American Bank Reports Third Quarter 2008 Earnings

CONTACT: Mark W. Jaindl, President and Chief Executive Officer
Allentown, PA, October 27, 2008

American Bank Incorporated (OTC BB: AMBK.OB), the parent company of American Bank, today announced earnings for the quarter ended September 30, 2008. For the quarter, the Company recorded a net loss of $2,990,000, or $(0.53) per diluted share, compared to net income of $651,000, or $0.12 per diluted share, for the same period in the prior year. The net loss was the result of other than temporary impairment of preferred stock of Federal National Mortgage Association (“FNMA” or “Fannie Mae”) and Federal Home Loan Mortgage Corporation (“FHLMC” or “Freddie Mac”) in the amount of $3,870,000 net of taxes. Excluding the loss on FNMA and FHLMC preferred stock, the Company recorded net income of $880,000, or $0.14 per diluted share, an increase of $229,000, or 35%, compared to the same quarter in 2007.

Net interest income for the quarter ended September 30, 2008 was $2,667,000, an increase of $193,000 from the prior year quarter ended September 30, 2007. The increase in net interest income was a result of the improvement in the Company’s net interest margin to 2.26% for the quarter ended September 30, 2008 from 2.07% for the same quarter in the prior year. Total assets declined by $1.6 million to $500.6 million at the end of the quarter. Non-interest expense decreased $16,000 to $1,560,000 during the quarter ended September 30, 2008, compared to $1,576,000 for the quarter ended September 30, 2007.

President and CEO Mark Jaindl stated, “The loss recognized on our investment in the preferred stock of Fannie Mae and Freddie Mac is a one time event. Excluding this one time charge, net income for the quarter ended September 30, 2008, from a pure operating standpoint, was the strongest in the history of the Company. The Company and the Bank continue to exceed all of the levels required to be considered ‘well capitalized’. In addition, loan quality remains strong with less than $60,000 in non-performing loans, representing just 0.01% of total loans.”

American Bank, Inc. common stock (AMBK.OB) last traded at $7.30 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 (AMBKP.OB) last traded at $7.00.

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.