Full Description

City Bank (the Bank), incorporated on October 23, 1973, is engaged in general commercial and retail banking, with an emphasis on small and medium-sized businesses, construction lending for single family residences and home mortgage lending. The Bank’s principle business activities are conducted thorough its office located in Lynnwood, Washington, and eight branches throughout Snohomish and King Counties. The Bank’s loan portfolio includes residential construction and development loans secured by real estate amounting to approximately 63% of the total loan portfolio. At December 31, 2008, 55.53% of the Bank’s deposits were in brokered deposits.

The Bank’s primary focus has been lending to small and medium-sized businesses, construction lending for single family residences and home mortgage lending. The Bank also offers a range of deposit services, including demand and interest bearing checking accounts, savings accounts and certificates of deposit, as well as providing individual retirement accounts, safe deposit boxes, automated teller machines (ATM’s), on-line banking and other consumer and business related services.

Lending activities

At December 31, 2008, the Bank operated three full service mortgage banking officers in Snohomish, Pierce and Clark Counties whose purpose is to originate loans for sale into the secondary market. At December 31, 2008, 98.08% of the Bank loan portfolio comprised of loans secured by real estate, including construction, completed lots, residential real estate loans and land development. During the year ended December 31, 2008, the Bank’s primary investing activity is the origination of construction and land development loans and single-family residential mortgage loans.

Investment activities

The Bank invests in United States agencies, municipal bonds. It also invests in equity securities.

Sources of funds

The Bank’s primary sources of funds are brokered deposits, retail customer deposits, proceeds from principal and interest payments on and the sale of loans, Federal Home Loan Bank (FHLB) advances and equity capital. At December 31, 2008, the Bank’s advances with the FHLB were at full capacity.