JEFFERSONVILLE BANCORP
                                 300 Main Street
                         Jeffersonville, New York 12748




                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                            TO BE HELD APRIL 28, 1998

Dear Stockholder:

     Notice is hereby  given that the  Annual  Meeting  of the  Stockholders  of
Jeffersonville  Bancorp (the "Company") will be held in the Company's Board Room
at The First  National  Bank of  Jeffersonville  (the  "Bank") 300 Main  Street,
Jeffersonville,  New York at 3:00 p.m., Jeffersonville,  New York Time, on April
28, 1998 for the following purposes:

                  (1) To elect four directors to the Board of Directors; and
                  (2) To ratify  the  appointment  of KPMG Peat  Marwick  LLP as
independent auditors for the Company for its year ending December 31, 1998.
                  (3) To  transact  such other  business  as may  properly  come
before the Annual Meeting or any adjournment thereof.

     Only those  holders  of record of common  stock of the  Company,  par value
$0.50 per share (the "Common Stock"), at the close of business on March 31, 1998
are entitled to notice of and to vote at the Annual  Meeting or any  adjournment
thereof.

     You are cordially invited and urged to attend the Annual Meeting in person,
but if you are  unable to do so,  please  date,  sign and  promptly  return  the
enclosed proxy in the enclosed,  self-addressed  stamped envelope. If you attend
the Annual  Meeting and desire to revoke your proxy and vote in person,  you may
do so, In any event, a proxy may be revoked at any time before it is exercised.





By Order of the Board of Directors


Arthur E. Keesler, President










Jeffersonville, New York
March 31, 1998


<PAGE>


                             JEFFERSONVILLE BANCORP
                                 300 Main Street
                         Jeffersonville, New York 12748


                                 PROXY STATEMENT



                         ANNUAL MEETING OF STOCKHOLDERS
                            TO BE HELD APRIL 28, 1998


     The  accompanying  proxy is  solicited  by and on  behalf  of the  Board of
Directors of  Jeffersonville  Bancorp,  a New York  corporation,  for use at the
Annual Meeting of Stockholders (the "Annual  Meeting"),  to be held on April 28,
1998 at 3:00 p.m., Jeffersonville,  New York time, at The First National Bank of
Jeffersonville,  300 Main Street, Jeffersonville,  New York, and any adjournment
thereof.  The purposes of the Annual  meeting are (a) to elect four directors to
the Board of  Directors  of the Company  (b) to ratify KPMG Peat  Marwick LLP as
independent  auditors for the Company for its year ending  December 31, 1998 (c)
and to  transact  such other  business  as may  properly  come before the Annual
Meeting or any adjournment thereof.

     Solicitation  of  proxies  may be made in person or by mail,  telephone  or
telegraph,  by  directors,  officers and regular  employees of the Company.  The
Company may also request  banking  institutions,  brokerage  firms,  custodians,
nominees and  fiduciaries  to forward  solicitation  material to the  beneficial
owners of Common  Stock held of record by such  persons,  and the  Company  will
reimburse the forwarding  expenses.  The cost of solicitation of proxies will be
paid by the Company. This Proxy Statement was first mailed to stockholders on or
about March 31,1998.

     The  Company  has its  principal  executive  offices  at 300  Main  Street,
Jeffersonville, New York 12748; telephone (914) 482-4000.


<PAGE>



                                TABLE OF CONTENTS



                                                               Page

     New Business................................................1

     Nomination of Directors.....................................1

     Quorum and Voting...........................................1

     Action to be Taken Under Proxy..............................2

     Election of Directors.......................................2

     Ratification of Appointment of Auditors.....................2

     Security Ownership of Certain Beneficial
     Owners and Management......................................3-4

     Directors and Executive Officer Information.................5

     Committees of the Board of Directors........................5

     Remuneration of Management and Others......................6-7

     Report of the Personnel Committee..........................7-8

     Transactions with Management................................8

     Comparative Stock Performance Graph........................8-9

     Other Matters...............................................9

     Documents Incorporated by Reference.........................9


<PAGE>



     The Company was organized as a New York corporation on January 12, 1982 for
the purpose of becoming a registered bank holding company under the Bank Holding
Company Act of 1956, as amended. Effective June 30, 1982, the Company became the
registered  bank  holding  company for the Bank which was  chartered in 1913 and
organized under the National Banking Laws of the United States.

     The Company does not pay any  compensation to directors or officers and the
compensation  payments and benefit plans described in this proxy are paid by the
Bank.  The same  members  make up the Board of Directors of both the Company and
the Bank.

                                  NEW BUSINESS

     At an annual  meeting  of  stockholders,  only such new  business  shall be
conducted  and  only  proposals  with  respect  to such  new  business  shall be
considered or acted upon,  as shall have been brought  before such meeting by or
at the direction of the Board of Directors or by any  stockholder of the Company
who gives timely  notice in writing to the Secretary of the Company as set forth
in Section 2.13 of the Company's Bylaws. For new business to be properly brought
before an annual meeting of stockholders by a stockholder,  the stockholder must
deliver notice to, or mailed and received at, the Company's  principal executive
office not less than 120 calendar  days in advance of the date of the  Company's
proxy  statement sent to  stockholders  in connection  with the previous  year's
annual  meeting of  stockholders,  except that, if no annual meeting was held in
the  previous  year or the date of the annual  meeting has been  changed by more
than 30 calendar  days from the date  contemplated  at the time of the  previous
year's  proxy  statement,  such  notice  shall be  received  by the Company in a
reasonable time before the solicitation is made. A stockholder's  notice must be
addressed  to the  Secretary  of the  Company.  A  stockholder's  notice  to the
Secretary  shall set  forth,  as to each  matter  of  business  the  stockholder
proposes to bring  before the  meeting,  (i) a brief  description  of the matter
desired to be brought  before the meeting and the  reasons for  conducting  such
business  at the  meeting;  (ii) the  name and  address  as they  appear  on the
Company's books, of the stockholder proposing such proposal; (iii) the class and
number of shares  of the  Company's  stock  that are  beneficially  owned by the
stockholder on the date of such stockholder notice and by any other stockholders
known by such  stockholder  to be  supporting  such proposal on the date of such
stockholder  notice;  and (iv) any financial interest of the stockholder in such
proposal.


                             NOMINATION OF DIRECTORS

     Nomination of candidates for election as directors at any annual meeting of
stockholders  may be  made  by the  Board  of  Directors  or by any  stockholder
entitled to vote at such annual  meeting.  Only persons  nominated in accordance
with the procedures  set forth in Section 2.12 of the Company's  Bylaws shall be
eligible for election as directors at an annual meeting.

     Nominations,  other than those made by or at the  direction of the Board of
Directors,  shall be made  pursuant to timely notice in writing to the Secretary
of the  Company  as set forth in Section  2.12 of the  Company's  Bylaws.  To be
timely, a stockholder's notice shall be delivered to, or mailed and received at,
the principal executive offices of the Company no later than December 1, 1997.


                                QUORUM AND VOTING

     At the close of  business  on March 31,  1998,  the  Company had issued and
outstanding  1,419,260 shares of Common Stock.  Only holders of record of Common
Stock at the close of business on March 31, 1998,  are entitled to notice of and
vote on matters to come before the Annual Meeting or any adjournment thereof.

     The  presence  in  person  or by  proxy of the  holders  of a  majority  of
outstanding  shares of common  stock  entitled to vote at the Annual  Meeting is
necessary  to  constitute  a quorum at the  Annual  Meeting  or any  adjournment
thereof.  The record holders the Common Stock are entitled to one vote in person
or by proxy in  respect  to each such  share on each  matter to come  before the
Annual Meeting.



                                       1
<PAGE>



                         ACTION TO BE TAKEN UNDER PROXY

     Each proxy unless stockholder  otherwise  indicates therein,  will be voted
"FOR" the election of the four persons named in the Proxy Statement as the Board
of  Directors'  nominees for  election to the Board of  Directors  and "FOR" the
ratification  of KPMG Peat  Marwick LLP as  independent  auditors.  In each case
where the stockholder  appropriately  specified how the proxy is to be voted, it
will be voted in  accordance  with his or her  specification.  Stockholders  may
designate a person or persons  other than those named in the  enclosed  proxy to
vote their shares at the Annual Meeting or any  adjournment  thereof.  As to any
other matter of business  which may be brought  before the Annual Meeting or any
adjournment  thereof,  a vote may be cast pursuant to the accompanying  proxy in
accordance  with the judgment of the persons voting the same, but the Board does
not know of any such other matters of business. Any stockholder has the power to
revoke his or her proxy at any time,  insofar as it has not been  exercised,  by
written  notice or  subsequently  dated  proxy sent to K.  Dwayne  Rhodes at the
Company, 300 Main Street, Jeffersonville,  New York 12748, or by oral revocation
given by the  stockholder  in person at the Annual  Meeting  or any  adjournment
thereof.


                              ELECTION OF DIRECTORS

     Pursuant to the Company Bylaws,  the Board of Directors has, by resolution,
fixed the number of directors at 13. The Board is divided into three classes (I,
II, III), and each director  typically serves a three-year term. A director will
initially  serve  less than  three  years if the term of office for the Class in
which he is elected  expires prior to the director's  third year in service.  In
this case, the director will stand for  reelection  with the other Class members
for a full three-year term.

     The terms of office of Class III directors  expires in 1998. The four Class
III directors have been  nominated to serve for  three-year  terms as members of
Class III. The Board of Directors has nominated to serve as directors Douglas A.
Heinle, James F. Roche, Frederick W.V. Schadt and Gilbert E. Weiss for Class III
directorship.  There are no shareholder  nominees for Class III  directors.  All
nominees are  currently  members of the Board.  It is intended  that the persons
named in the proxies  solicited  by the Board will vote for the  election of the
named nominees. If any nominee is unable to serve, the shares represented by all
valid proxies will be voted for the election of such  substitute as the Board of
Directors  may recommend or the Board of Directors may determine to decrease the
size of the Board to eliminate the vacancy at any time.
The  Board  knows of no  reason  why any  nominee  might be  unable  to serve if
elected.

     The Board of Directors recommends that shareholders vote "For" the approval
of the four  nominees  to the Board of  Directors,  after  consideration  of the
information contained herein. Your appointed proxies will vote your shares "For"
the four nominees unless you instruct otherwise in the proxy form.


                     RATIFICATION OF APPOINTMENT OF AUDITORS

     The Board of Directors  has  appointed the firm of KPMG Peat Marwick LLP as
independent auditor of the Company for the fiscal year ending December 31, 1998,
subject to ratification of such appointment by the stockholders. Representatives
of KPMG Peat  Marwick LLP are  expected to be present at the Annual  Meeting and
are  expected to make a statement if they desire to do so and/or be available to
respond to appropriate questions.

     The  Board  of  Directors  recommends  that  stockholders  vote  "For"  the
ratification of KPMG Peat Marwick LLP as independent auditors.










                                       2
<PAGE>







                          SECURITY OWNERSHIP OF CERTAIN
                        BENEFICIAL OWNERS AND MANAGEMENT

     The name and address,  position,  age, number of shares owned and principal
occupation  of the executive  officers,  directors  and 5%  stockholders  of the
Company as of March 24, 1998, are as follows:

<TABLE>
<CAPTION>

                                                                Shares of
                                                                 Common                      Owned
 Name and Address      Position (class)         Age            Stock owned                 Percentage        Principal Occupation
 ----------------      ----------------         ---            -----------                 ----------

<S>                                              <C>              <C>           <C>            <C>
Arthur E. Keesler   President and                66               19,200.000    (1)            1.35        Board Chairman of
Callicoon Center    Director (II)                                                                          the Company
NY,  12724          Director since 1982

Raymond  Walter     Vice President               51                8,653.273    (7)            0.61        President of the Bank
Box 159             and Director (II)
Yulan               Director since 1994
NY,  12792

John K. Gempler     Secretary and                55               18,015.457    (2)            1.27        Corporate Secretary
Box 323             Director (I)                                                                           Insurance Company
Kenoza Lake         Director since 1982
NY  12750

K. Dwayne Rhodes    Treasurer                    60                  844.318                   0.06        Executive Vice
Box 197                                                                                                    President and
Cochecton                                                                                                  Cashier of the Bank
NY, 12726

Hon. Lawrence H.    Director (I)                 84                6,564.000                   0.46        Attorney
Cooke               Director since 1985
Monticello
NY,  12701

John W. Galligan    Director (II)                61                7,239.000                   0.51        Land Surveyor
P.O. Box 71         Director since 1982
Monticello
NY,  12701

Douglas A. Heinle   Director (III)               68               16,032.000                   1.13        Postmaster
Cochecton Center    Director since 1982
NY,  12727

Solomon Katzoff     Director (II)                72               22,674.000    (3)            1.60        Real Estate Broker
Lake Huntington     Director since 1982
NY,  12752

Gibson E. McKean    Director (I)                 63               28,470.654                   2.01        Real Estate Broker
Highland Lake       Director since 1982
NY,  12743
</TABLE>




                                       3
<PAGE>



<TABLE>
<CAPTION>
                                                                Shares of
                                                                 Common                       Owned
 Name and Address      Position (class)         Age            Stock owned                 Percentage         Principal Occupation
 ----------------      ----------------         ---            -----------                 ----------

<S>                                              <C>             <C>                           <C>
James F. Roche      Director (III)               64              29,500                        2.08        Automobile Dealer
Callicoon           Director since 1982
NY,  12723

Frederick W.V.      Director (III)               53            11,040.000                      0.78        Attorney
Schadt              Director since 1992
Jeffersonville
NY,  12748

Edward T. Sykes     Director (I)                 53            21,045.659       (4)            1.48        Insurance Broker
Callicoon           Director since 1982
NY,  12723

Gilbert E. Weiss    Director (III)               75            48,000.000       (5)            3.38        Retired
RD1 Box 1374        Director since 1982
Beach Lake
PA,  18405

Earle A. Wilde      Director (II)                69            19,350.909       (6)            1.36        Agricultural Consultant
P.O. Box 386        Director since 1982
Jeffersonville
NY  12748
</TABLE>

(1)  Included in this number are 6,000 shares owned  jointly by Mr.  Keesler and
     his wife Jane Keesler and 3,500 shares owned by Jane Keesler.

(2)  Included in this number are 1,020 shares owned  jointly by Mr.  Gempler and
     his wife Lorraine Gempler.

(3)  Included  in this  number  is  4,170  shares  owned by Mr.  Katzoff's  wife
     Gertrude Katzoff.

(4)  Included in this number is 1,185.157  shares owned by Mr. Sykes' wife Joyce
     Sykes.

(5)  These shares are  registered in the name of Gilbert Weiss and Eleanor Weiss
     Family Trust.

(6)  Included in this number is 4,200 shares owned by Mr. Wilde's wife Elizabeth
     J. Wilde.

(7)  Included in this number are 1,048  shares owned  jointly by Mr.  Walter and
     his wife  Nancy  Walter  and  2,085.273  shares  owned by  Raymond L Walter
     custodian for Janelle D. Walter.

There are no  beneficial  owners  who own 5% or more of the  outstanding  common
stock.






                                       4
<PAGE>





                   DIRECTOR AND EXECUTIVE OFFICER INFORMATION


     Each director and executive officer has served with or been employed by the
Company and/or the Bank continuously for the past five years.

     No director or  executive  officer  sits on the board of  directors  of any
corporation  with a class  of  securities  registered  with the  Securities  and
Exchanges  Commission  pursuant to Section 12 of the Securities  Exchange Act of
1934, as amended,  subject to the requirements of Section 15 (d) of such act, or
any company registered under the Investment Company Act of 1940, as amended.

     There are no family  relationships among or between any of the directors or
executive officers of the Company.

     All reporting requirements of Section 16 (a) of the Exchange Act were met.


                                COMMITTEES OF THE
                               BOARD OF DIRECTORS

The Bank's Board Committees are described below.

     The Board of Directors  has a standing  Examining  Committee on which board
membership is rotated annually.  It was composed of Messrs.  Gempler (Chairman),
Galligan,  Heinle and Cooke on December 31, 1997.  The function of the Examining
Committee is to  institute,  oversee and assist the  internal and external  bank
auditors. The Audit Committee had four regularly scheduled meetings during 1997.

     The  Board of  Directors  does not have a  standing  Nominating  Committee.
Nominations are made by resolution at a Board of Directors meeting.

     The Board of Directors  has a standing  Salary and  Personnel  Committee on
which board  membership is rotated  annually.  It was composed of Messrs.  Wilde
(Chairman),  McKean,  Sykes and Roche on December 31, 1997.  The function of the
Salary and Personnel Committee is to review the compensation and benefits of the
directors,  officers  and  executive  officers  of the  Company.  The Salary and
Personnel Committee had four regularly scheduled meetings during 1997.

     The  Board of  Directors  has a  standing  Loan  Committee  on which  board
membership is rotated  monthly.  It was composed of Messrs.  Walter  (Chairman),
Galligan, Heinle and Schadt on December 31, 1997. The function of this committee
is to review loan applications for new credit extensions. The Loan Committee had
24 scheduled meetings during 1997.

     The Strategic  Planning Committee of the Board of Directors is also rotated
annually.  It was composed of Messrs.  Weiss  (chairman),  Schadt and Katzoff on
December  31, 1997.  The function of this  committee is to look ahead to prepare
for future trends and changes.  They also serve as the Data Processing Committee
reviewing  future  changes  and  enhancements  in  the  Bank's  data  processing
applications. This committee had four meetings during 1997.

     The Board of  Directors  has a Building  Committee  that meets on an ad hoc
basis.  Members  are  appointed  for  specific  meetings  as called by the Board
Chairman or President.

     The Company had 11 regularly  scheduled  Board meetings  during 1997.  Each
director has  attended at least 75% of the of the Board of  Directors  meetings.
The Bank had 13 regularly  scheduled  meetings  during 1997.  Each  director has
attended at least 75% of the of the Board of Directors meetings.



                                       5
<PAGE>




                      REMUNERATION OF MANAGEMENT AND OTHERS

                          EXECUTIVE COMPENSATION TABLE
<TABLE>
<CAPTION>

                                                                                          Long Term Compensation
                             Annual Compensation                                        Awards                   Payouts

(a)                           (b)         (c)           (d)             (e)          (f)        (g)        (h)            (i)
                                                                                Restricted                           All other
                                                     Profit      Other Annual        Stock    Options       LTIP       Compen-
Name and                               Salary       Sharing      Compensation    Award (s)       SARs    Payouts       sations
Principal Position          Years         ($)           ($)               ($)          ($)        (#)        ($)           ($)


<S>                            <C>      <C>            <C>             <C>               <C>        <C>        <C>           <C>
Raymond Walter                 1997     158,439        12,580          11,300            0          0          0             0
President                      1996     151,563        29,006          13,500            0          0          0             0
                               1995     134,147        23,258          11,800            0          0          0             0


K. Dwayne                      1997     119,852         9,180          10,500            0          0          0             0
Rhodes                         1996     114,487        18,410          10,300            0          0          0             0
Exec. Vice President           1995     106,696        17,702           9,800            0          0          0             0
</TABLE>


     The Bank pays members of its Board of Directors an  honorarium  of $500 per
meeting of the Board attended, with two absences per year also paid and $400 per
meeting  attended  for  members  who serve on each of the  Examining  Committee,
Personnel  Committee,  Strategic  Planning  Committee  and Loan  Committee.  The
Chairman  of the Board is paid a  $60,000  annual  fee in  addition  to  regular
meeting  fees.  The Board  Secretary  is paid $500 per  meeting in  addition  to
regular meeting and committee fees. The Company pays no honorariums to its Board
of Directors.

Employee Benefit Plans

Tax-Deferred Savings Plan

     The  Company  maintains  a  qualified  401K plan for all  employees,  which
permits tax-deferred employee contributions up to 15% of salary and provides for
matching  contributions  by the Company:  Beginning in 1996, the Company matches
100% of employee  contributions up to 4% of the employee's salary and 25% of the
next 2% of the employee's salary. The Company continues to match 25% of employee
contributions  beyond 6% of the  employee's  salary  until  the  total  matching
contribution  reaches  the  lesser  of  $1,500 or 15%.  For  1995,  the  Company
contributed  a  maximum  of fifty  cents  for each  dollar  contributed  by each
participating  employee,  up to a maximum of $1,500 per  employee.  The  Company
contributed approximately $117,000 in 1997, $93,000 in 1996 and $53,000 in 1995.
During  1997 the Bank  contributed  $7,556  and $5,657  for  Messrs.  Walter and
Rhodes,  respectively,  which amounts are included in the Executive Compensation
Table.

Pension Plan

     The Bank has a defined  benefit  pension  plan  (using  the New York  State
Bankers  Retirement Plan Protoype) (the "Pension  Plan") covering  substantially
all of its  employees.  The  benefits  are  based on years  of  service  and the
employee's average compensation during the five consecutive years in the last 10
years of employment  affording the highest such  average.  All W-2  compensation
paid by the Bank to its  employees  up to  $150,000  per year is  covered by the
Pension Plan, but this  limitation of $150,000 may be higher due to increases in
the  Consumer  Price  Index.  Participants  in the  Pension  Plan may choose the
following benefit option: one-sum payment, automatic joint and survivor annuity,
life annuity with 120  stipulated  payments,  or full cash refund  annuity.  The
Bank's funding  policy is to contribute  annually the maximum amount that can be



                                       6
<PAGE>



deducted for Federal income tax purposes.  Contributions are intended to provide
not only benefits  attributed to service to date but also for those  expected to
be earned in the future.

The  following  table sets forth the  estimated  annual  benefits  payable  upon
retirement to persons who have earned the specified average annual  compensation
and who have completed the specified years of creditable service:
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------
                 Annual                              Years of Creditable Service
----------------------------------------------------------------------------------------------------------------------
                 Average
              Compensation           15          20             25          30           35            40
----------------------------------------------------------------------------------------------------------------------
<S>            <C>              <C>         <C>             <C>         <C>           <C>          <C>
               $   25,000       $  3,788    $  5,050        $  6,313    $  7,575      $  8,838     $  10,088
----------------------------------------------------------------------------------------------------------------------
               $   50,000          9,096      12,128          15,160      18,192       21,224        23,724
----------------------------------------------------------------------------------------------------------------------
               $   75,000         14,721      19,628          24,535      29,442       34,349        38,099
----------------------------------------------------------------------------------------------------------------------
                $ 100,000         20,346      27,128          33,910      40,692       47,474        52,474
----------------------------------------------------------------------------------------------------------------------
                $ 150,000         31,596      42,128          52,660      63,192       73,724        81,224
----------------------------------------------------------------------------------------------------------------------
                $ 200,000         42,846      57,128          71,410      85,692       99,974       107,974
----------------------------------------------------------------------------------------------------------------------
</TABLE>

     The single plan maximum  benefit limit under Internal  Revenue Code Section
415 as of January 1, 1997 is $125,000 ($110,880 under the Normal Form of Payment
for a Single  Participant).  The maximum  annual  compensation  allowed  under a
qualified plan is $160,000 for 1997.  The benefits above were computed  assuming
that (i) the normal form of payment to a single participant is used and (ii) the
employee turns 65 in December 1997.

     The  estimated  creditable  years of service until  retirement  for Messrs.
Walter  and Rhodes  (the two  executive  officers  in the  proceeding  Executive
Compensation  Table,  who  participate in the Pension Plan) are 36 and 31 years,
respectively.

Profit Sharing Plan

     The Bank has a profit sharing plan (the "Profit Sharing Plan") in which all
employees  of the Bank with one  complete  year of service as of November 30 may
participate  for that fiscal year.  Employees with less than one year of service
are eligible for 1/12 of their normal share for each month of service.  A profit
sharing percentage is developed for each employee of the Bank ranging firm 7% to
17% of base salary, as determined by the Personnel Evaluation Committee of three
senior  members of  management.  The profit  sharing  percentage  for all senior
management is based on the performance of pre-determined goals. During 1997, the
Bank paid  Messrs.  Walter  and  Rhodes  $11,300  or 7.9% and  $10,500  or 8.8%,
respectively, pursuant to the Profit Sharing Plan, which amounts are included in
the preceeding Executive Cash Compensation Table.

Change of Control Severance Payment Plan

The Board of Directors of the Company  decided in 1996,  that it would be in the
best  interest of the Company and the Bank to  institute  certain  policies  and
procedures  that would have the effect of  securing  the  continued  services of
highly  competent and dedicated  senior officers of the Bank while  discouraging
hostile or unsolicited  takeover  attempts.  As a result, the Board of Directors
adopted  through a resolution that Certain Change of Control  Severance  Payment
Plan (the "Plan"), on January 19, 1996.

     The  Plan  applies  to  senior   management   officers  of  the  Bank  (the
"Executives") and becomes effective when any Executive experiences a Termination
Event (as  defined  below)  within 18 months  following  the date of a Change of
Control (a defined below). The Plan defines a "Termination Event" to mean, (a) a
termination of the Executive's  employment with the Company and/or the Bank; (b)
a failure to renew the Executive's  employment with the Company and/or the Bank;
(c) a decrease in the Executive's total compensation;  and (d) an adverse change
in the Executive's place of employment.  The Plan defines "Change of Control" to



                                       7
<PAGE>



mean,  (i) a merger or  consolidation  of the Bank or the  Company  with or into
another  entity,  immediately  after  which the equity  holders  of the  Company
immediately prior to the Change of Control (the "Historic Shareholders") own, in
the  aggregate  less  than  50%  of the  outstanding  equity  securities  of the
surviving  entity;  (ii) a sale of outstanding or newly issued equity securities
of either the Company or the Bank with the result that the Historic Shareholders
own, in the aggregate less than 50% of the outstanding  equity securities of the
Company or the Bank;  or (iii) a sale or  exchange of more than 50% of the gross
assets of either the Company or the Bank.

     The Plan  provides that if any  Executive  experiences a Termination  Event
within 18 months  following  the date of a Change of Control,  then the Company,
the Bank , or any  successor in interest  thereof,  shall pay to the Executive a
severance  payment in cash equal to three times such Executive's  highest yearly
aggregate salary and cash bonus during the three years immediately preceding the
year in which the Termination Event occurs.

     The Plan is not the  subject of a contract  or an  agreement  entered  into
between the Company and any Executive, but is merely a reflection of the Board's
policy currently in effect. The Plan may be amended,  modified,  or rescinded at
any item prior to a Change of Control by the affirmative  vote of 80% or more of
the directors sitting on the Board of Directors. In addition, it should be noted
that the Plan  specifically  defines  "Executive" to mean any senior  management
officer of the Bank. Any executive or senior management  officer of the Company,
therefore, who is not also a senior management officer of the Bank, would not be
covered by the Plan.

            REPORT OF THE PERSONNEL COMMITTEE DATED FEBRUARY 6, 1997

This Committee  establishes  policies relating to the compensation of employees,
officers and executive  officers.  All decisions by the Personnel  Committee are
ratified by the Board of Directors

     Compensation  levels for officers and executive officers from March 1, 1997
through  February  28,1998  were  fixed  by the  Board  of  Directors  based  on
recommendations  of the  Committee.  The  base  compensation  to be  paid to the
executive  officers in 1997 was, on the average,  approximately  4.6% above that
paid in 1996.

The compensation  recommended and approved for executive officers is intended to
further the earnings and financial  strength of the Company through the focus of
attention on efficient and productive operations in an increasingly  competitive
environment.  To achieve this goal, the Company's Executive  Compensation Policy
integrates  annual base  compensation  with profit  sharing  based on  corporate
performance  and  individual   initiatives.   In  evaluating   annual  executive
compensation,  the Committee examines net income,  earnings per share, return on
equity, asset growth, and total return to shareholders.

     The Bank's management performanace was satisfactory in 1996-97, despite the
difficult economic conditions.

     In making its recommendations for executive officer compensation, including
that for the  Chief  Executive  Officer,  the  Committee  considers  a number of
factors,  including  an  appraisal of the  officer's  performance,  the earnings
performance of the Company, and information supplied by a regionally  recognized
compensation consulting firm.

     The base compensation of the Chief Executive  Officer,  Raymond Walter, was
increased in 1997 by $7,018 over 1996 and following a base increase from 1995 to
1996 of $8,216 . There was a decrease in the profit sharing  percentage from 20%
to 7.9% in 1997 based on attainment of  predetermined  growth and  profitability
goals.

     The Committee based its recommendation  largely on Mr. Walter's performance
as President in 1994-97, as well as past performance, and the Committee believes
he has shown the  ability  to  effectively  lead the  Company  and  respond to a
difficult and changing business environment.

Earle A. Wilde, Chairman
James F. Roche
Solomon Katzoff
Frederick W.V. Schadt


                                       8
<PAGE>




                          TRANSACTIONS WITH MANAGEMENT

     In the  ordinary  course  of its  banking  business,  the  Bank has had and
anticipates it will continue to have  transactions with various of its executive
officers,  directors and their associates,  including corporations in which such
directors own a beneficial interest.  To the extent such transactions  consisted
of extensions of credit of any material amount, such transactions have been made
in the ordinary course of the Bank's business,  on substantially the same terms,
including  interest rates and  collateral,  as those  prevailing at the time for
comparable transactions with other Bank customers,  and do not involve more than
the normal risk of collectability or other unfavorable features.



                       COMPARATIVE STOCK PERFORMANCE GRAPH

     The graph on the following page sets forth the cumulative total shareholder
return on the Company's  Common Stock for the last five fiscal  years,  assuming
the  investment  of $100 on  December  31,  1992  and  the  reinvestment  of all
dividends  since that date to December  31,  1997.  The graph also  contains for
comparison purposes the NASDAQ Financial Companies Index and the NASDAQ Total US
Index.  The Data used was obtained from published  sources and is believed to be
accurate.

                           GRAPH TO COME AT LATER DATE

                                  OTHER MATTERS

     The Board of  Directors  is not aware of any  business  to come  before the
Annual Meeting other than those matters described above in this Proxy Statement.
However, if any other matters should properly come before the Annual Meeting, it
is intended that the proxies in the  accompanying  form will be voted in respect
thereof in accordance with the judgment of those voting the proxies.

                       DOCUMENTS INCORPORATED BY REFERENCE


     1. Item 7 Form 10-K,  Management's  Discussion  and  Analysis of  Financial
        Condition and Results of Operations.
     2. Jeffersonville Bancorp's 1997 Annual Report to Stockholders.

     A copy of the  Company's  Annual  Report  on Form  10-K for the year  ended
December 31, 1997 will be supplied to stockholders  without charge, upon written
request directed to K. Dwayne Rhodes, 300 Main Street, Jeffersonville,  New York
12748.

                     BY THE ORDER OF THE BOARD OF DIRECTORS



                                             Arthur E. Keesler
                                             President




                                       9
<PAGE>





                             Jeffersonville Bancorp
                  P.O. Box 398, Jeffersonville, New York 12748
              THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
                             JEFFERSONVILLE BANCORP

     The undersigned hereby appoints, Jesse P. Brown, Salvatore Princiotta,  and
Barbara Hahn with full power of substitution and resubstitution,  proxies of the
undersigned,  with all of the  powers  that the  undersigned  would  possess  if
personally present to cast all the votes which the undersigned would be entitled
to  vote  at  the  Annual  Meeting  of   Stockholders   ("Annual   Meeting")  of
Jeffersonville  Bancorp  to be held  on  Tuesday,  April  28,1998  at The  First
National  Bank of  Jeffersonville,  300 Main  Street,  Jeffersonville,  New York
commencing  at  3:00  p.m.,  Jeffersonville,  New  York  time,  and  any and all
adjournments  thereof,   including  (without  limiting  the  generality  of  the
foregoing) to vote and act as indicated on the reverse side.
     In their discretion,  the proxies are authorized to vote upon such business
as may properly come before the Annual Meeting.  This Proxy will be voted at the
Annual Meeting or any adjournment  thereof in accordance  with the  instructions
set forth on the reverse,  or in the event no instructions  are set forth,  this
Proxy  will  be  voted  FOR  each  of the  nominees  for  director  and  FOR the
ratification  of the  appointment  of  KPMG  Peat  Marwick  LLP  as  independent
auditors. 1. ELECTION OF DIRECTORS FOR the nominees listed below

     a.  Nominees to serve three-year term (Except as indicated to the contrary)
        expiring at 2001 Annual Meeting

WITHHOLD AUTHORITY
to vote for the
nominees listed
below.

Douglas A. Heinle,  James F. Roche,  Frederick W.V.  Schadt and Gilbert E. Weiss
instruction:  To withhold  authority  for an  individual  nominee(s),  write the
name(s) here:

    (Continued, and to be completed, dated and signed on the reverse side.)




<PAGE>


2.  Proposal to ratify the  appointment  of the firm of KPMG Peat Marwick LLP as
independent  auditors  of  Jeffersonville  Bancorp  for the fiscal  year  ending
December 31, 1998.

     FOR                          AGAINST                        ABSTAIN


3. In their  discretion,  the  proxies to vote upon such other  business  as may
properly come before the Annual Meeting.

                                                     IMPORTANT: Please date this
                                                     proxy and sign  exactly  as
                                                     your  name  appears  to the
                                                     left. If shares are held by
                                                     joint tenants,  both should
                                                     sign.   When   signing   as
                                                     attorney,         executor,
                                                     administrator,  trustee  or
                                                     guardian, please give title
                                                     as such. If a  corporation,
                                                     please    sign    in   full
                                                     corporate name by president
                                                     of  or   other   authorized
                                                     officer.  If a partnership,
                                                     please sign in  partnership
                                                     name by authorized person.

                                                     Date:                 ,1998
                                                     Signed:

     Please complete,  sign, date and return promptly this Proxy in the enclosed
stamped, addressed return envelope