FOR IMMEDIATE RELEASE
July 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
Second Quarter, 2006 Earnings
Cranford, New Jersey, July 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 June 30, 2006
of $1.060 million, or $0.10 per diluted share, compared to $1.105 million, or
$0.10 per diluted share, for the same period last year. Net income for the
six-month period ended June 30, 2006 was $2.109 million, or $0.20 per diluted
share, compared to $2.225 million, or $0.19 per diluted share, for the same
period last year. Results for the three- and six-month periods ended June 30,
2006 included $128,000, or $0.01 per diluted share, and $246,000, or $0.02 per
diluted share, respectively, 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 $999.7 million on June 30, 2006, an increase of 2.6%, or
$25.8 million, from $973.9 million on December 31, 2005. The increase was
primarily attributable to an increase of $37.5 million in net loans, partially
offset by a decline of $20.3 million in investment securities.
Net loans increased 5.1%, to $770.7 million, on June 30, 2006, from $733.2
million on December 31, 2005. During the first six months of 2006, Synergy Bank
sold approximately $9.1 million of loans that were providing yields below
current market levels. On June 30, 2006, total loans were comprised of 39.4% in
non-residential and multi-family mortgage loans, 21.4% in consumer loans, 16.6%
in single-family real estate loans, 14.8% in home equity loans, 6.5% in
commercial and industrial loans and 1.3% in construction loans.
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On June 30, 2006 the allowance for loan and lease losses was $6.1 million,
compared to $5.8 million on December 31, 2005. The ratio of the allowance for
loan and lease losses to total loans was 0.78% on both June 30, 2006 and
December 31, 2005. Non-performing assets represented 0.05% of total assets on
June 30, 2006, compared to 0.04% on December 31, 2005.
Deposits reached $658.4 million on June 30, 2006, an increase of $51.9 million,
or 8.6%, from the $606.5 million reported on December 31, 2005. Certificates of
deposit increased by $44.6 million, or 12.2%, from the $366.5 million reported
at year-end 2005, while core deposits, which consist of checking, savings, and
money market accounts, increased $7.3 million, or 3.0%. During the same period,
Federal Home Loan Bank borrowings declined $23.9 million, or 9.0%, to $242.7
million on June 30, 2006, due primarily to the growth in deposits.
Stockholders' equity totaled $94.5 million on June 30, 2006, a decrease of $0.7
million, or 0.8%, from $95.3 million on December 31, 2005. The decline was
attributable to the repurchase of 201,893 shares of the Company's common stock
in open market transactions, partially offset by net income for the period.
Additionally, on June 28, 2006, the Company's Board of Directors declared a
quarterly cash dividend of $0.06 per common share, which represented an increase
of $0.01, or 20%, from the Company's former quarterly cash dividend of $0.05.
The dividend is payable on July 28, 2006 to stockholders of record on July 14,
2006.
Net interest income declined $198,000, or 3.1%, for the three months ended June
30, 2006, to $6.3 million, from $6.5 million for the same period last year. Last
year's results included approximately $117,000 of loan prepayment fees. For the
six months ended June 30, 2006, net interest income increased 0.9%, to $12.6
million, from $12.5 million for the same period last year.
Other income increased $73,000, or 9.0%, for the three months ended June 30,
2006, to $883,000, from $811,000 for the same period last year. For the six
months ended June 30, 2006, other income increased 2.9%, to $1.8 million, from
$1.7 million for the same period last year. The increase for both the three- and
six-month periods was primarily due to an increase in income generated from
bank-owned life insurance.
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Other expenses increased $163,000, or 3.2%, for the three months ended June 30,
2006, to $5.2 million, from $5.0 million for the same period last year. For the
six months ended June 30, 2006, other expenses increased $626,000, or 6.4%, to
$10.3 million, from $9.7 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. Additionally, for the three-
and six-month periods of 2006, there was approximately $169,000 and $328,000,
respectively, of pre-tax stock option compensation expense associated with the
adoption of SFAS No. 123(R).
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.
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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)
(Unaudited)
June 30, December 31,
2006 2005
--------- ---------
Assets:
Cash and amounts due from banks $ 6,769 $ 4,635
Interest-bearing deposits with banks 7,095 1,948
--------- ---------
Cash and cash equivalents 13,864 6,583
Investment securities available-for-sale, at fair value 74,264 85,319
Investment securities held-to-maturity (fair
value of $82,738 and $93,575, respectively) 86,331 95,621
Federal Home Loan Bank of New York stock, at cost 12,298 13,263
Loans receivable, net 770,658 733,183
Accrued interest receivable 3,553 3,313
Property and equipment, net 18,304 18,570
Cash surrender value of bank-owned life insurance 15,424 13,138
Other assets 4,991 4,897
--------- ---------
Total assets $ 999,687 $ 973,887
========= =========
Liabilities:
Deposits $ 658,417 $ 606,471
Other borrowed funds 242,705 266,600
Advance payments by borrowers for taxes and insurance 2,837 2,215
Accrued interest payable on advances 503 611
Other liabilities 693 2,740
--------- ---------
Total liabilities 905,155 878,637
--------- ---------
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 - 12,471,681 in 2006 and 12,471,481 in 2005
Outstanding - 11,344,188 in 2006 and 11,545,881 in 2005 1,247 1,247
Additional paid-in-capital 84,071 85,959
Retained earnings 33,655 32,794
Unearned ESOP shares (4,939) (5,282)
Unearned RSP compensation - (2,567)
Treasury stock acquired for the RSP, at cost;
326,264 in 2006 and 363,037 in 2005 (3,706) (4,124)
Treasury stock, at cost; 1,127,493 in 2006
and 925,600 in 2005 (14,125) (11,426)
Accumulated other comprehensive loss, net of taxes (1,671) (1,351)
--------- ---------
Total stockholders' equity 94,532 95,250
--------- ---------
Total liabilities and stockholders' equity $ 999,687 $ 973,887
========= =========
SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2006 2005 2006 2005
-------- -------- -------- --------
Interest income:
Loans, including fees $ 11,917 $ 9,122 $ 23,257 $ 17,342
Investment securities 1,658 2,244 3,421 4,514
Other 172 143 345 234
-------- -------- -------- --------
Total interest income 13,747 11,509 27,023 22,090
-------- -------- -------- --------
Interest expense:
Deposits 5,057 3,013 9,414 5,733
Borrowed funds 2,429 2,037 4,971 3,830
-------- -------- -------- --------
Total interest expense 7,486 5,050 14,385 9,563
-------- -------- -------- --------
Net interest income before
provision for loan losses 6,261 6,459 12,638 12,527
Provision for loan losses 252 477 668 922
-------- -------- -------- --------
Net interest income after
provision for loan losses 6,009 5,982 11,970 11,605
-------- -------- -------- --------
Other income:
Service charges and other fees on
deposit accounts 519 504 1,013 1,012
Net gain (loss) on sale of investments - (34) - (34)
Commissions 184 201 414 449
Other 181 140 333 283
-------- -------- -------- --------
Total other income 884 811 1,760 1,710
-------- -------- -------- --------
Other expenses:
Salaries and employee benefits 3,047 2,834 6,124 5,477
Premises and equipment 671 768 1,333 1,461
Occupancy 564 507 1,126 1,012
Professional services 262 199 459 394
Advertising 146 241 260 415
Other operating 489 467 1,043 960
-------- -------- -------- --------
Total other expenses 5,179 5,016 10,345 9,719
-------- -------- -------- --------
Income before income tax expense 1,714 1,777 3,385 3,596
Income tax expense 654 672 1,276 1,371
-------- -------- -------- --------
Net income $ 1,060 $ 1,105 $ 2,109 $ 2,225
======== ======== ======== ========
Per share of common stock:
Basic earnings per share $ 0.10 $ 0.10 $ 0.20 $ 0.20
Diluted earnings per share $ 0.10 $ 0.10 $ 0.20 $ 0.19
Basic weighted average shares
outstanding 10,313 11,043 10,335 11,136
Diluted weighted average shares
outstanding 10,802 11,395 10,798 11,536
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