SecProbe.io

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                   [Letterhead of American Bank Incorporated]

November 10, 2005

VIA EDGAR AND FACSIMILE
-----------------------

Amit Pande
Assistant Chief Accountant
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549

                Re:     American Bank Incorporated
                        Form 10-KSB for the Fiscal Year Ended December 31, 2004
                        -------------------------------------------------------
Dear Mr. Pande:

         In response to the letter from the Securities and Exchange Commission
(the "Commission") to Mark W. Jaindl, President and Chief Executive Officer of
American Bank Incorporated (the "Company"), dated October 25, 2005 (copy
enclosed by facsimile), set forth below are the Company's responses to the
letter from the Commission.

Period of Expected Recovery
---------------------------

         Although the Company believes that predicting specific time frames for
economic cycles, including the recovery of the market value of securities,
cannot be done with exact specificity, the Company estimates the recovery period
for its preferred stock holdings in Fannie Mae and Freddie Mac as follows:

         Fannie Mae Series F - the Company believes that it is reasonable to
expect a recovery to occur at March 31, 2006 or shortly thereafter. This
security has a current dividend coupon of 1.37%, with a taxable equivalent yield
("TEY") of 1.86%. The dividend rate resets on March 31, 2006 to a rate equal to
the two-year Treasury minus 16 basis points. The two-year Treasury rate on
October 31, 2005 was 4.42%. If the two-year Treasury rate is the same on March
31, 2006 as today, this security would reset to a dividend rate of 4.26%, with a
TEY of 5.79%. In addition, as stated in our previous response the steepness of
the yield curve is important to the market value of this security because
investors value these securities much the same as longer-term debt securities.
The ten-year Treasury has a current yield of 4.59%. If, at the March 31, 2006
reset date, the ten-year Treasury yield is the same as today, this security
would have a TEY of 120 basis points more than the ten-year Treasury. This is a
greater spread than typical for ten-year corporate bonds rated AA. The Company

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Amit Pande
November 10, 2005
Page 2

expects that (i) a tax equivalent dividend rate of approximately 5.79% and (ii)
a spread over the ten-year Treasury of 120 basis points would result in this
security being priced at or near par.

         Freddie Mac Series M - the Company believes that it is reasonable to
expect a recovery to occur at March 31, 2007 or shortly thereafter. This
security has a current dividend coupon of 3.93%, with a TEY of 5.34%. The
dividend rate resets on March 31, 2007 to rate equal to the two-year Treasury
plus 10 basis points. The two-year Treasury rate on October 31, 2005 was 4.42%.
If the two-year Treasury rate is the same on March 31, 2007 as today, this
security would reset to a dividend rate of 4.52%, with a TEY of 6.15%. In
addition, if, at the March 31, 2007 reset date, the ten-year Treasury yield is
the same as today, this security would have a TEY of 156 basis points more than
the ten-year Treasury. This is a greater spread to the Treasury than is typical
for ten-year corporate bonds rated AA. The Company expects that (i) a tax
equivalent dividend rate of approximately 6.15% and (ii) a spread over the
ten-year Treasury of 156 basis points would result in this security being priced
at or near par. This security reset on March 31, 2005 from a dividend coupon of
1.82% with a TEY of 2.48% to a dividend coupon 3.93% and a TEY of 5.34%. At that
time the TEY, compared to the ten-year Treasury, went from a spread of negative
175 basis points to 84 basis points. The market price increased from $38.02 at
December 31, 2004 to $42.53 on March 31, 2005, or more than $90,000 on the
security we hold. At the time this security reset in March 2005 interest rates
were rising and the yield curve was flattening. Since the reset date the
two-year Treasury has increased by 59 basis points and the spread between the
two-year Treasury and the ten-year Treasury has decreased from 77 basis points
to 17 basis points. If these levels are maintained through the next reset date,
the price of this security will be at or near par.

         Freddie Mac Series R 5.70% - the Company has reviewed this security,
and considered the extent of the unrealized loss (see table below), the length
of time the security has been in an unrealized loss position, the credit quality
of the issuer, the current interest rate environment, the shape of the yield
curve, the likelihood of recovery of market value and the materiality of the
unrealized loss to the operating results of the Company, as suggested by
Statement of Financial Accounting Standards ("SFAS") No. 115 and Staff
Accounting Bulletin Topic 5M. Specifically, the Company notes that its
unrealized losses in this security are as follows:

<TABLE>
<CAPTION>

                                        Amortized       Market     Unrealized
                                           Cost          Price        Loss
                                        ---------       ------     ----------

<S>                                     <C>             <C>        <C>
         December 31, 2004              $  500,000      $49.90     $  1,000
         March 31, 2005                    500,000       47.50       25,000
         June 30, 2005                     500,000       47.50       25,000
         September 30, 2005                500,000       47.97       20,300

</TABLE>

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Amit Pande
November 10, 2005
Page 3

         Based on the above information the Company determined, at each balance
sheet date, that, considering the length of time and the immaterial extent to
which this security has been in an unrealized loss position (see the bold note
following paragraph 25 of SFAS 115), further impairment testing was not
necessary.

Intent and Ability to Hold Securities
-------------------------------------

         Regarding the determination of our intent and ability to hold these
securities until the expected recovery occurs, our intent at December 31, 2004,
March 31, 2005 and June 30, 2005 was based upon our belief that these securities
would recover their value during this economic cycle and that an economic cycle
of several years would be a reasonable time for recovery. Further, we consider
these securities to be desirable holdings due to their high credit quality and
relatively short interest rate lives. The Dividend Received Deduction ("DRD")
serves to further increase the attractiveness of holding these securities in our
portfolio. We recognize that during periods of low rates coupled with a steep
yield curve, these securities are not as desirable, but over time and changing
rate cycles these securities do provide value, on a total return basis, when
compared to long-term corporate debt securities.

         Regarding to our ability to hold these securities until the expected
recovery, our ability could be affected by regulatory actions of Federal or
state banking agencies, actions of the Internal Revenue Service to reduce or
remove the DRD, downgrades by the credit rating agencies to below investment
grade ratings and the liquidity needs of the Company. We know of no proposed or
pending actions of the banking agencies or the IRS to change the current
regulations. While at least one credit rating agency has one issuer,
specifically Fannie Mae, on a negative credit watch, the issuers are still rated
AA by the major rating agencies. We think that significant, multiple category
downgrades are unlikely to occur in the foreseeable future. Therefore, we think
a change in our ability to hold these securities until the expected recovery due
to regulatory actions or credit quality issues is remote. With regards to the
liquidity needs of the Company, we note that the amortized cost of the three
securities we hold is $2.5 million. We perform a liquidity analysis on a
quarterly basis and, excluding these securities, our sources of liquidity in
excess of our expected liquidity needs have consistently been in excess of $150
million at every measurement date. We believe that a significant change in our
liquidity position is remote, given that we are a bank holding company for a
financial institution with numerous and significant liquidity resources.

Determination on Each Balance Sheet Date
----------------------------------------

         We believe, after careful consideration, that these securities are more
like debt securities than equity securities in terms of how they are priced and
investors value these securities the same as they would a long-term corporate
bond. Accordingly, the Company believes that market value is not a sole
indication of other-than-temporary impairment. Also important to the

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Amit Pande
November 10, 2005
Page 4

determination of value is the effect of the DRD on the tax equivalent yield.
Freddie Mac Series M currently has a coupon of 3.93% and a TEY of 5.34%. The DRD
effect at this point was 141 basis points. While this was an improvement over
the 1.82% coupon before reset, the 5.34% TEY was 84 basis points more than the
ten year Treasury note. This is below the normal spread for a ten-year corporate
bond over the ten year Treasury and is reflected in the market value. At October
31, 2005, the two-year Treasury was 4.42% and, if resetting on this date the
Freddie Mac Series M would have a coupon of 4.52% and a tax equivalent yield of
6.12%. At October 31, 2005 the ten-year Treasury was at 4.59%. At this date the
TEY would have been 153 basis points more than the ten-year Treasury and more
than the normal corporate bond spread for like maturities and credit quality. If
the Freddie Mac was resetting at this date we believe the price would be at or
near par.

         We note that Fannie Mae Series F reset in 2004, during an interest rate
cycle of declining rates and a steepening yield curve, which is precisely the
economic environment that will cause a loss of market value in this type of
security. This security will reset again on March 31, 2006 in an interest rate
and yield curve environment that is more favorable to this type of security and
we believe will result in a recovery of market value as discussed above.

         Please see above regarding the determination on each balance sheet date
with respect to the Freddie Mac Series R 5.70%.

                                    * * * * *

         As stated in our initial response letter, we believe that Fannie Mae
Series F and Freddie Mac Series M are only temporarily impaired, and that
impairment with respect to the Freddie Mac Series R 5.70% is immaterial. We
believe that the Fannie Mae Series F and Freddie Mac Series M securities are
temporarily impaired because of the historic low levels of interest rates over
the last several years and the steepness of the Treasury yield curve. We expect
the market value of these securities to recover during the current economic
cycle, specifically, as the economy continues to expand, as interest rates rise
from their historic lows, as the Treasury yield curve flattens to a more normal
slope and as the Federal Reserve Board continues to remove accommodation from
the Federal Funds Rate.

         Our analysis of the Freddie Mac Series M and Fannie Mae Series F
preferred stock issues indicates that the market values of these securities are
sensitive to both the rate of the two-year Treasury note and the steepness of
the yield curve. In interest rate environments where rates are falling and the
yield curve is steepening the value of these securities will be negatively
impacted. This occurred when these securities reset in 2003 and 2004. When the
interest rate environment is one in which rates are rising and the yield curve
is flattening, these securities will be valued at levels at or above par. This
is occurring now and should be reflected in the market value when these
securities reset in 2006 and 2007. We note that Freddie Mac Series M had a

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Amit Pande
November 10, 2005
Page 5

significant recovery of market value when it reset in March 2005 and believe
that is a strong indication that both securities will recover market value to at
or near par at their next reset dates.

         Interest rates rise and fall as part of economic cycles. In addition,
it is expected that yield curves steepen and flatten over time. The market
values of these securities are directly affected by the movement of interest
rates and the shape of the yield curve. This provides strong evidence that
market values of these securities are volatile and that significant price
movements can and should be expected to occur. Therefore, we believe that
impairment of the market value of these securities is temporary. The market
value will recover as the economic cycle changes to a more favorable environment
for these securities and that this can reasonably be expected to occur in a
reasonable time. Further, in addition to the positive evidence that the
impairment with respect to these securities is only temporary, we have no
evidence to suggest that: (i) it is probable that we will not recover the
amortized cost of these securities; (ii) the expected recovery will not be in a
reasonable amount of time; and (iii) we lack both the ability and intent to hold
these securities until the expected recovery occurs.

                                    * * * * *

         In connection with these responses, and as requested by the Commission,
the Company acknowledges that:

         o    the Company is  responsible  for the adequacy and accuracy of the
              disclosure in the filing;

         o    staff  comments  or changes to  disclosure  in  response to staff
              comments do not foreclose the  Commission  from taking any action
              with respect to the filing; and

         o    the  Company  may not assert  staff  comments as a defense in any
              proceeding  initiated by the  Commission  or any person under the
              federal securities laws of the United States.

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Amit Pande
November 10, 2005
Page 6

         We trust that the above information is responsive to the staff's
comments. Please direct any additional comments or questions to the undersigned
at (610) 366-1800, or to our attorney, Ned Quint, at (202) 274-2007.

                                           Sincerely,

                                           \s\ Harry C. Birkhimer

                                           Harry C. Birkhimer
                                           Vice President and Treasurer

cc:      Amanda Roberts, Securities and Exchange Commission
         Mark W. Jaindl, President and Chief Executive Officer
         Ned Quint, Esq.
         Steven E. Morehart, Partner, Beard Miller Company LLP

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