FOR IMMEDIATE RELEASE
January 18, 2006
For further information contact:
Kevin M. McCloskey
Senior Vice President and Chief Operating Officer
Synergy Financial Group, Inc.
(800) 693-3838, extension 3292
Synergy Financial Group, Inc. Announces
Annual and Fourth Quarter, 2005 Earnings
Cranford, New Jersey, January 18, 2006 - 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 December 31,
2005 of $1.160 million, or $0.10 per diluted share, compared to $1.194 million,
or $0.10 per diluted share, for the same period last year. Net income for the
twelve-month period ended December 31, 2005 was $4.493 million, or $0.40 per
diluted share. This represents an increase of $290,000, or 6.9%, from the $4.203
million, or $0.37 per diluted share, reported for the same period in 2004.
Total assets reached $973.9 million on December 31, 2005, an increase of 13.2%,
or $113.2 million, from $860.7 million on December 31, 2004. The increase was
primarily attributable to an increase of $171.4 million in net loans, partially
offset by a decline of $64.0 million in investment securities.
Net loans increased 30.5%, to $733.2 million on December 31, 2005, from $561.7
million on December 31, 2004. On December 31, 2005, total loans were comprised
of 36.7% in non-residential and multi-family mortgage loans, 25.7% in consumer
loans, 17.6% in single-family real estate loans, 15.3% in home equity loans,
3.4% in commercial and industrial loans and 1.3% in construction loans.
On December 31, 2005, the allowance for loan and lease losses was $5.8 million,
compared to $4.4 million on December 31, 2004. The ratio of the allowance to
total loans was 0.78% on both December 31, 2005 and December 31, 2004.
Non-performing assets to total assets was 0.04% on December 31, 2005, compared
to 0.03% on December 31, 2004.
Deposits reached $606.5 million on December 31, 2005, an increase of $67.6
million, or 12.5%, from the $538.9 million reported on December 31, 2004.
Certificates of deposit increased by $113.7 million, or 45.0%, from the $252.7
million reported at year-end 2004, while core deposits, which consist of
checking, savings, and money market accounts, decreased $46.1 million, or 16.1%.
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, coupled with the placement of approximately $23.6
million of brokered certificates of deposit. Despite the decline in total core
deposits during the twelve-month period ended December 31, 2005, checking
accounts increased by $5.5 million or 9.8%. During the same
-More-
period, Federal Home Loan Bank borrowings increased $54.2 million, or 25.5%, to
$266.6 million on December 31, 2005.
Stockholders' equity totaled $95.3 million on December 31, 2005, a decrease of
8.4%, or $8.8 million, from $104.0 million on December 31, 2004. The decline was
attributable to the repurchase of 989,451 shares of common stock in open market
transactions to fund the Company's 2004 Restricted Stock Plan and its stock
repurchase programs, as well as the effect of the net unrealized investment
portfolio market value adjustment, offset by the net income for the period. On
August 24, 2005, the Company announced a new program to repurchase up to an
additional 5% of its outstanding common stock, or approximately 577,628 shares.
During the fourth quarter, the Company repurchased 275,000 shares. As a result,
it has now completed in excess of 52% of the current program, at an average
price of $12.72 per share. Additionally, on December 21, 2005, the Company's
Board of Directors declared a quarterly cash dividend of $0.05 per common share,
which is payable on January 27, 2006 to stockholders of record on January 13,
2006.
Net interest income increased $283,000, or 4.7%, for the three months ended
December 31, 2005, to $6.3 million, from $6.0 million for the same period last
year. For the twelve months ended December 31, 2005, net interest income
increased 7.0%, to $24.8 million, from $23.2 million for the same period last
year.
Other income decreased $130,000, or 11.6%, for the three months ended December
31, 2005, to $990,000, from $1,120,000 for the same period last year. The
decrease in other income from the fourth quarter of last year was primarily due
to a decline in commission income generated by Synergy Financial Services, Inc.
("SFSI"). For the twelve months ended December 31, 2005, other income increased
17.3%, to $3.9 million, from $3.3 million for the same period last year. The
increase was primarily attributable to growth in commission income generated by
SFSI and an increase in income generated from bank-owned life insurance.
Other expenses increased $14,000, or 0.3%, for the three months ended December
31, 2005, to $4.945 million, from $4.931 million for the same period last year.
For the twelve months ended December 31, 2005, other expenses increased $1.4
million, or 7.5%, to $19.8 million, from $18.4 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. During 2005, Synergy Bank opened branch offices in
Elizabeth, Spotswood and Summit and closed a Union Township facility.
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 20 branch offices located in Middlesex, Monmouth,
Morris, and Union counties New Jersey.
-More-
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.
-More-
SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share data)
December 31, December 31,
2005 2004
------------ ------------
(unaudited) (audited)
Assets:
Cash and amounts due from banks $ 4,635 $ 4,687
Interest-bearing deposits with banks 1,948 1,759
----------- -----------
Cash and cash equivalents 6,583 6,446
Investment securities available-for-sale,
at fair value 85,319 134,360
Investment securities held-to-maturity (fair
value of $93,575 and $111,154, respectively) 95,621 110,584
Federal Home Loan Bank of New York
stock, at cost 13,263 10,771
Loans receivable, net 733,183 561,687
Accrued interest receivable 3,313 2,751
Property and equipment, net 18,570 16,814
Cash surrender value of bank-owned life insurance 13,138 12,637
Other assets 4,897 4,627
----------- -----------
Total assets $ 973,887 $ 860,677
=========== ===========
Liabilities:
Deposits $ 606,471 538,916
Federal Home Loan Bank advances 266,600 212,414
Advance payments by borrowers
for taxes and insurance 2,215 1,702
Accrued interest payable on advances 611 385
Dividend payable 623 498
Other liabilities 2,117 2,720
----------- -----------
Total liabilities 878,637 756,635
----------- -----------
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 - 12,471,481 in 2005 and 12,452,011 in 2004
Outstanding - 11,545,881 in 2005 and 12,452,011 in 2004 1,247 1,245
Additional paid-in-capital 85,959 86,177
Retained earnings 32,794 30,603
Unearned ESOP shares (5,282) (5,962)
Unearned RSP compensation (2,567) (3,391)
Treasury stock held for the RSP, at cost; 363,037
and 387,043 shares in 2005 and 2004, respectively (4,124) (4,343)
Treasury stock, at cost; 925,600 and -0- shares in 2005
and 2004, respectively (11,426) -
Accumulated other comprehensive loss, net of taxes (1,351) (287)
------------ -----------
Total stockholders' equity 95,250 104,042
----------- -----------
Total liabilities and stockholders' equity $ 973,887 $ 860,677
=========== ===========
-More-
SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2005 2004 2005 2004
-------- --------- --------- ---------
(unaudited) (unaudited) (unaudited) (audited)
Interest income:
Loans, including fees $ 10,664 $ 7,610 $ 37,738 $ 28,258
Investment securities 1,813 2,354 8,261 7,980
Other 181 74 572 162
-------- --------- --------- ---------
Total interest income 12,658 10,038 46,571 36,400
-------- --------- --------- ---------
Interest expense:
Deposits 3,834 2,499 12,859 9,114
Borrowed funds 2,542 1,540 8,889 4,078
-------- --------- --------- ---------
Total interest expense 6,376 4,039 21,748 13,192
-------- --------- --------- ---------
Net interest income before
provision for loan losses 6,282 5,999 24,823 23,208
Provision for loan losses 546 358 1,860 1,492
-------- --------- --------- ---------
Net interest income after
provision for loan losses 5,736 5,641 22,963 21,716
-------- --------- --------- ---------
Other income:
Service charges and other fees on
deposit accounts 543 578 2,105 2,182
Net (loss) gain on sale of investments - - (26) 38
Commissions 195 331 855 517
Other 252 211 917 547
-------- --------- --------- ---------
Total other income 990 1,120 3,851 3,284
-------- --------- --------- ---------
Other expenses:
Salaries and employee benefits 2,540 2,768 10,801 9,948
Premises and equipment 1,018 946 3,807 3,800
Occupancy 590 475 2,245 1,911
Professional services 236 300 796 703
Advertising 252 219 975 822
Other operating 309 223 1,137 1,197
-------- --------- --------- ---------
Total other expenses 4,945 4,931 19,761 18,381
-------- --------- --------- ---------
Income before income tax expense 1,781 1,830 7,053 6,619
Income tax expense 621 636 2,560 2,416
-------- --------- --------- ---------
Net income $ 1,160 $ 1,194 $ 4,493 $ 4,203
======== ========= ========= =========
Per share of common stock:
Basic earnings per share $ 0.11 $ 0.10 $ 0.41 $ 0.38
Diluted earnings per share $ 0.10 $ 0.10 $ 0.40 $ 0.37
Basic weighted average shares
outstanding 10,669 11,374 10,911 11,009
Diluted weighted average shares
outstanding 11,057 11,734 11,306 11,276
# # # #