FOR IMMEDIATE RELEASE
April 26, 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
FIRST QUARTER, 2006 EARNINGS
CRANFORD, NEW JERSEY, APRIL 26, 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 March 31, 2006
of $1.049 million, or $0.10 per diluted share, compared to $1.120 million, or
$0.10 per diluted share, for the same period last year. Results for the first
quarter of 2006 included $118,000, or $0.01 per diluted share, in after-tax
stock option expense relating to the adoption of Statement of Financial
Accounting Standards (SFAS) No. 123(R), "Share-Based Payment," which became
effective January 1, 2006.
Total assets reached $979.2 million on March 31, 2006, an increase of 0.5%, or
$5.3 million, from $973.9 million on December 31, 2005. The increase was
primarily attributable to an increase of $13.6 million in net loans, partially
offset by a decline of $9.9 million in investment securities.
Net loans increased 1.9%, to $746.8 million, on March 31, 2006, from $733.2
million on December 31, 2005. During the quarter, Synergy Bank sold
approximately $7.1 million of loans that were providing yields below current
market levels. On March 31, 2006, total loans were comprised of 38.3% in
non-residential and multi-family mortgage loans, 23.9% in consumer loans, 17.3%
in single-family real estate loans, 15.0% in home equity loans, 4.4% in
commercial and industrial loans and 1.1% in construction loans.
On March 31, 2006 the allowance for loan and lease losses was $5.9 million,
compared to $5.8 million on December 31, 2005. The ratios of the allowance for
loan and lease losses to total
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loans and of non-performing assets to total assets were 0.78% and 0.04%,
respectively, on both March 31, 2006 and December 31, 2005.
Deposits reached $671.2 million on March 31, 2006, an increase of $64.7 million,
or 10.7%, from the $606.5 million reported on December 31, 2005. Certificates of
deposit increased by $52.9 million, or 14.4%, from the $366.5 million reported
at year-end 2005, while core deposits, which consist of checking, savings, and
money market accounts, increased $11.8 million, or 4.9%. During the same period,
Federal Home Loan Bank borrowings declined $57.1 million, or 21.4%, to $209.5
million on March 31, 2006 due primarily to the growth in deposits.
Stockholders' equity totaled $94.0 million on March 31, 2006, a decrease of
1.3%, or $1.3 million, from $95.3 million on December 31, 2005. The decline was
attributable to the repurchase of 185,393 shares of the Company's common stock
in open market transactions, partially offset by net income for the period. On
February 23, 2006, the Company announced a new program to repurchase up to an
additional 5% of its outstanding common stock, or approximately 572,294 shares.
Additionally, on March 29, 2006, the Company's Board of Directors declared a
quarterly cash dividend of $0.05 per common share, which is payable on April 28,
2006 to stockholders of record on April 14, 2006.
Net interest income increased $309,000 or 5.1%, for the three months ended March
31, 2006, to $6.4 million, from $6.1 million for the same period last year.
Other income decreased $23,000, or 2.6%, for the three months ended March 31,
2006, to $876,000, from $899,000 for the same period last year. The decrease in
other income was primarily due to a decline in commission income at Synergy
Financial Services, Inc.
Other expenses increased $460,000, or 9.8%, for the three months ended March 31,
2006, to $5.2 million, from $4.7 million for the same period last year. The
increase was primarily attributable to salaries and benefits associated with the
Company's growth strategy of expanding its branch network, coupled with
approximately $158,000 of pre-tax stock option compensation expense associated
with the adoption of SFAS No. 123(R).
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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 in 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.
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SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands)
March 31, December 31,
2006 2005
(unaudited) (audited)
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ASSETS:
Cash and amounts due from banks $ 5,175 $ 4,635
Interest-bearing deposits with banks 4,173 1,948
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Cash and cash equivalents 9,348 6,583
Investment securities available-for-sale, at fair value 79,972 85,319
Investment securities held-to-maturity (fair
value of $88,756 and $93,575, respectively) 91,054 95,621
Federal Home Loan Bank of New York stock, at cost 10,694 13,263
Loans receivable, net 746,770 733,183
Accrued interest receivable 3,358 3,313
Property and equipment, net 18,549 18,570
Cash surrender value of bank-owned life insurance 15,088 13,138
Other assets 4,335 4,897
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Total assets $ 979,168 $ 973,887
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LIABILITIES:
Deposits $ 671,170 $ 606,471
Other borrowed funds 209,500 266,600
Advance payments by borrowers for taxes and insurance 2,670 2,215
Accrued interest payable on advances 606 611
Dividend payable 624 623
Other liabilities 632 2,117
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Total liabilities 885,202 878,637
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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 2006 and 2005
Outstanding - 11,360,488 in 2006 and 11,545,881 in 2005 1,247 1,247
Additional paid-in-capital 86,275 85,959
Retained earnings 33,276 32,794
Unearned ESOP shares (5,112) (5,282)
Unearned RSP compensation (2,367) (2,567)
Treasury stock acquired for the RSP, at cost;
363,037 in 2006 and 2005 (4,124) (4,124)
Treasury stock, at cost; 1,110,993 in 2006 and
925,600 in 2005 (13,883) (11,426)
Accumulated other comprehensive loss, net (1,346) (1,351)
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Total stockholders' equity 93,966 95,250
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Total liabilities and stockholders' equity $ 979,168 $ 973,887
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SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share data)
Three Months Ended
March 31,
-------------------
2006 2005
(unaudited) (unaudited)
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Interest income:
Loans, including fees $ 11,340 $ 8,220
Investment securities 1,763 2,270
Other 173 91
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Total interest income 13,276 10,581
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Interest expense:
Deposits 4,357 2,720
Other borrowed funds 2,542 1,793
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Total interest expense 6,899 4,513
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Net interest income before provision for loan losses 6,377 6,068
Provision for loan losses 416 445
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Net interest income after provision for loan losses 5,961 5,623
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Other income:
Service charges and other fees on deposit accounts 494 508
Net gains on sales of investment securities - -
Commissions 230 248
Other 152 143
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Total other income 876 899
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Other expenses:
Salaries and employee benefits 3,077 2,643
Premises and equipment 662 693
Occupancy 562 504
Professional services 197 195
Advertising 114 175
Other operating 554 496
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Total other expenses 5,166 4,706
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Income before income tax expense 1,671 1,816
Income tax expense 622 696
--------- ---------
Net income $ 1,049 $ 1,120
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Per share of common stock:
Basic earnings per share $ 0.10 $ 0.10
Diluted earnings per share $ 0.10 $ 0.10
Basic weighted average shares outstanding 10,358 11,231
Diluted weighted average shares outstanding 10,793 11,680
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