CFNB Reports 15% Increase in Second Quarter EPS, 10% Increase in Quarterly Dividend.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 net earnings of $2.4 million for the second quarter ended December December: see month. 31, 2005, a 16% increase from net earnings of $2.1 million for the second quarter of fiscal 2005. 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 second quarter increased 15% to $0.21 per share, compared to $0.18 per share for the second quarter of the prior year. For the six months ended December 31, 2005, net earnings were up 32% to $4.8 million, compared to $3.7 million for the first six months of fiscal 2005. Diluted earnings per share were $.42 for the first six months of fiscal 2006, up 31% from $.32 per share reported for the same period of fiscal 2005. The smaller percentage increase in diluted earnings per share than in net earnings reflects the impact of a greater number of fully-diluted shares for both the three and six month periods. For the second quarter ended December 31, 2005, gross profit of $8.5 million was up 2% from the second quarter of the prior year. This reflected a $149,000 increase in net direct finance and interest income, and a $56,000 increase in other income. The increase in net direct finance and interest income to $5.1 million was primarily due to a 9%, or $465,000, increase in total direct finance and interest income resulting from a 20% increase in the average net investment in capital leases held in the Company's portfolio. Higher yields earned on the Company's liquid investments offset a decrease in average balances and contributed to a small increase in interest income. During the second quarter of fiscal 2006, interest expense on deposits increased by $316,000 to $538,000 due to a 73% increase in average deposit balances and an increase in average interest rates paid. No provision for lease losses was made during the second quarters of fiscal 2006 and 2005, as the overall level of reserves required did not increase during the periods. The slight increase in other income to $3.5 million during the second quarter of fiscal 2006 included a 15% increase in income from leases reaching their end of term during the quarter, offset by a decrease in other fee income. For the six months ended December 31, 2005, gross profit of $17.3 million increased 10% from $15.8 million reported for the same period of the prior year. This increase was primarily due to a $1.3 million increase in other income resulting from a 50% increase in the gain on sale of leased property related, to some extent, to the early buyout Buyout The purchase of a company or a controlling interest of a corporation's shares. Notes: A leveraged buyout is accomplished with borrowed money or by issuing more stock. of four leases in the first quarter of fiscal 2006. Total direct finance and interest income increased $1.2 million, or 13%, to $10.9 million, again due primarily to a 21% increase in the average net investment in capital leases held in the Company's portfolio. For the six months ended December 31, 2005, interest expense on deposits increased to $996,000 from $387,000, reflecting higher interest rates paid on average deposit balances that almost doubled from the year before to $57.2 million. For the first six months of fiscal 2006, a provision for lease losses of $402,000 was made, compared to no provision during the six-month period of the prior year. The 2006 provision for lease losses related to the deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in credit quality of certain lessees during the first quarter. During the second quarter of fiscal 2006, CalFirst Bancorp's selling, general and administrative expenses ("S,G&A") decreased by 9% to $4.6 million, compared to $5.1 million during the second quarter of fiscal 2005. For the six months of fiscal 2006, S,G&A expenses were down 5% to $9.4 million compared to $9.9 million reported for the first six months of the prior year. The decrease in S,G&A expenses for both periods is primarily due to containment containment Strategic U.S. foreign policy of the late 1940s and early 1950s intended to check the expansionist designs of the Soviet Union through economic, military, diplomatic, and political means. It was conceived by George Kennan soon after World War II. of costs related to the sales organization, but also reflects containment of other operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Commenting on the results, Patrick E. Paddon, President and Chief Executive Officer, indicated that "Second quarter and six month earnings were ahead of plan, and reflect the benefit from the growth in investment in capital leases along with better than expected results from our portfolio of assets reaching the end of term. New lease transactions booked during the second quarter and six months were $41 million and $79 million, respectively, and the net investment in capital leases increased 5% to $196.3 million at December 31, 2005. Transactions in process of $40.6 million were up 19% from June June: see month. 30, 2005, but were down slightly from $42.1 million a year ago. The volume of new leases originated during the second quarter was down from the second quarter of fiscal 2005, but originations for the first six months are in line with the prior year, although below plan. 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 unbooked leases is about 8% below the level of a year ago. "CalFirst Bank represents a growing share of the Company's operations, with the Bank's investment in capital leases now accounting for 44% of the consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: investment. While CalFirst Bank continues to be well capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. , with a total risk-based capital ratio Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. exceeding 18%, the Board of CalFirst Bancorp today approved the investment of an additional $15 million in the Bank. We believe this additional capital will expand the Bank's ability to meets its customers needs and increase its commitment to larger, high quality lessees. "At December 31, 2005, the Company's 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. investments were $38.4 million, of which $27.4 million is available to the leasing company operations. To support the growth of California First Leasing, the Board of Directors today approved a $25 million line of credit to be entered into by the leasing subsidiaries with Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. . The purpose of the line is to provide resources to expand the investment in transactions in process and capital leases over the next several years. Given the high cash balances maintained over the past few years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time Company has not had a line of credit in place since the prior one with Bank of America expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. in 2000. "At the Board meeting today, the CalFirst Bancorp Board also approved a 10% increase in the quarterly dividend rate to $0.11 per share. The last increase in the regular quarterly dividend was approved in July July: see month. 2003. The dividend will be paid April 7, 2006 to shareholders of record on March 24, 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 ("CalFirst Bank") is a 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 or such risks or uncertainties materialize ma·te·ri·al·ize 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 2005 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 2006 quarterly report on Form 10Q.
CALIFORNIA FIRST NATIONAL BANCORP
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Consolidated Statement of Earnings
----------------------------------
(000's except per share data)
Three Months Ended Six Months Ended
December 31, December 31,
-------------------- ----------------
2005 2004 2005 2004
--------- --------- ------- -------
Direct finance income $ 5,354 $ 4,909 $10,304 $ 9,131
Interest income on investments $ 256 $ 236 $ 562 $ 509
--------- --------- ------- -------
Total direct finance and
interest income $ 5,610 $ 5,145 $10,866 $ 9,640
Interest expense on deposits $ 539 $ 222 $ 996 $ 387
Provision for lease losses $ - $ - $ 402 $ -
--------- --------- ------- -------
Net direct finance and interest
income, after provision for
lease losses $ 5,071 $ 4,923 $ 9,468 $ 9,253
Other income
------------
Operating and sales-type lease
income $ 1,119 $ 1,105 $ 2,073 $ 2,131
Gain on sale of leases and
leased property $ 2,103 $ 1,748 $ 5,369 $ 3,711
Other fee income $ 257 $ 570 $ 414 $ 701
--------- --------- ------- -------
Total other income $ 3,479 $ 3,423 $ 7,856 $ 6,543
Gross Profit $ 8,550 $ 8,346 $17,324 $15,796
Selling, general and
administrative expenses $ 4,630 $ 5,069 $ 9,418 $ 9,932
--------- --------- ------- -------
Earnings before income taxes $ 3,920 $ 3,277 $ 7,906 $ 5,864
Income taxes $ 1,519 $ 1,203 $ 3,063 $ 2,199
--------- --------- ------- -------
Net earnings $ 2,401 $ 2,074 $ 4,843 $ 3,665
========= ========= ======= =======
Basic earnings per share $ 0.22 $ 0.19 $ 0.44 $ 0.33
Diluted earnings per share $ 0.21 $ 0.18 $ 0.42 $ 0.32
Weighted average common shares
outstanding 11,114 11,063 11,110 11,054
Diluted number of common shares
outstanding 11,428 11,310 11,419 11,292
CALIFORNIA FIRST NATIONAL BANCORP
---------------------------------
Consolidated Balance Sheets
---------------------------
(000's )
ASSETS December 31, June 30,
------------- -----------
2005 2005
------------ ----------
(Unaudited) (Audited)
Cash and short term investments $ 38,442 $ 43,321
Marketable securities 1,247 1,484
Net receivables 1,803 1,636
Property for transactions in process 40,637 34,052
Net investment in capital leases 196,311 187,802
Other assets 2,013 2,119
Discounted lease rentals assigned to lenders 4,946 8,405
------------ ----------
$ 285,399 $ 278,819
============ ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 5,258 $ 4,233
Income taxes payable, including deferred
taxes 11,874 15,834
Deposits 63,244 54,098
Other liabilities 10,290 9,313
Non-recourse debt 4,946 8,405
------------ ----------
Total liabilities 95,612 91,883
Stockholders' Equity 189,787 186,936
------------ ----------
$ 285,399 $ 278,819
============ ==========
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