American Bank Reports Second Quarter Earnings

CONTACT: Mark W. Jaindl, President and Chief Executive Officer
Allentown, PA, Monday, July 12, 2010

Allentown, PA, July 12, 2010 – American Bank Incorporated (OTC BB: AMBK.OB), the parent company of American Bank, today announced earnings for the quarter ended June 30, 2010. Net income for the quarter was $1,054,000, or $0.17 per diluted share, an increase from $656,000 or $0.11 per diluted share for the second quarter of 2009. The increase in net income for the quarter ended June 30, 2010 was the result of two non-recurring events that had a negative impact on earnings during the second quarter of 2009. These events included an other-than-temporary impairment charge of $442,000 on pooled trust preferred securities and the accrual of $220,000 for the FDIC Special Assessment imposed on financial institutions.

Net income for the six months ended June 30, 2010 was $2.1 million, or $0.34 per diluted share, an increase from $1.4 million, or $0.24 per diluted share for the six months ended June 30, 2009. The reasons for the increase in net income for the six-month period ended June 30, 2010 included the same non-recurring events that impacted income for the three month period ended June 30, 2010.

Net interest income for the quarter ended June 30, 2010 was $2,914,000, a decrease of $21,000 from the quarter ended June 30, 2009. Average interest-earning assets increased by $3.2 million to $469.0 million at June 30, 2010, while the net interest margin decreased 12 basis points to 2.53%.

Net interest income for the six months ended June 30, 2010 was $5.9 million, an increase of $330,000 from the $5.6 million for the six months ended June 30, 2009. Average interest-earning assets increased by $5.5 million to $472.6 million at June 30, 2010, compared to $467.1 million at June 30, 2009. The net interest margin increased by 14 basis points to 2.60% for the six months ended June 30, 2010 from 2.46% for the six months ended June 30, 2009.

Non-interest income increased by $498,000 during the quarter ended June 30, 2010 compared to the same quarter in 2009. Non-interest income increased by $678,000 for the six months ended June 30, 2010 compared to the six months ended June 30, 2009. The increases in non-interest income result from impairment charges on available for sale securities of $471,000 and $602,000 recognized during the quarter and six months ended June 30, 2009, respectively. There were no impairment charges recognized during 2010.

Non-interest expense decreased $121,000 to $1.6 million, or 1.33% of average assets, during the quarter ended June 30, 2010, compared to $1.7 million, or 1.46% of average assets, for the quarter ended June 30, 2009. Non-interest expense decreased $46,000 to $3,250,000, or 1.35 % of average assets, during the six months ended June 30, 2010 compared to $3,296,000, or 1.37% of average assets for the quarter ended June 30, 2009. Non-interest expense for the quarter and six-month period ended June 30, 2009 was higher than normal due to the FDIC Special Assessment of $220,000 which the Company recognized during the second quarter of 2009.

Loan quality remained strong at June 30, 2010 with no non-performing loans. The absence of non-performing loans may be attributed to American Bank’s conservative underwriting standards and the fact that it did not participate in “sub-prime” lending. While there are no non-performing loans, given the current economic environment American Bank has set aside reserves of over $4.3 million in the event they are needed.

American Bank is a "well capitalized" institution under all regulatory capital standards.

American Bank, Inc. common stock last traded at $6.00 per share. American Bank, Inc. Series A preferred stock (AMBKO.OB) is listed on the OTC BB but has not traded to date. American Capital Trust I Preferred Securities last traded at $7.00.

About American Bank
American Bank, a locally-owned community bank based in Allentown, PA, offers a complete selection of banking products and services to suit the needs of consumers and businesses and includes checking, money market, savings, certificates of deposit, consumer and commercial loans and Visa credit cards. American Bank is dedicated to providing customers superior, personalized customer service while offering some of the best loan and deposit rates available and as a result, has received the Bankrate.com® Top Tier award for consistently offering annual percentage yields (APYs) that were among the highest reported. Their online banking service, pcbanker, allows customers to bank conveniently and delivers a full range of real-time online banking services free of charge including online bill payment and presentment, ACH Direct, transfers between accounts, transaction history, check images and e-Statements. American Bank is FDIC insured.

American Bank Online and pcbanker.com are registered marks for the Internet financial services provided by American Bank, a state-chartered, FDIC insured full-service financial institution serving customers throughout the United States. American Bank is a member of the Federal Reserve System.

Forward-Looking Statements
Certain statements contained herein are not based on historical facts and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as "may," "will," "believe," "expect," "estimate," "anticipate," "continue," or similar terms or variations on those terms, or the negative of those terms. Forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, those related to the economic environment, particularly in the market areas in which the Bank operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, risks associated with the conduct of the Bank's business over the internet, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity.

The Bank wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Bank wishes to advise readers that the factors listed above could affect the Bank's financial performance and could cause the Bank's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Bank does not undertake and specifically declines any obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

For additional information, please contact Mark W. Jaindl, President and Chief Executive Officer.