted as a single class,
shall be required to amend or repeal, or to adopt any provisions inconsistent
with this Article; provided, however, that the preceding provision shall not be
applicable to any amendment or repeal or adoption of any provision inconsistent
with this Article I, and such amendment or repeal or adoption of any provision
inconsistent with this Article I shall require only such affirmative vote as
required by law and any other provisions of this Certificate of Incorporation,
if such amendment or repeal or adoption shall have been approved by a majority
vote of the Board of Directors.
<PAGE>
V. The total number of directors which constitutes the Board
of Directors of the Corporation shall not be less than five (5) or more than
twenty-five (25), the total number to be fixed by the vote of a majority of the
total number of authorized directors in advance of the Annual Meeting of
Stockholders.

A. During the period between Annual Meetings of Stockholders,
the Board of Directors may increase or decrease the number of directors in
office by no more than two (2) directors.

B. At the Annual Meeting of Stockholders, the stockholders of
the Corporation shall be entitled to increase or decrease the number of
directors, to a greater or lesser number than that set by the Board of
Directors, by the affirmative vote of at least 75% of the shares of the
Corporation then entitled to be voted in an election of directors.

C. Any increase or decrease in the number of directors shall
be apportioned among the classes of directors so as to maintain the size of each
class as nearly equal as possible.

D. Any vacancy on the Board of Directors,whether resulting
from death, resignation, removal, increase in number of directors, or other
cause, may be filled only by a vote of two-thirds of the directors then in
office at any regular or special meeting of the Board of Directors called for
that purpose. Any director so elected shall serve until the next election of the
class for which such director shall have been chosen and until his successor
shall be elected and qualified.

E. Any director on the Board of Directors may be removed for
cause as set forth in this Section E. Except as may otherwise be provided by
law, cause for removal shall be construed to exist only if:

(1) the director whose removal is proposed has been
convicted, or where a director was granted immunity to testify
where another has been convicted, of a felony by a court of
competent jurisdiction and such conviction is no longer
subject to direct appeal;

(2) such director has been adjudicated by a court of
competent jurisdiction to be liable for negligence, or
misconduct, in the performance of his duty to the Corporation
in a matter of substantial importance to the Corporation and
such adjudication is no longer subject to direct appeal;

(3) such director has become mentally incompetent, whether
or not so adjudicated, which mental incompetency directly
affects his ability as a director of the Corporation;

(4) such director ceases to fulfill the qualification
requirements set forth in the By-Laws of the Corporation; or

(5) such director's actions or failure to act are deemed
by the Board of Directors to be in derogation of the
director's duties.
<PAGE>
F. Removal for cause, as cause is defined in (1) and (2)
above, must be approved by at least a two-thirds vote of the total number of
directors and the action for removal must be brought within one year of such
conviction or adjudication. Removal for cause as cause is defined in (3), (4)
and (5) above, must be approved by at least two-thirds of the total number of
directors. For purposes of this paragraph, the total number of directors shall
not include the director who is the subject of the removal determination, nor
will such director be entitled to vote thereon.

G. No director may be removed by the Board of Directors or by
the stockholders without cause.

H. Notwithstanding any other provisions of the Certificate of
Incorporation or By-Laws of the Corporation (and notwithstanding the fact that a
lesser percentage may be specified by law, the other provisions of this
Certificate of Incorporation, or the By-Laws of the Corporation), and in
addition to any requirement of the Business Corporation Act of New Jersey, the
affirmative vote of the stockholders holding not less than three-fourths of the
outstanding shares of common stock of the Corporation, voted as a single class,
shall be required to amend or repeal, or to adopt any provisions inconsistent
with this Article; provided, however, that the preceding provision shall not be
applicable to any amendment or repeal or adoption of any provision inconsistent
with this Article, and such amendment or repeal or adoption of any provision
inconsistent with this Article shall require only such affirmative vote as
required by law and any other provisions of this Certificate of Incorporation,
if such amendment or repeal or adoption shall have been approved by a majority
vote of the Board of Directors.

VI. No action required to be taken or which may be taken at
any meeting of stockholders of the Corporation may be taken by written consent
without a meeting, except that any such action may be taken without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by all
the stockholders of the Corporation entitled to vote thereon, except as may be
provided by law.

Notwithstanding any other provisions of the Certificate of
Incorporation or ByLaws of the Corporation (and notwithstanding the fact that a
lesser percentage may be specified by law, the other provisions of this
Certificate of Incorporation, or the By-Laws of the Corporation), and in
addition to any requirement of the Business Corporation Act of New Jersey, the
affirmative vote of the stockholders holding not less than three-fourths of the
outstanding shares of common stock of the Corporation, voted as a single class,
shall be required to amend or repeal, or to adopt any provisions inconsistent
with this Article; provided, however, that the preceding provision shall not be
applicable to any amendment or repeal or adoption of any provision inconsistent
with this Article, and such amendment or repeal or adoption of any provision
inconsistent with this Article shall require only such affirmative vote as
required by law and any other provisions of this Certificate of Incorporation,
if such Amendment or repeal or adoption shall have been approved by a majority
vote of the Board of Directors.
<PAGE>
VII. Except as expressly permitted in sub-paragraph A below,
any purchase by the corporation, or any subsidiary of the Corporation, of shares
of common stock from a person or group of persons known by the Corporation to be
an Interested Stockholder (as hereinafter defined) at a per share price in
excess of the Fair Market Value (as hereinafter defined) at the time of such
purchase of the shares so purchased, shall require the affirmative vote of not
less than a majority of the votes entitled to be cast by the holders of all then
outstanding shares of common stock, voting together as a single class. Such
affirmative vote shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage or separate class vote may be specified by
law, or otherwise.

A. The provisions of this Article shall not be applicable to
any purchase of shares of common stock, if such purchase is pursuant to:

(1) an offer, made available on the same terms, to the
holders of all of the outstanding shares of the same class as
those purchased; or

(2) a purchase program effected on the open market and not
the result of a privately-negotiated transaction.

B. For purposes of this Article:

(1) The term "Interested Stockholder" shall mean a holder,
or group of holders acting in concert, of more than five
percent (5%) of the common stock of the Corporation; and

(2) The term "Fair Market Value" shall mean the average
closing bid quotations with respect to a share of common stock
for the 30 day period preceding the date in question on the
National Association of Securities Dealers, Inc. Automated
Quotation System or any system or exchange on which the stock
is then listed or quoted, or if no such quotation is
available, the value of a share of common stock as determined
in good faith by a majority vote of the Board of Directors.

C. Notwithstanding any other provisions of the Certificate of
Incorporation or By-Laws of the Corporation (and notwithstanding the fact that a
lesser percentage may be specified by law, the other provisions of this
Certificate of Incorporation, or the By-laws of the Corporation), and in
addition to any requirement of the Business Corporation Act of New Jersey, the
affirmative vote of the stockholders holding not less- than three-fourths of the
outstanding shares of common stock of the Corporation, voted as a single class,
shall be required to amend or repeal, or to adopt any provisions inconsistent
with this Article; provided, however, that the preceding provision shall not be
applicable to any amendment or repeal or adoption of any provision inconsistent
with this Article, and such amendment or repeal or adoption of any provision
inconsistent with this Article shall require only such affirmative vote as
required by law and any other provisions of this Certificate of Incorporation,
if such amendment or repeal or adoption shall have been approved by a majority
vote of the Board of Directors.
<PAGE>
VIII. The affirmative vote or consent of the holders of not
less than two-thirds of the outstanding shares of Voting Stock (as hereinafter
defined) of the Corporation held by stockholders other than the Acquiring Person
(as hereinafter defined) with which or by or on whose behalf, directly or
indirectly, a "Business Combination" (as hereinafter defined) is proposed,
voting as a single class, shall be required for the approval or authorization of
such Business Combination. Notwithstanding the foregoing, the above two-thirds
voting requirement shall not be applicable if such Business Combination is
approved by a majority vote of the Continuing Directors (as hereinafter defined)
or if the cash or fair market value of the property, securities, or other
consideration to be received per share by all holders of shares of each class or
series of Voting Stock in such Business Combination, as of the date of
consummation thereof, is an amount not less than the higher of (a) the Highest
Per Share Price (as hereinafter defined) paid by such Acquiring Person in
acquiring any of its holdings of Voting Stock, and (b) the Fair Market Price (as
hereinafter defined) of such class of Voting Stock determined on the date the
proposal for such Business Combination was first publicly announced, and such
consideration shall be in the same form and of the same kind as the
consideration paid by such Acquiring Person in acquiring the shares of Voting
Stock it already owns. If the Acquiring Person had paid for shares of Voting
Stock with varying forms of consideration, the form of consideration to be
received by the holders of Voting Stock shall be in the form used to acquire the
largest number of shares of Voting Stock acquired by the Acquiring Person. If
the Continuing Directors have not approved the Business Combination by a
majority vote, then other conditions which must be met if the two-thirds voting
requirement is not to be applicable to the subject Business Combination are:

(i)after the Acquiring Person has obtained 5% of the
Corporation's voting Stock and prior to the consummation of the Business
Combination (except as approved by a vote of a majority of the Continuing
Directors) there shall have been no failure to declare and pay at the regular
date therefor any full quarterly dividend (whether or not cumulative) on any
outstanding preferred stock of the Corporation; there shall have been

(1) no reduction in the annual rate of dividends, if any,
paid on the common stock (except as necessary to reflect any
subdivision of the common stock), except as approved by a
majority vote of the Continuing Directors, and

(2) an increase in such annual rate of dividends as
necessary to prevent any such reduction in the event of any
reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction
which has the effect of reducing the number of outstanding
shares of common stock, unless the failure so to increase such
annual rate is approved by a majority vote of the Continuing
Directors; and such Acquiring Person shall not have become the
beneficial owner of any additional shares of Voting Stock
except as part of the transaction which results in such
Acquiring Person owning 5 % or more of the Voting Stock;

(ii)after such Acquiring Person has become an Acquiring
Person, such Acquiring Person shall not have received the benefit, directly or
indirectly (except proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credits or other
tax advantages provided by the Corporation, whether in anticipation of or in
connection with such Business Combination or otherwise, except as approved by a
majority vote of the Continuing Directors;
<PAGE>
(iii) a proxy or information statement describing the proposed
Business Combination and complying with the requirements of the Securities
Exchange Act of 1934, as amended (the "Act"), shall be mailed to stockholders of
the Corporation at least 30 days prior to the consummation of such Business
Combination (whether such proxy or information statement is required to be
mailed pursuant to the Act or the rules promulgated thereunder (the "Rules");

(iv) if deemed advisable by a majority vote of Continuing
Directors, the proxy or information statement shall contain either a
recommendation by a majority of Continuing Directors as to the advisability (or
inadvisability) of the Business Combination or an opinion by an investment
banking firm, selected by a majority of the Continuing Directors, as to the
fairness (or unfairness) of the Business Combination to the stockholders of the
Corporation other than the Acquiring Person, or both; and

(v) all per share prices referred to in this Article shall
have been appropriately adjusted to reflect any intervening stock splits, stock
dividends, recapitalization, reclassification (including any reverse stock
splits), reorganizations or any similar transactions.

A. For purposes of this Article:

(1) "Acquiring Person" shall mean any individual, corporation (other
than the Corporation), partnership, other person or entity which, together with
its affiliates and associates (as defined in the Act or the Rules thereunder. as
amended), and with any other individual, corporation (other than the
Corporation), partnership, person or entity with which it or they have any
agreement,arrangement, or understanding with respect to acquiring, holding,
voting or disposing of Voting Stock, beneficially owns (within the meaning of
the Act or the Rules) in the aggregate 5% or more of the outstanding Voting
Stock of the Corporation. "Acquiring Person" shall also include any assignee of
or person or entity which has succeeded to any shares of Voting Stock which were
at any time prior to the date of assignment or succession beneficially owned by
a 5% owner, or an affiliate or associate of a 5% owner, if such assignment or
succession shall have occurred in the course of a transaction or series of
transactions not involving a public offering within the meaning of the
Securities Act of 1933, as amended. A person or entity, its affiliates and
associates, assignees and successors, and all such other persons or entities
with whom they have any such agreement, arrangement, or understanding shall be
deemed a single Acquiring Person for purposes of this Article. For purposes of
this Article, the Continuing Directors shall by majority vote have the power to
determine, on the basis of information known to the Board, if and when there is
an Acquiring Person. Any such determination shall be conclusive and binding for
all purposes of this Article.

(2) "Business Combination" shall mean (a) any merger or consolidation
of the Corporation or a subsidiary of the Corporation with or into an Acquiring
Person, (b) any sale, lease, exchange, transfer or other disposition, including,
without limitation, a mortgage or other security device, in a single transaction
or related series of transactions, of all or any Substantial Part (as
hereinafter defined of the assets either of the Corporation (including without
limitation any voting securities of a subsidiary) or of a subsidiary of the
Corporation to an Acquiring Person, (c) any merger or consolidation of an
<PAGE>
Acquiring Person with or into the Corporation or a subsidiary of the
Corporation, (d) any sale, lease, exchange, transfer or other disposition,
including without limitation a mortgage or other security device, in a single
transaction or related series of transactions, of all or any Substantial Part of
the assets of an Acquiring Person to the Corporation or a subsidiary of the
Corporation, (e) the issuance of any securities of the Corporation or a
subsidiary of the Corporation to an Acquiring Person, (f) any recapitalization,
merger or consolidation that would have the effect of increasing the voting
power of an Acquiring Person, (g) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed, directly or indirectly,
by or on behalf of an Acquiring Person, (h) any merger or consolidation of the
Corporation with a subsidiary of the Corporation proposed by or on behalf of an
Acquiring Person, unless approved by a majority vote of the Continuing
Directors; (i) any agreement, contract, or other arrangement providing for any
of the transactions described in this definition of Business Combination, and
(j) any other transaction with an Acquiring Person which requires the approval
of the stockholders under the Business Corporation Act of New Jersey. A person
who is an Acquiring Person as of (k) the time any definitive agreement relating
to a Business Combination is entered into, (1) the record date for the
determination of stockholders entitled to notice of and to vote on a Business
Combination, or (m) immediately prior to the consummation of a Business
Combination, shall be an Acquiring Person for purposes of this definition.

(3) "Continuing Directors" of the Corporation shall mean a director
who was a member of the Board of Directors of the Corporation on or about
February 1, 1996 and is still a director, together with each director who was a
member of the Board of Directors immediately prior to the time that the
Acquiring Person involved in a Business Combination became an Acquiring Person
and any successor to such Continuing Director who was nominated or elected by a
majority of the then Continuing Directors or any director nominated or approved
for nomination to the Board of Directors by a majority of the then Continuing
Directors and elected by the stockholders. A majority vote of the Continuing
Directors shall mean a vote of the majority of the Continuing Directors then in
office, provided that at least two Continuing Directors are then in office and
participate in such vote.

(4) "Fair Market Price" shall mean for any class or series of Voting
Stock the highest closing bid quotation with respect to a share of such class or
series of stock as determined in good faith by a majority vote of the Continuing
Directors.

(5) "Highest Per Share Price" shall mean the following: If there is
only one class and series of Voting Stock of the Corporation - issued and
outstanding, the Highest Per Share Price shall mean the highest per share price
that can be determined to have been paid at or after the time the Acquiring
Person by or on whose behalf, directly or indirectly, the Business Combination
has been proposed, for any share or shares of that class and series of Voting
Stock. If there is more than one class or series of Voting Stock issued and
outstanding. as to each class or series, the Highest Per Share Price shall mean
the higher of (i) the highest per share price that can be determined to have
been paid at any time by the Acquiring Person by or on whose behalf, directly or
indirectly, the Business Combination has been proposed for any share or shares
of that class or series, (ii) the highest Preferential amount per share to which
the holders of such class or series of Voting Stock would be entitled in the
<PAGE>
event of a voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, (iii) if convertible into a class or series of Voting Stock
which the Acquiring Person has purchased the highest price for such class or
series of convertible stock determined by multiplying the number of shares of
the class into which such Voting Stock is convertible by the highest per share
price paid by the Acquiring Person for a share of the class or series of stock
into which such class or series of convertible stock is convertible, or (iv) the
equivalent price for such class or series as determined in good faith by a
majority vote of the Continuing Directors. In determining the Highest Per Share
Price, all purchases by an Acquiring Person shall be taken into account after
the Acquiring Person became an Acquiring Person. Further, the Highest Per Share
Price shall include any brokerage commissions, transfer taxes and soliciting
dealers fees paid by the Acquiring Person with respect to the shares of Voting
Stock of the Corporation acquired by the Acquiring Person. The Highest Per Share
Price shall be appropriately adjusted to take into account stock dividends,
subdivisions, combinations, reclassification and similar events or transactions.

(6) "Voting Stock" shall mean all of the outstanding shares of capital
stock of the Corporation entitled to vote in the election of directors
(considered for purposes of voting in accordance with this Article as one
class), and each reference to a percentage of shares of Voting Stock shall refer
to such percentage of the votes entitled to be cast by such shares.

B. The Continuing Directors, acting by majority vote, shall
have the power and duty to determine. on the basis of information known to them
after reasonable inquiry, all facts necessary to determine compliance with this
Article, including without limitation (i) whether a person is an Acquiring
Person, (ii) the number of shares of Voting Stock beneficially owned by any
person, (iii) whether a person is an affiliate or associate of another, (iv) the
"Highest Per Share Price" as used in definition (5) of this Article, (v) whether
all requirements and conditions of this Article have been met with respect to
any Business Combination, and (vi) whether the assets which are the subject of
any Business Combination are a substantial part of the Corporation's assets. The
good faith determination by a majority vote of the Continuing Directors on such
matters shall be conclusive and binding for all purposes of this Article.

Nothing contained in this Article shall be construed to
relieve the Board of Directors or any Acquiring Person from any fiduciary
obligation imposed by law.

X. The names and addresses of the fourteen (14) persons
constituting the first Board of Directors of the Corporation until the First
Annual Meeting of stockholders are:

Name Address
- ---- -------
Robert P. Corcoran 12 Harvest Ct., Flemington, NJ 08822

Raymond L. Hughes 180 Cowperthwaite Rd., Bedminster, NJ 07921

Frank J. Orlando 786 Princeton Ave., Brick, NJ 08724

Donald Sciaretta 61 Spring Hollow Rd., Far Hills, NJ 07931

Gilbert E. Pittenger RD 1, Box 91, New Ringgold, PA 17960

Herman C. Simonse 93 Douglass Ave., Bernardsville, NJ 07924

S. Tucker S. Johnson PO Box 675, Oldwick, NJ 08858

G. Robert Santye 138 Fairview Rd., Skillman, NJ 08558

John K. Kitchen 475 Burnt Mills Rd., Bedminster, NJ 07921

Frederick D. Quick 924 River Rd., Neshanic, NJ 08853

Anthony J. Santye, Jr. 140 Fairview Rd., Skillman, NJ 08558

Donald B. Tourville 182V Old Driftway, Lebanon, NJ 08833

Bernard Bernstein 122 Tappen Ave., North Plainfield, NJ 07060

Willem Kooyker Sunnybranch Rd., Box 953, Far Hills, NJ 07931
<PAGE>
IN WITNESS WHEREOF, the undersigned, the incorporators of the Corporation
hereinabove referred to, have signed this instrument this 25 day of January,
1996.

/s/Robert P. Corcoran
------------------
Robert P. Corcoran

/s/Raymond L. Hughes
-----------------
Raymond L. Hughes

/s/Frank J. Orlando
----------------
Frank J. Orlando

/s/Donald Sciaretta
----------------
Donald Sciaretta

/s/Gilbert E. Pittenger
--------------------
Gilbert E. Pittenger

/s/Herman C. Simonse
-----------------
Herman C. Simonse

/s/S. Tucker S. Johnson
--------------------
S. Tucker S. Johnson

/s/G. Robert Santye
----------------
G. Robert Santye

/s/John K. Kitchen
---------------
John K. Kitchen

/s/Frederick D. Quick
------------------
Frederickk D. Quick

/s/Anthony J. Santye, Jr.
----------------------
Anthony J. Santye, Jr.

/s/Donald B. Tourville
-------------------
Donald B. Tourville

/s/Bernard Bernstein
-----------------
Bernard Bernstein

/s/Willem Kooyker
--------------
Willem Kooyker
<PAGE>
BYLAWS

SVB FINANCIAL SERVICES, INC.

A New Jersey Corporation

ARTICLE I

Offices

The Corporation shall maintain its principal office in the State of New
Jersey. The Corporation may also have offices in such other places, either
within or without the state of New Jersey, as the Board of Directors may from
time to time designate or as the busienss of the Corporation may require.

ARTICLE II

Meetings of Stockholders

Section 1. Place. Meetings of the stockholders of the Corporation shall
be held at such place, either within or without the State of New Jersey, as may
from time to time be designated by the Board of Directors and stated in the
notice of the meeting.

Section 2. Annual Meeting. An annual meeting of the stockholders of the
Corporation shall be held in each year on the last Tuesday in April (or if that
be a legal holiday, then on the next business day) for the election of directors
and for the transaction of such other business as may properly be brought before
the meeting.

Section 3. Special Meetings. Special meetings of the stockholders may
be called on the order of the President or of a majority of the Board of
Directors.

Section 4. Notice. Written notice of all meetings of stockholders shall
be mailed postage prepaid to each stockholder at least ten (10) days prior to
the meeting. Notice of any special meeting shall state in general terms the
purposes for which the meeting is to be held.

Section 5. Quorum. The holders of a majority of the issued and
outstanding shares of the capital stock of the Corporaton entitled to vote
thereat, present in person or represented by proxy, shall constitute a quorum
for the transaciton of business at all meetings of the stockholders except as
may otherwise be provided by law, by the Certificate of Incorporation, or by
these Bylaws; but if there be less than a quorum, the holders of a majority of
the stock so present or represented may adjourn the meeting from time to time. A
majority of the votes cast shall decide every question or matter submitted to
the stockholders at any meeting, unless otherwise provided by law or by the
Certificate of Incorporation.

Section 6. Voting. All elections of directors shall be managed by three
Inspectors, who shall be appointed by the Board of Directors. The Inspectors of
election shall hold and conduct the election at which they are appointed to
serve, and, after the election, they shall file with the Secretary a certificate
under their hand, certifying the result thereof and the names of the directors
elected. The Inspectors of election, at the request of the Chairman of the
<PAGE>
meeting, shall act as tellers of any other vote by ballot taken at such meeting
and shall certify the result therof.

At all meetings of stockholders, every registered owner of shares
entitled to vote may vote in person or by proxy and shall have one vote for each
such share standing in his, her, or its name on the books of the Corporation.

Section 7. Proxies. Stockholders may vote at any meeting of the
stockholders by proxies duly authorized in writing. Proxies shall be valid only
for one meeting, to be specified therein, and any adjournments of such meeting.
Proxies shall be dated and shall be filed with the records of the meeting.

Section 8. Conduct of Meetings. The Chairman of the Board of the
corporation shall act as Chairman of the meeting and the Vice-Chairman of the
board of the Corporation shall act as Vice-Chairman of the meeting. In the
absence of the Chairman and Vice-Chairman, the President of the Corporation
shall act as Chairman of the meeting. The Secretary of the Corporation shall act
as Secretary of the meeting. In his absence, the Chairman shall appoint an
officer of the Corporation to act as Secretary of the meeting.

ARTICLE III

Board of Directors

Section 1. Powers. The Board of Directors shall have the power to
manage and administer the business and affairs of the Corporation. Except as
expressly limited by law, all powers of the Corporation shall be vested in and
may be exercised by the Board.

Section 2. Number. The Board shall consist of not less than five (5)
nor more than twenty-five (25) and shall be divided into three (3) classes all
as set forth in Article IV and Article V of the Certificate of Incorporation
which articles are incorporated herein by reference.

Section 3. Organization Meeting. The Chairman of the meeting, upon
receiving the certificate of Inspectors of the result of any election, shall
notify the directors-elect of their election and of the time and place at which
they are required to meet for the purpose of organizing the new Board and
electing and appointing officers of the Corporation for the succeeding year.
Such meeting shall be scheduled to be held on the day of the election or as soon
thereafter as practicable and, in any event, within thirty (30) days thereof.
If, at the time fixed for such meeting, there shall not be a quorum present, the
directors present may adjourn the meeting, from time to time, until a quorum is
obtained.

Section 4. Regular Meetings. Regular meetings of the Board of Directors
shall be held at the principal office of the Corporation, or such other office
of the Corporation as may be designated by the Board, at least once per month,
unless otherwise ordered by the Board, on such day and at such times the Board
may specify. When any regular meeting of the Board falls upon a holiday, the
meeting shall be held on the next business day, unless the Board shall designate
some other day.

Section 5. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board, the Vice-Chairman of the Board, the
President or the Secretary and shall be called by the Chairman, President or
Secretary upon written request of three (3) Directors, all upon two (2) business
days notice by fax or overnight mail to each Director.
<PAGE>
Section 6. Conduct of Meetings. At meetings of the Board of Directors,
the Chairman of the Board, or in his absence, the Vice-Chairman, the President,
or a designated Director shall preside. A majority of the members of the Board
of directors shall constitute a quorum for the transaction of business, but less
than a quorum may adjourn any meeting from time to time until a quorum shall be
present, whereupon the meeting may be held, as adjourned without further notice.
At any meeting at which every director shall be present, even though without any
notice, any business may be transacted.

Section 7. Vacancies. Any vacancy which occurs on the Board shall be
filled in accordance with Article V Section D of the Certificate of
Incorporation which Section is incorporated herein by reference.

Section 8. Compensation. The Directors shall receive such compensation
for their services as directors and as members of any committee appointed by the
Board as may be prescribed by the Board of Directors and shall be reimbursed by
the Corporation for ordinary and reasonable expenses incurred in the performance
of their duties.

Section 9. Removal of Directors or Officers. The Board of Directors
shall have power to remove any Director from office, but only in accordance with
Article V Section E, F, and G of the Certificate of Incorporation which Sections
are incorporated herein by reference.

The Board may remove any officer for any cause or without cause by a
majority vote of the entire Board.

ARTICLE IV

Committees of the Board

Section 1. Executive Committee. The Board of Directors shall appoint an
Executive Committee consisting of the Chairman of the Board and five (5) members
thereof appointed by the Board. During all periods when the Board is not in
session, the Executive Committee shall have and may exercise all the authority
of the Board except with respect to the filling of vacancies on the Board or in
any committee or remove any officer or Director; the fixing of compensation of
the Directors for serving on the Board or on any committee; the amendment or
repeal of Bylaws or the adoption of new Bylaws; the amendment or repeal of any
resolution of the Board which by its express terms is not so amendable or
repealable; the appointment of other committees of the Board or the members
thereof.

Section 2. Establishment of Committees. The Board of Directors may
appoint, from time to time, from its own members, such other committees of one
or more persons, for such purposes and with such powers as the Board may
determine.

Section 3. Committee Organization. The chairman of each committee shall
be recommended by the Chairman and approved by the Board of Directors. Each
committee shall determine its own time and place of meetings and rules of
procedure unless otherwise directed by the Board.

Section 4. Committee Reports. Actions taken at a meeting of any
committee shall be reported to the Board at its next meeting following such
committee meeting; except that, when the meeting of the Board is held within two
(2) days after the committee meeting, such report shall, if not made at the
first meeting, be made to the Board at its second meeting following such
committee meeting.
<PAGE>

ARTICLE V

Officers and Employees

Section 1. Chairman of the Board. The Board of Diretors shall appoint
one of its members to be Chairman of the Board, to serve at the pleasure of the
Board, who shall preside at all meetings of the Board and perform such other
duties as may be prescribed from time to time by th Board of Directors or by the
Bylaws. The Board may also appoint a Vice-Chairman of the Board, who will
preside at all of its meetings in the absence of the Chairman.

Section 2. President. The Board of Directors shall appoint a President
of the Corporation who may be a member of the Board. In the absence of the
Chairman and Vice-Chairman, he shall preside at any meeting of the Board. The
President shall be the Chief Executive Officer of the Corporation, and shall
have and may exercise any and all powers and duties normally pertaining to the
office of President of the Corporation. He shall also have and may exercise such
further powers and duties as from time to time may be conferred upon or assigned
to him by the Board of Directors or by these Bylaws.

Section 3. Vice-President. The Board of Directors may appont one or
more Vice-Presidents, one or more of whom may be designated Executive
Vice-President, who may be a member of the Board, or Senior Vice-President. Each
Vice-President shall have such powers and duties as may be assigned to him by
the Board and the President.

Section 4. Secretary. The Board of Directors shall appoint a Secretary
who shall keep the minutes of all meetings of the stockholders and the Board of
Directors, and, to the extent ordered by the Board of Directors or the
President, the minutes of meetings of all committees. He shall cause notice to
be given of meetings of stockholders, of the Board of Directors, and of any
committee appointed by the Board. He shall have custody of the corporate seal
and general charge of the records of the Corporation. He may sign or execute
contracts with the President or a Vice-President thereunto authorized, in the
name of the Corporation and affix the seal of the Corporation thereto. He shall
perform all duties normally incident to the office of Secretary and such other
duties as may be prescribed from time to time by the Board of Directors or by
the Bylaws.

Section 5. Treasurer. The Board of Directors shall appoint a Treasurer
who shall have general custody of all the funds and securities of the
Corporation and have general supervision of the collection and disbursement of
funds of the Corporation. He may sign, with the President, or such otehr person
or persons as may be designated for the purpose by the Board of Directors, all
financial instruments of the Corporation. He shall perform all duties normally
incident to the office of Treasurer and such other duties as may be prescribed
from time to time by the Board of Directors or by the Bylaws.

Section 6. Other Officers. The Board of Directors may appoint one or
more Assistant Vice-Presidents, one or more Assistant Secretaries, one or more
Assistant Treasurers and such other officers as, from time to time, may appear
to the Board to be requried or desirable to transact the business of the
Corporation. Such officers shall respectively exercise such powers and perform
such duties as pertain to their several offices or as may be conferred upon or
assigned to them by the Board or President.

Section 7. Tenure of Office. The Chairman of the Board, Vice-Chairman,
<PAGE>
and any officer who may be required or permitted by these Bylaws to be a member
of the Board of Directors, shall hold his office for the current year for which
the Board of which he shall be a member was elected, unless he shall resign,
become disqualified, or be removed. Any vacancy occurring in the office of
President shall be filled promptly by the Board at any regular or special
meeting.

Section 8. Vacancies. In case any office shall become vacant, the Board
of Directors shall have power to fill such vacancies. In case of the absence or
disability of any officer, the Board of Directors may delegate the powers or
duties of any officer to another officer or a director for the time being.

Section 9. Exercise of Rights as Stockholders. Unless otherwise ordered
by the Board of Directors, the Presidnet or a Vice-President therunto duly
authorized by the President shall have full power and authority on behalf of the
Corporation to attend and to vote at any meeting of stockholders of any
corporation of which this Corporation may hold stock, and may exercise on behalf
of this Corporation any all all of the rights and powers incident to the
ownership of such stock at any such meeting, and shall have power and authority
to execute and deliver proxies and consents on behalf of this Corporation in
connection with the exercise by this corportaion of the rights and powers
incident to the ownership of such stock. The Board of Directors, from time to
time, may confer like powers upon any other person or persons.

Section 10. Surety Bonds. Each officer and employee of the Corporation
may be covered by bond of such amount and with such security as shall be
approved by the Board of Directors, conditioned for the honest and faithful
discharge of his duties as such officer or employee. At the discretion of the
Board, such bonds may be schedule or blanket form and the premiums shall be paid
by the Corporation.

ARTICLE VI

Stock and Stock Certificates

Section 1. Transfers. Shares of stock shall be transferable on the
books of the Corporation, and a transfer book shall be kept in which all
transfers of stock shall be recorded. Every person becoming a stockholder by
such transfer shall, in proportion to his shares, succeed to all rights and
liabilities of the prior holder of such shares. The transfer book may be
computerized so long as it is convertible into written form within a reasonable
time.

Section 2. Stock Certificates. Certificates of stock shall be in such
form as may from time to time be prescribed by the Board of Directors and shall
be signed in the name of the Corporation by the Chairman of the Board, or the
President or a Board designated Vice-President and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant secretary, and the seal of
the Corporation or a facsimile thereof shall be placed thereon.

Section 3. Transfer Agent. The Board of Directors shall have power to
appoint one or more Transfer Agents and Registrars for the transfer and
registration of certificates of stock of any class, and may require that stock
certificates shall be countersigned and registered by one or more of such
Transfer Agents.

Section 4. Transfer of Stock. Shares of capital stock of the
Corporation shall be transferable on the books of the corporation only by the
<PAGE>
holder of record thereof personally, or by a duly authorized attorney, upon
surrender and cancellation of certificates for a like number of shares.

Section 5. Lost Certificates. In case any certificate for the capital
stock of the Corporation shall be lost, stolen, or destroyed, the Corporation
may require such proof of the fact and such indemnity and costs to be given to
it and to its Transfer Agent and Registrar, if any, as shall be deemed necessary
or advisable by it.

Section 6. Holder of Record. The Corporation shall be entitled to treat
the holder of record of any share or shares of stock as the holder thereof in
fact and 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 express or other notice thereof, except as otherwise expressly provided by
law.

Section 7. Closing of Books. The Board of Directors shall have the
power to close the stock transfer books of the Corporation for a period not more
than sixty (60) nor less than ten (10) days preceding the date of any meeting of
stockholders or the date for payment of any dividend or the date for the
allotment of rights or the date when any change or conversion or exchange of
capital stock shall go into effect.

ARTICLE VII

Corporate Seal

The corporate seal of the Corporation shall be in appropriate form and
shall contain the designation SVB Financial Services, Inc. 1996, New Jersey

ARTICLE VIII

Indemnification

Section 1. Indemnification. Subject to the provision of Section 3, any
person who was or is a party or is threatened to be made a party to any
threatened, pending or contemplated action, suit or proceedings, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person is or was a director or officer of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee, trustee, or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, shall be indemnified by the Corporation
against expenses (including attorneys' fees), judgments, fines, excise taxes and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding to the full extent permitted by
the laws of the State of New Jersey as in effect at the time of such
indemnification.

Section 4. Emergencies. In the event of an emergency declared by the
President of the United States or the person performing his function, the Bylaws
of this corporation and the operation thereof shall be temporarily suspended and
in place thereof the officers and employees of this Corporation will continue to
conduct the affairs of the Corporation and its subsidiaries under the authority
of resolutions duly adopted by the Board of Directors, to become operative in
such emergencies.

Section 5. Word Clarification. The use of the word "he", or any pronoun
referring to such word, as used in these Bylaws shall be construed as masculine,
<PAGE>
feminine or neuter or in the singular or plural as the sense requires.

ARTICLE X

Bylaws

Section 1. Inspection. A copy of the Bylaws, with all amendments
thereto, shall at all times be kept in a convenient place at the principal
office of the Corporation and shall be open for inspection to all stockholders
during normal business hours.

Section 2. Amendments. These Bylaws may be amended upon vote of a
majority of the entire Board of directors at any meeting of the Board, provided
two days' notice of the proposed amendment has been given to each member of the
Board of Directors. In the case of any Bylaw, the provisions of which are
prescribed by law or the Certificate of Incorporation, no amendment may be made
unless the Bylaw, as amended, is consistent with the requirements of law or the
Certificate of Incorporation. The shareholders may alter or repeal any provision
of the Bylaws by the vote of a majority of the shareholders at any meeting,
except as otherwise provided by the Certificate of Incorporation, provided that
a statement of the proposed action shall have been included in the notice of
such meeting of stockholders.

ARTICLE XI

Mergers

1. No merger, consolidation or other business combination, nor any
sale, lease, or exchange of substantially all of the assets of this Corporation
may be effected except in accordance with all appropriate provisions of the
Certificate of Incorpation, which provisions are hereby incorporated herein by
reference.

2. In the event of a tender offer or other offer for the securities of
the Corporation, the Board of Directors shall consider all relevant factors with
respect to the impact of the offer upon the stockholders, employees, customers
of the Corporation, and upon the Corporation's subsidiaries and the communities
served by such subsidiaries, and all relevant financial, legal and other issues
raised by the proposed offer. The Board shall have the discretion to promote
acceptance or encourage rejection of an offer by all lawful means in the best
interests of the Corporation, and the interests taken into account in reaching
its determination, subject to all applicable provisions of the Certificate of
Incorporation.

STATEMENT

The foregoing Bylaws, consisting of fifteen (15) pages, were adopted by
the Board of Directors at the organizational meeting of SVB FINANCIAL SERVICES,
INC. on February 29, 1996.

/s/ Marguerite Eppler
---------------------
Marguerite Eppler
Secretary
<PAGE>

SIGNATURES

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

SVB FINANCIAL SERVICES, INC.
----------------------------
(Registrant)

Date By: /s/Keith B. McCarthy
-----------------
Keith B. McCarthy
Executive Vice President