California First National Bancorp (NASDAQ: CFNB) (“CalFirst Bancorp”) today announced that net earnings for the fourth quarter ended June 30, 2012 of $2.2 million were down 10% from net earnings of $2.5 million for the fourth quarter of fiscal 2011. For the fiscal year ended June 30, 2012, net earnings of $8.9 million were 18% below the $10.9 million reported for fiscal 2011. Diluted earnings per share for the fourth quarter of 2012 of $0.21 per share were 10% below the $0.24 per share for the fourth quarter of the prior year, while diluted earnings per share of $0.85 for fiscal 2012 were 19% below the $1.05 per share reported for the prior year.
The decline in net income for the fourth quarter of fiscal 2012 reflects the comparison to the prior year’s fourth quarter that benefited from a 35% reduction in the provision for income taxes related to a reduction in unrecognized tax benefits and a reduction in the estimated tax rate for fiscal 2011. Excluding any tax impact, earnings before income taxes in the fourth quarter of fiscal 2012 of $3.5 million were up 7% from the fourth quarter of fiscal 2011. This increase largely reflects an increase in non-interest income that offset lower net interest income.
Total direct finance, loan and interest income for the fourth quarter of fiscal 2012 decreased 9% to $5.8 million from $6.4 million for the fourth quarter of fiscal 2011. The decrease includes a $470,000, or 11%, decrease in direct finance income and a $100,000 decrease in investment income. The decrease in direct finance income related to a decline of 160 basis points the average yield earned that offset a 12% increase in the average investment in leases to $250 million. The average investment in commercial loans of $83.7 million for the fourth quarter of fiscal 2012 was down 12% from the prior year, but commercial loan income benefited from a one-time fee recognized in the period. Combined, the average yield earned on leases and loans during the quarter decreased by 93 basis points to 6.10%, while the average yield earned on average investment balances of $120.8 million increased by 37 basis points to 2.44%. During the fourth quarter of fiscal 2012, interest expense on deposits of $589,000 was 38% below the prior year due to an 11% decrease in average balances to $249.0 million and a decrease of 41 basis points in average rates paid to 0.95%. The Company did not make a provision for credit losses during the fourth quarter of fiscal 2012 or 2011, as the portfolio sustained no growth during both periods and the credit quality remained stable. As a result of the foregoing, net direct finance, loan and interest income after provision for credit losses during the fourth quarter of fiscal 2012 decreased 4.6% to $5.2 million, compared to $5.5 million for the fourth quarter of fiscal 2011.