American Riviera Bank on Tuesday announced its first quarterly profit and considerable revenue and asset growth.

American Riviera Bank (OTC BB:ARBV.OB) reported revenue of $1.5 million and net profit of $38,000 for the quarter ending Sept. 30, compared with $1 million in revenue and a net loss of $550,000. Revenue for the nine months ending September was $4.2 million, up 75 percent from the $2.4 million reported for the same period last year.

The bank’s year-to-date loss in 2008 of $288,000 is less than projected, and considerably lower than the $1.4 million loss incurred for the same period last year.

The bank has reduced the total cost of funds to 2.88 percent for the third quarter, from 4.25 percent in the same quarter last year, and maintained net interest margin of 4.29 percent compared with most recent peer group averages of 3.25 percent.

“In June, we had our first month of profitability, and today we announce our first full quarter of profitability,” said Jeff DeVine, the bank’s president and CEO. “The continued positive trend has been made possible by high-quality asset and core deposit growth.”

Total assets grew to $96.3 million, up from $68.8 million. Loans increased 50 percent to $79.8 million, from the $53.3 million reported for 2007’s third quarter. The bank’s loan portfolio continues to perform well with no delinquent loans, no nonaccrual loans and no loan charge-offs. Loan loss provision for the third quarter was $127,000, compared with $133,000 in last year’s third quarter.

American Riviera Bank’s capital position remains strong with a Tier 1 Leverage ratio of 20 percent, well above the regulatory definition of 5 percent for well-capitalized institutions.

The bank’s continued focus on gathering core deposits and expanding relationships resulted in a 46 percent increase in total deposits from 2007, reaching $70.2 million.

“It has become increasingly apparent in these uncertain economic times that our existing and new depositors have found comfort in our community banking approach and strong capital position,” DeVine said. “Deposit growth has been consistent across all product types this year, including demand, savings, money market and certificates of deposit.”

American Riviera Bank is a full-service community bank, focused on serving the lending and deposit needs of businesses and consumers in the community. The bank was founded in 2006 by more than 400 local shareholders and has one branch at 1033 Anacapa St. in downtown Santa Barbara.

Michelle Martinich is senior vice president and chief financial officer of American Riviera Bank.