American Bank Announces Third Quarter Earnings

CONTACT: Mark W. Jaindl, President and Chief Executive Officer
Allentown, PA, Thursday, October 16, 2003

Allentown, PA, October 16, 2003 – American Bank, Inc. (NasdaqSC: AMBK), the parent company of American Bank, today announced earnings for the quarter and nine months ended September 30, 2003. Net income for the quarter was $556,000, or $0.08 per diluted share, a decrease of $55,000 from the same period in the prior year. Net income for the nine months ended September 30, 2003 was $1,921,000, or $0.29 per diluted share, an increase of $113,000 from the same period in the prior year.

At the end of the third quarter of 2003, assets totaled $478.9 million, up 9.5% from $437.4 million for the third quarter of 2002. Total loans reached $187.0 million as of September 30, 2003, an increase of 41.3%, from $132.3 million as of September 30, 2002, while deposits increased 11.6% to $325.2 million from $291.5 million for the same period.

The decrease in earnings for the quarter is primarily attributable to a decrease of 54 basis points in the net interest margin compared to September 30, 2002. This decrease was the result, in large part, to accelerated prepayments of residential mortgage backed securities created by the recent refinancing surge that occurred during the second and third quarters of 2003. As a result of the accelerated prepayments, premiums paid for the mortgage backed securities were amortized at a faster rate and the funds from the prepayments were reinvested into lower yielding securities. During the third quarter, earnings were positively impacted by a $348,000 increase in non-interest income to $677,000 compared to $329,000 for the same quarter in 2002.

President and CEO Mark Jaindl stated, “We are pleased with the growth of American Bank’s loan portfolio which increased by $52.1 million, or 39%, since the beginning of the year. As a result of this loan growth, the Company recorded a provision for loan losses of $207,000 for the current quarter compared to $15,000 for the same period in 2002, even though the quality of our loan portfolio remains strong with no non-performing loans at the end of the quarter.”

Chairman of the Board of Directors Frederick Jaindl commented, “It is important to note that we continue to improve our operating expense to asset ratio, which reflects our commitment to being one of the most efficient banks in the country. By improving this ratio, which declined to 1.07% for the quarter ended September 30, 2003 from 1.36% for the same period in 2002, we are able to offer our customers competitive rates on loans and deposit products.”

American Bank, Inc. common stock last traded at $8.29 per share.

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.