Synergy Financial Group, Inc. Announces Third Quarter, 2005 Earnings
CRANFORD, N.J., Oct. 26 -- 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.
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