Synergy Financial Group, Inc.
310 North Avenue East
P.O. Box 130
Cranford, NJ 07016-0130
(908) 272-3838
(800) 693-3838
FOR IMMEDIATE RELEASE
January 24, 2007
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, 2006 EARNINGS
CRANFORD, NEW JERSEY, JANUARY 24, 2007 - 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,
2006 of $1.005 million, or $0.09 per diluted share, compared to $1.160 million,
or $0.10 per diluted share, for the same period last year. Net income for the
twelve-month period ended December 31, 2006 was $4.095 million, or $0.38 per
diluted share, compared to $4.493 million, or $0.40 per diluted share, for the
same period last year. Results for the three- and twelve-month periods ended
December 31, 2006 included $129,000, or $0.01 per diluted share, and $505,000,
or $0.04 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 $986.3 million on December 31, 2006, an increase of 1.3%,
or $12.4 million, from $973.9 million on December 31, 2005. The increase was
primarily attributable to an increase of $31.8 million in net loans and $8.7
million in bank-owned life insurance, partially offset by a decline of $34.6
million in investment securities.
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Synergy Financial Group, Inc. (page 2)
Net loans increased 4.3%, to $765.0 million, on December 31, 2006, from $733.2
million on December 31, 2005. During the year of 2006, Synergy Bank sold
approximately $9.1 million of loan participations that were providing yields
below current market levels. On December 31, 2006, total loans were comprised of
42.3% in non-residential and multi-family mortgage loans, 18.9% in consumer
loans, 16.7% in single-family real estate loans, 14.2% in home equity loans,
7.1% in commercial and industrial loans and 0.8% in construction loans.
On December 31, 2006, the allowance for loan losses was $6.0 million, compared
to $5.8 million on December 31, 2005. The ratio of the allowance for loan losses
to total loans was 0.78% on both December 31, 2006 and December 31, 2005.
Non-performing assets represented 0.04% of total assets on both December 31,
2006 and December 31, 2005. During the fourth quarter of 2006, an $825,000
non-residential loan that had been placed into non-performing status during the
third quarter of 2006 was paid in full.
Deposits reached $645.8 million on December 31, 2006, an increase of $39.3
million, or 6.5%, from the $606.5 million reported on December 31, 2005.
Certificates of deposit increased by $48.9 million, or 13.4%, from the $366.5
million reported at year-end 2005, while core deposits, which consist of
checking, savings, and money market accounts, decreased $9.6 million, or 4.0%.
During the same period, Federal Home Loan Bank borrowings declined $30.9
million, or 11.6%, to $235.7 million on December 31, 2006.
Stockholders' equity totaled $98.5 million on December 31, 2006, an increase of
$3.2 million, or 3.4%, from $95.3 million on December 31, 2005. The increase was
attributable to net income for the period, partially offset by the repurchase of
201,893 shares of the Company's common stock in open market transactions.
Additionally, on December 27, 2006, the Company's Board of Directors announced a
quarterly cash dividend of $0.06 per common share, which is payable on January
26, 2007 to stockholders of record on January 12, 2007.
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Synergy Financial Group, Inc. (page 3)
Net interest income declined $897,000, or 14.2%, for the three months ended
December 31, 2006, to $5.4 million, from $6.3 million for the same period last
year. For the twelve months ended December 31, 2006, net interest income
decreased 5.1%, to $23.7 million, from $25.0 million last year. This
year-over-year decline was the result of margin compression stemming from the
flat to inverted yield curve, increased funding costs and a slowdown in asset
growth.
Other income increased $202,000, or 22.0%, for the three months ended December
31, 2006, to $1,119,000, from $917,000 for the same period last year. For the
twelve months ended December 31, 2006, other income increased 7.1%, to $3.8
million. The increase for both the three- and twelve-month periods was primarily
due to growth in commission income generated by Synergy Financial Services, Inc.
and an increase in income from bank-owned life insurance.
Other expenses increased $69,000, or 1.4%, for the three months ended December
31, 2006, to $5.0 million. For the twelve months ended December 31, 2006, other
expenses increased $635,000, or 3.2%, to $20.3 million, from $19.7 million for
the same period last year. For the three- and twelve-month periods of 2006,
there was approximately $170,000 and $667,000, 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 19 branch offices located in Middlesex, Monmouth
and Union counties in New Jersey.
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Synergy Financial Group, Inc. (page 4)
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. (page 5)
SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
December 31, December 31,
2006 2005
-------- ---------
ASSETS:
Cash and amounts due from banks $ 5,673 $ 4,635
Interest-bearing deposits with banks 4,458 1,948
-------- ---------
Cash and cash equivalents 10,131 6,583
Investment securities available-for-sale, at fair value 68,417 85,319
Investment securities held-to-maturity (fair
value of $76,263 and $93,575, respectively) 77,917 95,621
Federal Home Loan Bank of New York stock, at cost 11,981 13,263
Loans receivable, net 765,001 733,183
Accrued interest receivable 3,848 3,313
Property and equipment, net 20,106 18,570
Cash surrender value of bank-owned life insurance 21,816 13,138
Other assets 7,109 4,897
-------- ---------
Total assets $ 986,326 $ 973,887
======== =========
LIABILITIES:
Deposits $ 645,816 $ 606,471
Other borrowed funds 235,675 266,600
Advance payments by borrowers for taxes and insurance 2,701 2,215
Accrued interest payable on borrowed funds 651 611
Other liabilities 2,983 2,740
-------- ---------
Total liabilities 887,826 878,637
-------- ---------
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 - 12,509,636 in 2006 and 12,471,481 in 2005
Outstanding - 11,382,143 in 2006 and 11,545,881 in 2005 1,251 1,247
Additional paid-in-capital 85,381 85,959
Retained earnings 34,582 32,794
Unearned ESOP shares (4,600) (5,282)
Unearned RSP compensation - (2,567)
Treasury stock acquired for the RSP, at cost;
271,613 in 2006 and 363,037 in 2005 (3,086) (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 (903) (1,351)
-------- ---------
Total stockholders' equity 98,500 95,250
-------- ---------
Total liabilities and stockholders' equity $ 986,326 $ 973,887
======== =========
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Synergy Financial Group, Inc. (page 6)
SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- --------------------
2006 2005 2006 2005
------ ------ ------ ------
Interest income:
Loans, including fees $ 12,555 $ 10,718 $ 48,011 $ 37,928
Investment securities 1,540 1,812 6,538 8,260
Other 188 181 714 572
------- -------- -------- --------
Total interest income 14,283 12,711 55,263 46,760
------- -------- -------- --------
Interest expense:
Deposits 5,999 3,834 21,084 12,859
Borrowed funds 2,846 2,542 10,444 8,889
------- -------- -------- --------
Total interest expense 8,845 6,376 31,528 21,748
------- -------- -------- --------
Net interest income before
provision for loan losses 5,438 6,335 23,735 25,012
Provision for loan losses 101 545 969 1,859
------- -------- -------- --------
Net interest income after
provision for loan losses 5,337 5,790 22,766 23,153
------- -------- -------- --------
Other income:
Service charges and other fees on
deposit accounts 555 543 2,125 2,105
Net losses on sales of investments - - - (26)
Commissions 288 195 913 855
Other 276 179 797 647
------- -------- -------- --------
Total other income 1,119 917 3,835 3,581
------- -------- -------- --------
Other expenses:
Salaries and employee benefits 3,259 2,540 12,463 10,801
Premises and equipment 633 820 2,600 3,046
Occupancy 571 569 2,286 2,164
Professional services 126 237 734 796
Advertising 64 249 405 926
Other operating 342 511 1,828 1,948
------- -------- -------- --------
Total other expenses 4,995 4,926 20,316 19,681
------- -------- -------- --------
Income before income tax expense 1,461 1,781 6,285 7,053
Income tax expense 456 621 2,190 2,560
------- -------- -------- --------
Net income $ 1,005 $ 1,160 $ 4,095 $ 4,493
======= ======== ======== ========
Per share of common stock:
Basic earnings per share $ 0.10 $ 0.11 $ 0.39 $ 0.41
Diluted earnings per share $ 0.09 $ 0.10 $ 0.38 $ 0.40
Basic weighted average shares
outstanding 10,455 10,669 10,376 10,911
Diluted weighted average shares
outstanding 10,881 11,057 10,760 11,306
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