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California First Leasing Corporation

   
Interim Report to Shareholders

Third Quart0er and Nine Months Ended March 31, 2024

 

California First Leasing Corporation, (OTCQX: CFNB, “Company”), headquartered in Newport Beach, California, is an internally managed non-diversified closed-end investment company registered under the Investment Company Act of 1940, as amended. The Company retains its lease business while using equity and other investments to maximize current income and generate capital appreciation.

    

This interim report for the quarter and nine months ended March 31, 2024, prepared by management without audit, provides an update to the annual report for the fiscal year ended June 30, 2023. Accordingly, it does not contain all the information required to meet annual or semiannual disclosure obligations and should be reviewed in conjunction with the annual report filed with the Securities and Exchange Commission and available on the Company’s website at https://www.calfirstlease.com/investor/. The Company’s quarterly and year-to-date earnings and net asset value per share can fluctuate widely due to including gains and losses on equity securities that are determined based on stock prices on the last day of a fiscal quarter. 

  

Selected Financial Data

 

(in thousands, except per share data)

Three Months Ended

  

Nine Months Ended

 

March 31,

  

March 31,

 

  

2024

   

 

2023

    

  

2024

    

 

2023

Dividend income and interest income

$

1,299

 

$

1,763

 

$

4,149

 

$

4,243

Net realized (loss) on securities

  

(1,335)

    

(46)

    

(1,591)

    

(2,076)

Net unrealized gain on securities

  

27,881

   

3,380

   

39,881

   

6,241

    Investment income

 

27,845

  

    

5,097

  

 

42,439

 

 

8,408

Lease income

  

623

   

1,751

   

1,835

   

4,024

Operating expenses

  

678

   

781

   

2,054

   

2,139

Income taxes

  

8,125

   

1,348

   

12,020

   

2,190

    Net income

 

19,665

  

 

4,719

 

 

30,200

   

 

8,103

                       

Net asset value per share, beginning of period

$

23.99

 

$

21.22

 

$

22.61

 

$

20.60

    Net income

  

2.11

   

0.49

   

3.17

   

0.81

    Dividends paid

  

-

   

-

   

-

   

-

   Net gain on share repurchase

  

-

   

-

   

0.32

   

0.30

Net Asset Value per share, end of period

$

26.10

 

$

21.71

 

$

26.10

 

$

21.71

                       

Weighted common shares outstanding

  

9,309

   

9,703

   

9,533

   

10,057

Common shares outstanding, end of period

  

9,309

   

9,703

   

9,309

   

9,703

                       
 

March 31,

  

At June 30,

      

Balance Sheet Data

    

2024

       

 

2023

     

2023

      

Cash and cash equivalents

$

31,411

 

$

45,453

 

$

43,065

     

Equity securities

  

214,752

   

149,569

   

163,653

     

Lease and loan assets

  

13,983

   

20,388

   

20,152

     

Total assets

  

260,600

   

216,330

   

227,438

     

Shareholders' equity

$

243,014

 

$

210,621

 

$

219,380

     

 

Equity Investment Portfolio

 

The investment in equity securities at March 31, 2024 and fiscal year end June 30, 2023 is summarized in four industry groups below.

 

(in thousands)

        

Unrealized

      
   

 

Cost Basis

  

 

Gains

  

 

(Losses)

  

 

FMV

as of March 31, 2024

                        

Commercial / Industrial

  

$

88,589

 

$

53,901

 

$

(368)

  

$

142,122

Consumer

    

25,684

   

2,240

   

(4,390)

    

23,534

Financial

    

22,492

   

7,175

   

(158)

    

29,509

Healthcare

    

14,983

   

4,913

   

(309)

    

19,587

   

$

151,748

 

$

68,229

 

$

(5,225)

  

$

214,752

                         

as of June 30, 2023

                        

Commercial / Industrial

  

$

80,292

 

$

25,935

 

$

(5,532)

  

$

100,695

Consumer

    

28,781

   

2,621

   

(4,403)

    

26,999

Financial

    

16,476

   

2,234

   

(1,057)

    

17,653

Healthcare

    

14,983

   

3,323

   

-

   

18,306

   

$

140,532

 

$

34,113

 

$

(10,992)

  

$

163,653

                         

 

5000 Birch Street, Suite 500, Newport Beach, California 92660

Phone: 800-496-4640    949-255-0500    www.calfirstlease.com

 

 

California First Leasing Corporation

               Interim Report as of March 31, 2024

 

SCHEDULE OF INVESTMENTS

 

Industry-- Percent of Net Assets

Company

  

Shares

  

Market Value

 

Auto & Truck Dealerships-- 1.21%

Lithia Mtrs Inc

  

9,779

$

2,942,110

 

Auto Parts-- 1.41%

Allison Transmission

  

42,290

 

3,432,256

 

Banks - Diversified-- 4.73%

Wells Fargo & Co

  

106,400

 

6,166,944

 

 

JP Morgan Chase & Co

  

4,380

 

877,314

 

 

Bank of America Corporation

  

117,500

 

4,455,600

 

         

11,499,858

 

Capital Markets-- 3.99%

Goldman Sachs

  

23,200

 

9,690,408

 

Credit Services-- 1.58%

Credit Acceptance Corporation (1)

  

1,220

 

672,891

 

 

PayPal Holdings Inc (1)

  

47,100

 

3,155,229

 

         

3,828,120

 

Drug Manufacturers-- 2.96%

Bristol Myers Squibb

  

132,800

 

7,201,744

 

Entertainment-- 0.66%

Netflix.com Inc. (1)

  

2,650

 

1,609,425

 

Footwear & Accessories-- 1.47%

On Holding AG (1)

  

101,100

 

3,576,918

 

Healthcare Plans-- 5.10%

Cigna Corp New

  

30,710

 

11,153,565

 

 

United Health Group

  

2,489

 

1,231,308

 

         

12,384,873

 

Insurance - Diversified-- 0.58%

Berkshire Hathaway Inc (1)

  

3,364

 

1,414,629

 

Insurance - Reinsurance-- 1.27%

Everest Group LTD

  

7,740

 

3,076,650

 

Internet Content & Info-- 10.33%

Alphabet Inc. (1)

  

105,100

 

15,862,743

 

 

Match Group Inc (1)

  

68,500

 

2,485,180

 

 

Meta Platforms Inc

  

13,907

 

6,752,961

  

         

25,100,884

 

Internet Retail-- 0.15%

Alibaba Grp Hldg

  

4,900

 

354,564

 

Oil & Gas E & P-- 3.42%

Ovintiv Inc.

  

159,925

 

8,300,108

 

Oil & Gas Equip & Services-- 2.91%

Schlumberger LTD

  

129,000

 

7,070,490

 

Oil & Gas Integrated-- 7.69%

Exxon Mobil

  

160,800

 

18,691,392

 

Scientific & Technical Instruments-- 0.75%

Sensata Technologies

  

49,350

 

1,813,119

 

Semiconductor Equip & Materials-- 9.54%

Applied Materials

  

102,000

 

21,035,460

 

 

Teradyne Incorporated

  

19,000

 

2,143,770

  

         

23,179,230

 

Semiconductors-- 15.95%

Advanced Micro Devices Inc. (1)

  

37,100

 

6,696,179

 

 

Marvell Technology Inc

  

123,000

 

8,718,240

 

 

Micron Technology Inc

  

81,300

 

9,584,457

 

 

Qualcomm Inc

  

58,650

 

9,929,445

 

 

Taiwan Semiconductor Co

  

28,250

 

3,843,413

 

 

 

 

 

 

38,771,734

 

Specialty Business Services-- 1.96%

Global Payments Inc.

  

35,650

 

4,764,979

 

Specialty Chemicals-- 2.58%

Dupont De Nemours

  

53,940

 

4,135,580

 

 

Intl Flavors & Fragrance

  

24,750

 

2,128,253

 

 

 

 

 

 

6,263,832

 

Steel-- 2.24%

Cleveland-Cliffs Inc. (1)

  

239,000

 

5,434,860

 

Telecom Services-- 4.51%

Charter Communications Inc (1)

  

12,640

 

3,673,563

 

 

Verizon Communications

  

173,750

 

7,290,550

 

         

10,964,113

 

Thermal Coal-- 0.73%

Consol. Energy Inc

  

21,300

 

1,784,088

 

Tobacco-- 0.66%

British American Tobacco

  

52,500

 

1,601,250

 

Total-Equity Securities-- 88.37%

    

$

214,751,634

 

Bank Deposit-- 0.11%

Liberty Bank, N.A.

$

276,234

 

U.S. Treasuries-- 1.81%

U.S. Treasury Bill (5.33%)*

  

4,397,442

 

Money Market Mutual Funds-- 10.88%

JP Morgan Prim MMkt (5.39%)**

  

11,051,743

 

 

State Street Inst Liquid Rsrvs (5.41%)**

  

14,712,757

 

 

Goldman FSQ Money Market (5.23%)**

  

682,433

 

Total Short-term Investments-- 12.81%   

$

31,120,609

 

Total Investments-- 101.18%

    

$

245,872,242

 

Net Assets at March 31, 2024

    

$

243,013,723

 

(1) Non-income producing security

        

  

 *   Weighted average yield to maturity for bill maturing on 4/04/24

        

 

**   Rate is the annualized seven-day yield of the fund at period end.