FOR IMMEDIATE RELEASE


Contacts:
Lauren T. Barnett, President and CEO
Tel: (518) 842-7200  Fax: (518) 842-7500
Harold A. Baylor, Jr., Vice Pres., CFO & Treasurer
Tel: (518) 842-7200  Fax: (518) 842-1688


                 AMBANC & AFSALA Receive OTS Approval For Merger

     Amsterdam,  N.Y.,  October 29, 1998 -- AMBANC  HOLDING CO.,  INC.  (NASDAQ:
AHCI),  parent company of Amsterdam  Savings Bank,  announced  today that it has
received  approval  from the Office of Thrift  Supervision  (OTS) for its merger
with AFSALA BANCORP,  INC. (NASDAQ:  AFED),  parent company of Amsterdam Federal
Bank.

     The  shareholders  of both  companies  voted to approve the  transaction at
special  shareholders'  meetings  held in September of this year.  The Merger is
expected to close in November. Upon consummation of the Merger, each outstanding
share of AFSALA common stock will be converted into 1.07 shares of Ambanc common
stock.

     Following the merger,  Amsterdam  Savings Bank and  Amsterdam  Federal Bank
will  operate as one bank under the name "Mohawk  Community  Bank" and will have
total assets of approximately $700 million. Mohawk Community Bank will also have
total deposits of  approximately  $460 million and serve customers in 18 upstate
New York offices, located in Montgomery, Fulton, Schenectady,  Saratoga, Albany,
Otsego and Chenango counties.

     John M.  Lisicki,  who will become  President  and CEO of AMBANC and Mohawk
Community  Bank in the Merger,  said that he was very happy to have obtained the
approval of OTS. Lisicki,  currently Chairman, CEO & President of AFSALA Bancorp
and Amsterdam  Federal Bank,  said he is looking  forward to closing the Merger.
Lisicki added he is  enthusiastic  about the combined  institution's  ability to
provide  banking and  financial  services  in the  community  banking  tradition
established  by Amsterdam  Federal Bank and Amsterdam  Savings Bank. Mr. Lisicki
further added that the primary benefit of the two companies  becoming one is the
opportunity  to  enhance  shareholder  value  by  consolidating   resources  and
eliminating  duplication,  in  addition  to allowing  Mohawk  Community  Bank to
continue  to  provide  high  levels  of  personal   service  to  customers   and
communities.

     Lauren T.  Barnett,  who will retire from his interim role as President and
CEO of AMBANC and Amsterdam  Savings Bank, said that it was a proud day for him,
the  employees  and the  board of his  company.  He  agreed  with Mr.  Lisicki's
sentiments  and added that he was impressed  with the energy and  proficiency of
the team of employees and consultants who have been working  tirelessly to bring
about the consummation of the merger.


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