SYNF Synergy Financial Grp. (MM)

CRANFORD, N.J., Oct. 26 /PRNewswire-FirstCall/ -- John S. Fiore, President and Chief Executive Officer of Synergy Financial Group, Inc. (NASDAQ:SYNF) (the "Company"), the holding company of Synergy Bank and Synergy Financial Services, Inc., today announced net income for the three-month period ended September 30, 2005 of $1.108 million, or $0.10 per diluted share, compared to $1.094 million, or $0.09 per diluted share, for the same period last year. Net income for the nine-month period ended September 30, 2005 was $3.333 million, or $0.29 per diluted share. This represents an increase of $324,000, or 10.8%, from the $3.009 million, or $0.27 per diluted share, reported for the same nine-month period of 2004. (Logo: http://www.newscom.com/cgi-bin/prnh/20040128/SYNFDLOGO ) Total assets reached $945.6 million on September 30, 2005, an increase of 9.9%, or $84.9 million, from $860.7 million on December 31, 2004. The increase was primarily attributable to an increase of $129.1 million in net loans, partially offset by a decline of $50.3 million in investment securities. Net loans increased 23.0%, to $690.8 million on September 30, 2005, from $561.7 million on December 31, 2004. On September 30, 2005, total loans were comprised of 33.3% in non-residential and multi-family mortgage loans, 27.4% in consumer loans, 18.4% in single-family real estate loans, 16.5% in home equity loans, 3.2% in commercial and industrial loans and 1.2% in construction loans. On September 30, 2005, the allowance for loan and lease losses was $5.4 million, compared to $4.4 million on December 31, 2004. The ratio of the allowance to total loans was 0.78% on both September 30, 2005 and December 31, 2004. Non-performing assets to total assets was 0.06% on September 30, 2005, compared to 0.03% on December 31, 2004. Deposits reached $581.1 million on September 30, 2005, an increase of $42.2 million, or 7.8%, from the $538.9 million reported on December 31, 2004. Certificates of deposit increased by $71.0 million, or 28.1%, from the $252.7 million reported at year-end 2004, while core deposits, which consist of checking, savings, and money market accounts, decreased $28.8 million, or 10.1%. The increase in certificates of deposit was the result of initiatives directed toward attracting funds with extended maturities in response to the current interest rate environment. Despite the decline in total core deposits during the nine-month period, checking accounts increased by $5.0 million or 8.9%. During the same period, Federal Home Loan Bank borrowings increased $50.0 million, or 23.6%, to $262.5 million on September 30, 2005. Stockholders' equity totaled $97.8 million on September 30, 2005, a decrease of 6.0%, or $6.2 million, from $104.0 million on December 31, 2004. The decline was attributable to the repurchase of common stock in open market transactions to fund the Company's 2004 Restricted Stock Plan and the 5% stock repurchase program that was announced on January 26, 2005, as well as the effect of the net unrealized investment portfolio market value adjustment, offset by the net income for the period. During the third quarter, the Company completed the stock repurchase program originally announced in January, 2005 and commenced a new program to purchase up to an additional 5% of its outstanding common shares. Additionally, on September 28, 2005, the Company's Board of Directors declared a quarterly cash dividend of $0.05 per common share, which is payable on October 28, 2005 to stockholders of record on October 14, 2005. Net interest income increased $78,000, or 1.3%, for the three months ended September 30, 2005, to $6.1 million, from $6.0 million for the same period last year. For the nine months ended September 30, 2005, net interest income increased 7.7%, to $18.5 million, from $17.2 million for the same period last year. Other income increased $72,000, or 7.6%, for the three months ended September 30, 2005, to $1,024,000, from $952,000 for the same period last year. For the nine months ended September 30, 2005, other income increased 32.2%, to $2.9 million, from $2.2 million for the same period last year. The increase was primarily attributable to growth in commission income generated by Synergy Financial Services, Inc. and an increase in income generated from bank-owned life insurance. Other expenses increased $159,000, or 3.2%, for the three months ended September 30, 2005, to $5.1 million, from $4.9 million for the same period last year. For the nine months ended September 30, 2005, other expenses increased $1.4 million, or 10.2%, to $14.8 million, from $13.5 million for the same period last year. The increase was primarily attributable to salaries and benefits associated with the Company's growth strategy, which includes equity- based employee compensation plans, coupled with higher operating expenses associated with a larger branch network. About Synergy Financial Group, Inc. Synergy Financial Group, Inc. is the holding company for Synergy Bank and Synergy Financial Services, Inc. The Company is a financial services company that provides a diversified line of products and services to individuals and small- to mid-size businesses. Synergy offers consumer banking, mortgage lending, commercial banking, consumer finance, Internet banking, and financial services through a network of 19 branch offices located in Middlesex, Monmouth, Morris, and Union counties New Jersey. Forward-Looking Statements This press release contains forward-looking statements, which are not historical facts and pertain to future operating results. These forward- looking statements are within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, expectations, and intentions and other statements contained in this press release that are not historical facts. When used in this press release, the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," or words of similar meaning, or future or conditional verbs, such as "will," "would," "should," "could," or "may" are generally intended to identify forward-looking statements. These forward-looking statements are inherently subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the results discussed in these forward-looking statements. We do not undertake to update any forward-looking statement that may be made by the Company from time to time. SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except share data) September 30, December 31, 2005 2004 (unaudited) (audited) Assets: Cash and amounts due from banks $4,386 $4,687 Interest-bearing deposits with banks 3,554 1,759 Cash and cash equivalents 7,940 6,446 Investment securities available-for-sale, at fair value 93,485 134,360 Investment securities held-to-maturity (fair value of $100,203 and $111,154, respectively) 101,155 110,584 Federal Home Loan Bank of New York stock, at cost 13,123 10,771 Loans receivable, net 690,808 561,687 Accrued interest receivable 3,118 2,751 Property and equipment, net 17,752 16,814 Cash surrender value of bank-owned life insurance 13,010 12,637 Other assets 5,172 4,627 Total assets $945,563 $860,677 Liabilities: Deposits $581,140 $538,916 Federal Home Loan Bank advances 262,450 212,414 Advance payments by borrowers for taxes and insurance 2,140 1,702 Accrued interest payable on advances 780 385 Dividend payable 623 498 Other liabilities 599 2,720 Total liabilities 847,732 756,635 Stockholders' equity: Preferred stock; $.10 par value, 5,000,000 shares authorized; issued and outstanding - none - - Common stock; $.10 par value, 20,000,000 shares authorized; Issued - 12,466,903 in 2005 and 12,452,011 in 2004 Outstanding - 11,453,266 in 2005 and 12,064,968 in 2004 1,247 1,245 Additional paid-in-capital 85,601 86,177 Retained earnings 32,211 30,603 Unearned ESOP shares (5,452) (5,962) Unearned RSP compensation (2,784) (3,391) Treasury stock held for the RSP, at cost; 363,037 and 387,043 shares in 2005 and 2004, respectively (4,042) (4,343) Treasury stock, at cost; 650,600 and 0 shares in 2005 and 2004, respectively (7,916) - Accumulated other comprehensive loss, net of taxes (1,034) (287) Total stockholders' equity 97,831 104,042 Total liabilities and stockholders' equity $945,563 $860,677 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2005 2004 2005 2004 (unaudited)(unaudited)(unaudited)(unaudited) Interest income: Loans, including fees $9,819 $7,278 $27,074 $20,647 Investment securities 1,934 2,463 6,448 5,626 Other 156 42 391 88 Total interest income 11,909 9,783 33,913 26,361 Interest expense: Deposits 3,292 2,329 9,025 6,615 Borrowed funds 2,517 1,432 6,347 2,538 Total interest expense 5,809 3,761 15,372 9,153 Net interest income before provision for loan losses 6,100 6,022 18,541 17,208 Provision for loan losses 392 429 1,314 1,133 Net interest income after provision for loan losses 5,708 5,593 17,227 16,075 Other income: Service charges and other fees on deposit accounts 550 556 1,562 1,604 Net gain (loss) on sale of investments 8 38 (26) 38 Commissions 211 153 660 186 Other 255 205 665 336 Total other income 1,024 952 2,861 2,164 Other expenses: Salaries and employee benefits 2,784 2,687 8,261 7,180 Premises and equipment 962 939 2,789 2,854 Occupancy 604 490 1,655 1,436 Professional services 165 156 560 403 Advertising 269 241 723 603 Other operating 272 384 828 974 Total other expenses 5,056 4,897 14,816 13,450 Income before income tax expense 1,676 1,648 5,272 4,789 Income tax expense 568 554 1,939 1,780 Net income $1,108 $1,094 $3,333 $3,009 Per share of common stock: Basic earnings per share $0.10 $0.10 $0.30 $0.28 Diluted earnings per share $0.10 $0.09 $0.29 $0.27 Basic weighted average shares outstanding 10,711 11,496 10,993 10,886 Diluted weighted average shares outstanding 11,102 11,743 11,390 11,113 http://www.newscom.com/cgi-bin/prnh/20040128/SYNFDLOGODATASOURCE: Synergy Financial Group, Inc. CONTACT: Kevin M. McCloskey, Senior Vice President and Chief Operating Officer of Synergy Financial Group, Inc., 1-800-693-3838, extension 3292 Web site: http://www.synergyonthenet.com/

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