American Bank Reports Record Fourth Quarter Earnings, 88% Increase in 2002 Earnings

CONTACT: Mark W. Jaindl, President and Chief Executive Officer
Allentown, PA, Friday, January 10, 2003

Allentown, PA, January 10, 2003 – American Bank, Inc. (NasdaqSC: AMBK), the parent company of American Bank (collectively “American Bank”), today announced record earnings for the quarter and year ended December 31, 2002. Net income for the quarter was $708,000, or $.11 per diluted share, an increase of $307,000 or 76% from the same period in the prior year. For the year ended December 31, 2002, American Bank posted net income of $2,516,000, or $.40 per diluted share, an increase of $1,178,000 or 88% from the prior year. This increase is primarily attributable to an increase of $101.2 million of average earning assets, which was partially offset by a decrease of 33 basis points in the net interest margin since December 31, 2001. During 2002, the assets of American Bank increased by 22.8%, while the quality of its loan portfolio remained high with no non-performing assets at December 31, 2002.

American Bank’s earnings for the fourth quarter marks the thirteenth consecutive quarter of record earnings, making it the only Internet bank in the United States that has attained this succession of earnings increases. Although American Bank currently has no non-performing assets, it did increase its loan loss reserves by $56,000 during the fourth quarter and by $212,000 for the year ended December 31, 2002.

President and CEO Mark Jaindl stated, “Our increase in earnings for the fourth quarter was driven by our ability to control costs. For the quarter ended December 31, 2002, our operating expense to asset ratio declined to 1.18% from 1.46% for the same period in 2001. Reducing this ratio has been important to the success of American Bank’s business model. By maintaining low operating expenses, we can consistently offer our customers attractive rates on loan and deposit products.”

American Bank’s operating expense ratio of 1.18% makes it one of the most efficient banks in the United States as less than 1% of commercial banks nationwide have an operating expense to asset ratio below this level. American Bank’s efficiency ratio also improved to 55.24% for the three months ended December 31, 2002, compared to 58.02% for the same period in the prior year.

Chairman of the Board of Directors Frederick Jaindl stated, “We are pleased with the progress of the Bank during the past year and look forward to continued, but moderate growth, in 2003. The financial markets were disappointing for many of us during 2002 with the Dow Jones Industrials and Nasdaq falling by approximately 16% and 31% respectively. However, American Bank shareholders recognized an increase in the value of their shares of over 20% during that same period. At American Bank we are committed to both our shareholders and customers and strive to continue our tradition of superior service in financial services while also enhancing shareholder value.”

American Bank common stock last traded at $9.37 per share and the American Bank warrants last traded at $3.55 per warrant. American Bank warrants are exercisable at $6.67 per share 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.

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.