CFNB First Quarter Earnings Increase 19%

  CFNB First Quarter Earnings Increase 19%

Business Wire

IRVINE, Calif. -- October 23, 2013

California First National Bancorp (NASDAQ:CFNB)(“CalFirst Bancorp” or the
“Company”) today announced net earnings of $1.8 million for the first quarter
ended September 30, 2013, up 19% from $1.5 million earned during the first
quarter of fiscal 2013. Diluted earnings per share for the first quarter of
fiscal 2014 were $0.18 compared to $0.15 per share reported for the same
period of the prior year.

The increase in net earnings for the first quarter of fiscal 2014 is largely
due to a 44% increase in non-interest income and 12% decrease in non-interest
expenses that offset a 13% decrease in net interest income.

Total direct finance, loan and interest income for the first quarter ending
September 30, 2013 declined 7% to $5.0 million from $5.4 million for the first
quarter of fiscal 2013. This decrease includes a $276,000 reduction in
commercial loan income and $262,000 decrease in investment income that was
offset in part by a $156,000 increase in direct finance income. The decline in
commercial loan income reflected an 18% decline in average balances to $71.4
million for the period from $86.9 million and a 50 basis point decline in
average yields. The increase in direct finance income was due to a 33%
increase in average balances to $335.4 million that offset a 124 basis point
decline in the average yield. The average yield on all leases and loans held
in the Company’s portfolio decreased 104 basis points to 4.51%. The average
yield on cash and investments of 1.3% was down 97 basis points from the first
quarter of fiscal 2013 as average cash balances increased by 54% to $82.9
million and investments declined 31% to $45 million. Interest expense paid
increased 39% to $792,000 due to a 37.5% increase in the average balance of
deposits to $344.4 million and 1 basis point increase in average rate paid to
0.92%. The Company made no provision for credit losses during the first
quarter of fiscal 2014, compared to a $275,000 provision made for the quarter
ending September 30, 2012 as total risk assets were down slightly from the
level at June 30, 2013 and the credit profile of the portfolios was stable. As
a result of the foregoing, net direct finance, loan and interest income after
provision for credit losses decreased by $328,000, or 7%, to $4.2 million.

Non-interest income for the first quarter of fiscal 2014 increased by 44% to
$1.4 million from $978,000 in the first quarter of the prior year, primarily
due to a $437,000 increase in income realized on the sale of leased property.

During the first quarter of fiscal 2014, CalFirst Bancorp’s non-interest
expenses decreased 12% to $2.7 million, compared to $3.0 million during the
first quarter of fiscal 2013. The decrease in expenses was primarily due to
lower sales overhead and other compensation expense.

Commenting on the results, Patrick E. Paddon, President and Chief Executive
Officer, indicated, “The net investment in lease receivables of $322.3 million
at September 30, 2013 was up 29% from $249.7 million at September 30, 2012,
and with this increase in the portfolio, we produced the first quarterly
increase in direct finance income in two years. For the first quarter of
fiscal 2014, lease bookings of $40.5 million were down 21% from the first
quarter of fiscal 2013, and with no commercial loans booked during the
quarter, total first quarter loan and lease bookings decreased by 33% from
$60.8 million the year before. As a result, the net investment in leases and
loans of $404.1 million at September 30, 2013 was down 3% from June 30, 2013
but up 16% from $349.5 million at September 30, 2012. New lease and loan
originations during the first quarter of fiscal 2014 were up 89% from the
first quarter of fiscal 2013 and the backlog of approved lease and loan
commitments of $104 million is just 3% below the level of a year ago.
Commitments include $24.6 million of unfunded loan commitments compared to
$16.2 million the year before.”

California First National Bancorp is a bank holding company with leasing and
bank operations based in Orange County, California. California First National
Bank is an FDIC-insured national bank that gathers deposits from a centralized
location by posting rates on the Internet, and provides lease financing and
commercial loans to businesses and organizations nationwide.

This press release contains forward-looking statements, which involve
management assumptions, risks and uncertainties. The statements in this press
release that are not strictly historical in nature constitute “forward-looking
statements.” Such statements include expectations regarding backlog of lease
and loan commitments and growth in direct finance income and lease and loan
bookings. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that could cause actual results to be
different from the results expressed or implied by such forward-looking
statements. Consequently, if such management assumptions prove to be incorrect
or such risks or uncertainties materialize, the Company’s actual results could
differ materially from the results forecast in the forward-looking statements.
All forward-looking statements are qualified in their entirety by this
cautionary statement, and the Company undertakes no obligation to revise or
update this press release to reflect events or circumstances arising after the
date hereof. For further discussion regarding management assumptions, risks
and uncertainties, readers should refer to the Company’s 2013 Annual Report on
Form 10-K.

                                     
CALIFORNIA FIRST NATIONAL BANCORP

Consolidated Statements of Earnings

(000's)
                                         
                                         Three Months Ended
                                         September 30,
                                         2013               2012
                                                                      
Direct finance and loan income           $ 4,586                      $ 4,706
Investment and interest income            426                         688
Total direct finance, loan and             5,012                        5,394
interest income
                                                                      
Interest expense on deposits and          792                         571
borrowings
                                                                      
Net direct finance, loan and               4,220                        4,823
interest income
Provision for credit losses               -                           275
Net direct finance, loan and
interest income after provision            4,220                        4,548
for credit losses
                                                                      
Non-interest income
Operating and sales-type lease             499                          544
income
Gain on sale of leases and leased          781                          313
property
Other fee income                          132                         121
Total non-interest income                 1,412                       978
                                                                      
Non-interest expenses
Compensation and employee benefits         1,747                        2,240
Occupancy                                  205                          234
Professional services                      156                          155
Other general and administrative          551                         387
Total non-interest expenses               2,659                       3,016
                                                                      
Earnings before income taxes               2,973                        2,510
Income taxes                              1,142                       972
Net earnings                             $ 1,831                      $ 1,538
                                                                      
Basic earnings per share                 $ 0.18                       $ 0.15
Diluted earnings per share               $ 0.18                       $ 0.15
                                                                      
Weighted average common shares             10,447                       10,444
outstanding
Diluted number of common shares            10,451                       10,451
outstanding
                                                                      
                                                                      

                                                     
CALIFORNIA FIRST NATIONAL BANCORP

Consolidated Balance Sheets

(000’s)
                                                                 
ASSETS                             September 30,                 June 30, 2013
                                   2013
                                                                 
Cash and short term                $    78,791                   $    75,469
investments
Investment securities                   43,881                        48,162
Net receivables                         2,120                         1,395
Property for transactions in            20,360                        11,927
process
Net investment in leases                333,860                       342,589
Commercial loans                        70,204                        73,980
Income tax receivable                   376                           3,301
Other assets                            1,049                         1,312
Discounted lease rentals               633                          768
assigned to lenders
                                  $    551,274                  $    558,903
                                                                 
LIABILITIES AND
STOCKHOLDERS' EQUITY
Accounts payable                   $    5,122                    $    8,849
Income taxes payable,                   16,732                        18,575
including deferred taxes
Deposits                                341,792                       346,028
Other liabilities                       4,335                         3,804
Non-recourse debt                      633                          768
Total liabilities                       368,614                       378,024
Stockholders' Equity                   182,660                      180,880
                                  $    551,274                  $    558,903

Contact:

California First National Bancorp
S. Leslie Jewett, (949) 255-0500
ljewett@calfirstbancorp.com