City Bank (the Bank) 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. 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.