CFNB Reports 21% Increase in Third Quarter Earnings.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)--April 21, 2004 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 $2.8 million for the third quarter ended March 31, 2004, a 21% increase from net earnings of $2.3 million for the third quarter of 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 for the third quarter increased 19% to $0.25 per share, compared to $0.21 per share for the third quarter of the prior year, reflecting the impact of a slightly greater number of 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. For the nine months ended March 31, 2004, net earnings decreased 8% to $7.5 million, compared to $8.2 million for the first nine months of fiscal 2003. Diluted earnings per share were $0.67 for the first nine months of fiscal 2004, down 8% from $0.73 per share reported for the same period of fiscal 2003. For the third quarter ended March 31, 2004, gross profit of $9.5 million increased 14% from $8.4 million reported for the third quarter of the prior year. This reflected a $240,000 decrease in net direct finance and interest income, which was offset by a $1.4 million increase in other income. The increase in other income is primarily due to a significant increase in the gain on sales of leased property, benefiting in part from a larger investment in leases reaching their end of term during the quarter. The 5% decrease in net direct finance and interest income to $4.9 million, compared to $5.1 million for the third quarter of fiscal 2003, reflects lower direct finance income resulting from lower yields earned on the investment in capital leases, despite an increase in average balances. The provision for lease losses was down, as the overall level of reserves required against problem leases did not increase during the period. For the first nine months of fiscal 2004, gross profit of $26.7 million increased 2% from $26.2 million reported for the same period of the prior year. The change reflected a $1.4 million increase in other income, which was offset by a $818,000 decrease in net direct finance and interest income. The increase in other income again resulted primarily from a large increase in gain on sales of leased property, offset by decreased income from sales type leases. The decrease in net direct finance and interest income to $14.1 million, from $14.9 million for the prior year period, reflected lower total direct finance and interest income, offset somewhat by a lower provision for lease losses. The decrease in total direct finance and interest income reflected a significant decrease in interest and investment income earned on liquid investments, along with lower direct finance income resulting from lower yields earned. During the third quarter, CalFirst Bancorp's selling, general and administrative ("S,G&A") expenses increased by 8% to $5.0 million, compared to $4.6 million during the third quarter of fiscal 2003. For the first nine months, S,G&A expenses were up 13% to $14.5 million, compared to $12.8 million reported for the first nine months of the prior year. The increase in S,G&A expenses for both periods 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: "CalFirst Bancorp's results for the third quarter of fiscal 2004 show the benefit of improved performance from our investment in capital leases, while at the same time we continued to focus on developing new business. During the third quarter and first nine months of fiscal 2004, the volume of new leases originated increased by 50% when compared to last year. New leases booked during the third quarter also jumped considerably, and consequently, our investment in capital leases increased to $154.7 million, while transactions in process were still up by 37%. Growth in other income contributed strongly to improved profit comparisons, due mostly to higher income from sales of leased property, and in part to a portfolio of leases reaching the end of term during fiscal 2004 comparable in magnitude magnitude, in astronomy, measure of the brightness of a star or other celestial object. The stars cataloged by Ptolemy (2d cent. A.D.), all visible with the unaided eye, were ranked on a brightness scale such that the brightest stars were of 1st magnitude and the to the prior year. During the third quarter ended March 31, 2004, CalFirst Bank recorded a meaningful profit, and is profitable on a year to date basis as well." California First National Bancorp is a bank holding company with leasing and bank operations based in Orange County, Calif. 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 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 Statement of Earnings
(000's except per share data)
Three Months Nine Months Ended
Ended
March 31, March 31,
2004 2003 2004 2003
Direct finance income $4,816 $5,105 $14,122 $14,629
Interest income on investments $223 $190 $435 $807
Total direct finance and interest
income $5,039 $5,295 $14,557 $15,436
Interest expense on deposits $118 $55 $298 $184
Provision for lease losses $41 $120 $164 $338
Net direct finance and interest
income after provision for
lease losses $4,880 $5,120 $14,095 $14,914
Other income
Operating and sales-type lease
income $1,757 $1,879 $4,201 $4,975
Gain on sale of leases and leased
property $2,486 $1,176 $7,636 $5,816
Other income $409 $183 $774 $468
Total other income $4,652 $3,238 $12,611 $11,259
Gross Profit $9,532 $8,358 $26,706 $26,173
Selling, general and administrative
expenses $5,028 $4,639 $14,474 $12,805
Earnings before income taxes $4,504 $3,719 $12,232 $13,368
Income taxes $1,734 $1,432 $4,709 $5,147
Net earnings $2,770 $2,287 $7,523 $8,221
Basic earnings per share $0.25 $0.21 $0.69 $0.74
Diluted earnings per share $0.25 $0.21 $0.67 $0.73
Weighted average common shares
outstanding 10,998 10,993 10,956 11,070
Diluted number of common shares
outstanding 11,248 11,138 11,155 11,291
CALIFORNIA FIRST NATIONAL BANCORP
Consolidated Balance Sheets
(000's)
ASSETS March 31, June 30,
2004 2003
(Unaudited) (Audited)
Cash and short term investments $ 62,485 $ 67,340
Securities held to maturity 1,783 553
Net receivables 3,564 1,964
Property for transactions in process 27,731 20,287
Net investment in capital leases 154,681 146,396
Other assets 2,470 2,095
Discounted lease rentals assigned to lenders 21,126 40,056
$273,840 $278,691
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 1,264 $1,598
Income taxes payable, including deferred taxes 18,147 22,385
Deposits 21,551 7,594
Other liabilities 9,227 9,781
Non-recourse debt 21,126 40,056
Total liabilities 71,315 81,414
Stockholders' Equity 202,525 197,277
$273,840 $278,691
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