PENFED BANCORP, INC.
          ANNOUNCES STOCK PLAN TRUST PURCHASE PROGRAM



     Falmouth, Kentucky  41040-1238 ...  August 30, 1996:  Penfed
Bancorp announced today that its Board of Directors has approved
the establishment of a grantor trust that would commence purchasing
up to 34,500 shares of the company's common stock, which represents
approximately 10% of the outstanding common stock.  The purchases
will be dependent upon market conditions and there  is no guarantee
as to the exact number of shares to be purchased by the company's
trust.

     Mr. David C. Wills, President & Chief Operating Officer of the
company, stated that the trust's purchases are expected to be
completed within the next twelve months, with shares being held
principally for delivery upon the exercise of outstanding stock
options.  According to Mr. Wills, the trust's purchases generally
would be effected through open market purchases, although he did
not rule out the possibility of unsolicited negotiated transactions
or other types of repurchases.  Mr. Wills explained that the
trust's purchases are designed to offset the future  dilution
incurred in connection with implementation of the company's stock
option plan.  In addition, Mr. Wills noted that the Board of
Directors considers the company's common stock to be an attractive
investment.