UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Synergy Financial Group, Inc.
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(Name of Registrant as Specified in Its Charter)
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Presentation to ISS Regarding the
2006 Annual Meeting of Stockholders of
Synergy Financial Group, Inc.
Forward-looking statements
This presentation 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
presentation, 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.
Company profile
o Synergy Financial Group, Inc. is a $974 million financial services holding
company headquartered in Cranford, New Jersey.
o Synergy Bank, the Company's principal subsidiary, has 20 branch banking
offices in New Jersey's Middlesex, Monmouth and Union counties.
o The Company traces its roots to a federal credit union that was chartered
in 1952 to serve employees of Schering Corporation.
Company profile
o In May of 1998, the former Synergy Federal Credit Union converted to a
federally-chartered mutual savings bank.
o In March of 2001, Synergy Bank reorganized into a mutual holding company
structure, whereby it became a stock savings bank that was wholly-owned by
a federal stock corporation, which, in turn, was wholly-owned by Synergy,
MHC.
Company profile
o In September 2002, the federal stock corporation completed a minority stock
offering, at which time 1,454,750 shares of common stock were offered to
the public, representing 43.5% of the outstanding common stock of the
corporation.
o In August of 2003, Synergy Financial Group, Inc. was incorporated as a New
Jersey corporation in connection with the conversion and reorganization to
a full stock corporation on January 20, 2004.
Company profile
o One day later - on January 21, 2004 - the Company began trading on the
NASDAQ National Market System ("SYNF").
o At December 31, 2005:
- $974 million of total assets;
- 20 banking offices;
- 30,000 households and businesses served;
- 11,545,881 common shares outstanding;
- $95 million in total stockholders' equity.
Company profile
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Synergy Financial Group, Inc.
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Synergy Bank Synergy Financial Services, Inc.
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Synergy Capital Investments, Inc.
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Synergy Investments Corporation
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Business drivers
o Grow loans and diversify mix
o Grow deposits and diversify mix
o Grow and diversify other income
o Control expenses
o Enhance branch network and delivery options
o Utilize capital market tools
Shareholder value
o Through March 1, 2006:
- A greater than 400% gain in the value of shares purchased in Synergy's
September 2002 initial public offering, compared to an increase of 49%
for the S&P 500 average.
- A 35% increase in shares purchased in the Company's second-step
offering in January 2004, compared to 13% gain for the S&P 500.
Grow loans and diversify mix
Net Loans in Millions
[GRAPHIC OMITTED]
2001 2002 2003 2004 2005
---- ---- ---- ---- ----
$224.7 $319.4 $434.6 $561.7 $733.2
Net Loan Growth 42.2% 36.1% 29.3% 30.5%
Grow loans and diversify mix
Loan Portfolio Composition
December 31, 2005
[PIE OMITTED]
Single-family Real Estate 18%
Home Equity 15%
Non-residential/Multi-family 37%
Consumer 26%
Commercial 3%
Construction 1%
Grow loans and diversify mix
[GRAPHIC OMITTED]
2001 2002 2003 2004 2005
---- ---- ---- ---- ----
Single-family Real Estate 46.8% 38.6% 29.7% 23.2% 17.5%
Home Equity 19.0% 24.3% 22.0% 20.2% 15.3%
Non-residential / Multi-family 8.4% 15.1% 20.7% 26.7% 36.8%
Consumer 25.8% 21.3% 25.8% 26.7% 25.7%
Commercial 2.2% 3.4%
Construction 1.0% 1.3%
Grow loans and diversify mix
Non-performing Loans (greater than 90 days) in Thousands
[GRAPHIC OMITTED]
2001 2002 2003 2004 2005
---- ---- ---- ---- ----
$71 $449 $348 $264 $382
0.03% 0.14% 0.08% 0.05% 0.05%
Grow loans and diversify mix
Net Charge-offs to Average Loans Outstanding
[GRAPHIC OMITTED]
2001 2002 2003 2004 2005
---- ---- ---- ---- ----
0.08% 0.08% 0.24% 0.07% 0.08%
Grow loans and diversify mix
Allowance for Loan and Lease Losses in Thousands
[GRAPHIC OMITTED]
2001 2002 2003 2004 2005
---- ---- ---- ---- ----
$1,372 $2,231 $3,274 $4,427 $5,763
0.61% 0.69% 0.75% 0.78% 0.78%
Grow deposits and diversify mix
Total Deposits in Millions
[GRAPHIC OMITTED]
2001 2002 2003 2004 2005
---- ---- ---- ---- ----
$249.8 $354.1 $473.5 $538.9 $606.5
Total Deposit Growth 41.7% 33.7% 13.8% 12.6%
Grow deposits and diversify mix
Deposit Composition
December 31, 2005
[PIE OMITTED]
Checking 10.1%
Savings 9.9%
Money Market 19.5%
Time 60.5%
Loan to deposit ratio
[GRAPHIC OMITTED]
2001 2002 2003 2004 2005
---- ---- ---- ---- ----
90.43% 88.67% 85.13% 104.89% 121.72%
Control expenses
Efficiency Ratio
[GRAPHIC OMITTED]
2001 2002 2003 2004 2005
---- ---- ---- ---- ----
73.2% 72.9% 70.8% 69.4% 68.9%
Enhance branch network and delivery options
o Opened eleven new
branch offices since
2002 in Middlesex, [MAP OMITTED]
Monmouth and Union
counties.
Enhance branch network and delivery options
Expansion plans -
o Middlesex County
o Monroe (relocation), Woodbridge
o Monmouth County
o Howell
o Mercer County
o East Windsor
Enhance branch network and delivery options
o Branch banking offices and Call Center open 7 days a week
o Extended service hours
o Internet- and telephone-based transactional banking services
o Internet-based bill payment service for individuals and businesses
o Internet-based cash management service for businesses
Utilize capital market tools
o Stock buy-back program commenced in 2003 to fund stockholder-approved
benefit plans.
o Three additional buy-back programs have been announced since receiving
authorization for same from regulator in December 2005.
o Executed a series of capital leverage strategies.
Utilize capital market tools
o On June 22, 2004 the Company's Board of Directors declared a quarterly cash
dividend of $0.04 per common share. One year later, the quarterly cash
dividend was increased 25%, to $0.05 per common share.
o Acquired First Bank of Central Jersey in January 2003.
Bank capital ratios
2001 2002 2003 2004 2005
---- ---- ---- ---- ----
OTS "Well Capitalized"
Risk-based 12.00% 11.17% 10.41% 16.57% 12.84% 10.00%
Tier I 11.30% 10.41% 9.63% 15.79% 12.04% 6.00%
Tangible 7.48% 7.01% 6.37% 10.44% 8.96% 5.00%
Board profile
o The Board is made up of nine total directors.
o All are outside directors, with the exception of the president and chief
executive officer.
o Three have been nominated for election at the upcoming annual meeting and
six are continuing.
Board profile
o Key board committees (Audit, Nominating, Compensation) consist solely of
outside directors.
o All directors who have been elected since Synergy's credit union conversion
in 1998 live or work in the bank's market area.