American Bank Reports Increase in 2007 Income

CONTACT: Mark W. Jaindl, President and Chief Executive Officer
Allentown, PA, January 22, 2008

American Bank, Inc. (OTC BB: AMBK.OB), the parent company of American Bank, today announced a 38% increase in earnings for the year ended December 31, 2007. Net income for the year was $3,920,000, or $0.61 per diluted share, an increase from $2,831,000, or $0.43 per diluted share, reported for the year ended December 31, 2006.

The increase in net income for the year ended December 31, 2007 is the result of $1.35 million in net after-tax gains on available for sale securities, and an increase of $110,000 in net interest income. These increases were off-set by an increase of $170,000 in provisions for loan losses and an increase of $487,000 in non-interest expense. The increase in non-interest expense results from an increase in salaries and benefits of $253,000, an increase in professional fees of $110,000 and FDIC insurance premiums of $182,000. The increase in professional fees relates to the re-organization and de-registration completed in July 2007. The FDIC insurance premiums were not imposed in prior years.

Net interest income for the year ended December 31, 2007 was $9,870,000, an increase of $110,000 from $9,760,000 for the prior year ended December 31, 2006. The increase in net interest income was a result of the improvement in the Company’s net interest margin to 2.04% for the year ended December 31, 2007 from 1.94% for the prior year. American Bank’s net loans outstanding decreased by $12.1 million, or 3.8%, to $307.9 million at December 31, 2007, while non-performing loans were less than $68,000 at year-end. Deposits increased by $7.3 million, or 2.0%, from $368.9 million to $376.2 at December 31, 2007.

For the quarter ended December 31, 2007, American Bank, Inc. posted net income of $522,000, or $0.09 per diluted share, a decrease from $674,000, or $0.10 per diluted share, reported in the same period of the prior year. At December 31, 2007, the Company determined that a certain issue of FNMA preferred stock was other than temporarily impaired and recorded a charge of $316,000 to reduce the amortized cost of this security to market value on that date.

As was previously reported, on November 21, 2007, the Board of Directors of American Bank, Inc. declared a quarterly dividend of $0.05 per share of common stock to shareholders of record on December 4, 2007 and payable on January 2, 2008. The Board of Directors also declared a quarterly dividend of $0.05 per share of Series A preferred stock to shareholders of record on December 4, 2007 and payable on January 2, 2008.

American Bank, Inc. common stock last traded at $7.45 per share. American Bank, Inc. Series A preferred stock (AMBKO.OB) is listed on the OTC BB but has not traded to date. American Capital Trust I Preferred Securities last traded at $9.00.

About American Bank

American Bank is a locally-owned community bank based in Allentown, PA. American Bank is recognized as a 5-Star Superior rated financial institution (the highest rating possible) by Bauer Financial Inc., designating it as one of the strongest banks in the nation as well as being named one of the safest banks in the nation by MSN Money. American Bank was ranked #1 by the Morning Call’s Top Workplaces in the Lehigh Valley and has been named one of the Best Places to Work in Pennsylvania.

American Bank 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. Dedicated to providing customers superior, personalized customer service, American Bank also offers some of the best loan and deposit rates available and as a result, for the past 12 years, has received the® Top Tier award for consistently offering annual percentage yields (APYs) that were among the highest reported. Their online banking service, AmericanBank Online, which is accessible from the Bank’s website at, 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. In addition, both consumer and business customers can bank on the go using mobile banking which includes mobile deposit. American Bank is FDIC insured and is an Equal Housing Lender.

AmericanBank Online is a registered trade mark 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.