American Bank Reports Record Earnings for 2005, Increases Dividend

CONTACT: Mark W. Jaindl, President and Chief Executive Officer
Allentown, PA, Thursday, January 19, 2006

Allentown, PA, January 19, 2006 – American Bank, Inc. (NasdaqSC: AMBK), the parent company of American Bank, today announced record earnings for the year ended December 31, 2005. Net income for the year was $3,532,000, or $0.45 per diluted share, an increase of $365,000 or 11.5% from the prior year. For the quarter ended December 31, 2005, American Bank, Inc. posted net income of $1,000,000, or $0.12 per diluted share. The increase in net income for the year ended December 31, 2005 is the result of an increase of $18.8 million of average earning assets and an increase in the net interest margin of 11 basis points. American Bank’s net loans outstanding increased by $59.0 million, or 24.4%, to $301.4 million at December 31, 2005. Total deposits increased $23.2 million, or 6.7%, to $369.0 million during the twelve month period.

President and CEO Mark Jaindl stated, “We are pleased with our progress during 2005, which also marks the eighth year of increased profitability for American Bank. Our earnings growth was driven by increases in net loans outstanding and net interest margin, resulting in an increase of $876,000, or 9.6%, in net interest income. While our level of loan growth throughout 2005 was strong, we were able to achieve this growth without sacrificing asset quality as illustrated through non-performing assets, which were only $40,000 at December 31, 2005. We also continue to control costs, as was evidenced by the decrease in our operating expense ratio to 1.09% for the quarter ended December 31, 2005, from 1.12% for the quarter ended September 30, 2005. American Bank is one of a few banks throughout the country with an operating expense ratio at or below this level.”

Jaindl continued, “As part of our continued focus on enhancing shareholder value, on January 17, 2006, the Board of Directors declared a dividend of $0.12 per share to shareholders of record on February 15, 2006 and payable on March 1, 2006. This is an increase of 9% over the dividend paid in 2005. In addition, shareholders participating in the Dividend Reinvestment and Stock Purchase Plan will be given the opportunity to purchase additional shares of American Bank Inc. common stock at a 10% discount to the market price. A full plan description will be mailed to shareholders on or about February 1, 2006.”

American Bank, Inc. common stock last traded at $8.40 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.