July 29, 1996



FOR INFORMATION CONTACT                     FOR IMMEDIATE RELEASE
Eldorus Maynard, 
 Chairman and Chief Executive Officer


            PEEKSKILL FINANCIAL CORPORATION ANNOUNCES
                     STOCK REPURCHASE PROGRAM

     Peekskill, New York -- Peekskill Financial Corporation
(NASDAQ: "PEEK"), the holding company for First Federal Savings
Bank, announced the Company has received a waiver from the Office
of Thrift Supervision to repurchase up to 4% of its outstanding
shares of common stock in the open market.  These shares will be
purchased at prevailing market prices from time to time over a six-month
period depending upon market conditions.

     Eldorus Maynard, Chairman and Chief Executive Officer of the
Company, indicated that the Board of Directors approved the
repurchase program in view of the current price level of the
Company's common stock and the strong capital position of the
Company's subsidiary, First Federal Savings Bank.  Mr. Maynard
stated that, "We believe the repurchase of our shares is an
attractive investment opportunity which will benefit the Company
and its stockholders."

     The Company was organized in 1995 to act as the holding
company of the Bank.  The Bank, with headquarters in Peekskill, New
York, primarily serves the communities in its market area through
its three full service branches.

     At June 30, the Company had consolidated total assets of
$191.3 million and stockholders' equity of $59.8 million.