California First Leasing : CFNB Q2 2022 Financial Report 1-27-22

CALIFORNIA FIRST LEASING CORPORATION

a California Corporation

5000 Birch Street, Suite 500

Newport Beach, CA 92660

Telephone: [phone]

Website: www.CalFirstLease.com

SIC Code: 7359

Quarterly Report

For the period ending December 31, 2021

(the "Reporting Period")

The number of shares outstanding of our Common Stock is 10,284,139as of December 31, 2021The number of shares outstanding of our Common Stock was 10,284,139as of June 30, 2021

Indicate by check mark whether the company is a shell company (as defined in Rule 405 of the Securities Act of

1933 and Rule 12b-2 of the Exchange Act of 1934):

Yes: □

No: ■

Indicate by check mark whether the company's shell status has changed since the previous reporting period:

Yes: □

No: ■

Indicate by check mark whether a Change in Control4 of the company has occurred over this reporting period:

Yes: □

No: ■

ITEM 1: EXACT NAME OF ISSUER AND ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICES

Name of Issuer	California First Leasing Corporation
Principal Executive Offices	5000 Birch Street, Suite 500
	Newport Beach, CA 92660
	Telephone: [phone]
	Website: www.calfirstlease.com
Investor Relations	S. Leslie Jewett, CFO
	[e-mail]
	Telephone: [phone]

ITEM 2: SECURITIES AUTHORIZED AND OUTSTANDING

The following table sets forth information concerning each authorized class of equity securities of California First Leasing as of January 21, 2022:

Freely

Number of

Shares

Tradable

Shares

Beneficial

Shareholders

Class

As Of

Outstanding

Shares

Authorized

Shareholders *

of Record

(public float)

Common

1/21/2022

20,000,000

10,284,139

2,286,275

254

12

Preferred

1/21/2022

2,500,000

-

-

-

-

• Estimate of number of beneficial shareholders is drawn from available reports. Based on such reports, more than 100 beneficial shareholders each own at least 100 shares of common stock.

California First Leasing Corporation	Quarterly Report for the Fiscal Quarter Ended
December 31, 2021

This Quarterly Report provides an update to the Annual Report for the fiscal year ended June 30, 2021. Accordingly, it does not contain all the information required to meet the annual disclosure obligations and should be reviewed in conjunction with the Annual Report. This report has been compiled to fulfill the disclosure requirements of the OTC Market Group, Inc. ("OTC") and the sequential Items contained herein correspond to the sequential format of the OTC disclosure guidelines.

On February 26, 2021, California First National Bancorp completed the sale of California First National Bank ("Bank"), merged its California First Leasing subsidiary into itself and changed its name to "California First Leasing Corporation" (the "Company" or "CalFirstLease").

Statements made in this report that are not strictly historical in nature constitute "forward-looking statements." Forward-looking statements involve management assumptions, risks and uncertainties. Such statements include, but are not limited to, beliefs regarding projected changes in lease originations and in the lease and loan portfolio, the credit quality of the lease and loan portfolio, the adequacy of reserves for credit losses, investments in equity securities, swings in stock prices and the potential for this to cause significant volatility in reported net earnings, the impact of external events on business activities and opportunities, estimates of expected tax rates applicable to future periods, impact of changes in interest rates and equity and fixed income markets. Such forward-looking statements involve known and unknown risks and uncertainties and factors that could cause actual results to differ materially include political, economic, business, competitive, market, regulatory and other risks, including the future impact of the novel coronavirus disease ("COVID-19") outbreak and measures taken in response to it for which future developments are highly uncertain and difficult to predict. Consequently, if 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 information to reflect events or circumstances arising after the date hereof (January 27, 2022).

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California First Leasing Corporation		Quarterly Report for the Fiscal Quarter Ended
				December 31, 2021
ITEM 3: INTERIM FINANCIAL STATEMENTS
BALANCE SHEETS
(in thousands, except for share amounts)
			December 31,			June 30,		Percent
			2021			2021		Change
			(Unaudited)
ASSETS
Cash and due from banks	$	12,600	$	37,045	(66.0)	%
Equity investments		201,307			160,125	25.7	%
Property acquired for transactions in process		1,888			1,751	7.8	%
Leases and loans:
Net investment in leases		29,198			36,037	(19.0)	%
Commercial loans		3,388			3,613	(6.2)	%
Allowance for credit losses		(476)			(620)		(23.2)	%
Net investment in leases and loans		32,110			39,030		(17.7)	%
Net property on operating leases		48			28	71.4	%
Income taxes receivable		2,502			2,857	(12.4)	%
Other assets		943			853	10.6	%
Discounted lease rentals assigned to lenders		871			1,228		(29.1)	%
Total Assets	$	252,269	$	242,917	3.8	%
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable	$	2,588	$	628	312.1	%
Accrued liabilities		1,044			1,264	(17.4)	%
Lease deposits		143			188	(23.9)	%
Non-recourse debt		871			1,228	(29.1)	%
Deferred income taxes, net		12,560			9,309		34.9	%
Total Liabilities		17,206			12,617	36.4	%
Commitments and contingencies		-			-		n/a
Stockholders' equity:
Preferred stock; 2,500,000 shares authorized; none issued		-			-		n/a
Common stock; $.01 par value; 20,000,000 shares authorized;
10,284,139 issued and outstanding both periods		103			103	0.0	%
Additional paid in capital		2,314			2,314	0.0	%
Retained earnings		232,646			227,883	2.1	%
Accumulated other comprehensive income, net of tax		-			-		0.0	%
Total Stockholders' Equity		235,063			230,300		2.1	%
Total Liabilities and Stockholders' Equity		$	252,269		$	242,917		3.8	%

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California First Leasing Corporation	Quarterly Report for the Fiscal Quarter Ended
December 31, 2021

STATEMENTS OF EARNINGS

(in thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Six Months Ended
		December 31,		Percent				December 31,		Percent
		2021			2020		Change				2021			2020		Change
Finance & loan income	$	597	$	1,091	(45.3)	%		$	1,262	$	1,957	(35.5) %
Dividend income		1,121			594	88.7	%			2,023			1,021	98.1	%
Investment interest income		2			44	(95.5)	%			9			117	(92.3)	%
Total interest & dividend income		1,720			1,729	(0.5)	%			3,294			3,095	6.4	%
Interest expense on deposits		-			12	(100.0)	%			-			33	(100.0)	%
Net interest & dividend income		1,720			1,717	0.2	%			3,294			3,062	7.6	%
Release of (provision for) reserves for credit losses		-			150	(100.0)	%			100			50	100.0	%
Net interest & dividend income after reserves for credit losses		1,720			1,867	(7.9)	%			3,394			3,112	9.1	%
Non-interest income
Operating & sales-type lease income		69			135	(48.9)	%			111			338	(67.2)	%
Gain on sale of leases, loans & leased property		130			74	75.7	%			143			2,155	(93.4)	%
Gain on equity securities		21,266			16,957	25.4	%			11,717			16,565	(29.3)	%
Other fee income		144			17	747.1	%			316			31	919.4 %
Total non-interest income		21,609			17,183	25.8	%			12,287			19,089	(35.6)	%
Non-interest expenses
Compensation & employee benefits		490			797	(38.5)	%			1,096			1,615	(32.1) %
Occupancy		25			49	(49.0) %			52			100	(48.0) %
Professional and IT services		123			170	(27.6)	%			270			363	(25.6)	%
FDIC and regulatory fees		-			16	(100.0)	%			-			(76)	(100.0)	%
Other general & administrative		63			79	(20.3)	%			127			155	(18.1)	%
Total non-interest expenses		701			1,111	(36.9)	%			1,545			2,157	(28.4)	%
Earnings before income taxes		22,628			17,939	26.1	%			14,136			20,044	(29.5)	%
Income taxes		6,349			2,848	122.9	%			3,614			3,515	2.8	%
Net earnings	$	16,279		$	15,091	7.9	%		$	10,522		$	16,529	(36.3) %
Basic earnings per common share	$	1.58	$	1.47	7.9 %		$	1.02	$	1.61	(36.3) %
Weighted average common shares outstanding		10,284			10,284						10,284			10,284

• For periods prior to February 26, 2021, financial statements represent the consolidation of California First National Bancorp and subsidiaries, California First National Bank and California First Leasing.

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Quarterly Report for the Fiscal Quarter Ended
California First Leasing Corporation					December 31, 2021
STATEMENTS OF CASH FLOWS*
(Unaudited, in thousands)
		Six Months Ended
		December 31,
		2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) Earnings	$	10,522	$	16,529
Adjustments to reconcile net earnings to cash flows
provided by (used for) operating activities:
(Release of) provision for credit losses		(100)			(50)
Depreciation and net amortization		24			90
Gain on sale of leased property and sales-type lease income		(137)			(2,127)
Gains on equity securities, net		(11,717)			(16,565)
Deferred income taxes, including income taxes payable		3,251			2,839
Decrease in income taxes receivable		355			-
Net decrease in accounts payable and accrued liabilities		(220)			(726)
Other, net		(353)			82
Net cash provided by operating activities		1,625			72
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in leases, loans and transactions in process		(3,187)			(22,024)
Payments received on lease receivables and loans		11,885			24,062
Proceeds from sales of leased property and sales-type leases		396			2,504
Purchase of equity securities		(41,343)			(48,045)
Pay down on investments		-			452
Proceeds from sale of equity securities		11,879			7,855
Net decrease in other assets		59			64
Net cash used for investing activities		(20,311)			(35,132)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in time certificates of deposit		-			(3,339)
Net decrease in demand and savings deposits		-			(10,820)
Dividends to stockholders		(5,759)			(5,553)
Net cash used for financing activities		(5,759)			(19,712)
NET CHANGE IN CASH AND CASH EQUIVALENTS		(24,445)			(54,772)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		37,045			154,123
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	12,600	$	99,351
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Decrease in lease rentals assigned to lenders and related
non-recourse debt	$	(357)		$	(357)
Estimated residual values recorded on leases	$	(19)		$	(716)
Interest paid on deposits	$	-		$	35
Income taxes paid	$	8	$	676

• For periods prior to February 26, 2021, financial statements represent the consolidation of California First National Bancorp and subsidiaries, California First National Bank and California First Leasing.

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