American Bank Reports 62% Increase in Third Quarter Earnings

CONTACT: Mark W. Jaindl, President and Chief Executive Officer
Allentown, PA, Wednesday, October 16, 2002

American Bank, Inc. (NasdaqSC: AMBK), the parent company of American Bank, today announced record earnings for the quarter and nine months ended September 30, 2002. Net income for the quarter was $611,000 or $0.10 per diluted share, an increase of $235,000, or 62.5%, from the same period in the prior year. Net income for the nine months ended September 30, 2002 was $1,808,000 or $0.29 per diluted share, an increase of $872,000, or 93.2%, from the same period in the prior year.

The increase in earnings for the quarter is primarily attributable to an increase of $97.4 million of average earning assets, which was partially offset by a decrease of 26 basis points in the net interest margin compared to September 30, 2001. In addition, earnings were positively impacted by the Company’s ability to control costs as evidenced by the decline in its operating expense to asset ratio from 1.53% for the quarter ended September 30, 2001 to 1.25% for the same period in 2002.

President and CEO Mark Jaindl stated, "The Board of Directors and staff at American Bank remain focused on increasing shareholder value by improving earnings per share, which increased 67% from the same quarter in the prior year."

Jaindl continued, "At the same time, we have made significant enhancements to our product line that should help expand our customer base throughout the country. During the third quarter, we introduced an improved version of our online banking product, pcbanker.com. This upgrade will make our customers’ online banking experience convenient and more efficient with the introduction of new and updated features. These new features include allowing our customers to view both check images and electronic statements."

Chairman of the Board of Directors Frederick Jaindl stated, "While we are pleased with the significant growth in both earnings and assets during the first nine months of 2002, we recognize that under current economic conditions the level of growth may slow. We continue to maintain strong underwriting practices relating to asset generation and will take additional steps to reduce our operating expense to asset ratio."

American Bank, Inc. common stock last traded at $7.30 per share, American Bank, Inc. warrants last traded at $1.90 per warrant and American Capital Trust I preferred shares lasted traded at $11.50 per share. American Bank, Inc. warrants are exercisable at $6.67 per warrant through June 30, 2003.

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.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:
Statements in this press release regarding American Bank’s business which are not historical facts, including expectations regarding future financial results, are "forward-looking statements" that involve risks and uncertainties which could cause actual results to differ materially from such statements.

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