While acknowledging that the metropolitan area is in a slight recession, the chief executive of American Security Bank, the city's second largest, said yesterday that he sees no end to the downtown real estate boom and the increase in the cost of housing in the city.

W. Jarvis Moody, who for just over three months has served as chairman of the bank, said in an inteview that although American Security's soon-to-be-released second-quater profits look strong, the picture for the second half of 1980 is not quite so bright.

"Loan demand is flat, consumer lending is flat, but things are good on the construction side," Moody said. "We're in a recession to a degree now."

But Moody also said that American Security is "right about on target" in meeting 1980 profit projections. He said the bank's second-quarter profits should be up more than 20 percent over last year, which would give the bank about a 13 percent profit hike for the first half of 1980.

But Moody, whose bank operates loan production offices outside the Washington area in cities such as Birmingham and Cincinnatti, said his readings of the bank's out-of-town business predictably indicate that the recession is far worse outside Washington.

He predicted that the city's building boom will continue unabated, and that -- particulary as the city's downtown section moves eastward toward the site of the new convention center -- there will be "more and more construction." Any break in that boom is "not on the horizon as far as I can see," he said.

In his first interview since taking over the bank from Carleton Stewart last March, Moody painted a picture of American Security as an institution trying to balance a large international portfolio with a substantial commitment to the community.

That theme -- balancing the bank's local interests with the high-powered world of international finance -- was the primary reasdon bank officials cited when they started the Washington financial community by replacing Stewart with Moody, 52, a 16-year veteran of American Security. Before taking the top job, Moody was the bank's president, coming to American Security after 14 years with Morgan Guaranty Trust co. of New York.

Critics said Stewart had done too little to maintain the bank's local client base and had antagonized, if not alienated, members of American Security's board of directors. "I'm trying to emphasize all segments of the market," Moody said. "I'm making sure we have additional emphasis on the community and the client base here."

Already American Security maintains loans in more than 40 countries and has other types of financial relationships in more than 50 countries. But at the same time, Moody said it is important for the bank to maintain its 1979 position as the largest real estate lender in the District. In addition the bank operates 35 branches in town, with approval by the government pending on another branch in Georgetown. t

Moody has been active in the community for many years, having served on the local board of trade and the boards of the Kenndy Center, Wolf Trap and the National Symphony. He is currently the campaign chairman of the local United Way chapter.

In a wide-ranging interview, Moody also said:

The prime interest rate could fall to about 10 3/4 percent this month and as low as 9 percent by about November, before rising to perhaps 10 1/2 percent by middle of next year.

American Security plans to upgrade its services to the city's diplomatic community by expanding a branch near Embassy Row to provide more efficient, if not luxurious, banking facilities for foreign customers.

The bank recently received the highest rating possible by both Moody's and Standard and Poor's, making American Security and Maryland National Bank the only two regional banks with the high rating. That rating was given in preparation for a securities sale by American Security probably later this summer.

He, like others in the commuity, was surprised to learn of the magnitude of the District goverenment's budget crunch. He said the federal government "must play a fair role in helping the District at this time." He added that American Security will deal with the city's budget problems as the facts are presented, but said he doubted that the banking community would be asked to put together a major financing package for the city.

The bank, which under the Edge Act opended a Miami facility just this week, is looking at other domestic sites for other similar offices. But he said he does not think the bank soon will open a full-scale overseas office, like the kind of banking operation launched by Riggs National Bank in London.

As the lines that separate banks from other financial institutions continue to blur, ultimately with mergers and other combinations, there will be fewer banks in business. "There is not reason for there to be 14,500 banks in the country." he said. "I would think, without being specific, that there may only be four or five banks in town over time."

But the bank is gearing up to begin offering NOW, or interest-bearing checking accounts, when the omnibus banking deregulation bill permits such policies at the beginning of 1981. Moody expects the competition for NOW accounts to be intense in the District.

Although rumblings of an imminent Carter administration recommendation on interstate banking have surfaced recently, Moody says he does not know exactly what the task force would recommend.