CFNB Announces Lower 2004 Earnings but Strong Origination Volume.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:CFNB CFNB California First National Bancorp ) ("CalFirst Bancorp") today announced that for the fiscal year ended June June: see month. 30, 2004 net earnings decreased 9 percent to $9.8 million, compared to $10.7 million for fiscal 2003. 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 $0.88 for the fiscal year ended June 30, 2004, down 8 percent from $0.96 per share reported for the prior year. For the fourth quarter ended June 30, 2004, net earnings of $2.3 million also decreased 9 percent from net earnings of $2.5 million for the fourth quarter of fiscal 2003. Diluted earnings per share for the fourth quarter decreased 13 percent to $0.20 per share, compared to $0.23 per share for the fourth quarter of the prior year, reflecting an increase in fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. shares outstanding. For the fourth quarter ended June 30, 2004, net direct finance and interest income decreased 9 percent to $4.6 million, compared to $5.0 million for the fourth quarter of fiscal 2003. This decline is primarily due to lower direct finance income resulting from lower yields earned on the company's investment in capital leases, despite an increase in average balances. This was partially offset by a decrease in the provision for lease losses, as the overall level of reserves required against problem leases was relatively constant during the period. Other income of $3.9 million was unchanged from the fourth quarter of the prior year, as a slight increase in income from end-of-term transactions offset a decrease in other fee income. Consequently, gross profit of $8.5 million for the fourth quarter of fiscal 2004 decreased 5 percent from $8.9 million reported for the quarter ended June 30, 2003. For the fiscal year ending June 30, 2004, gross profit increased slightly to $35.2 million compared to $35.1 million for the year ended June 30, 2003. This reflected higher other income offset by a decrease in net direct finance and interest income. Net direct finance and interest income decreased 6 percent to $18.7 million, compared to $19.9 million for fiscal 2003. Consistent with the quarterly results, the decrease reflects a decline in direct finance income resulting from lower yields earned on the lease portfolio and lower interest and investment income. This was offset in part by a significant decrease in the provision for lease losses, as the amounts required for reserves against problem leases remained relatively unchanged during the year. Other income increased 9 percent to $16.5 million, compared to $15.2 million reported for fiscal 2003. The increase included a significant increase in income from the sale of leased property that was offset slightly by lower income from lease renewals. For the fourth quarter, CalFirst Bancorp's selling, general and administrative ("S,G&A") expenses of $4.8 million was unchanged from the fourth quarter of fiscal 2003. For the year, S,G&A expenses increased by 9 percent to $19.3 million from $17.7 million during the prior year. The increase in S,G&A expenses for the year is due to higher costs related to the development of the organization and expanded marketing programs. Commenting on the results, Patrick E. Paddon, president and chief executive officer, indicated that: "Fiscal 2004 has been a year of progress for CalFirst Bancorp, even though the improvement is not reflected in the bottom line. In part, the results reflect the expense of expanding and developing our sales organization and the inherent delay in recognizing earnings from our expansion programs. Nevertheless, there are good indicators of progress. Our volume of lease originations during the fourth quarter and full year were up 42 percent and 35 percent, respectively. While the volume of leases booked during the year increased by only 7 percent, 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 lease commitments increased by 39 percent and is at the highest level we have seen in over five years. At June 30, 2004, our 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 was up 7 percent to $141.6 million from June 30, 2003, and our transactions in process were up 50 percent to $30.5 million. Looking forward to fiscal 2005, we should see growth in our direct finance income as the lease commitments are completed and we benefit from an increase in interest rates. The portfolio of leases reaching the end of term is expected to be slightly lower than in fiscal 2004. We plan to continue to invest in the expansion of the sales organization along the lines seen this past year." 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 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 2003 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 2004 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 Ended Year Ended
June 30, June 30,
2004 2003 2004 2003
Direct finance income $4,560 $5,010 $18,682 $19,638
Interest income on investments $144 $260 $578 $1,068
Total direct finance and interest
income $4,704 $5,270 $19,260 $20,706
Interest expense on deposits $132 $52 $430 $237
Provision for lease losses $- $216 $164 $554
Net direct finance and interest
income after provision for lease
losses $4,572 $5,002 $18,666 $19,915
Other income
Operating and sales-type lease
income $1,783 $1,408 $5,985 $6,384
Gain on sale of leases and leased
property $1,989 $2,111 $9,625 $7,926
Other fee income $156 $407 $930 $876
Total other income $3,928 $3,926 $16,540 $15,186
Gross Profit $8,500 $8,928 $35,206 $35,101
Selling, general and administrative
expenses $4,783 $4,848 $19,257 $17,653
Earnings before income taxes $3,717 $4,080 $15,949 $17,448
Income taxes $1,431 $1,570 $6,140 $6,717
Net earnings $2,286 $2,510 $9,809 $10,731
Basic earnings per common share $0.21 $0.23 $0.89 $0.97
Diluted earnings per common share $0.20 $0.23 $0.88 $0.96
Weighted average common shares
outstanding 11,038 10,937 10,976 11,035
Diluted number of common shares
outstanding 11,282 11,028 11,190 11,223
Dividends declared per common share
outstanding $ 0.10 $ 0.04 $ 0.40 $ 0.16
CALIFORNIA FIRST NATIONAL BANCORP
Consolidated Balance Sheets
(000's)
ASSETS June 30, June 30,
2004 2003
Cash and short-term investments $64,872 $67,340
Marketable securities 3,957 553
Net receivables 1,464 1,964
Property for transactions in process 30,480 20,287
Net investment in capital leases 153,902 146,396
Other assets 2,329 2,095
Discounted lease rentals assigned to lenders 17,541 40,056
$274,545 $278,691
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $1,624 $1,598
Income taxes payable, including deferred taxes 17,567 22,385
Deposits 24,600 7,594
Other liabilities 9,364 9,781
Nonrecourse debt 17,541 40,056
Total liabilities 70,696 81,414
Stockholders' Equity 203,849 197,277
$274,545 $278,691
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