American Riviera Bank announced Thursday unaudited net income of $931,000 for the nine months ended Sept. 30. The strong earnings are attributable to increased net interest margin and stabilized credit costs.

“We are very pleased with the bank’s performance, and plan to reinvest our profits in the local community through relationship-based lending at a time when many other financial institutions have pulled back,” said Jeff DeVine, president and chief executive officer.

The bank’s net interest margin reached 4.82 percent for the nine months ended Sept. 30, up from 3.85 percent for the same period last year, and benefited from an increased core deposit mix.

In the past 12 months, core deposits have increased 13 percent to $90 million, representing 84 percent of total deposits as of Sept. 30. Demand deposits alone have grown a notable 40 percent since Dec. 31, 2009. Year-to-date average loan balances for the nine months ended Sept. 30 increased 8 percent from a year ago, with the bank reporting $105 million in total loans outstanding at Sept. 30.

American Riviera Bank continues to maintain an ample 2.76 percent loan loss allowance as a percentage of total loans. The bank recorded $281,000 in loan loss provision and $57,000 in net recoveries for the nine months ended Sept. 30. Continued improvements in loan quality have resulted in a 48 percent reduction in nonperforming loans and other real estate owned since Dec. 31, 2009.

The bank reported a record $429,000 in unaudited net income for the quarter ended Sept. 30. During the quarter, the bank recorded a $58,000 loan charge-off and an $82,000 reduction in the fair value of other real estate owned. Net interest margin was 5.11 percent for the quarter ended Sept. 30, up from 4.9 percent for the previous quarter.

The bank maintains a strong capital position with Tier 1 capital to total assets of 14 percent as of Sept. 30, well above the regulatory guideline of 5 percent for well-capitalized institutions.

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