PRESS RELEASE

                                    Contact:          James S. Nelson
                                                      Executive Vice President
                                                      Steelton Bancorp, Inc.
                                                      (717) 939-1966


Steelton Bancorp, Inc.
Mechanics Savings Bank
51 S. Front Street
Steelton, PA  17113

OTC Electronic Bulletin Board "SELO"

                              FOR IMMEDIATE RELEASE
                              ---------------------

                             STEELTON BANCORP, INC.
                             ----------------------
                           ANNOUNCES 5% STOCK DIVIDEND
                           ---------------------------

Steelton,  Pennsylvania  - October  19,  2001 - Harold  Stremmel,  President  of
Steelton Bancorp, Inc. (the "Corporation"),  Steelton, Pennsylvania, the holding
company  of  Mechanics  Savings  Bank (the  "Bank"),  announced  today  that the
Corporation's  Board of  Directors  has  declared  a 5% stock  dividend  payable
December  15, 2001 to  shareholders  of record  December 1, 2001 with cash to be
paid in lieu of any fractional shares.

         The Bank is a federally  chartered stock savings bank  headquartered in
Steelton, Pennsylvania. The Bank's deposits are federally insured by the Federal
Deposit Insurance Corporation ("FDIC"). At September 30, 2001, Steelton Bancorp,
Inc.  had  total  assets  and  stockholders'  equity of $59.1  million  and $5.7
million, respectively.

For further information contact:
James S. Nelson, Investor Relations Officer



51 South Front Street - P.O.  Box 7614 - Steelton,  Pennsylvania  17113
Phone  717-939-1966 - FAX 717-939-2629