California First National Bancorp (NASDAQ: CFNB) (“CalFirst Bancorp” or
the “Company”) today announced net earnings of $2.5 million for the
first quarter ended September 30, 2014, up 34% from $1.8 million earned
during the first quarter of fiscal 2014. Diluted earnings per share for
the first quarter of fiscal 2015 of $0.24 were also up 34% from $0.18
per share reported for the same period of the prior year.
The increase in net earnings for the first quarter of fiscal 2015 is
largely due to an 80% increase in non- interest income but also reflects
the first quarterly increase in total interest income in three years.
Total finance, loan and interest income for the first quarter ending
September 30, 2014 increased 5% to $5.3 million from $5.0 million for
the first quarter of fiscal 2014. This increase includes a $470,300, or
61%, increase in commercial loan income offset by $114,700 decrease in
investment income and $110,800 decrease in finance income. The growth in
commercial loan income reflected a 93% increase in average loan balances
to $137.7 million from $71.4 million, which was offset in part by a 71
basis point decline in average loan yield. The decrease in finance
income was due to a 6% decrease in average lease balances to $316.7
million that offset a 13 basis point improvement in the average yield.
The average yield on all leases and loans in the Company’s portfolio
declined by 15 basis points during the first quarter of 2015 to 4.35% on
an average portfolio that increased 12% to $454.3 million. For the first
quarter of fiscal 2015, the average yield on cash and investments of
1.36% was up 3 basis points from the first quarter of fiscal 2014 as
average cash balances declined by 38% to $51.0 million and investments
declined 10% to $40 million. Interest expense paid increased 8% to
$858,000, reflecting a 9.4% increase in the average balance of deposits
and borrowings to $376.7 million and 1 basis point decrease in average
rate paid to 0.91%. The Company made a $275,000 provision for credit
losses during the first quarter of fiscal 2015, which compared to no
provision made during the quarter ending September 30, 2013. The first
quarter 2015 provision related to the growth in the credit portfolio
since June 30, 2014 and did not reflect any deterioration in the credit
profile of the portfolios. As a result of the foregoing, net finance,
loan and interest income after provision for credit losses decreased by
$95,900, or 2%, to $4.1 million.
Selected Interest-Earning Asset and
Interest-Bearing Liability Data
|
|
Quarter Ending
|
|
Quarter Ending
|
|
|
September 30, 2014
|
|
September 30, 2013
|
(dollars in thousands)
|
|
|
Average
|
|
Yield/
|
|
|
Average
|
|
Yield/
|
|
|
|
Balance
|
|
Rate
|
|
|
Balance
|
|
Rate
|
Interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
Interest-earning deposits
|
|
$
|
51,003
|
|
0.20%
|
|
$
|
82,855
|
|
0.16%
|
Investment securities
|
|
|
40,377
|
|
2.83%
|
|
|
45,052
|
|
3.49%
|
Commercial loans
|
|
|
137,676
|
|
3.61%
|
|
|
71,419
|
|
4.32%
|
Net investment in leases
|
|
|
316,662
|
|
4.68%
|
|
|
335,399
|
|
4.55%
|
Total interest-earning assets
|
|
$
|
545,718
|
|
3.85%
|
|
$
|
534,725
|
|
3.75%
|
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
$
|
369,871
|
|
0.92%
|
|
$
|
344,372
|
|
0.92%
|
Borrowings
|
|
|
6,858
|
|
0.27%
|
|
|
-
|
|
0.00%
|
Total interest-bearing liabilities
|
|
$
|
376,729
|
|
0.91%
|
|
$
|
344,372
|
|
0.92%
|
Net interest spread (1)
|
|
|
|
|
2.94%
|
|
|
|
|
2.83%
|
Net interest margin (2)
|
|
|
|
|
3.22%
|
|
|
|
|
3.16%
|
|
|
|
|
|
|
|
|
|
|
|
1) Net interest spread is equal to the difference between average
yield on interest earning assets and average rate paid on
interest-bearing liabilities.
2) Net interest margin represents net finance income as a percent
of average interest earnings assets.
|
|
Non-interest income for the first quarter of fiscal 2015 increased by
80% to $2.5 million from $1.4 million in the first quarter of the prior
year, primarily due to a $1.5 million increase in income realized on the
sale of leased property. The gain from the sale of property on one large
transaction reaching the end of term during the quarter accounted for
81% of non-interest income for the period.
For the first quarter of fiscal 2015, CalFirst Bancorp’s non-interest
expenses were unchanged at $2.7 million, but included a 10% increase in
salaries and benefits that was offset by lower general and occupancy
expenses.
Commenting on the results, Patrick E. Paddon, President and Chief
Executive Officer, indicated, “The net investment in leases and loans of
$485.4 million at September 30, 2014 was up 20% from $404.1 million at
September 30, 2013, and 6.5% from $455.8 million at June 30, 2014,
producing an increase in total interest income despite a slight decline
in average yields. For the first quarter of fiscal 2015, lease bookings
of $65.6 million were 62% greater than the first quarter of fiscal 2014,
while commercial loans booked of $25.4 million compared to no loans
booked during the first quarter of fiscal 2014. As a result, total first
quarter loan and lease bookings of $91 million were up by 124% from
$40.6 million the year before. New lease and loan originations during
the first quarter of fiscal 2015 were 9% lower than the first quarter of
fiscal 2014, but the backlog of approved lease and loan commitments of
$140.7 million is up 36% from $104 million a year ago. Commitments
include $30 million of unfunded loan commitments compared to $24.5
million the year before.
“At a meeting Tuesday, October 21, 2014, the Board of Directors of CFNB
approved the payment of an annual dividend in the amount of $0.42 per
share to be paid on December 16, 2014 to shareholders of record on
December 1, 2014. The Board will continue to review its dividend policy
on an ongoing basis, and the decision to pay dividends in future periods
will depend on a variety of factors including the business, economic and
tax environment.”
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 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 2014 Annual Report on Form 10-K.
|
|
|
|
|
CALIFORNIA FIRST NATIONAL BANCORP
|
|
Consolidated Statements of Earnings
|
(000's except per share data)
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
|
September 30,
|
|
Percent
|
|
|
2014
|
|
2013
|
|
Change
|
|
|
|
|
|
|
|
|
|
Finance and loan income
|
|
$
|
4,946
|
|
$
|
4,586
|
|
7.8%
|
Investment interest income
|
|
|
311
|
|
|
426
|
|
(27.0)%
|
Total finance, loan and interest income
|
|
|
5,257
|
|
|
5,012
|
|
4.9%
|
|
|
|
|
|
|
|
|
|
Interest expense on deposits and borrowings
|
|
|
858
|
|
|
792
|
|
8.3%
|
|
|
|
|
|
|
|
|
|
Net finance, loan and interest income
|
|
|
4,399
|
|
|
4,220
|
|
4.2%
|
Provision for credit losses
|
|
|
275
|
|
|
-
|
|
-
|
Net finance, loan and interest income
|
|
|
|
|
|
|
|
|
after provision for credit losses
|
|
|
4,124
|
|
|
4,220
|
|
(2.3)%
|
|
|
|
|
|
|
|
|
|
Non-interest income
|
|
|
|
|
|
|
|
|
Operating and sales-type lease income
|
|
|
134
|
|
|
499
|
|
(73.1)%
|
Gain on sale of leases and leased property
|
|
|
2,360
|
|
|
781
|
|
202.2%
|
Other than temporary impairment loss
|
|
|
(91)
|
|
|
-
|
|
-
|
Other fee income
|
|
|
144
|
|
|
132
|
|
9.1%
|
Total non-interest income
|
|
|
2,547
|
|
|
1,412
|
|
80.4%
|
|
|
|
|
|
|
|
|
|
Non-interest expenses
|
|
|
|
|
|
|
|
|
Compensation and employee benefits
|
|
|
1,926
|
|
|
1,747
|
|
10.2%
|
Occupancy
|
|
|
158
|
|
|
205
|
|
(22.9)%
|
Professional services
|
|
|
148
|
|
|
156
|
|
-5.1%
|
Other
|
|
|
440
|
|
|
551
|
|
(20.1)%
|
Total non-interest expenses
|
|
|
2,672
|
|
|
2,659
|
|
0.5%
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes
|
|
|
3,999
|
|
|
2,973
|
|
34.5%
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
1,540
|
|
|
1,142
|
|
34.9%
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
2,459
|
|
$
|
1,831
|
|
34.3%
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share
|
|
$
|
0.24
|
|
$
|
0.18
|
|
34.2%
|
Diluted earnings per common share
|
|
$
|
0.24
|
|
$
|
0.18
|
|
34.2%
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
10,460
|
|
|
10,447
|
|
|
Diluted number of common shares outstanding
|
|
|
10,460
|
|
|
10,451
|
|
|
|
|
|
|
|
|
|
|
|
CALIFORNIA FIRST NATIONAL BANCORP
|
|
Consolidated Balance Sheets
|
(000’s)
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
June 30,
|
|
Percent
|
|
|
2014
|
|
2014
|
|
Change
|
ASSETS
|
|
|
|
|
|
|
|
|
Cash and short term investments
|
|
$
|
46,845
|
|
$
|
40,122
|
|
16.8%
|
Investment securities
|
|
|
47,841
|
|
|
29,316
|
|
63.2%
|
Net receivables
|
|
|
1,161
|
|
|
680
|
|
70.7%
|
Property for transactions in process
|
|
|
25,373
|
|
|
40,567
|
|
(37.5)%
|
Net investment in leases
|
|
|
330,187
|
|
|
326,619
|
|
1.1%
|
Commercial loans
|
|
|
155,184
|
|
|
129,186
|
|
20.1%
|
Income tax receivable
|
|
|
1,188
|
|
|
1,658
|
|
(28.3)%
|
Other assets
|
|
|
2,277
|
|
|
2,762
|
|
(17.6)%
|
Discounted lease rentals assigned to lenders
|
|
|
7,764
|
|
|
8,640
|
|
-10.1%
|
|
|
$
|
617,820
|
|
$
|
579,550
|
|
6.6%
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
13,710
|
|
$
|
4,655
|
|
194.5%
|
Income taxes payable, including deferred taxes
|
|
|
16,276
|
|
|
15,284
|
|
6.5%
|
Deposits and borrowings
|
|
|
383,614
|
|
|
362,668
|
|
5.8%
|
Other liabilities
|
|
|
10,395
|
|
|
4,558
|
|
128.1%
|
Non-recourse debt
|
|
|
7,764
|
|
|
8,640
|
|
(10.1)%
|
Total liabilities
|
|
|
431,759
|
|
|
395,805
|
|
9.1%
|
Stockholders' Equity
|
|
|
186,061
|
|
|
183,745
|
|
1.3%
|
|
|
$
|
617,820
|
|
$
|
579,550
|
|
6.6%
|
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