EXHIBIT 99.1



PRESS RELEASE           FOR IMMEDIATE RELEASE
                        CONTACT:  Anderson L. Smith, President and CEO
                        Tel: (423) 586-8421



                           JEFFERSON BANCSHARES, INC.
                           --------------------------
                        ANNOUNCES DATE OF ANNUAL MEETING
                        --------------------------------


     Morristown,   Tennessee --  October  2,  2003.  Jefferson  Bancshares, Inc.
(Nasdaq:  JFBI),  announced  today  that the  Corporation's  annual  meeting  of
shareholders will be held on Thursday, January 8, 2004.

     Jefferson  Bancshares,  Inc. is the holding  company for Jefferson  Federal
Bank headquartered in Morristown, Tennessee.