American Bank Reports Earnings for 2006, Increases Dividend.

ALLENTOWN, Pa. -- American Bank, Inc. (NasdaqCM:AMBK), the parent company of American Bank, today announced earnings for the year ended December 31, 2006. Net income for the year was $2,831,000, or $0.43 per diluted share, a decrease of $0.02 per share from the $0.45 per diluted share reported for the year ended December 31, 2005. For the quarter ended December 31, 2006, American Bank, Inc. posted net income of $674,000, or $0.10 per diluted share, a decrease of $0.02 per share from the $0.12 per diluted share reported in the same period of the prior year. The decrease in net income for the year ended December 31, 2006 is the result of a decrease of $788,000 in non-interest income and an increase of $189,000 in non-interest expense. The decrease in non-interest income results from a decrease in gains on sale of mortgage loans of $70,000, a decrease in gains on available for sale securities of $342,000 and a decrease in other income of $371,000. American Bank's net loans outstanding increased by $18.6 million, or 6.2%, to $320.0 million at December 31, 2006, while non-performing loans were less than $68,000 at year-end.

President and CEO Mark W. Jaindl stated, "On September 1, 2006, American Bank reported that it could realize a significant gain on the sale of shares of PSB Bancorp, Inc. if the proposed acquisition of PSB Bancorp by Conestoga Bancorp, Inc. is completed. PSB Bancorp held a special annual meeting on January 12, 2007 for the purpose of voting on the merger. Ninety-nine percent of shareholders voted in favor of the transaction. If this transaction closes, we anticipate an after-tax gain for American Bank, Inc. of approximately $1.7 million in the first or second quarter of 2007."

On December 19, 2006, the Board of Directors of American Bank, Inc. declared a 25% increase in the quarterly dividend from the current $0.04 per share to $0.05 per share. The dividend will be paid to shareholders of record on January 15, 2007 and payable on January 29, 2007. In addition, American Bank will continue its Dividend Reinvestment Plan, which allows shareholders to purchase additional shares of American Bank, Inc. common stock at a 5% discount to the average of the closing "bid" and "ask" price on the Record Date.

American Bank, Inc. common stock last traded at $7.79 per share. American Capital Trust I Preferred Securities last traded at $8.81.

About American Bank

American Bank offers a complete selection of banking services that includes checking, money market, savings, certificates of deposit, consumer and commercial loans, free personal online bill payment, credit cards and VISA check cards. Pcbanker.com delivers a full range of real-time Internet banking and discount brokerage services, while consistently offering some of the best loan and deposit rates in the United States. American Bank has been recognized as one of the top Internet banks in the country and has received the Bankrate.com[R] Top Tier award for consistently offering annual percentage yields (APYs) that were among the highest reported. American Bank is FDIC insured.

American Bank Online and pcbanker.com are registered trade 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 Company 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 Company'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 Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company wishes to advise readers that the factors listed above could affect its financial performance and could cause the Company'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 Company 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.

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