• 8% loan growth in fourth quarter boosts loan portfolio to $404 million, up 66% from June 30, 2015.
• Total assets reach $888.2 million at June 30, 2016, up 22% from $731.1 million year before.
• Fourth quarter net interest income increased 22%, with fiscal 2016 net interest income up 13%.
• 176% jump in fourth quarter net income reflected significant gains recognized on the sale of property on leases reaching the end of term during the quarter.
• Full year 2016 net income decline of $407,000 compares to fiscal 2015 results that included a $2.7 million pre-tax gain on the settlement of claims filed in an antitrust case. Excluding the settlement claim from the prior year results, 2016 pre-tax income of $14.1 million was up 16.5%.
• Focus on overhead reduced non-interest expenses by 7% in the fourth quarter and 8% for the year, but write-downs taken on a repossessed asset in the third and fourth quarters of fiscal 2016 offset some of the benefit.
• Non-performing assets were 0.15% of total assets at June 30, 2016, down slightly from 0.18% at March 31, 2016. 
• Capital remains strong, with Tier 1 common equity ratio of 25.12%.

• Commercial loan income growth resulted from a 75% increase in average loan balances to $401.4 million and a 25 basis point increase in the average yield to 3.79%.
• Investment interest income increased 26% as average cash and investments were up 38% to $192.4 million and this offset a 13 basis point drop in average yield.
• Direct finance income of $3.6 million was down 3% from the 2015 fourth quarter due to a 14% decline in the average investment in leases to $252.3 million offset by a 68 basis point improvement in the average yield to 5.74% that benefitted from the early termination of three leases.
• During the fourth quarter of fiscal 2016, interest expense on deposits and borrowings of $1.86 million increased 60% as average balances were up 37% to $661.6 million and average rates increased 16 basis points to 1.13%.
• The increased interest cost is largely due to a 17 basis point increase in average cost of deposits to 1.18% and a $158 million increase in average deposits, with the total funding cost increase tempered by a $21 million increase in average borrowings at an average rate of 0.49%

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For the year ended June 30, 2016, non-interest income was down 44% to $4.9 million from $8.7 million in fiscal 2015. Non-interest income for the prior year included the pre-tax recovery of $2,743,920 from the settlement of claims filed in a TFT-LCD (thin-film transistor liquid display) products antitrust case. Excluding that income from the prior year, non-interest income for fiscal 2016 was still down by $1.08 million or 18% due to a $1.3 million decrease in gains from the sale of leases and $458,600 decline in securities gains offset in part by a $706,000 increase in income from the release of property on leases reaching the end of term during the year.

Non-interest Expenses

CalFirst Bancorp’s non-interest expenses of $2.7 million for the 2016 fourth quarter declined 7% from $2.9 million in the 2015 fourth quarter, while fiscal 2016 non-interest expenses of $10.8 million was down 8% from $11.8 million reported for fiscal 2015. The decrease in expenses for both periods in fiscal 2016 was due primarily to a decrease in sales compensation and benefits cost recognized, offset in part by charges taken in the third and fourth quarter to write-down the value of a repossessed asset.

Lease and Loan Business

Fourth quarter 2016 commercial loan bookings of $47.3 million were up 9% from $43.5 million in the 2015 fourth quarter, while lease bookings in the period were down to $8.1 million from $60.2 million the prior year. Combined, total lease and loan bookings of $55.4 million decreased 47% from 2015 fourth quarter bookings of $103.7 million.

Full fiscal year 2016 commercial loans booked of $238.1 million were up 53% from $155.3 million booked in fiscal 2015, while lease bookings of $110.4 million were down 49% from $217.8 million booked in fiscal 2015. Total 2016 loan and lease bookings of $348.5 million in fiscal 2016 were 7% below $373.1 million booked in fiscal 2015.

The total lease and loan portfolio at June 30, 2016 increased 18% to $641.4 million from $541.8 million at June 30, 2015. The quality of the portfolio has been maintained, notwithstanding the loan growth and a $1.1 million write-off during the year primarily related to one large lease in bankruptcy.

2016 fourth quarter lease and loan originations were down 45% from the fourth quarter of fiscal 2015, with 2016 full year originations down 3% from the prior year’s record level.  Originations were dominated by loan originations which were up 19% for the year and offset in part a 26% decline in 2016 lease originations. The estimated backlog of approved lease and loan commitments of $89 million at June 30, 2016 is 28% lower than at June 30, 2015 but up slightly from $88 million at March 31, 2016.

Investment Securities

Investment securities of $99.8 million at June 30, 2016 increased 18% from $84.5 million at June 30, 2015. The 2016 increase in investment securities primarily relates to the acquisition of additional government agency mortgage-backed securities and one corporate bond, along with an increase in unrecognized gains in the value of securities owned.

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

This release contains forward-looking statements, which involve management assumptions, risks and uncertainties. The statements in this release that are not strictly historical in nature constitute "forward-looking statements." Such statements include expectations regarding the Company's expected growth in assets, estimated bookings, credit quality and the impact of general economic conditions and interest rates on our earnings. 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. All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update this 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 2015 Annual Report on Form 10-K and the 2016 quarterly reports on Form 10-Q.

CONTACT:                                                                                                    

S. Leslie Jewett

ljewett@calfirstbancorp.com

CALIFORNIA FIRST NATIONAL BANCORP

Consolidated Statements of Earnings

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CALIFORNIA FIRST NATIONAL BANCORP

Consolidated Balance Sheets

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