CFNB Announces Decline in 2003 Net Earnings, 150% Increase in Quarterly Dividend.Business Editors 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.--(BUSINESS WIRE)--Aug. 1, 2003 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:CFNB CFNB California First National Bancorp ); ("CalFirst Bancorp") today announced that for the fiscal year ended June June: see month. 30, 2003, net earnings decreased 28% to $10.7 million, compared with $14.8 million for fiscal 2002. 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 were $.96 for the fiscal year ended June 30, 2003, down 26% from $1.29 per share reported for the prior year. For the fourth quarter ended June 30, 2003, net earnings of $2.5 million decreased 43% from net earnings of $4.4 million for the fourth quarter of fiscal 2002. Diluted earnings per share for the fourth quarter decreased 39% to $0.23 per share, compared with $0.38 per share for the fourth quarter of the prior year. For the fourth quarter ended June 30, 2003, net direct finance and interest income increased 53% to $5.0 million, compared with $3.3 million for the fourth quarter of fiscal 2002. This improvement is primarily due to a significant decrease in the provision for lease losses, as the overall level of reserves required against problem leases remained relatively unchanged over the period. This was coupled with a 16% increase in direct finance income resulting from a larger investment in capital leases. Other income decreased 48% to $3.9 million, compared with $7.5 million during the fourth quarter of fiscal 2002. The decrease reflects a significant decrease in sales-type lease Sales-type lease The leasing out of a firm's own equipment, such as a printing company leasing its own presses, thereby competing with an independent leasing company. income and gain on sales of leased property. As a result of the foregoing, gross profit of $8.9 million for the fourth quarter of fiscal 2003 decreased 17% from $10.8 million reported for the fourth quarter of the prior year. For the fiscal year ending June 30, 2003, net direct finance and interest income increased 47% to $19.9 million, compared with $13.6 million for fiscal 2002. The increase again reflects a significant decrease in the provision for lease losses, as the amounts required for reserves against problem leases remained relatively unchanged over the year. Total direct finance income increased 12% for the year as a result of higher direct finance income earned from a larger investment in capital leases. Other income decreased 40% to $15.2 million, compared with $25.2 million reported for fiscal 2002. The decrease included a significant decrease in income from the sale of leased property as well as a large decline in sales-type lease income. Gross profit of $35.1 million for fiscal 2003 decreased 10% from $38.8 million reported for the year ended June 30, 2002. For the fourth quarter, CalFirst Bancorp's selling, general and administrative ("S,G&A") expenses increased 33% to $4.8 million, compared with $3.6 million during the fourth quarter of fiscal 2002. For the year, S,G&A expenses increased by 20% to $17.7 million from $14.7 million during the prior year. The increase in S,G&A expenses for both periods is due to higher costs related to an expansion of the sales organization, which has almost doubled its headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. over the past year. Commenting on the results, Patrick E. Paddon, president and chief executive officer, indicated that: "CalFirst Bancorp's results for fiscal 2003 reflect the expense of expanding our sales organization at a time when the economic and credit environment are not supporting commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. growth in our lease business. At the same time, income from sales of leased property and lease extension revenue are down significantly, reflecting our previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). decrease in volume of leases reaching their end of term during fiscal 2003. "Offsetting this somewhat, new leases closed and booked during the year increased by 23% from the prior year, and the net investment in lease receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed at June 30, 2003 increased by 27% to $117.9 million from June 30, 2002. From a new business perspective, our volume of lease originations during the fourth quarter and full year were slightly below the levels of the prior year. "However, recent activity levels seem to show improvement. Looking forward to fiscal 2004, the portfolio of leases reaching the end of term is expected to be about the same as in fiscal 2003. We expect to continue to invest in the expansion of the sales organization, but not at the pace of this past year." The Board of Directors of CalFirst Bancorp today approved an increase in the quarterly dividend on the company's common stock to 10 cents a share from 4 cents a share. The dividend is payable on Oct. 10, 2003 to stockholders of record on Sept. 26, 2003. "The recent change in the tax laws has made dividend payments a more efficient way to provide value to our stockholders," said Paddon. "The significant increase in the dividend level reflects the strength of CFNB's financial position and our commitment to enhancing our stockholders' returns." California First National Bancorp is a bank holding company with leasing and bank operations based in Orange County, Calif. California First Leasing Corp. 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 news 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 2002 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 2003 quarterly reports on Form 10-Q Form 10-Q See 10-Q. .
CALIFORNIA FIRST NATIONAL BANCORP
Consolidated Statement of Earnings
(000's except per share data)
Three Months Year
Ended Ended
June 30, June 30,
2003 2002 2003 2002
Direct finance income $5,010 $4,317 $19,638 $17,487
Interest income on investments $260 $358 $1,068 $1,551
Total direct finance and interest
income $5,270 $4,675 $20,706 $19,038
Interest expense on deposits $52 $65 $237 $129
Provision for lease losses $216 $1,350 $554 $5,354
Net direct finance and interest
income after provision for lease
losses $5,002 $3,260 $19,915 $13,555
Other income
Operating and sales-type lease income $1,408 $3,678 $6,384 $8,822
Gain on sale of leases and leased
property $2,111 $3,509 $7,926 $15,123
Other income $407 $310 $876 $1,301
Total other income $3,926 $7,497 $15,186 $25,246
Gross Profit $8,928 $10,757 $35,101 $38,801
Selling, general and administrative
expenses $4,848 $3,650 $17,653 $14,729
Earnings before income taxes $4,080 $7,107 $17,448 $24,072
Income taxes $1,570 $2,736 $6,717 $9,268
Net earnings $2,510 $4,371 $10,731 $14,804
Basic earnings per share $0.23 $0.39 $0.97 $1.32
Diluted earnings per share $0.23 $0.38 $0.96 $1.29
Weighted average common shares
outstanding 10,937 11,157 11,035 11,204
Diluted number of common shares
outstanding 11,028 11,429 11,223 11,435
CALIFORNIA FIRST NATIONAL BANCORP
Consolidated Balance Sheets
(000's )
ASSETS June 30, June 30,
2003 2002
Cash and short term investments $ 67,340 $ 88,393
Federal Reserve Bank Stock 553 583
Net receivables 16,683 15,961
Property for transactions in process 20,287 20,570
Net investment in capital leases 131,677 108,091
Other assets 2,095 2,289
Discounted lease rentals assigned to lenders 40,056 72,754
$278,691 $308,641
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 1,598 $1,422
Income taxes payable, including deferred taxes 22,385 22,502
Deposits 7,594 8,969
Other liabilities 9,781 11,603
Nonrecourse debt 40,056 72,754
Total liabilities 81,414 117,250
Stockholders' Equity 197,277 191,391
$278,691 $308,641
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