California First National Bancorp Reports Operating Results (10-K)

At June 30, 2010, leases accounted for 75% of the Company s net investment in leases and loans. The Company leases and finances most capital assets used by businesses and organizations, with a focus on high technology systems and other mission critical assets. The leases are structured individually and can accommodate a variety of our customers objectives. In addition to computer systems and networks, property leased includes automated manufacturing and distribution management systems, production systems, printing presses and warehouse distribution systems. Telecommunications systems include digital private branch equipment and switching equipment as well as voice over Internet protocol (“VoIP”) systems, wireless networks and satellite tracking systems. Retail point-of-sale and inventory tracking systems often integrate computers, scanners and software. Other electronic equipment leased includes ultrasound and medical imaging systems, computer-based patient monitoring systems, testing equipment, and copying equipment. In addition, the Company leases a wide variety of non-high technology property, including oil and gas production equipment, machine tools, school buses, trucks, exercise equipment and office and dormitory furniture. Of the leases booked in fiscal 2010, approximately 30.3% involved oil and gas production equipment, 27.6% computer equipment and software, 15.1% manufacturing equipment, 9.4% furniture and fixtures, and 5.8% transportation, with the balance including yellow, medical and test equipment, point of sale and office equipment.

CalFirst Leasing and CalFirst Bank provide leasing and financing to customers throughout the United States and across a breadth of industries and disciplines, including commercial, industrial and financial companies, as well as government and non-profit entities. The average size of lease transaction booked during fiscal 2010 was approximately $468,000, compared with $398,000 during fiscal 2009. One customer accounted for 27% of the property cost subject to leases booked during fiscal 2010, but historically no lessee has represented more than 5% of leases booked in any one year. Leases primarily are originated directly through a centralized marketing program and direct delivery channels. The marketing program includes a confidential database of current and potential users of business property, a training program to introduce new marketing employees to leasing, and an in-house computer and telecommunication systems. The marketing programs have been augmented through the expanded use of web sites and the Internet to identify and communicate with potential customers. Prospect management software is utilized to enhance the productivity of the sales effort. Specific information about potential customers is entered into a confidential database accessible to sales professionals and their managers that allows them to efficiently focus on the most likely purchaser or lessee of capital assets. The prospect management system and an integrated in-house telecommunications system permit sales management to monitor account executive activity, daily prospect status and pricing information. The ability to monitor account activity and offer immediate assistance in negotiating or pricing a transaction makes it possible to be responsive to customers and prospects.