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| California                                                          | 33-0964185                                |
|---------------------------------------------------------------------|-------------------------------------------|
| (State      or other jurisdiction of Incorporation or organization) | (I.R.S.      Employer Identification No.) |

| Registrant's        telephone number, including area code: | (949)      255-0500 |
|------------------------------------------------------------|---------------------|

|   | Title of Each      Class          | Name of Each Exchange      on Which Registered |
|--------|-----------------------------------|------------------------------------------------|
|   | Common      Stock, $.01 par value | The      NASDAQ Stock Market LLC               |

| Large accelerated      filer o   |    Accelerated filer o    |   Non-accelerated filer o | Smaller reporting      company þ |
|-------------------------------------------------|--------------------------------------------------------------|------------------------------------------|--------------------------------------------|

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| PART I         | PAGE                                                                                                              |
|----------------|-------------------------------------------------------------------------------------------------------------------|
|           |                                                                                                              |   |
| Item 1.        | Business                                                                                                          |   2-12 |
| Item 1A.       | Risk Factors                                                                                                      | 12-15 |
| Item 1B.       | Unresolved Staff Comments                                                                                         |   15 |
|           |                                                                                                              |   |
| Item 2.        | Properties                                                                                                        |   15 |
|           |                                                                                                              |   |
| Item 3.   | Legal Proceedings                                                                                                 |   15 |
|           |                                                                                                              |   |
| Item 4.        | Submission of Matters to a Vote of Security      Holders                                                          |   15 |
|           |                                                                                                              |   |
| PART      II   |                                                                                                              |   |
|           |                                                                                                              |   |
| Item 5.        | Market for Company's Common Equity and Related Stockholder      Matters and Issuer Purchases of Equity Securities | 16-18 |
|           |                                                                                                              |   |
| Item 6.        | Selected Financial Data                                                                                           |   18-19 |
|           |                                                                                                              |   |
| Item 7.        | Management's Discussion and Analysis of Financial Condition      and Results of Operations                        | 19-29 |
| Item 7A.       | Quantitative and Qualitative Disclosures About Market      Risk                                                   |  29-31 |
|           |                                                                                                              |   |
| Item 8.   | Financial Statements and Supplementary    Data                                                                    |  31-52 |
|           |                                                                                                              |   |
| Item 9.        | Changes in and Disagreements with Accountants on Accounting      and Financial Disclosure                         | 52 |
| Item 9A.       | Controls and Procedures                                                                                           |   52 |
| Item 9B.       | Other Information                                                                                                 |   52 |
|           |                                                                                                              |   |
| PART      III  |                                                                                                              |   |
|           |                                                                                                              |   |
| Item 10.       | Directors, Executive Officers and Corporate      Governance                                                       |   53 |
|           |                                                                                                              |   |
| Item 11.       | Executive Compensation                                                                                            |   53 |
|           |                                                                                                              |   |
| Item 12.       | Security Ownership of Certain Beneficial Owners and      Management and Related Stockholder Matters               |        53 |
|           |                                                                                                              |   |
| Item 13.       | Certain Relationships and Related Transactions, and      Director Independence                                    |   53 |
|           |                                                                                                              |   |
| Item 14.       | Principal Accountant Fees and Services                                                                            |   53 |
|           |                                                                                                              |   |
| PART      IV   |                                                                                                              |   |
|           |                                                                                                              |   |
| Item 15.  | Exhibits and Financial Statement    Schedules                                                                     |   54-55 |
|           |                                                                                                              |   |
| Signatures     |                                                                                                              |    56 |

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PART I

ITEM 1. BUSINESS

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ITEM 1A.   RISK FACTORS

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ITEM 1B.  UNRESOLVED STAFF COMMENTS

ITEM 2. PROPERTIES

ITEM 3. LEGAL PROCEEDINGS

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

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PART II

ITEM5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDERMATTERS ANDISSUER PURCHASES OF EQUITY SECURITIES

|                |   | For      the years ended |   |
|---------------------|--------|--------------------------|--------|
|                |   | June      30, 2008       |   |   | June      30, 2007 |   |
|                |   | High                     |   |   | Low |   |   | High |   |   | Low |   |
| First      Quarter  |   | $                        | 13.92  |   |   | $ | 12.22 |   |   | $ | 16.00 |   |   | $ | 13.96 |   |
| Second      Quarter |   |                     | 13.68  |   |   |   | 9.53 |   |   |   | 14.90 |   |   |   | 13.40 |   |
| Third      Quarter  |   |                     | 11.31  |   |   |   | 8.51 |   |   |   | 14.15 |   |   |   | 12.89 |   |
| Fourth      Quarter |   | $                        | 11.66  |   |   | $ | 9.14 |   |   | $ | 15.42 |   |   | $ | 12.60 |   |

|                                |   | Total      number                                                                                                                                             |   |                                                                                                                                                     |   |   Maximum      number of |
|-------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|
|                                |   | of      shares                                                                                                                                                |   | Average      price                                                                                                                                       |   | shares      that may yet be        |
| Period                              |   | Purchased                                                                                                                                                     |   | paid      per share                                                                                                                                      |   | Purchased      under the plan      |
|                                |   |                                                                                                                                                          |   |                                                                                                                                                     |   |                               |
| April      1, 2008 - April 30, 2008 |   |                           - |   |                $          - |   | 429,335                            |
| May      1, 2008 - May 31, 2008     |   |                           - |   |                $          - |   | 429,335                            |
| June      1, 2008 - June 30, 2008   |   | -                                                                                                                                                             |   |                $          - |   | 429,335                            |
|                                |   | -                                                                                                                                                             |   |                $          - |   |                               |

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|    Plan      category                                  |   | Number      of shares of commonstock      to be issued upon exerciseof outstanding options      (1) |       |   | Weighted      averageexercise      price ofoutstanding      options |   |      | Number      of shares of common stockremaining      available for futureissuance      under equitycompensation      plans(excluding shares in      first column) |   |
|-----------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|------------|--------|---------------------------------------------------------------------|--------|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Equity      compensation plans approved      by shareholders     |   |                                                                                                | 451,374    |   |                                                                | $      | 9.18      |                                                                                                                                                             |   |   | 1,318,202 |   |
| Equity      compensation plans not      approved by shareholders |   |                                                                                                | None  |   |                                                                |   | N/A  |                                                                                                                                                             |   |   | N/A  |   |
| Total                                                                 |   |                                                                                                | 451,374    |   |                                                                | $      | 9.18      |                                                                                                                                                             |   |   | 1,318,202 | (1) |

| (1)   | The      maximum number of shares that may be issued under the equity compensation      plan increases each year by an amount equal to 1% of the total number of      issued and outstanding shares of Common Stock as of June 30 of the fiscal      year immediately preceding such fiscalyear. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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ITEM 6. SELECTED FINANCIAL DATA

| INCOME      STATEMENT DATA                                                  |   | YEARS      ENDED JUNE 30, |   |
|-----------------------------------------------------------------------------|--------|---------------------------|--------|
|      (in      thousands, except per share amounts) |   | 2008                      |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |   | 2004 |   |
|                                                                        |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Direct      finance and loan income                                         |   | $                         | 25,927 |   |   | $ | 24,846 |   |   | $ | 18,861 |   |   | $ | 15,496 |   |   | $ | 14,813 |   |
| Interest      and investment income                                         |   |                      | 1,914  |   |   |   | 2,057 |   |   |   | 1,329 |   |   |   | 1,009 |   |   |   | 578 |   |
|     Total      direct finance, loan and interest income |   |                      | 27,841 |   |   |   | 26,903 |   |   |   | 20,190 |   |   |   | 16,505 |   |   |   | 15,391 |   |
| Interest      expense on deposits                                           |   |                      | 5,735  |   |   |   | 4,706 |   |   |   | 2,593 |   |   |   | 1,054 |   |   |   | 430 |   |
| Provision      for credit losses                                            |   |                      | 1,165  |   |   |   | -120 |   |   |   | 482 |   |   |   | 359 |   |   |   | 164 |   |
| Net      direct finance, loan and interest income                           |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           after provision for credit losses             |   |                      | 20,941 |   |   |   | 22,317 |   |   |   | 17,115 |   |   |   | 15,092 |   |   |   | 14,797 |   |
|                                                                        |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      and sales-type lease income                                  |   |                      | 2,810  |   |   |   | 4,430 |   |   |   | 4,498 |   |   |   | 4,379 |   |   |   | 5,255 |   |
| Gain      on sale of leases and leased property                             |   |                      | 3,366  |   |   |   | 3,561 |   |   |   | 10,390 |   |   |   | 8,961 |   |   |   | 9,625 |   |
| Other      income (loss)                                                    |   |                      | (59    | ) |   |   | 1,171 |   |   |   | 780 |   |   |   | 1,091 |   |   |   | 930 |   |
| Total      other income                                                     |   |                      | 6,117  |   |   |   | 9,162 |   |   |   | 15,668 |   |   |   | 14,431 |   |   |   | 15,810 |   |
|                                                                        |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross      profit                                                           |   |                      | 27,058 |   |   |   | 31,479 |   |   |   | 32,783 |   |   |   | 29,523 |   |   |   | 30,607 |   |
| Selling,      general and administrative expenses                           |   |                      | 15,888 |   |   |   | 15,466 |   |   |   | 15,278 |   |   |   | 16,039 |   |   |   | 15,388 |   |
| Earnings      before income taxes                                           |   |                      | 11,170 |   |   |   | 16,013 |   |   |   | 17,505 |   |   |   | 13,484 |   |   |   | 15,219 |   |
| Income      taxes                                                           |   |                      | 4,189  |   |   |   | 6,125 |   |   |   | 6,783 |   |   |   | 5,057 |   |   |   | 5,859 |   |
| Net      earnings                                                           |   | $                         | 6,981  |   |   | $ | 9,888 |   |   | $ | 10,722 |   |   | $ | 8,427 |   |   | $ | 9,360 |   |
|                                                                        |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted      earnings per share                                             |   | $                         | 0.61   |   |   | $ | 0.86 |   |   | $ | 0.94 |   |   | $ | 0.74 |   |   | $ | 0.84 |   |
| Diluted      common shares outstanding                                      |   |                      | 11,507 |   |   |   | 11,534 |   |   |   | 11,461 |   |   |   | 11,340 |   |   |   | 11,190 |   |
|                                                                        |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      dividends per share                                               |   | $                         | 0.48   |   |   | $ | 0.46 |   |   | $ | 0.42 |   |   | $ | 2.30 |   |   | $ | 0.40 |   |
| Dividend      payout ratio                                                  |   |                      | 77.5   | % |   |   | 52.1 | % |   |   | 43.6 | % |   |   | 302.6 | % |   |   | 46.9 | % |
| Return      on average assets                                               |   |                      | 2.0    | % |   |   | 3.1 | % |   |   | 3.7 | % |   |   | 3.1 | % |   |   | 3.4 | % |
| Return      on average equity                                               |   |                      | 3.5    | % |   |   | 5.1 | % |   |   | 5.7 | % |   |   | 4.3 | % |   |   | 4.7 | % |

| BALANCE      SHEET DATA                                                     |   | AS      OF JUNE 30, |    |
|-----------------------------------------------------------------------------|--------|---------------------|---------|
|      (in      thousands, except per share amounts) |   | 2008                |    |   | 2007 |   |   | 2006 |   |   | 2005 |   |   | 2004 |   |
|                                                                        |   |                |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and liquid securities                                             |   | $                   | 77,056  |   |   | $ | 47,630 |   |   | $ | 41,277 |   |   | $ | 44,226 |   |   | $ | 68,275 |   |
| Net      investment in leases and loans                                     |   |                | 262,375 |   |   |   | 231,830 |   |   |   | 213,956 |   |   |   | 187,432 |   |   |   | 153,075 |   |
| Total      assets                                                           |   |                | 386,594 |   |   |   | 329,187 |   |   |   | 314,355 |   |   |   | 278,492 |   |   |   | 273,814 |   |
|                                                                        |   |                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand,      savings and time deposits                                      |   |                | 156,239 |   |   |   | 105,470 |   |   |   | 89,166 |   |   |   | 54,098 |   |   |   | 24,600 |   |
| Non-recourse      debt                                                      |   |                | 9,274   |   |   |   | 6,239 |   |   |   | 8,424 |   |   |   | 8,405 |   |   |   | 17,541 |   |
| Stockholders'      equity                                                   |   | $                   | 202,455 |   |   | $ | 197,667 |   |   | $ | 193,527 |   |   | $ | 186,738 |   |   | $ | 203,399 |   |
|                                                                        |   |                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity      to total assets ratio                                           |   |                | 52.4    | % |   |   | 60.1 | % |   |   | 61.6 | % |   |   | 67.1 | % |   |   | 74.3 | % |
| Book      value per common share                                            |   | $                   | 17.70   |   |   | $ | 17.75 |   |   | $ | 17.34 |   |   | $ | 16.83 |   |   | $ | 18.43 |   |

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS

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| (in      thousands)                               |   | 2008      compared to 2007 |   |   | 2007      compared to 2006 |   |
|---------------------------------------------------|--------|----------------------------|--------|--------|----------------------------|--------|
|                                              |   | Volume                     |   |   | Rate                       |   |   | Total |   |   | Volume |   |   | Rate |   |   | Total |   |
| Direct      finance, loan and interest income     |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      investment in leases                     |   | $                          | 743    |   |                       | $      | (407 | ) |   | $ | 336 |   |   | $ | 2,484 |   |   | $ | 3,501 |   |   | $ | 5,985 |   |
| Commercial      loans                             |   |                       | 745    |   |                       |   | - |   |   |   | 745 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Discounted      lease rentals                     |   |                       | (99    | )      |                       |   | (26 | ) |   |   | (125 | ) |   |   | 8 |   |   |   | (5 | ) |   |   | 3 |   |
| Federal      funds sold                           |   |                       | 419    |   |                       |   | (533 | ) |   |   | (114 | ) |   |   | 294 |   |   |   | 227 |   |   |   | 521 |   |
| Investment      securities                        |   |                       | 136    |   |                       |   | (33 | ) |   |   | 103 |   |   |   | 5 |   |   |   | 7 |   |   |   | 12 |   |
| Interest-earning      deposits with banks         |   |                       | (109   | )      |                       |   | (23 | ) |   |   | (132 | ) |   |   | 12 |   |   |   | 183 |   |   |   | 195 |   |
| Total      finance, loan and interest income      |   |                       | 1,835  |   |                       |   | (1,022 | ) |   |   | 813 |   |   |   | 2,803 |   |   |   | 3,913 |   |   |   | 6,716 |   |
|                                              |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense                             |   |                       |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-recourse      debt                            |   |                       | (99    | )      |                       |   | (26 | ) |   |   | (125 | ) |   |   | 8 |   |   |   | (5 | ) |   |   | 3 |   |
| Demand      and savings deposits                  |   |                       | 183    |   |                       |   | (65 | ) |   |   | 118 |   |   |   | (167 | ) |   |   | 71 |   |   |   | (96 | ) |
| Time      deposits                                |   |                       | 899    |   |                       |   | 12 |   |   |   | 911 |   |   |   | 1,364 |   |   |   | 845 |   |   |   | 2,209 |   |
| Total      interest expense                       |   |                       | 983    |   |                       |   | (78 | ) |   |   | 904 |   |   |   | 1,205 |   |   |   | 911 |   |   |   | 2,116 |   |
| Net      direct finance, loan and interest income |   | $                          | 852    |   |                       | $      | (943 | ) |   | $ | (91 | ) |   | $ | 1,598 |   |   | $ | 3,002 |   |   | $ | 4,600 |   |

----

|                                                                              |   |          |     Year      ended June 30, 2008 |   |          | Year      ended June 30, 2007           |   |   | Year      ended June 30, 2006 |
|-----------------------------------------------------------------------------------|--------|---------------|-------------------------------------------------------|--------|---------------|-----------------------------------------|--------|--------|-------------------------------|
|                                                                              |   |          | Average                                               |   |          |                                    |   | Yield/ |                          |   | Average |   |   |   |   | Yield/ |   |   | Average |   |   |   |   | Yield/ |
| Assets                                                                            |   |          | Balance                                               |   |          | Interest                                |   | Rate   |                          |   | Balance |   |   | Interest |   | Rate |   |   | Balance |   |   | Interest |   | Rate |
| Interest-earning      assets                                                      |   |          |                                                  |   |          |                                    |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Interest-earning      deposits with banks                       |   | $   |   22,437                                    |   | $   |       694 |   | 3.1%   |                          | $   |    25,859 |   | $   |     826 |   | 3.2% |   | $   |   25,376 |   | $   |      631 |   | 2.5% |
|    Federal      funds sold                                         |   |          | 29,145                                                |   |          | 1,043                                   |   | 3.6%   |                          |   | 21,398 |   |   | 1,157 |   | 5.4% |   |   | 14,619 |   |   | 636 |   | 4.4% |
|    Investment      securities                                      |   |          | 3,846                                                 |   |          | 177                                     |   | 4.6%   |                          |   | 1,350 |   |   | 74 |   | 5.5% |   |   | 1,258 |   |   | 62 |   | 4.9% |
|    Commercial      loans                                           |   |          | 9,973                                                 |   |          | 745                                     |   | 7.5%   |                          |   | - |   |   | - |   | - |   |   | - |   |   | - |   | - |
|    Net      investment in leases,                                  |   |          |                                                  |   |          |                                    |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       including      discounted lease rentals (1,2) |   |          | 238,602                                               |   |          | 25,528                                  |   | 10.7%  |                          |   | 233,403 |   |   | 25,317 |   | 10.8% |   |   | 206,972 |   |   | 19,329 |   | 9.3% |
| Total      interest-earning assets                                                |   |          | 304,003                                               |   |          | 28,187                                  |   | 9.3%   |                          |   | 282,010 |   |   | 27,374 |   | 9.7% |   |   | 248,225 |   |   | 20,658 |   | 8.3% |
| Other      assets                                                                 |   |          | 39,658                                                |   |          |                                    |   |   |                          |   | 38,267 |   |   |   |   |   |   |   | 41,780 |   |   |   |   |   |
|                                                                              |   | $   |  343,661                                         |   |          |                                    |   |   |                          | $   |  320,277 |   |   |   |   |   |   | $   |  290,005 |   |   |   |   |   |
|                                                                              |   |          |                                                  |   |          |                                    |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and      Shareholders' Equity                                         |   |          |                                                  |   |          |                                    |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      liabilities                                                 |   |          |                                                  |   |          |                                    |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Demand      and savings deposits                                |   | $   |    11,091                              |   |          | 436                                     |   | 3.9%   |                          | $   |    7,041 |   |   | 318 |   | 4.5% |   | $   |   11,817 |   |   | 414 |   | 3.5% |
|    Time      deposits                                              |   |          | 107,005                                               |   |          | 5,299                                   |   | 5.0%   |                          |   | 88,809 |   |   | 4,388 |   | 4.9% |   |   | 54,627 |   |   | 2,179 |   | 4.0% |
|    Non-recourse      debt                                          |   |          | 5,808                                                 |   |          | 346                                     |   | 6.0%   |                          |   | 7,365 |   |   | 471 |   | 6.4% |   |   | 7,239 |   |   | 468 |   | 6.5% |
| Total      interest-bearing liabilities                                           |   |          | 123,904                                               |   |          | 6,081                                   |   | 4.9%   |                          |   | 103,215 |   |   | 5,177 |   | 5.0% |   |   | 73,683 |   |   | 3,061 |   | 4.2% |
| Other      liabilities                                                            |   |          | 19,280                                                |   |          |                                    |   |   |                          |   | 20,784 |   |   |   |   |   |   |   | 26,562 |   |   |   |   |   |
| Shareholders'      equity                                                         |   |          | 200,477                                               |   |          |                                    |   |   |                          |   | 196,278 |   |   |   |   |   |   |   | 189,760 |   |   |   |   |   |
|                                                                              |   | $   |  343,661                                         |   |          |                                    |   |   |                          | $   |  320,277 |   |   |   |   |   |   |  $  |  290,005 |   |   |   |   |   |
| Net      interest income                                                          |   |          |                                                  |   | $   |  22,106                            |   |   |                          |   |   |   | $   |  22,197 |   |   |   |   |   |   | $   |  17,597 |   |   |
| Net      direct finance and interest income to                                    |   |          |                                                  |   |          |                                    |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    average      interest-earning assets                            |   |          |                                                  |   |          |                                    |   | 7.3%   |                          |   |   |   |   |   |   | 7.9% |   |   |   |   |   |   |   | 7.1% |
| Average      interest-earning assets over                                         |   |          |                                                  |   |          |                                    |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    average      interest-bearing liabilities                       |   |          |                                                  |   |          |                                    |   | 245.4% |                          |   |   |   |   |   |   | 273.2% |   |   |   |   |   |   |   | 336.9% |

| (1)   | Direct      finance income and interest expense on average discounted lease rentals      and non-recourse debt of $5.9 million, $7.4 million and $7.2 million at      June 30, 2008, 2007 and 2006, respectively, offset each other and do not      contribute to the Company’s net interest and finance    income. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Average      balance is based on month-end balances, includes non-accrual leases, and      is presented net of unearnedincome. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                   |   |      |   |   | Principal      Balance Due in |   |
|--------------------------------------------------------|--------|-----------|--------|--------|-------------------------------|--------|
|                                                   |   | Principal |   |   | One      Year                 |   |   | One      to |   |   | Due      After |   |
| Loan      Type                                         |   | Balance   |   |   | Or      less                  |   |   | Five      Years |   |   | Five      Years |   |
| (dollars      in thousands)                            |   |      |   |   |                          |   |   |   |   |   |   |   |
| Commercial      Loans                                  |   | $         | 31,457 |   |                          | $      | 773 |   |   | $ | 10,973 |   |   | $ | 19,711 |   |
| Commercial      Real Estate Loans                      |   |      | 8,829  |   |                          |   | 273 |   |   |   | 1,249 |   |   |   | 7,307 |   |
| Revolving      Lines of Credit                         |   |      | 3,300  |   |                          |   | 3,300 |   |   |   | - |   |   |   | - |   |
|                                                   |   |      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Principal      balance outstanding                     |   |      | 43,586 |   |                          | $      | 4,346 |   |   | $ | 12,222 |   |   | $ | 27,018 |   |
| Deferred      fee income and discounts,                |   |      |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
|      net      of direct costs |   |      | (1,374 | )      |                          |   |   |   |   |   |   |   |   |   |   |   |
| Net      commercial loans                              |   | $         | 42,212 |   |                          |   |   |   |   |   |   |   |   |   |   |   |

|                                                                     |   | June      30,       |   |
|--------------------------------------------------------------------------|--------|---------------------|--------|
| Non-performing      Leases                                               |   | 2008                |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |   | 2004 |   |
|                                                                     |   | (in      thousands) |   |
| Non-accrual      leases                                                  |   | $                   | 2,132  |   |   | $ | 1,133 |   |   | $ | 1,010 |   |   | $ | 945 |   |   | $ | 2,011 |   |
| Restructured      leases                                                 |   |                | 398    |   |   |   | 452 |   |   |   | 996 |   |   |   | - |   |   |   | 354 |   |
| Leases      past due 90 days (other than above)                          |   |                | 39     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|      Total      non-performing assets           |   | $                   | 2,569  |   |   | $ | 1,585 |   |   | $ | 2,006 |   |   | $ | 945 |   |   | $ | 2,365 |   |
| Non-performing      assets as % of net investment                        |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      in      leases and loans before allowances |   |                | 1.0    | % |   |   | 0.7 | % |   |   | 0.9 | % |   |   | 0.5 | % |   |   | 1.5 | % |

----

>  

| Years Ended June 30,                                                                            |   |                        | 2008    |   |   | 2007   |    |   | 2006   |   |    | 2005   |   |   | 2004    |   |
|-------------------------------------------------------------------------------------------------|--------|-----------------------------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
|                                                                                            |   | (dollars      in thousands) |    |
| Property      acquired for transactions in process before allowance                             |   | $                           | 29,063  |   |   | $      | 34,788  |   |   | $      | 41,748  |   |   | $      | 34,120  |   |   | $ | 30,558 |   |
| Net      investment in leases and loans before allowance                                        |   |                        | 266,258 |   |   |   | 235,106 |   |   |   | 217,525 |   |   |   | 190,859 |   |   |   | 156,458 |   |
|   Net      investment in “risk assets”                                    |   | $                           | 295,321 |   |   | $      | 269,894 |   |   | $      | 259,273 |   |   | $      | 224,979 |   |   | $ | 187,016 |   |
|                                                                                            |   |                        |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Allowance      for credit losses at beginning of year                                           |   | $                           | 3,344   |   |   | $      | 3,637   |   |   | $      | 3,495   |   |   | $      | 3,461   |   |   | $ | 4,291 |   |
|      Charge-off      of lease receivables and transactions in process  |   |                        | (709    | )      |   |   | (850    | )      |   |   | (391    | )      |   |   | (377    | )      |   |   | (1,359 | ) |
|      Recovery      of amounts previously written off                   |   |                        | 121     |   |   |   | 677     |   |   |   | 51      |   |   |   | 52      |   |   |   | 365 |   |
|      Provision      for credit losses                                  |   |                        | 1,165   |   |   |   | (120    | )      |   |   | 482     |   |   |   | 359     |   |   |   | 164 |   |
| Allowance      for credit losses at end of year                                                 |   | $                           | 3,921   |   |   | $      | 3,344   |   |   | $      | 3,637   |   |   | $      | 3,495   |   |   | $ | 3,461 |   |
| Allowance      for credit losses as percent of net                                              |   |                        |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|     investment      in leases and loans before allowances                   |   |                        | 1.5     | %      |   |   | 1.4     | %      |   |   | 1.7     | %      |   |   | 1.8     | %      |   |   | 2.2 | % |
| Allowance      for credit losses as percent of net investment in “risk      assets” |   |                        | 1.3     | %      |   |   | 1.2     | %      |   |   | 1.4     | %      |   |   | 1.6     | %      |   |   | 1.9 | % |

----

| (dollars      in thousands)               |   | Years      ended June 30, |   |
|-------------------------------------------|--------|---------------------------|--------|
|                                      |   | 2008                      |   |   | 2007 |   |   | 2006 |   |
|                                      |   | Average                   |   |   | Average |   |   | Average |   |   | Average |   |   | Average |   |   | Average |   |
|                                      |   | Balance                   |   |   | Rate      Paid |   |   | Balance |   |   | Rate      Paid |   |   | Balance |   |   | Rate      Paid |   |
| Non-interest      bearing demand deposits |   | $                         | 1,480  |   |   |   | n/a |   |   | $ | 1,383 |   |   |   | n/a |   |   | $ | 1,202 |   |   |   | n/a |   |
| Interest-bearing      demand deposits     |   |                      | 150    |   |   |   | 0.49 | % |   |   | 70 |   |   |   | 0.50 | % |   |   | 48 |   |   |   | 0.50 | % |
| Savings      deposits                     |   |                      | 10,941 |   |   |   | 3.97 | % |   |   | 6,971 |   |   |   | 4.55 | % |   |   | 11,769 |   |   |   | 3.51 | % |
| Time      deposits less than $100,000     |   |                      | 52,795 |   |   |   | 4.92 | % |   |   | 45,010 |   |   |   | 4.91 | % |   |   | 31,024 |   |   |   | 3.94 | % |
| Time      deposits, $100,000 or more      |   | $                         | 54,210 |   |   |   | 4.98 | % |   | $ | 43,799 |   |   |   | 4.97 | % |   | $ | 23,603 |   |   |   | 4.05 | % |

----

|                     |   | June      30, 2008  |     |
|--------------------------|--------|---------------------|----------|
|                     |   | Less      than      |     |   | Greater      than |   |
|                     |   |                | $100,000 |   |   |   | $100,000 |   |
|                     |   | (in      thousands) |     |
| Under      3 months      |   | $                   | 10,472   |   |   | $ | 13,154 |   |
| 3 –      6 months  |   |                | 3,735    |   |   |   | 4,256 |   |
| 6 –      12 months |   |                | 31,952   |   |   |   | 29,354 |   |
| After      12 months     |   |                | 12,574   |   |   |   | 10,855 |   |
|                     |   |                |     |   |   |   |   |   |
|                     |   | $                   | 58,733   |   |   | $ | 57,619 |   |

----

|                                                       |   | Due      by Period          |    |
|------------------------------------------------------------|--------|-----------------------------|---------|
|                                                       |   |                        |    |   | Less      Than |   |   |   |   |   | After |   |
| Contractual      Obligations                               |   | Total                       |    |   | 1      Year |   |   | 1-5      Years |   |   | 5      Years |   |
|                                                       |   | (dollars      in thousands) |    |
| Time      deposits less than $100,000                      |   | $                           | 58,733  |   |   | $ | 46,159 |   |   | $ | 12,574 |   |   | $ | - |   |
| Time      deposits $100,000 or more                        |   |                        | 57,619  |   |   |   | 46,764 |   |   |   | 10,855 |   |   |   | - |   |
| Deposits      without a stated maturity                    |   |                        | 39,887  |   |   |   | 39,887 |   |   |   | - |   |   |   | - |   |
| Operating      lease rental expense                        |   |                        | 4,704   |   |   |   | 371 |   |   |   | 4,333 |   |   |   | - |   |
| Commercial      loan commitments                           |   |                        | 10,404  |   |   |   | 10,404 |   |   |   | - |   |   |   | - |   |
| Lease      property purchases (1), (2)                     |   |                        | 68,237  |   |   |   | 68,237 |   |   |   | - |   |   |   | - |   |
|     Total      contractual commitments |   | $                           | 239,584 |   |   | $ | 211,822 |   |   | $ | 27,762 |   |   | $ | - |   |
|                                                       |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Contractual Cash      Receipts                             |   |                        |    |
| Lease      receivable & loan principal payments (3)    |   | $                           | 294,318 |   |   | $ | 116,065 |   |   | $ | 150,422 |   |   | $ | 27,831 |   |
| Cash      and cash equivalents                             |   |                        | 71,790  |   |   |   | 71,790 |   |   |   | - |   |   |   | - |   |
|   Total      projected cash availability         |   |                        | 366,108 |   |   |   | 187,855 |   |   |   | 150,422 |   |   |   | 27,831 |   |
|                                                       |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      projected cash inflow                             |   | $                           | 126,524 |   |   | $ | (23,967 | ) |   | $ | 122,660 |   |   | $ | 27,831 |   |

|   |   |
|--------|--------|

| (1)   | Disbursements      to purchase property on approved leases or loan commitments are estimated      to be completed within one year, but it is likely that some portion could      be deferred to fiscal 2010 or neverfunded. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Does      not include amounts to be received related to transactions-in-process      already funded and the unfunded lease property purchases included above,      which together aggregate to $100.2 million at June 30, 2008. The timing      and amount of repayment cannot be determined until a lease      commences. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Based      upon contractual cash flows; amounts could differ due to prepayments,      lease restructures, charge-offs and other  factors. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------|

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKETRISK

----

|                                   |   | 3      Months |    |   | Over      3 to |   |    | Over      1 Through |   |   | Over         |   |   | Non-rate  |    |   |   |   |
|----------------------------------------|--------|---------------|---------|--------|----------------|--------|---------|---------------------|--------|--------|--------------|--------|--------|-----------|---------|--------|--------|--------|
| (in      thousands)                    |   | or      Less  |    |   | 12      Months |   |    | 5      years        |   |   | 5      years |   |   | Sensitive |    |   | Total  |   |
|                                   |   |          |    |   |           |   |    |                |   |   |         |   |   |      |    |   |   |   |
| Rate Sensitive Assets      (RSA):      |   |          |    |   |           |   |    |                |   |   |         |   |   |      |    |   |   |   |
| Cash      due from banks               |   | $             | 38,355  |   |           | $      | -       |                |   | $      | -            |   |   | $         | -       |   |   | $      | - |   |   | $ | 38,355 |   |
| Fed      funds sold                    |   |          | 33,435  |   |           |   | -       |                |   |   | -            |   |   |      | -       |   |   |   | - |   |   |   | 33,435 |   |
| Investment      securities             |   |          | 3,770   |   |           |   | -       |                |   |   | -            |   |   |      | 2,590   |   |   |   | - |   |   |   | 6,360 |   |
| Net      investment in leases          |   |          | 30,235  |   |           |   | 81,483  |                |   |   | 138,201      |   |   |      | 814     |   |   |   | (30,570 | ) |   |   | 220,163 |   |
| Commercial      loans                  |   |          | 37,197  |   |           |   | 174     |                |   |   | 932          |   |   |      | 5,283   |   |   |   | (1,374 | ) |   |   | 42,212 |   |
| Non-interest      earning assets       |   |          | -       |   |           |   | -       |                |   |   | -            |   |   |      | -       |   |   |   | 46,069 |   |   |   | 46,069 |   |
| Totals                                 |   | $             | 142,992 |   |           | $      | 81,657  |                |   | $      | 139,133      |   |   | $         | 8,687   |   |   | $      | 14,125 |   |   | $ | 386,594 |   |
| Cumulative      total for RSA          |   | $             | 142,992 |   |           | $      | 224,649 |                |   | $      | 363,782      |   |   | $         | 372,469 |   |   |   |   |   |   |   |   |   |
|                                   |   |          |    |   |           |   |    |                |   |   |         |   |   |      |    |   |   |   |   |   |   |   |   |   |
| Rate Sensitive      Liabilities (RSL): |   |          |    |   |           |   |    |                |   |   |         |   |   |      |    |   |   |   |   |   |   |   |   |   |
| Demand      and savings deposits       |   | $             | 39,887  |   |           | $      | -       |                |   | $      | -            |   |   | $         | -       |   |   | $      | - |   |   | $ | 39,887 |   |
| Time      deposits                     |   |          | 23,626  |   |           |   | 69,370  |                |   |   | 23,356       |   |   |      | -       |   |   |   | - |   |   |   | 116,352 |   |
| Non-interest      bearing liabilities  |   |          | -       |   |           |   | -       |                |   |   | -            |   |   |      | -       |   |   |   | 27,900 |   |   |   | 27,900 |   |
| Stockholders'      equity              |   |          | -       |   |           |   | -       |                |   |   | -            |   |   |      | -       |   |   |   | 202,455 |   |   |   | 202,455 |   |
| Totals                                 |   | $             | 63,513  |   |           | $      | 69,370  |                |   | $      | 23,356       |   |   | $         | -       |   |   | $      | 230,355 |   |   | $ | 386,594 |   |
| Cumulative      total for RSL          |   | $             | 63,793  |   |           | $      | 132,883 |                |   | $      | 156,239      |   |   | $         | 156,239 |   |   |   |   |   |   |   |   |   |
|                                   |   |          |    |   |           |   |    |                |   |   |         |   |   |      |    |   |   |   |   |   |   |   |   |   |
| Interest      rate sensitivity gap     |   | $             | 79,479  |   |           | $      | 12,287  |                |   | $      | 115,777      |   |   | $         | 8,687   |   |   | $      | (216,230 | ) |   |   |   |   |
| Cumulative      GAP                    |   | $             | 79,479  |   |           | $      | 91,766  |                |   | $      | 207,543      |   |   | $         | 216,230 |   |   |   |   |   |   |   |   |   |
|                                   |   |          |    |   |           |   |    |                |   |   |         |   |   |      |    |   |   |   |   |   |   |   |   |   |
| RSA      divided by RSL (cumulative)   |   |          | 225.1   | %      |           |   | 169.1   | %                   |   |   | 232.8        | %      |   |      | 238.4   | %      |   |   |   |   |   |   |   |   |
| Cumulative      GAP / total assets     |   |          | 20.6    | %      |           |   | 23.7    | %                   |   |   | 53.7         | %      |   |      | 55.9    | %      |   |   |   |   |   |   |   |   |

----

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

|                                                                                                       | Page      Number |
|------------------------------------------------------------------------------------------------------------|------------------|
| Report      of Independent Registered Public Accounting Firm                                               | 32               |
|                                                                                                       |             |
| Consolidated Balance      Sheets at June 30, 2008 and 2007                                            | 33               |
|                                                                                                       |             |
| Consolidated      Statements of Earnings for the years ended June      30, 2008, 2007 and 2006        | 34               |
|                                                                                                       |             |
| Consolidated      Statements of Stockholders' Equity for the years      ended June 30, 2008, 2007 and 2006 | 35               |
|                                                                                                       |             |
| Consolidated      Statements of Cash Flows for the years ended      June 30, 2008, 2007 and 2006           | 36               |
|                                                                                                       |             |
| Notes to Consolidated      Financial Statements                                                            | 37-52            |

----

----

|                                                                                                                                                                          |   | June      30, |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|-----------|
| ASSETS                                                                                                                                                                        |   | 2008          |      |   | 2007 |   |
|                                                                                                                                                                          |   |          |      |   |   |   |
| Cash      and due from banks                                                                                                                                                  |   | $             | 38,355    |   |   | $ | 20,126 |   |
| Federal      funds sold and securities purchased under                                                                                                                        |   |          |      |   |   |   |   |   |
|   agreements      to resell                                                                                                                                         |   |          | 33,435    |   |   |   | 24,390 |   |
|       Total      cash and cash equivalents (Note 1)                                                                                             |   |          | 71,790    |   |   |   | 44,516 |   |
| Investment      securities (Note 2)                                                                                                                                           |   |          | 6,360     |   |   |   | 4,169 |   |
| Receivables      (Note 3)                                                                                                                                                     |   |          | 1,946     |   |   |   | 1,345 |   |
| Property      acquired for transactions in process (Note 1,4)                                                                                                                 |   |          | 29,046    |   |   |   | 34,720 |   |
| Net      investment in leases and loans (Note 4)                                                                                                                              |   |          | 262,375   |   |   |   | 231,830 |   |
| Property      on operating leases, less accumulated   depreciation      of $77 (2008) and $21 (2007)                                                           |   |          |  333 |   |   |   |  303 |   |
| Income      tax receivable (Note 8)                                                                                                                                           |   |          | 4,239     |   |   |   | 4,331 |   |
| Other      assets                                                                                                                                                             |   |          | 1,231     |   |   |   | 1,734 |   |
| Discounted      lease rentals assigned to lenders (Note 4)                                                                                                                    |   |          | 9,274     |   |   |   | 6,239 |   |
|                                                                                                                                                                          |   |          |      |   |   |   |   |   |
|                                                                                                                                                                          |   | $             | 386,594   |   |   | $ | 329,187 |   |
|                                                                                                                                                                          |   |          |      |   |   |   |   |   |
| LIABILITIES AND      STOCKHOLDERS’ EQUITY                                                                                                                               |   |          |      |   |   |   |   |   |
|                                                                                                                                                                          |   |          |      |   |   |   |   |   |
| Liabilities:                                                                                                                                                                  |   |          |      |   |   |   |   |   |
|   Accounts      payable                                                                                                                                             |   | $             | 2,422     |   |   | $ | 3,865 |   |
|   Accrued      liabilities                                                                                                                                          |   |          | 4,152     |   |   |   | 3,695 |   |
|   Demand      and savings deposits                                                                                                                                  |   |          | 39,887    |   |   |   | 8,292 |   |
|   Time      certificates of deposit                                                                                                                                 |   |          | 116,352   |   |   |   | 97,178 |   |
|   Lease      deposits                                                                                                                                               |   |          | 5,059     |   |   |   | 4,771 |   |
|   Non-recourse      debt (Note 4)                                                                                                                                   |   |          | 9,274     |   |   |   | 6,239 |   |
|   Deferred      income taxes, net (Note 8)                                                                                                                          |   |          | 6,993     |   |   |   | 7,480 |   |
|                                                                                                                                                                          |   |          |      |   |   |   |   |   |
|                                                                                                                                                                          |   |          | 184,139   |   |   |   | 131,520 |   |
|                                                                                                                                                                          |   |          |      |   |   |   |   |   |
| Commitments      and contingencies (Note 11)                                                                                                                                  |   |          |      |   |   |   |   |   |
|                                                                                                                                                                          |   |          |      |   |   |   |   |   |
| Stockholders'      equity (Note 9):                                                                                                                                           |   |          |      |   |   |   |   |   |
|   Preferred      stock; 2,500,000 shares authorized; none issued                                                                                                    |   |          | -         |   |   |   | - |   |
|   Common      stock; $.01 par value; 20,000,000 shares authorized;     11,440,725      (2008) and 11,138,425 (2007) issued and outstanding |   |          |  114 |   |   |   |  111 |   |
|   Additional      paid in capital                                                                                                                                   |   |          | 7,003     |   |   |   | 4,091 |   |
|   Retained      earnings                                                                                                                                            |   |          | 195,611   |   |   |   | 193,485 |   |
|   Other      comprehensive loss, net of tax                                                                                                                         |   |          | (273      | ) |   |   | (20 | ) |
|                                                                                                                                                                          |   |          | 202,455   |   |   |   | 197,667 |   |
|                                                                                                                                                                          |   | $             | 386,594   |   |   | $ | 329,187 |   |

----

|                                                                                                                                                |   | Years      ended June 30, |       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|------------|
|                                                                                                                                                |   | 2008                      |       |   | 2007 |   |   | 2006 |   |
|                                                                                                                                                |   |                      |       |   |   |   |   |   |   |
| Direct      finance and loan income                                                                                                                 |   | $                         | 25,927     |   |   | $ | 24,846 |   |   | $ | 18,861 |   |
| Interest      and investment income                                                                                                                 |   |                      | 1,914      |   |   |   | 2,057 |   |   |   | 1,329 |   |
|                                                                                                                                                |   |                      |       |   |   |   |   |   |   |   |   |   |
|    Total      direct finance, loan and interest income                                                                               |   |                      | 27,841     |   |   |   | 26,903 |   |   |   | 20,190 |   |
|                                                                                                                                                |   |                      |       |   |   |   |   |   |   |   |   |   |
| Interest      expense on deposits                                                                                                                   |   |                      | 5,735      |   |   |   | 4,706 |   |   |   | 2,593 |   |
| Provision      for credit losses                                                                                                                    |   |                      | 1,165      |   |   |   | (120 | ) |   |   | 482 |   |
|    Net      direct finance, loan and interest income after       provision      for credit losses |   |                      | 20,941     |   |   |   | 22,317 |   |   |   | 17,115 |   |
|                                                                                                                                                |   |                      |       |   |   |   |   |   |   |   |   |   |
| Other      income                                                                                                                                   |   |                      |       |   |   |   |   |   |   |   |   |   |
|     Operating      and sales-type lease income                                                                                  |   |                      | 2,810      |   |   |   | 4,430 |   |   |   | 4,498 |   |
|     Gain      on sale of leases and leased property                                                                             |   |                      | 3,366      |   |   |   | 3,561 |   |   |   | 10,390 |   |
|     Other      income (loss)                                                                                                    |   |                      | (59        | ) |   |   | 1,171 |   |   |   | 780 |   |
|                                                                                                                                                |   |                      |       |   |   |   |   |   |   |   |   |   |
|         Total      other income                                                                             |   |                      | 6,117      |   |   |   | 9,162 |   |   |   | 15,668 |   |
|                                                                                                                                                |   |                      |       |   |   |   |   |   |   |   |   |   |
| Gross      profit                                                                                                                                   |   |                      | 27,058     |   |   |   | 31,479 |   |   |   | 32,783 |   |
|                                                                                                                                                |   |                      |       |   |   |   |   |   |   |   |   |   |
| Selling,      general and administrative expenses                                                                                                   |   |                      | 15,888     |   |   |   | 15,466 |   |   |   | 15,278 |   |
|                                                                                                                                                |   |                      |       |   |   |   |   |   |   |   |   |   |
| Earnings      before income taxes                                                                                                                   |   |                      | 11,170     |   |   |   | 16,013 |   |   |   | 17,505 |   |
|                                                                                                                                                |   |                      |       |   |   |   |   |   |   |   |   |   |
| Income      taxes                                                                                                                                   |   |                      | 4,189      |   |   |   | 6,125 |   |   |   | 6,783 |   |
|                                                                                                                                                |   |                      |       |   |   |   |   |   |   |   |   |   |
| Net      earnings                                                                                                                                   |   | $                         | 6,981      |   |   | $ | 9,888 |   |   | $ | 10,722 |   |
|                                                                                                                                                |   |                      |       |   |   |   |   |   |   |   |   |   |
| Basic      earnings per common share                                                                                                                |   | $                         | 0.62       |   |   | $ | 0.88 |   |   | $ | 0.96 |   |
|                                                                                                                                                |   |                      |       |   |   |   |   |   |   |   |   |   |
| Diluted      earnings per common share                                                                                                              |   | $                         | 0.61       |   |   | $ | 0.86 |   |   | $ | 0.94 |   |
|                                                                                                                                                |   |                      |       |   |   |   |   |   |   |   |   |   |
| Dividends      declared per common share outstanding                                                                                                |   | $                         | 0.48       |   |   | $ | 0.46 |   |   | $ | 0.42 |   |
|                                                                                                                                                |   |                      |       |   |   |   |   |   |   |   |   |   |
| Average      common shares outstanding – basic                                                                                                |   |                      | 11,265,388 |   |   |   | 11,184,208 |   |   |   | 11,125,473 |   |
|                                                                                                                                                |   |                      |       |   |   |   |   |   |   |   |   |   |
| Average      common shares outstanding – diluted                                                                                              |   |                      | 11,506,837 |   |   |   | 11,533,729 |   |   |   | 11,460,912 |   |
|                                                                                                                                                |   |                      |       |   |   |   |   |   |   |   |   |   |

----

|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |
|-----------------------------------------------------------------|--------|-------------------|------------|--------|--------------|--------|--------|------------|--------|--------|---------------|--------|--------|-------------|---------|--------|--------|--------|
|                                                            |   |              |       |   |         |   |   | Additional |   |   |          |   |   | Accumulated |    |   |   |   |
|                                                            |   | Common      Stock |       |   | Paid      in |   |   | Retained   |   |   | Comprehensive |   |   |        |    |
|                                                            |   | Shares            |       |   | Amount       |   |   | Capital    |   |   | Earnings      |   |   | Income      |    |   | Total  |   |
|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |
| Balance,      June 30, 2005                                     |   |              | 11,098,683 |   |         | $      | 111    |       |   | $      | 3,013         |   |   | $           | 183,614 |   |   | $      | - |   |   | $ | 186,738 |   |
|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|     Net      earnings                       |   |              | -          |   |         |   | -      |       |   |   | -             |   |   |        | 10,722  |   |   |   | - |   |   |   | 10,722 |   |
|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Shares      issued – stock options exercised  |   |              | 62,825     |   |         |   | 1      |       |   |   | 556           |   |   |        | -       |   |   |   | - |   |   |   | 557 |   |
|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Stock      based compensation expense               |   |              | -          |   |         |   | -      |       |   |   | 187           |   |   |        | -       |   |   |   | - |   |   |   | 187 |   |
|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Dividends      declared                             |   |              | -          |   |         |   | -      |       |   |   | -             |   |   |        | (4,677  | )      |   |   | - |   |   |   | (4,677 | ) |
|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Balance,      June 30, 2006                                     |   |              | 11,161,508 |   |         |   | 112    |       |   |   | 3,756         |   |   |        | 189,659 |   |   |   | - |   |   |   | 193,527 |   |
|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Comprehensive      income                           |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Net      earnings                                   |   |              | -          |   |         |   | -      |       |   |   | -             |   |   |        | 9,888   |   |   |   | - |   |   |   | 9,888 |   |
|   Unrealized      loss on investment                  |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|       securities,      net of tax |   |              | -          |   |         |   | -      |       |   |   | -             |   |   |        | -       |   |   |   | (20 | ) |   |   | (20 | ) |
|   Total      comprehensive income                     |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   | 9,868 |   |
|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Shares      issued – stock options exercised  |   |              | 85,538     |   |         |   | -      |       |   |   | 868           |   |   |        | -       |   |   |   | - |   |   |   | 868 |   |
|   Shares      repurchased                             |   |              | (108,621   | )      |         |   | (1     | )          |   |   | (665          | )      |   |        | (915    | )      |   |   | - |   |   |   | (1,581 | ) |
|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Stock      based compensation expense               |   |              | -          |   |         |   | -      |       |   |   | 132           |   |   |        | -       |   |   |   | - |   |   |   | 132 |   |
|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Dividends      declared                             |   |              | -          |   |         |   | -      |       |   |   | -             |   |   |        | (5,147  | )      |   |   | - |   |   |   | (5,147 | ) |
|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Balance,      June 30, 2007                                     |   |              | 11,138,425 |   |         |   | 111    |       |   |   | 4,091         |   |   |        | 193,485 |   |   |   | (20 | ) |   |   | 197,667 |   |
|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Cumulative      effect of applying                  |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|       provisions      of FIN 48   |   |              | -          |   |         |   | -      |       |   |   | -             |   |   |        | 1,200   |   |   |   | - |   |   |   | 1,200 |   |
|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Comprehensive      income                           |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Net      earnings                                   |   |              | -          |   |         |   | -      |       |   |   | -             |   |   |        | 6,981   |   |   |   | - |   |   |   | 6,981 |   |
|   Unrealized      loss on investment                  |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|       securities,      net of tax |   |              | -          |   |         |   | -      |       |   |   | -             |   |   |        | -       |   |   |   | (253 | ) |   |   | (253 | ) |
|   Total      comprehensive income                     |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   | 6,728 |   |
|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Shares      issued – stock options exercised  |   |              | 377,300    |   |         |   | 4      |       |   |   | 3,175         |   |   |        | -       |   |   |   | - |   |   |   | 3,179 |   |
|   Shares      repurchased                             |   |              | (75,000    | )      |         |   | (1     | )          |   |   | (327          | )      |   |        | (647    | )      |   |   | - |   |   |   | (975 | ) |
|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Stock      based compensation expense               |   |              | -          |   |         |   | -      |       |   |   | 64            |   |   |        | -       |   |   |   | - |   |   |   | 64 |   |
|                                                            |   |              |       |   |         |   |   |       |   |   |          |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   Dividends      declared                             |   |              | -          |   |         |   | -      |       |   |   | -             |   |   |        | (5,408  | )      |   |   | - |   |   |   | (5,408 | ) |
| Balance,      June 30, 2008                                     |   |              | 11,440,725 |   |         | $      | 114    |       |   | $      | 7,003         |   |   | $           | 195,611 |   |   | $      | (273 | ) |   | $ | 202,455 |   |

----

|                                                                                                       |   | Years      Ended June 30, |     |
|------------------------------------------------------------------------------------------------------------|--------|---------------------------|----------|
|                                                                                                       |   | 2008                      |     |   | 2007 |   |   | 2006 |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES:                                                                 |   |                      |     |   |   |   |   |   |   |
| Net      Earnings                                                                                          |   | $                         | 6,981    |   |   | $ | 9,888 |   |   | $ | 10,722 |   |
| Adjustments      to reconcile net earnings to cash flows provided by (used for) operating      activities: |   |                      |     |   |   |   |   |   |   |   |   |   |
|   Depreciation                                                                                   |   |                      | 561      |   |   |   | 601 |   |   |   | 844 |   |
|   Stock-based      compensation expense                                                          |   |                      | 64       |   |   |   | 132 |   |   |   | 187 |   |
|   Leased      property on operating leases, net                                                  |   |                      | (88      | ) |   |   | (323 | ) |   |   | (259 | ) |
|   Interest      accretion of estimated residual values                                           |   |                      | (1,523   | ) |   |   | (1,285 | ) |   |   | (1,414 | ) |
|   Gain      on sale of leased property and sales-type lease income                               |   |                      | (2,242   | ) |   |   | (4,206 | ) |   |   | (11,034 | ) |
|   Provision      for credit losses                                                               |   |                      | 1,165    |   |   |   | (120 | ) |   |   | 482 |   |
|   Deferred      income taxes, including income taxes payable                                     |   |                      | 790      |   |   |   | (2,247 | ) |   |   | (5,966 | ) |
|   (Increase)      decrease in receivables                                                        |   |                      | (601     | ) |   |   | 560 |   |   |   | (269 | ) |
|   Decrease      (increase) in income taxes receivable                                            |   |                      | 92       |   |   |   | 413 |   |   |   | (4,744 | ) |
|   Net      decrease in accounts payable and accrued liabilities                                  |   |                      | (1,006   | ) |   |   | (405 | ) |   |   | (217 | ) |
|   Increase      (decrease) in customer lease deposits                                            |   |                      | 288      |   |   |   | (764 | ) |   |   | 171 |   |
| Net      cash provided by (used for) operating activities                                                  |   |                      | 4,481    |   |   |   | 2,244 |   |   |   | (11,497 | ) |
|                                                                                                       |   |                      |     |   |   |   |   |   |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES:                                                                 |   |                      |     |   |   |   |   |   |   |   |   |   |
|   Investment      in leases, loans and transactions in process                                   |   |                      | (165,843 | ) |   |   | (139,527 | ) |   |   | (157,969 | ) |
|   Payments      received on lease receivables and loans                                          |   |                      | 138,137  |   |   |   | 126,386 |   |   |   | 118,828 |   |
|   Proceeds      from sales of leased property and sales-type leases                              |   |                      | 5,456    |   |   |   | 7,838 |   |   |   | 16,955 |   |
|   Purchase      of investment securities                                                         |   |                      | (4,814   | ) |   |   | (482 | ) |   |   | (26 | ) |
|   Pay      down of investment securities                                                         |   |                      | 2,293    |   |   |   | 2,796 |   |   |   | 8,425 |   |
|   Net      increase in other assets                                                              |   |                      | (1       | ) |   |   | (550 | ) |   |   | (189 | ) |
| Net      cash used for investing activities                                                                |   |                      | (24,772  | ) |   |   | (3,539 | ) |   |   | (13,976 | ) |
|                                                                                                       |   |                      |     |   |   |   |   |   |   |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES:                                                                 |   |                      |     |   |   |   |   |   |   |   |   |   |
|   Net      increase in time certificates of deposit                                              |   |                      | 19,174   |   |   |   | 17,791 |   |   |   | 39,422 |   |
|   Net      increase (decrease) in demand and money market deposits                               |   |                      | 31,595   |   |   |   | (1,486 | ) |   |   | (4,354 | ) |
|   Payments      to repurchase common stock                                                       |   |                      | (975     | ) |   |   | (1,581 | ) |   |   | 0 |   |
|   Dividends      to stockholders                                                                 |   |                      | (5,408   | ) |   |   | (5,147 | ) |   |   | (4,677 | ) |
|   Proceeds      from exercise of stock options including tax benefit                             |   |                      | 3,179    |   |   |   | 868 |   |   |   | 557 |   |
| Net      cash provided by financing activities                                                             |   |                      | 47,565   |   |   |   | 10,445 |   |   |   | 30,948 |   |
|                                                                                                       |   |                      |     |   |   |   |   |   |   |   |   |   |
| NET      CHANGE IN CASH AND CASH EQUIVALENTS                                                               |   |                      | 27,274   |   |   |   | 9,150 |   |   |   | 5,475 |   |
| CASH      AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                      |   |                      | 44,516   |   |   |   | 35,366 |   |   |   | 29,891 |   |
| CASH      AND CASH EQUIVALENTS AT END OF PERIOD                                                            |   | $                         | 71,790   |   |   | $ | 44,516 |   |   | $ | 35,366 |   |
|                                                                                                       |   |                      |     |   |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL SCHEDULE      OF NONCASH INVESTING & FINANCING ACTIVITIES                                 |   |                      |     |   |   |   |   |   |   |   |   |   |
| Increase      (decrease) in lease rentals assigned to lenders and related non-recourse      debt           |   | $                         | 3,035    |   |   | $ | (2,185 | ) |   | $ | 19 |   |
| Estimated      residual values recorded on leases                                                          |   | $                         | (2,421   | ) |   | $ | (2,380 | ) |   | $ | (2,603 | ) |
|                                                                                                       |   |                      |     |   |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL      DISCLOSURES OF CASH FLOW INFORMATION                                                     |   |                      |     |   |   |   |   |   |   |   |   |   |
| Cash      paid during the year for:                                                                        |   |                      |     |   |   |   |   |   |   |   |   |   |
|     Interest                                                                           |   | $                         | 5,747    |   |   | $ | 4,715 |   |   | $ | 2,605 |   |
|     Income      Taxes                                                                  |   | $                         | 3,308    |   |   | $ | 7,972 |   |   | $ | 17,493 |   |

----

----

----

|                                                         |   | Years      ended June 30,                               |       |
|--------------------------------------------------------------|--------|---------------------------------------------------------|------------|
|                                                         |   | 2008                                                    |       |   | 2007 |   |   | 2006 |   |
|                                                         |   | (in      thousands, except share and per share amounts) |       |
| Net      earnings                                            |   | $                                                       | 6,981      |   |   | $ | 9,888 |   |   | $ | 10,722 |   |
| Weighted      average number of common shares outstanding    |   |                                                    |       |   |   |   |   |   |   |   |   |   |
|   assuming      no exercise of outstanding options |   |                                                    | 11,265,388 |   |   |   | 11,184,208 |   |   |   | 11,125,473 |   |
| Dilutive      stock options using the treasury stock method  |   |                                                    | 241,449    |   |   |   | 349,521 |   |   |   | 335,439 |   |
| Dilutive      common shares outstanding                      |   |                                                    | 11,506,837 |   |   |   | 11,533,729 |   |   |   | 11,460,912 |   |
| Basic      earnings per common share                         |   | $                                                       | 0.62       |   |   | $ | 0.88 |   |   | $ | 0.96 |   |
| Diluted      earnings per common share                       |   | $                                                       | 0.61       |   |   | $ | 0.86 |   |   | $ | 0.94 |   |

|                                  |   | Years      ended June 30, |    |
|---------------------------------------|--------|---------------------------|---------|
|                                  |   | 2008                      |    |   | 2007 |   |   | 2006 |   |
| Antidilutive      stock option shares |   |                      | 129,282 |   |   |   | 11,543 |   |   |   | 77,918 |   |

----

| (in      thousands)                                 |   | Amortized |   |   | Gross      Unrealized |   |   | Fair   |   |   | Carrying |   |
|-----------------------------------------------------|--------|-----------|--------|--------|-----------------------|--------|--------|--------|--------|--------|----------|--------|
|                                                |   | Cost      |   |   | Gains      / (Losses) |   |   | Value  |   |   | Value    |   |
| Held-to-maturity:                                   |   |      |   |   |                  |   |   |   |   |   |     |   |
|    Federal      Reserve Bank Stock   |   | $         | 1,055  |   |                  | $      | -      |   |   | $      | 1,055    |   |   | $ | 1,055 |   |
|    Federal      Home Loan Bank Stock |   |      | 38     |   |                  |   | -      |   |   |   | 38       |   |   |   | 38 |   |
|    Mortgage-backed      security     |   |      | 1,497  |   |                  |   | 1      |   |   |   | 1,498    |   |   |   | 1,497 |   |
| Total      held-to-maturity                         |   |      | 2,590  |   |                  |   | 1      |   |   |   | 2,591    |   |   |   | 2,590 |   |
|                                                |   |      |   |   |                  |   |   |   |   |   |     |   |   |   |   |   |
| Available-for-sale:                                 |   |      |   |   |                  |   |   |   |   |   |     |   |   |   |   |   |
|    Marketable      securities        |   |      | 4,131  |   |                  |   | (361   | )      |   |   | 3,770    |   |   |   | 3,770 |   |
| Total      investment securities                    |   | $         | 6,721  |   |                  | $      | (360   | )      |   | $      | 6,361    |   |   | $ | 6,360 |   |

| (in      thousands)                               |   | Amortized |   |   | Gross      Unrealized |   |   | Fair   |   |   | Carrying |   |
|---------------------------------------------------|--------|-----------|--------|--------|-----------------------|--------|--------|--------|--------|--------|----------|--------|
|                                              |   | Cost      |   |   | Gains      / (Losses) |   |   | Value  |   |   | Value    |   |
| Held-to-maturity:                                 |   |      |   |   |                  |   |   |   |   |   |     |   |
|    Federal      Reserve Bank Stock |   | $         | 1,055  |   |                  | $      | -      |   |   | $      | 1,055    |   |   | $ | 1,055 |   |
|    Mortgage-backed      security   |   |      | 320    |   |                  |   | (24    | )      |   |   | 296      |   |   |   | 320 |   |
| Total      held-to-maturity                       |   |      | 1,375  |   |                  |   | (24    | )      |   |   | 1,351    |   |   |   | 1,375 |   |
|                                              |   |      |   |   |                  |   |   |   |   |   |     |   |   |   |   |   |
| Available-for-sale                                |   |      |   |   |                  |   |   |   |   |   |     |   |   |   |   |   |
|    Marketable      securities      |   |      | 2,826  |   |                  |   | (32    | )      |   |   | 2,794    |   |   |   | 2,794 |   |
| Total      investment securities                  |   | $         | 4,201  |   |                  | $      | (56    | )      |   | $      | 4,145    |   |   | $ | 4,169 |   |

----

|                                      |   | Amortized           |   |   | Fair   |   |
|-------------------------------------------|--------|---------------------|--------|--------|--------|--------|
|                                      |   | Cost                |   |   | Value  |   |
|                                      |   | (in      thousands) |   |
| Held-to-maturity:                         |   |                |   |   |   |   |
|    Due      after 10 years |   | $                   | 2,590  |   |   | $      | 2,591 |   |
|                                      |   |                |   |   |   |   |   |   |
| Available-for-sale                        |   |                |   |   |   |   |   |   |
|   Less      than 12 months      |   |                | 4,131  |   |   |   | 3,770 |   |
|                                      |   | $                   | 6,721  |   |   | $      | 6,361 |   |

|                           |   | June      30,       |   |
|--------------------------------|--------|---------------------|--------|
|                           |   | 2008                |   |   | 2007 |   |
|                           |   | (in      thousands) |   |
| Other      lessee receivables  |   | $                   | 1,418  |   |   | $ | 1,344 |   |
| Financial      institutions    |   |                | 405    |   |   |   | - |   |
| Miscellaneous      receivables |   |                | 123    |   |   |   | 1 |   |
|                           |   | $                   | 1,946  |   |   | $ | 1,345 |   |

|                                                                                    |   | June      30, |    |
|-----------------------------------------------------------------------------------------|--------|---------------|---------|
| (in      thousands)                                                                     |   | 2008          |    |   | 2007 |   |
|                                                                                    |   |          |    |   |   |   |
|   Minimum      lease payments receivable                                      |   | $             | 237,423 |   |   | $ | 253,802 |   |
|   Estimated      residual value                                               |   |          | 13,310  |   |   |   | 12,847 |   |
|   Commercial      loan syndications                                           |   |          | 31,457  |   |   |   | - |   |
|   Commercial      real estate loans                                           |   |          | 8,829   |   |   |   | - |   |
|   Revolving      lines of credit                                              |   |          | 3,300   |   |   |   | - |   |
|   Less      unearned income and discounts                                     |   |          | (28,061 | ) |   |   | (31,543 | ) |
|      Net      investment in leases and loans before allowances |   |          | 266,258 |   |   |   | 235,106 |   |
|   Less      allowance for lease and loan losses                               |   |          | (3,779  | ) |   |   | (3,124 | ) |
|   Less      valuation allowance for estimated residual value                  |   |          | (104    | ) |   |   | (152 | ) |
|      Net      investment in leases and loans                   |   | $             | 262,375 |   |   | $ | 231,830 |   |

----

| Years      ending                  |   |  Lease        Receivableand        Loan |    |   |   | Estimated           |   |   |   |   |    |
|------------------------------------|--------|----------------------------------------------|---------|--------|--------|---------------------|--------|--------|--------|--------|---------|
| June      30,                      |   | Principal        Payments                    |    |   |   | Residual      Value |   |   |   | Total  |    |
|                               |   |                                         |    |   |   |                |   |   |   |   |    |   |
|      2009 |   | $                                            | 111,308 |   |   | $                   | 4,757  |   |   | $      | 116,065 |   |
|      2010 |   |                                         | 75,786  |   |   |                | 3,571  |   |   |   | 79,357  |   |
|      2011 |   |                                         | 36,045  |   |   |                | 3,428  |   |   |   | 39,473  |   |
|      2012 |   |                                         | 25,182  |   |   |                | 1,007  |   |   |   | 26,189  |   |
|      2013 |   |                                         | 4,883   |   |   |                | 520    |   |   |   | 5,404   |   |
| Thereafter                         |   |                                         | 27,805  |   |   |                | 27     |   |   |   | 27,831  |   |
|                               |   |                                         | 281,009 |   |   |                | 13,310 |   |   |   | 294,319 |   |
| Less      unearned income          |   |                                         | (25,496 | )      |   |                | (2,565 | )      |   |   | (28,061 | ) |
| Less      allowances               |   |                                         | (3,779  | )      |   |                | (104   | )      |   |   | (3,883  | ) |
|                               |   | $                                            | 251,734 |   |   | $                   | 10,641 |   |   | $      | 262,375 |   |

|                                                                          |   | 2008                |   |   | 2007   |   |
|-------------------------------------------------------------------------------|--------|---------------------|--------|--------|--------|--------|
|                                                                          |   | (in      thousands) |   |
| Allowance      for credit losses at beginning of year                         |   | $                   | 3,344  |   |   | $      | 3,637 |   |
|      Charge-off      of lease receivables            |   |                | (509   | )      |   |   | (850 | ) |
|      Charge-off      of transactions in process      |   |                | (200   | )      |   |   | - |   |
|      Recovery      of amounts previously written off |   |                | 121    |   |   |   | 677 |   |
|      Provision      for credit losses                |   |                | 1,165  |   |   |   | (120 | ) |
| Allowance      for credit losses at end of year                               |   | $                   | 3,921  |   |   | $      | 3,344 |   |
| Components:                                                                   |   |                |   |   |   |   |   |   |
|     Allowance      for lease and loan losses              |   | $                   | 3,883  |   |   | $      | 3,276 |   |
|     Liability      for unfunded loan commitments          |   |                | 20     |   |   |   | - |   |
|     Allowance      for losses on transactions in process  |   |                | 18     |   |   |   | 68 |   |
|                                                                          |   | $                   | 3,921  |   |   | $      | 3,344 |   |
| Allowance      for lease and loan losses as percent of net                    |   |                |   |   |   |   |   |   |
|     investment      in leases and loans before allowances |   |                | 1.5    | %      |   |   | 1.4 | % |

----

| Years ending June      30,                   |   | Non-recourse        Debt    |   |
|---------------------------------------------------|--------|-----------------------------|--------|
|                                              |   | (in        thousands)  |   |
|      2009                |   | $                           | 3,483  |   |
|      2010                |   |                        | 2,530  |   |
|      2011                |   |                        | 1,467  |   |
|      2012                |   |                        | 628    |   |
|      2013                |   |                        | 491    |   |
| Total      non-recourse debt                      |   |                        | 8,599  |   |
| Deferred      interest expense                    |   |                        | 675    |   |
| Discounted      lease rentals assigned to lenders |   | $                           | 9,274  |   |

----

|                                                |   | June      30, 2008  |    |   | June      30, 2007 |   |
|-----------------------------------------------------|--------|---------------------|---------|--------|--------------------|--------|
|                                                |   | Carrying            |    |   | Estimated          |   |   | Carrying |   |   | Estimated |   |
|                                                |   | Amount              |    |   | Fair Value         |   |   | Amount |   |   | Fair Value |   |
|                                                |   | (in      thousands) |    |
| Financial      Assets:                              |   |                |    |   |               |   |   |   |   |   |   |   |
|    Cash      and cash equivalents    |   | $                   | 71,790  |   |               | $      | 71,790 |   |   | $ | 44,516 |   |   | $ | 44,516 |   |
|    Investment      securities        |   |                | 6,360   |   |               |   | 6,361 |   |   |   | 4,169 |   |   |   | 4,145 |   |
|    Commercial      loans             |   |                | 42,212  |   |               |   | 42,212 |   |   |   | - |   |   |   | - |   |
|                                                |   |                |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Financial      Liabilities:                         |   |                |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
|    Demand      and savings deposits  |   |                | 39,887  |   |               |   | 39,887 |   |   |   | 8,292 |   |   |   | 8,292 |   |
|    Time      certificates of deposit |   | $                   | 116,352 |   |               | $      | 112,923 |   |   | $ | 97,178 |   |   | $ | 93,032 |   |

|                                                             |   | June      30, 2008          |    |   | June      30, 2007 |   |
|------------------------------------------------------------------|--------|-----------------------------|---------|--------|--------------------|--------|
|                                                             |   | (amounts      in thousands) |    |
| Non-interest      bearing deposits                               |   |                        |    |   |               |   |   |   |   |   |   |   |
|      Demand      deposits               |   | $                           | 1,192   |   |               |   | 0.8 | % |   | $ | 1,848 |   |   |   | 1.8 | % |
|                                                             |   |                        |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      deposits                                   |   |                        |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
|      Demand      deposits               |   |                        | 1,226   |   |               |   | 0.8 | % |   |   | 57 |   |   |   | 0.1 | % |
|      Savings      deposits              |   |                        | 37,469  |   |               |   | 24.0 | % |   |   | 6,387 |   |   |   | 6.0 | % |
|      Time      certificates of deposits |   |                        | 116,352 |   |               |   | 74.4 | % |   |   | 97,178 |   |   |   | 92.1 | % |
|                                                             |   |                        |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Total      Deposits                                              |   | $                           | 156,239 |   |               |   | 100.0 | % |   | $ | 105,470 |   |   |   | 100.0 | % |

| Years      Ending:                       |   | (in      thousands) |    |
|------------------------------------------|--------|---------------------|---------|
|      2009       |   | $                   | 92,996  |   |
|      2010       |   |                | 17,150  |   |
|      2011       |   |                | 6,206   |   |
|      Thereafter |   |                | -       |   |
| Total      time certificates of deposit  |   | $                   | 116,352 |   |

----

|                                 |   | Years      ended June 30, |   |
|--------------------------------------|--------|---------------------------|--------|
|                                 |   | 2008                      |   |   | 2007 |   |   | 2006 |   |
|                                 |   | (in      thousands)       |   |
| Current      tax expense:            |   |                      |   |   |   |   |   |   |   |
|    Federal            |   | $                         | 2,861  |   |   | $ | 6,954 |   |   | $ | 11,153 |   |
|    State              |   |                      | 918    |   |   |   | 1,293 |   |   |   | 1,229 |   |
|                                 |   |                      | 3,779  |   |   |   | 8,247 |   |   |   | 12,382 |   |
| Deferred      tax expense (benefit): |   |                      |   |   |   |   |   |   |   |   |   |   |
|    Federal            |   |                      | 310    |   |   |   | (1,789 | ) |   |   | (5,026 | ) |
|    State              |   |                      | 100    |   |   |   | (333 | ) |   |   | (573 | ) |
|                                 |   |                      | 410    |   |   |   | (2,122 | ) |   |   | (5,599 | ) |
|                                 |   | $                         | 4,189  |   |   | $ | 6,125 |   |   | $ | 6,783 |   |

|                                                               |   | June      30,       |   |
|--------------------------------------------------------------------|--------|---------------------|--------|
|                                                               |   | 2008                |   |   | 2007 |   |
|                                                               |   | (in      thousands) |   |
| Deferred      income tax liabilities:                              |   |                |   |   |   |   |
|    Tax      operating leases                        |   | $                   | 7,052  |   |   | $ | 7,613 |   |
|    Deferred      selling expenses                   |   |                | 2,071  |   |   |   | 1,890 |   |
|    Other      investments                           |   |                | 141    |   |   |   | - |   |
| Total      liabilities                                             |   |                | 9,264  |   |   |   | 9,503 |   |
| Deferred      income tax assets:                                   |   |                |   |   |   |   |   |   |
|    Allowances      and reserves                     |   |                | (1,600 | ) |   |   | (1,369 | ) |
|    State      income taxes                          |   |                | (321   | ) |   |   | (453 | ) |
|    Depreciation      other than on operating leases |   |                | (240   | ) |   |   | (98 | ) |
|    Stock-based      compensation                    |   |                | (110   | ) |   |   | (103 | ) |
| Total      assets                                                  |   |                | (2,271 | ) |   |   | (2,203 | ) |
| Net      deferred income tax liabilities                           |   | $                   | 6,993  |   |   | $ | 7,480 |   |

|                                                                            |   | Years      ended June 30, |   |
|---------------------------------------------------------------------------------|--------|---------------------------|--------|
|                                                                            |   | 2008                      |   |   | 2007 |   |   | 2006 |   |
| Federal      statutory rate                                                     |   |                      | 35.00  | % |   |   | 35.00 | % |   |   | 35.00 | % |
| State      tax, net of Federal benefit                                          |   |                      | 5.30   |   |   |   | 5.25 |   |   |   | 4.70 |   |
| Other,      mainly tax exempt leases                                            |   |                      | (2.80  | ) |   |   | (2.00 | ) |   |   | (0.95 | ) |
|           Effective      rate |   |                      | 37.50  | % |   |   | 38.25 | % |   |   | 38.75 | % |

----

----

|                                                       |   | As      of June, 30 |          |
|------------------------------------------------------------|--------|---------------------|---------------|
|                                                       |   | 2008                |          |   | 2007 |   |   | 2006 |   |
|                                                       |   |   Shares  |          |   | Weighted Average ExercisePrice |   |   |   Shares |   |   | WeightedAverageExercisePrice |   |   |   Shares |   |   | Weighted AverageExercisePrice |   |
| Options      outstanding at the      beginning of the year |   |                | 860,229       |   |   | $ | 8.91 |   |   |   | 945,767 |   |   | $ | 9.02 |   |   |   | 1,017,518 |   |   | $ | 9.02 |   |
| Exercised                                                  |   |                | (377,300      | ) |   |   | 8.13 |   |   |   | (85,538 | ) |   |   | 10.15 |   |   |   | ( 62,825 | ) |   |   | 8.86 |   |
| Canceled/expired                                           |   |                | (31,555       | ) |   |   | 14.26 |   |   |   | - |   |   |   | - |   |   |   | ( 8,926 | ) |   |   | 9.33 |   |
| Options      outstanding at the      end of the year       |   |                |  451,374 |   |   | $ | 9.18 |   |   |   | 860,229 |   |   | $ | 8.91 |   |   |   | 945,767 |   |   | $ | 9.02 |   |
|                                                       |   |                |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares      available for issuance                         |   |                | 1,318,202     |   |   |   |   |   |   |   | 1,175,263 |   |   |   |   |   |   |   | 1,063,648 |   |   |   |   |   |
|                                                       |   |                |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Options      exercisable                                   |   |                | 436,365       |   |   |   |   |   |   |   | 817,747 |   |   |   |   |   |   |   | 875,811 |   |   |   |   |   |

| As      of June 30, 2008                     |   |
|----------------------------------------------|--------|
| Options      outstanding                     |   |   | Options      exercisable |   |
| Range      ofExercise Prices                 |   |   | NumberOutstanding |   |   | Weighted      AverageRemaining      ContractualLife (in years) |   |   | Weighted      AverageExercise Price |   |   | NumberExercisable |   |   | Weighted      AverageExercise Price |   |
| $5.20          - $ 8.81                 |   |   |  222,242 |   |   | 2.92 |   |   | $ 6.66 |   |   |  210,698 |   |   | $ 6.54 |   |
|  9.96          -   13.64 |   |   |  229,132 |   |   | 1.96 |   |   |  11.61 |   |   |  225,667 |   |   |  11.61 |   |
| $5.20          - $13.64                      |   |   |  451,374 |   |   | 2.44 |   |   | $ 9.18 |   |   |  436,365 |   |   | $ 9.14 |   |

----

|                                   |   | June      30,               |    |
|----------------------------------------|--------|-----------------------------|---------|
|                                   |   | 2008                        |    |   | 2007 |   |
|                                   |   | (dollars      in thousands) |    |
| California      First National Bancorp |   | Amount                      |    |   | Ratio |   |   | Amount |   |   | Ratio |   |
| Tier      1 risk-based capital         |   | $                           | 202,728 |   |   |   | 63.7 | % |   | $ | 197,688 |   |   |   | 60.1 | % |
| Total      risk-based capital          |   | $                           | 206,338 |   |   |   | 64.8 | % |   | $ | 200,368 |   |   |   | 60.9 | % |
| Tier      1 leverage capital           |   | $                           | 202,728 |   |   |   | 55.8 | % |   | $ | 197,688 |   |   |   | 62.0 | % |
|                                   |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| California      First National Bank    |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier      1 risk-based capital         |   | $                           | 39,927  |   |   |   | 18.1 | % |   | $ | 38,136 |   |   |   | 21.7 | % |
| Total      risk-based capital          |   | $                           | 41,415  |   |   |   | 18.8 | % |   | $ | 39,271 |   |   |   | 22.3 | % |
| Tier      1 leverage capital           |   | $                           | 39,927  |   |   |   | 20.0 | % |   | $ | 38,136 |   |   |   | 23.9 | % |

|   |                      |   | Future      minimum |   |
|--------|---------------------------|--------|---------------------|--------|
|   | Years      ending         |   | lease      payments |   |
|   |   June      30, |   | (in      thousands) |   |
|   | 2009                      |   | $                   | 371    |   |
|   | 2010                      |   |                | 763    |   |
|   | 2011                      |   |                | 790    |   |
|   | 2012                      |   |                | 815    |   |
|   | 2013                      |   |                | 1,683  |   |
|   | 2014                      |   |                | 282    |   |
|   |                      |   | $                   | 4,704  |   |

----

|                                                                   |   |                |    |   |     |   |    | Bancorp      and |   |   |         |   |
|------------------------------------------------------------------------|--------|---------------------|---------|--------|----------|--------|---------|------------------|--------|--------|--------------|--------|
|                                                                   |   | Leasing             |    |   | CalFirst |   |    | Eliminating      |   |   |         |   |
|                                                                   |   | Companies           |    |   | Bank     |   |    | Entires          |   |   | Consolidated |   |
|                                                                   |   | (in      thousands) |    |
|                                                                   |   |                |    |   |     |   |    |             |   |   |         |   |
| Year end June 30,      2008                                            |   |                |    |   |     |   |    |             |   |   |         |   |
| Net      direct finance, loan and interest income                      |   |                |    |   |     |   |    |             |   |   |         |   |
|     after      provision for lease and loan losses |   | $                   | 15,076  |   |     | $      | 5,599   |             |   | $      | 266          |   |   | $ | 20,941 |   |
| Other      income                                                      |   |                | 5,245   |   |     |   | 872     |             |   |   | -            |   |   |   | 6,117 |   |
| Gross      profit                                                      |   | $                   | 20,321  |   |     | $      | 6,471   |             |   | $      | 266          |   |   | $ | 27,058 |   |
|                                                                   |   |                |    |   |     |   |    |             |   |   |         |   |   |   |   |   |
| Net      earnings                                                      |   | $                   | 3,625   |   |     | $      | 1,791   |             |   | $      | 1,565        |   |   | $ | 6,981 |   |
|                                                                   |   |                |    |   |     |   |    |             |   |   |         |   |   |   |   |   |
| Total      assets                                                      |   | $                   | 175,688 |   |     | $      | 217,756 |             |   | $      | (6,850       | )      |   | $ | 386,594 |   |
|                                                                   |   |                |    |   |     |   |    |             |   |   |         |   |   |   |   |   |
| Year end June 30,      2007                                            |   |                |    |   |     |   |    |             |   |   |         |   |   |   |   |   |
| Net      direct finance and interest income                            |   |                |    |   |     |   |    |             |   |   |         |   |   |   |   |   |
|     after      provision for lease and loan losses |   | $                   | 17,121  |   |     | $      | 5,026   |             |   | $      | 170          |   |   | $ | 22,317 |   |
| Other      income                                                      |   |                | 8,213   |   |     |   | 944     |             |   |   | 5            |   |   |   | 9,162 |   |
| Gross      profit                                                      |   | $                   | 25,334  |   |     | $      | 5,970   |             |   | $      | 175          |   |   | $ | 31,479 |   |
|                                                                   |   |                |    |   |     |   |    |             |   |   |         |   |   |   |   |   |
| Net      earnings                                                      |   | $                   | 5,926   |   |     | $      | 1,797   |             |   | $      | 2,165        |   |   | $ | 9,888 |   |
|                                                                   |   |                |    |   |     |   |    |             |   |   |         |   |   |   |   |   |
| Total      assets                                                      |   | $                   | 172,881 |   |     | $      | 167,160 |             |   | $      | (10,854      | )      |   | $ | 329,187 |   |
|                                                                   |   |                |    |   |     |   |    |             |   |   |         |   |   |   |   |   |
| Year end June 30,      2006                                            |   |                |    |   |     |   |    |             |   |   |         |   |   |   |   |   |
| Net      direct finance, loan and interest income                      |   |                |    |   |     |   |    |             |   |   |         |   |   |   |   |   |
|     after      provision for lease and loan losses |   | $                   | 13,315  |   |     | $      | 3,743   |             |   | $      | 57           |   |   | $ | 17,115 |   |
| Other      income                                                      |   |                | 14,935  |   |     |   | 733     |             |   |   | -            |   |   |   | 15,668 |   |
| Gross      profit                                                      |   | $                   | 28,250  |   |     | $      | 4,476   |             |   | $      | 57           |   |   | $ | 32,783 |   |
|                                                                   |   |                |    |   |     |   |    |             |   |   |         |   |   |   |   |   |
| Net      earnings                                                      |   | $                   | 8,248   |   |     | $      | 1,278   |             |   | $      | 1,196        |   |   | $ | 10,722 |   |
|                                                                   |   |                |    |   |     |   |    |             |   |   |         |   |   |   |   |   |
| Total      assets                                                      |   | $                   | 180,876 |   |     | $      | 133,793 |             |   | $      | (314         | )      |   | $ | 314,355 |   |

----

| Condensed      Balance Sheets                                                                |   | June      30, |    |
|----------------------------------------------------------------------------------------------|--------|---------------|---------|
| (in      thousands, except share amounts)                                                    |   | 2008          |    |   | 2007 |   |
| Assets                                                                                       |   |          |    |   |   |   |
|    Cash      and cash equivalents                                             |   | $             | 11,241  |   |   | $ | 5,911 |   |
|    Investment      securities                                                 |   |          | 1,792   |   |   |   | - |   |
|    Intercompany      receivables                                              |   |          | 211     |   |   |   | 512 |   |
|    Investments      in bank subsidiary                                        |   |          | 39,927  |   |   |   | 38,136 |   |
|    Investments      in non-bank subsidiaries                                  |   |          | 105,904 |   |   |   | 106,676 |   |
|    Intercompany      note receivable                                          |   |          | 51,060  |   |   |   | 48,041 |   |
|    Other      assets                                                          |   |          | 485     |   |   |   | 1,782 |   |
|    Premises      and other fixed assets                                       |   |          | 66      |   |   |   | 189 |   |
|                                                                                         |   | $             | 210,686 |   |   | $ | 201,247 |   |
| Liabilities                                                                                  |   |          |    |   |   |   |   |   |
|    Accrued      liabilities                                                   |   | $             | 1,650   |   |   | $ | 1,686 |   |
|    Payable      to non-bank subsidiaries                                      |   |          | 148     |   |   |   | 1,894 |   |
|    Deferred      income taxes, net                                            |   |          | 6,433   |   |   |   | - |   |
|                                                                                         |   |          | 8,231   |   |   |   | 3,580 |   |
| Stockholders’      Equity                                                              |   |          |    |   |   |   |   |   |
|    Preferred      stock; 2,500,000 shares authorized, none issued             |   |          | -       |   |   |   | - |   |
|    Common      stock, $0.01 par value; 20,000,000 shares authorized;          |   |          |    |   |   |   |   |   |
|         11,440,725      (2008) and 11,138,425 (2007) |   |          |    |   |   |   |   |   |
|         issued      and outstanding                  |   |          | 114     |   |   |   | 111 |   |
|    Additional      paid-in capital                                            |   |          | 7,154   |   |   |   | 4,242 |   |
|    Retained      earnings                                                     |   |          | 195,342 |   |   |   | 193,314 |   |
|    Other      comprehensive loss, net of tax                                  |   |          | (155    | ) |   |   | - |   |
|                                                                                         |   |          | 202,455 |   |   |   | 197,667 |   |
|                                                                                         |   | $             | 210,686 |   |   | $ | 201,247 |   |

| Condensed      Statements of Earnings                                                 |   | June      30, |   |
|---------------------------------------------------------------------------------------|--------|---------------|--------|
| (in      thousands)                                                                   |   | 2008          |   |   | 2007 |   |
| Income                                                                                |   |          |   |   |   |   |
|    Dividends      from non-bank subsidiary                             |   | $             | 5,500  |   |   | $ | - |   |
|    Management      fee income from bank subsidiary                     |   |          | 266    |   |   |   | 247 |   |
|    Management      fee income from non-bank subsidiaries               |   |          | 1,046  |   |   |   | 1,054 |   |
|    Interest      income from non-bank subsidiaries                     |   |          | 3,299  |   |   |   | 4,071 |   |
|    Other      interest income                                          |   |          | 266    |   |   |   | 175 |   |
|                                                                                  |   |          | 10,377 |   |   |   | 5,547 |   |
| Expenses                                                                              |   |          |   |   |   |   |   |   |
|    Selling,      general and administrative                            |   |          | 2,159  |   |   |   | 2,140 |   |
|    Interest      expense                                               |   |          | -      |   |   |   | - |   |
|                                                                                  |   |          | 2,159  |   |   |   | 2,140 |   |
| Income      before taxes and equity in over distributed earnings of      subsidiaries |   |          | 8,218  |   |   |   | 3,407 |   |
| Income      tax expense                                                               |   |          | 1,154  |   |   |   | 1,242 |   |
|                                                                                  |   |          | 7,064  |   |   |   | 2,165 |   |
| Equity      in over distributed comprehensive earnings of subsidiaries                |   |          | (181   | ) |   |   | 7,703 |   |
| Unrealized      loss on investment securities, net of tax                             |   |          | (155   | ) |   |   | - |   |
| Total      comprehensive income                                                       |   | $             | 6,728  |   |   | $ | 9,868 |   |

----

| Condensed      Statements of Cash Flows                                                      |   | June      30, |   |
|----------------------------------------------------------------------------------------------|--------|---------------|--------|
| (in      thousands)                                                                          |   | 2008          |   |   | 2007 |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES:                                                   |   |          |   |   |   |   |
|    Total      comprehensive income                                            |   | $             | 6,728  |   |   | $ | 9,868 |   |
|    Adjustments      to reconcile net earnings to cash flows:                  |   |          |   |   |   |   |   |   |
|       Stock-based      compensation expense                    |   |          | 64     |   |   |   | 132 |   |
|       Deferred      income taxes                               |   |          | 6,486  |   |   |   | 1,242 |   |
|       Equity      in over distributed earnings of subsidiaries |   |          | 181    |   |   |   | (7,703 | ) |
|       Net      change in other liabilities                     |   |          | (36    | ) |   |   | (139 | ) |
|       Net      change in other assets                          |   |          | 1,297  |   |   |   | (2,197 | ) |
|       Other,      net                                          |   |          | 123    |   |   |   | 121 |   |
| Net      cash provided by operating activities                                               |   |          | 14,998 |   |   |   | 1,324 |   |
|                                                                                         |   |          |   |   |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES:                                                   |   |          |   |   |   |   |   |   |
|    Purchase      of investment securities                                     |   |          | (1,845 | ) |   |   | - |   |
|    (Advances)      to and payments for investments in subsidiaries            |   |          | (4,464 | ) |   |   | 5,330 |   |
| Net      cash (used for) provided by investing activities                                    |   |          | (6,309 | ) |   |   | 5,330 |   |
|                                                                                         |   |          |   |   |   |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES:                                                   |   |          |   |   |   |   |   |   |
|    Proceeds      from issuance of common stock                                |   |          | 3,179  |   |   |   | 868 |   |
|    Payments      to repurchase stock                                          |   |          | (975   | ) |   |   | (1,581 | ) |
|    Dividends      paid                                                        |   |          | (5,408 | ) |   |   | (5,147 | ) |
| Net      cash used for financing activities                                                  |   |          | (3,204 | ) |   |   | (5,860 | ) |
|                                                                                         |   |          |   |   |   |   |   |   |
| NET      CHANGE IN CASH AND CASH EQUIVALENTS                                                 |   |          | 5,330  |   |   |   | 794 |   |
|                                                                                         |   |          |   |   |   |   |   |   |
| CASH      AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                        |   |          | 5,911  |   |   |   | 5,117 |   |
|                                                                                         |   |          |   |   |   |   |   |   |
| CASH      AND CASH EQUIVALENTS AT END OF PERIOD                                              |   | $             | 11,241 |   |   | $ | 5,911 |   |
|                                                                                         |   |          |   |   |   |   |   |   |

|                                                                   |   | Three      months ended                      |   |
|------------------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                                   |   | September      30,                           |   |   | December      31, |   |   | March      31, |   |   | June      30, |   |
|                                                                   |   | (in      thousands except per share amounts) |   |
| 2008                                                                   |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Direct      finance and loan income                                    |   | $                                            | 6,094  |   |   | $ | 6,478 |   |   | $ | 6,374 |   |   | $ | 6,981 |   |
| Net      direct finance, loan and interest income                      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     after      provision for lease and loan losses |   |                                         | 5,203  |   |   |   | 5,414 |   |   |   | 4,983 |   |   |   | 5,341 |   |
| Gross      profit                                                      |   |                                         | 7,113  |   |   |   | 7,126 |   |   |   | 6,413 |   |   |   | 6,406 |   |
| Net      earnings                                                      |   | $                                            | 2,015  |   |   | $ | 1,809 |   |   | $ | 1,484 |   |   | $ | 1,673 |   |
|                                                                   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      earnings per common share                                   |   | $                                            | 0.18   |   |   | $ | 0.16 |   |   | $ | 0.13 |   |   | $ | 0.15 |   |
| Diluted      earnings per common share                                 |   | $                                            | 0.18   |   |   | $ | 0.16 |   |   | $ | 0.13 |   |   | $ | 0.14 |   |
|                                                                   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends      declared per common share                               |   | $                                            | 0.12   |   |   | $ | 0.12 |   |   | $ | 0.12 |   |   | $ | 0.12 |   |

|                                                                   |   | Three      months ended                      |   |
|------------------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                                   |   | September      30,                           |   |   | December      31, |   |   | March      31, |   |   | June      30, |   |
|                                                                   |   | (in      thousands except per share amounts) |   |
| 2007                                                                   |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Direct      finance and loan income                                    |   | $                                            | 5,464  |   |   | $ | 6,659 |   |   | $ | 6,324 |   |   | $ | 6,399 |   |
| Net      direct finance, loan and interest income                      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     after      provision for lease and loan losses |   |                                         | 4,833  |   |   |   | 6,219 |   |   |   | 5,545 |   |   |   | 5,720 |   |
| Gross      profit                                                      |   |                                         | 7,028  |   |   |   | 8,815 |   |   |   | 7,890 |   |   |   | 7,746 |   |
| Net      earnings                                                      |   | $                                            | 2,025  |   |   | $ | 3,066 |   |   | $ | 2,401 |   |   | $ | 2,396 |   |
|                                                                   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      earnings per common share                                   |   | $                                            | 0.18   |   |   | $ | 0.27 |   |   | $ | 0.21 |   |   | $ | 0.21 |   |
| Diluted      earnings per common share                                 |   | $                                            | 0.18   |   |   | $ | 0.27 |   |   | $ | 0.21 |   |   | $ | 0.21 |   |
|                                                                   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends      declared per common share                               |   | $                                            | 0.11   |   |   | $ | 0.11 |   |   | $ | 0.12 |   |   | $ | 0.12 |   |

----

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTINGAND   FINANCIAL DISCLOSURE

ITEM 9A. CONTROLS AND PROCEDURES

| ·   | Pertain      to the maintenance of records that in reasonable detail accurately and      fairly reflect the transactions and dispositions of the assets of the      Company; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Provide      reasonable assurance that transactions are recorded as necessary to permit      preparation of financial statements in accordance with generally accepted      accounting principles, and that receipts and expenditures of the Company      are being made only in accordance with authorizations of management and      directors of the Company; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Provide      reasonable assurance regarding prevention or timely detection of      unauthorized acquisition, use or disposition of the Company’s assets that      could have a material effect on the financial  statements. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

ITEM 9B. OTHER INFORMATION

----

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATEGOVERNANCE

ITEM 11. EXECUTIVE COMPENSATION

ITEM12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ANDRELATED STOCKHOLDER MATTERS

ITEM 13. CERTAIN RELATIONSHIPS AND RELATEDTRANSACTIONS

ITEM 14.  PRINCIPAL ACCOUNTANT FEES ANDSERVICES

----

PART IV

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENTSCHEDULES

|   | All financial      statements are set forth under Item 8 of this annual report on Form 10-K.      Financial statement schedules have been omitted since they are      either not required, not applicable, or the information is otherwise      included. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Exhibit No. |   | Description of Exhibit |   | PageNo. |
|-------------|--------|------------------------|--------|---------|

|  2.1 | Agreement      of Merger dated as of May 22, 2001 among Amplicon, Inc., California First      National Bancorp and CFNB Merger Sub (incorporated by reference to Exhibit      2.1 to Registrant's Statement on Form 8-K dated May 25,    2001) |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  3.1 | Articles      of Incorporation of California First National Bancorp (incorporated by      reference to Exhibit 3.1 to Registrant's Statement on Form 8-K dated May      25, 2001) |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  3.2 | Bylaws      of California First National Bancorp (incorporated by reference to Exhibit      3.2 to Registrant's Statement on Form 8-K dated May 25,    2001) |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.1 | 1995      Equity Participation Plan, as amended to date (incorporated by reference      to Exhibit 10.1 to Registrant’s Statement on Form S-8 File No.      333-15683) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2 | Capital      Assurances and Liquidity Maintenance Agreement between California First      National Bancorp and California First National Bank, effective as of May      23, 2001 (incorporated by reference to Exhibit 10.1 to Registrant's      Statement on Form 8-K dated May 25,2001) |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.3 | Agreement      by and between California First National Bank and the Office of the      Comptroller of the Currency dated as of May 23, 2001 (incorporated by      reference to Exhibit 10.2 to Registrant's Statement on Form 8-K dated May      25, 2001) |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.4 | Office      Lease dated January 30, 2003, between California First National Bancorp      and World Trade Center Building, Inc. (incorporated by reference to      Exhibit 10.8 to the Registrant’s March 31, 2003 Form  10-Q) |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.5 | Business      Loan Agreement dated as of January 20, 2006 between California First      Leasing Corporation and Amplicon, Inc. and Bank of America (incorporated      by reference to Exhibit 10.6 to the Registrant’s December 31, 2005 Form      10-Q). |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.6 | First      Amendment to the Business Loan Agreement between California First Leasing      Corporation and Amplicon, Inc. and Bank of America dated as of March 29,      2007 (incorporated by reference to Exhibit 10.7 to Registrant's Statement      on Form 8-K dated April 2, 2007) |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.7 | Second      Amendment to the Business Loan Agreement between California First Leasing      Corporation and Amplicon, Inc. and Bank of America dated as of March 29,      2008 (incorporated by reference to Exhibit 10.7 to Registrant's Statement      on Form 8-K dated June 16, 2008) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.8 | Second      Amendment to Office Lease dated June 11, 2008, between California First      National Bancorp and World Trade Center Building, Inc. (incorporated by      reference to Exhibit 10.8 to the Registrant’s Statement on Form 8-K dated      June 16, 2008) |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.1   | Rule      13a-14(a)/15d-14(a) Certifications of Principal Executive      Officer                     | 57     |
|--------|------------------------------------------------------------------------------------------------------|--------|
|   |                                                                                                 |   |
| 31.2   | Rule      13a-14(a)/15d-14(a) Certifications of Principal Financial      Officer                     | 58     |
|   |                                                                                                 |   |
| 32     | Section      1350 Certifications by Principal Executive Officer and Principal Financial      Officer | 59     |

----

SIGNATURES

| CALIFORNIA      FIRST NATIONAL BANCORP |
|----------------------------------------|
|                                   |   |   |   |   |   |   |
|                                   |   |   |   |   |   |   |
|                                   |   |   |   |   |   |   |
| By                                     | /s/      S. Leslie Jewett | Date:  | September 23, 2008 |   |   |
|                                   | S.      Leslie Jewett |   |   |   |   |
|                                   | Chief      Financial Officer |   |   |   |   |

| Signature                         |   | Title                                       |   | Date               |
|-----------------------------------|--------|---------------------------------------------|--------|--------------------|
|                              |   |                                        |   |               |
| /s/ Patrick      E. Paddon   |   | President,      Chief Executive             |   | September 23, 2008 |
| Patrick      E. Paddon            |   |    Officer      and Director |   |               |
|                              |   |                                        |   |               |
|                              |   |                                        |   |               |
| /s/ Glen      T. Tsuma       |   | Vice      President, Chief Operating        |   | September 23, 2008 |
| Glen      T. Tsuma                |   |    Officer      and Director |   |               |
|                              |   |                                        |   |               |
|                              |   |                                        |   |               |
| /s/ S.      Leslie Jewett    |   | Chief      Financial Officer                |   | September 23, 2008 |
| S.      Leslie Jewett             |   |                                        |   |               |
|                              |   |                                        |   |               |
|                              |   |                                        |   |               |
| /s/ Michael      H. Lowry    |   | Director                                    |   | September 23, 2008 |
| Michael      H. Lowry             |   |                                        |   |               |
|                              |   |                                        |   |               |
|                              |   |                                        |   |               |
| /s/      Harris      Ravine  |   | Director                                    |   | September 23, 2008 |
| Harris      Ravine                |   |                                        |   |               |
|                              |   |                                        |   |               |
|                              |   |                                        |   |               |
| /s/ Danilo      Cacciamatta  |   | Director                                    |   | September 23, 2008 |
| Danilo      Cacciamatta           |   |                                        |   |               |

----