Difference between creating an object within the constructor vs outside of the constructor?

Within my program, I am trying to create a toolbar within a frame. Within the toolbar, I have three buttons that are represented with a picture instead of text.

The problem is that I have found that there is a difference in how the buttons are displayed if I create the JButton objects within the constructor, compared to if I did this outside of the constructor (but still within the JFrame class).

My code when I create the buttons within the constructor :

public class Tool extends JFrame
{
    public Tool()
    {
         JToolbar bar = new JToolBar();

         JButton button1 = new JButton(img1);
         JButton button2 = new JButton(img2);
         JButton button3 = new JButton(img3);

         bar.add(button1);
         bar.add(button2);
         bar.add(button3);
    }
}

Then the buttons are added nicely and neatly to the toolbar.

However, if I do this:

public class Tool extends JFrame
{
     JButton button1 = new JButton(img1);
     JButton button2 = new JButton(img2);
     JButton button3 = new JButton(img3); 

public Tool()
        {
             JToolbar bar = new JToolBar();

             bar.add(button1);
             bar.add(button2);
             bar.add(button3);
        }
 }

Then, the buttons are still added to the toolbar. BUT instead of being formatted nicely, they seem to have a border around them (similar to if you just copied an image off of google and paste it onto a powerpoint presentation, for example, and you get a square border around the image).

Why is this the case? Why does it matter where I create the JButton objects?

Thank you in advance.

Edit (complete CORRECT code): In the code below, button1 and button2 are created within the constructor, whereas button3 is created outside of the constructor. As you can see, there is a faint white border around the button with the text "Java", compared to the two other buttons.

import java.awt.*;
import java.awt.event.*;
import javax.swing.*;

public class Tool extends JFrame
{
        JButton button3 = new JButton("Java");


    public Tool()
    {
        super("Tool");
        setLookAndFeel();
        setSize(370, 200);
        setDefaultCloseOperation(JFrame.EXIT_ON_CLOSE);

        JButton button1 = new JButton("Help");
        JButton button2 = new JButton("SOS");

        //build toolbar
        JToolBar bar = new JToolBar();
        bar.add(button1);
        bar.add(button2);
        bar.add(button3);

        // build text area
        JTextArea edit = new JTextArea(8, 40);
        JScrollPane scroll = new JScrollPane(edit);

        // create frame
        BorderLayout border = new BorderLayout();
        setLayout(border);
        add("North", bar);
        add("Center", scroll);
        setVisible(true);
    }

    private void setLookAndFeel()
    {
        try
        {
            UIManager.setLookAndFeel("com.sun.java.swing.plaf.nimbus.NimbusLookAndFeel");
        }
        catch(Exception e)
        {

        }
    }

    public static void main(String[] arguments)
    {
        Tool loot = new Tool();
    }
}