City Bank (MM) (NASDAQ:CTBK)
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On December 10, 2008, the Board of Directors of City Bank (NASDAQ:CTBK)
declared a $.06 per share cash dividend, payable to shareholders of
record as of January 2, 2009, and payable on January 16, 2009. This cash
dividend is the 99th paid, including regular and special
dividends, in the Bank’s 34-year history and the Bank’s 81st
consecutive quarterly dividend.
The decision to reduce the quarterly cash dividend was made after
careful and extensive consideration at our Board of Directors meeting.
The Board recognizes the significant impact this will have on our
shareholders. Unfortunately, the economic cycle we are experiencing
creates tremendous challenges for all financial institutions, including
City Bank, as evidenced by the significant increase in the nonperforming
assets as reported for the third quarter ended September 30, 2008.
Therefore, the Board believes this is prudent and ultimately in the best
long-term interest of shareholders to preserve the Bank’s strong level
of capital.
Risk-based capital ratios are calculated to provide a measure of capital
that reflects the degree of risk associated with a financial
institution's assets and off-balance-sheet items. City Bank’s total
risk-based capital ratio was 17.55% at September 30, 2008, significantly
greater than the 10% level required to be classified as
"well-capitalized," the highest rating possible under FDIC and Federal
Reserve Board Guidelines. The Board recognizes that these are not
ordinary times, and took that into consideration in setting the lower
dividend payment.
The Board of Directors also announced, while applauding the U.S.
Government's systemic and creative approach to alleviating the current
National financial crisis, that it would not be in the best interests of
the Bank or its shareholders to apply for aid from the U.S. Treasury
under the Treasury's new capital assistance program. This conclusion was
reached based on the costs of the program versus the relative benefits
given the bank’s capital position.
City Bank is a state-chartered commercial bank founded in 1974
and headquartered in Lynnwood, Washington. Eight banking offices and
three mortgage loan production offices serve Snohomish, North King,
Pierce and Clark counties. City Bank provides a wide range of
banking services for business and individuals, including loans for
residential construction, land development, mortgage, commercial, Small
Business Administration, consumer, and all types of deposits as well as
other general banking services. City Bank has been consistently
recognized as one of the top performing banks in Washington State as
well as nationally.