City Bank Founder and CEO Conrad Hanson to Retire; the Bank Appoints Martin Heimbigner to Succeed Conrad Hanson as President and CEO

Conrad Hanson, 67, Chairman, President and CEO of City Bank (NASDAQ: CTBK) in Lynnwood, said today that he is stepping away from day-to-day activities of the Bank and will retire as President and CEO at the end of 2009. He will continue to serve as Chairman of the Board of Directors until the Bank's annual shareholders’ meeting in May 2010.

The City Bank Board of Directors elected Lead Independent Director Martin L. (Marty) Heimbigner, 51, to serve as President and CEO. In addition, the Board elected James (Jim) Carroll, 58, the Bank’s current Executive Vice President and a member of the Board of Directors to serve as Chief Credit Officer.

Mr. Hanson has spent almost 46 years in banking, the last 35 years as the leader of City Bank, founded in 1974. "Marty has worked closely with me on a full time basis over the past year as we have dealt with the Bank’s challenges. Marty brings a unique skill set that has been essential in helping the Bank work through the recovery process,” Hanson said.

Hanson continued, "The Bank has been very successful in meeting our 2009 goals to aggressively sell non-performing assets, increase liquidity and repay maturing brokered deposits. Marty provided oversight and guidance to the management team as we have executed on these challenges. I am pleased to have Marty and Jim in these new roles. As the Bank's largest shareholder, I am fully supportive of their ability to profitably lead the Bank in the future. As a part of that we are working on a capital raise and I have committed to invest an additional $3 million into that effort.”

Mr. Heimbigner commented, "In 2009, the City Bank team has been a leader in selling residential real estate in the Puget Sound region. We will continue to sell homes in an aggressive and orderly manner to further reduce the Bank’s non-performing assets. In 2010 our goals will include rebuilding the Bank’s foundation, diversifying our lending from construction to small business commercial loans and residential mortgage lending, and investing in the Bank’s retail branch network.”

Mr. Hanson commented, "The Bank is continuing to sell $20 million to $30 million per month in residential housing. Through December 18, 2009 the Bank has sold 1,145 homes and lots representing over $334 million. We see this trend continuing in 2010 as we contract with a select group of home builders to build houses on the Bank’s approximately 2,800 building lots. Due to the distressed market prices for residential building lots, the Bank has marked-to-market our portfolio of lots. Our strategy is to build affordable houses on these lots. When the homes are sold, in the $250,000 to $350,000 price range, they will generate much higher rate of return for the Bank than selling the lots at current market prices.”

Mr. Heimbigner said we will continue to work with the Bank’s regulators on implementing City Bank’s recovery plan. "The Bank has been successful in building liquidity during 2009 and the Bank will have repaid over $450 million of brokered deposits, FHLB advances and public deposits. The Bank’s efforts to improve liquidity and repay maturing liabilities have successfully restructured the Bank’s balance sheet,” Mr. Heimbigner commented.

About Martin L. Heimbigner

Mr. Heimbigner is a partner with Tatum LLC, the nation’s largest executive services firm (www.tatumllc.com), providing financial and operational expertise. He has been a City Bank Director since June 2003 and has served as member of the Audit Committee, the Compensation Committee and the Nominating Committee. Since January 2009, Mr. Heimbigner has been Lead Independent Director with responsibility for the Bank’s response to regulatory matters. As Lead Independent Director he has been directly involved, on a full time basis, with the Bank’s management and its regulators during the past year. He has been a Certified Public Accountant with a "Big 4” CPA firm and served as Chief Accounting Officer of Demand Media, a leading Internet, domain name and social media company. He was also Chief Financial Officer of Intelligent Results, Inc. of Bellevue, an enterprise software company selling to the banking industry. During a 13 year career with KPMG, Mr. Heimbigner worked extensively with community banks in Washington State.

Heimbigner is a graduate of Washington State University with degrees in Business and Accounting. He also has an Executive MBA degree from the University of Washington.

About James Carroll

Carroll has been with City Bank for over 18 years and has over 37 years of banking experience. He has served as corporate secretary, a member of the Board of Directors, manager of the commercial and consumer loan portfolios, and as credit administrator. Before joining City Bank, he worked for Rainier Bank/Security Pacific Bank prior to its acquisition by Bank of America.

Carroll graduated from the University of Washington with a degree in Economics and is a graduate of the Pacific Coast Banking School.

About City Bank

Forward-Looking Statements

This discussion contains selected comments about City Bank’s operating results and financial condition. The discussion may contain certain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those stated, including, but not limited to, the Bank’s inability to generate increased earning assets, sustain credit losses, maintain adequate net interest margin, control fluctuations in operating results, maintain liquidity to fund assets, retain key personnel, and other risks detailed from time to time in the Bank’s filings with the Federal Deposit Insurance Corporation, including our Annual Report on Form 10-K for the period ended December 31, 2008. Readers are cautioned not to place undue reliance on these forward-looking statements.

City Bank is a state-chartered commercial bank founded in 1974 and headquartered in Lynnwood, Washington. The Bank is publicly traded (NASDAQ: CTBK) and many of the stockholders are local individuals. Eight banking offices serve both Snohomish and North King counties. Three mortgage loan offices serve Snohomish, 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.