CFNB Announces 14% Increase in Fourth Quarter Earnings.IRVINE Irvine, town, Scotland Irvine (ûr`vĭn), town (1991 pop. 32,507), North Ayrshire, SW Scotland, on the Irvine River estuary. Industries include iron and brass foundries. Other products are chemicals, electric goods, and clothing. , Calif. -- California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). First National Bancorp (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CFNB CFNB California First National Bancorp ; "CalFirst Bancorp") today announced that for the fourth quarter ended June June: see month. 30, 2005, net earnings of $2.6 million increased 14% from net earnings of $2.3 million for the fourth quarter of fiscal 2004. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the fourth quarter of 2005 increased 15% to $0.23 per share, compared to $0.20 per share for the fourth quarter of the prior year. For the fiscal year ended June 30, 2005, net earnings of $8.2 million were down 17% from $9.8 million reported for fiscal 2004. Diluted earnings per share of $.72 for the fiscal year ended June 30, 2005 were down 18% from $0.88 per share reported for the prior year. For the fourth quarter ended June 30, 2005, total direct finance and interest income increased 22% to $5.7 million, compared to $4.7 million for the fourth quarter of fiscal 2004. This increase is primarily due to higher direct finance income resulting from an over 21% increase in the average investment in capital leases held in the Company's portfolio, along with higher rates earned on investments, despite lower cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investment balances. This increase was offset partially by increased interest expense on deposits arising from higher average balances and interest rates, and an increase in the provision for lease losses. Consequently, net direct finance and interest income increased only 12% to $5.1 million, compared to $4.6 million for the fourth quarter of fiscal 2004. During the fourth quarter ended June 30, 2005, other income of $4.1 million, up 3% from $3.9 million reported for the fourth quarter of the prior year, included the recognition of a $1.3 million gain on sale of leased property related to a lease in bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most . While the sale proceeds were received during fiscal 2004, the recognition of the gain had to be deferred until certain bankruptcy issues were resolved. The foregoing factors resulted in gross profit of $9.2 million for the fourth quarter of fiscal 2005, an increase of 8% from $8.5 million reported for the quarter ended June 30, 2004. For the fiscal year ended June 30, 2005, total direct finance and interest income increased 6% to $20.5 million, compared to $19.3 million in fiscal 2004, again reflecting increased income from the growth in the portfolio and higher interest income earned on cash and investments, offset by slightly lower rates earned on the investment in capital leases. The lower growth in net direct finance and interest income after provision for lease losses of 2% to $19.1 million reflected the impact of higher interest expense related to growth in deposits and a higher provision for lease losses. The higher provision largely relates to the 20% growth in the aggregate lease portfolio. For the full fiscal year, other income of $14.0 million decreased 15% from $16.5 million reported for fiscal 2004. The decrease largely related to lower income from lease extensions and sales of leased property, as the portfolio of leases reaching the end of term during the year was smaller than the prior year. As a result of the foregoing, gross profit for the year decreased 5% to $33.1 million compared to $35.2 million for the year ended June 30, 2004. For the fourth quarter, CalFirst Bancorp's selling, general and administrative ("S,G&A") expenses of $5.0 million were up 4% from $4.8 million for the fourth quarter of fiscal 2004. S,G&A expenses for the year also increased by 4%, to $20.0 million from $19.3 million during the prior year. The increase in S,G&A expenses for the year is due to higher administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. required to manage the growth in the portfolio as well as higher costs related to the development of the organization. Commenting on the results, Patrick E. Paddon, President and Chief Executive Officer, indicated, "The results during the last half of fiscal 2005 are beginning to reflect the benefit from our expansion programs. New lease transactions booked during the fourth quarter were $35.8 million, about 22% greater than the fourth quarter of the prior year. For the year ended June 30, 2005, new lease bookings of $161.5 million are 28% greater than the prior year. As a result, the net investment in capital leases of $187.8 million at June 30, 2005 is up 22% from $153.9 million at June 30, 2004, and contributed to the growth in direct finance income during the fourth quarter. The volume of new leases originated during the fourth quarter is down slightly from the fourth quarter of fiscal 2004, but for the full year, new lease originations of $175.9 million are very comparable to originations during fiscal 2004. Our backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of approved but un-booked leases at June 30, 2005 is about 3% below the level of a year ago, notwithstanding the significant increase in leases booked. Looking forward to fiscal 2006, we should see continued growth in our direct finance income from the larger investment in capital leases, which should be sustained with the completion and booking of current lease commitments. Higher interest rates should also contribute to higher direct finance and interest income. Growth in other income will continue to be impacted during the first part of fiscal 2006 by a lower volume of leases reaching the end of term, but should pick up in later quarters. We will continue to focus resources on the development and expansion of the sales organization with the objective of achieving higher lease originations in fiscal 2006." California First National Bancorp is a bank holding company with leasing and bank operations based in Orange County, California Orange County is a county in Southern California, United States. Its county seat is Santa Ana. According to the 2000 Census, its population was 2,846,289, making it the second most populous county in the state of California, and the fifth most populous in the United States. . California First Leasing Corporation leases and finances computer networks and other high technology assets through a centralized cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. marketing program designed to offer cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. leasing alternatives. California First National Bank is an FDIC-insured national bank that gathers deposits using telephone, the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , and direct mail from a centralized location, and will lease capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) to businesses and organizations and provide business loans to fund the purchase of assets leased by third parties. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , which involve management assumptions, risks and uncertainties. Consequently, if such management assumptions prove to be incorrect Incorrect means to not be correct and may also refer to:
v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. , the Company's actual results could differ materially from the results forecast in the forward-looking statements. For further discussion regarding management assumptions, risks and uncertainties, readers should refer to the Company's 2004 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and the 2005 quarterly reports on Form 10-Q Form 10-Q See 10-Q. .
CALIFORNIA FIRST NATIONAL BANCORP
Consolidated Statements of Earnings
(000's except per share data)
Three Months Year Ended
Ended
June 30, June 30,
--------------- -----------------
2005 2004 2005 2004
------- ------- -------- --------
Direct finance income $5,401 $4,560 $19,501 $18,682
Interest income on investments $315 $144 $1,009 $578
------- ------- -------- --------
Total direct finance and interest
income $5,716 $4,704 $20,510 $19,260
Interest expense on deposits $404 $132 $1,054 $430
Provision for lease losses $207 $- $359 $164
------- ------- -------- --------
Net direct finance and interest
income after provision for lease
losses $5,105 $4,572 $19,097 $18,666
Other income
------------------------------------
Operating and sales-type lease
income $808 $1,783 $3,975 $5,985
Gain on sale of leases and leased
property $3,058 $1,989 $8,961 $9,625
Other fee income $188 $156 $1,091 $930
------- ------- -------- --------
Total other income $4,054 $3,928 $14,027 $16,540
Gross Profit $9,159 $8,500 $33,124 $35,206
Selling, general and administrative
expenses $4,991 $4,783 $20,044 $19,257
------- ------- -------- --------
Earnings before income taxes $4,168 $3,717 $13,080 $15,949
Income taxes $1,563 $1,431 $4,905 $6,140
------- ------- -------- --------
Net earnings $2,605 $2,286 $8,175 $9,809
======= ======= ======== ========
Basic earnings per common share $0.23 $0.21 $0.74 $0.89
Diluted earnings per common share $0.23 $0.20 $0.72 $0.88
Weighted average common shares
outstanding 11,096 11,038 11,073 10,976
Diluted number of common shares
outstanding 11,356 11,282 11,340 11,190
Dividends declared per common share
outstanding $0.10 $0.10 $2.30 $0.40
CALIFORNIA FIRST NATIONAL BANCORP
Consolidated Balance Sheets
(000's)
ASSETS June 30, June 30,
2005 2004
--------- ---------
Cash and short term investments $43,321 $64,872
Marketable securities 1,484 3,957
Net receivables 1,636 1,464
Property for transactions in process 34,052 30,480
Net investment in capital leases 187,802 153,902
Other assets 2,119 2,329
Discounted lease rentals assigned to lenders 7,711 17,541
--------- ---------
$278,125 $274,545
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $4,233 $1,624
Income taxes payable, including deferred taxes 15,834 17,567
Deposits 54,098 24,600
Other liabilities 9,313 9,364
Non-recourse debt 7,711 17,541
--------- ---------
Total liabilities 91,189 70,696
Stockholders' Equity 186,936 203,849
--------- ---------
$278,125 $274,545
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