American Bank Reports Increase in Third Quarter Earnings

CONTACT: Mark W. Jaindl, President and Chief Executive Officer
Allentown, PA, Thursday, October 13, 2005

Allentown, PA, October 13, 2005 – American Bank, Inc. (NasdaqSC: AMBK), the parent company of American Bank, today announced earnings for the quarter ended September 30, 2005. Net income for the quarter was $728,000, or $0.10 per diluted share, an increase of $23,000, or 4.0%, from the same period in the prior year. At the end of the quarter, assets totaled $528 million, up 2.5% from $515 million at September 30, 2004. Total deposits reached $371 million as of September 30, 2005, up from $356 million from the same time the previous year. American Bank’s net loans outstanding totaled $288 million as of September 30, 2005, up from $234 million at the same time last year, an increase of $54 million, or 23.1%.

The improvement in third quarter earnings is attributable to an increase of $17.5 million of average earning assets and an increase of 10 basis points in the net interest margin in the current quarter compared to the prior year. In addition to the increase in net interest income, non-interest income increased $100,000 in the third quarter of 2005 compared to the same quarter in the prior year. Partially offsetting the improvement in net interest income was an increase of $90,000 in the provision for loan losses and an increase of $213,000 in operating expense.

Net income for the nine months ended September 30, 2005 was $2,532,000, or $0.33 per diluted share, an increase of $374,000, or 17.3%, from the same period in the prior year. The improvement in year-to-date earnings is attributable to an increase of $17.2 million of average earning assets and an increase of 29 basis points in the net interest margin in the current nine-month period compared to the nine-month period in 2004. In addition to the increase in net interest income of $1,007,000, non-interest income increased by $107,000. Partially offsetting the improvement in net interest income was an increase of $210,000 in the provision for loan losses, an increase in operating expense of $380,000 and an increase in taxes on income of $140,000.

American Bank common stock last traded at $8.90 per share. American Capital Trust I Preferred Securities last traded at $10.25.

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.