City Bank ( CTBK) declared a $3 special dividend and a 20-cent regular quarterly dividend.

The Lynnwood, Wash., bank said the distributions are payable Jan. 6 to shareholders of record Nov. 25. The company cited its strong capital position and said the low federal dividend tax rate makes such payouts "the most efficient way to return capital to shareholders."

On Thursday, City Bank rose 85 cents to $32.99.