SYNF Synergy Financial Grp. (MM)

Synergy Financial Group, Inc. Announces Second Quarter, 2005 Earnings CRANFORD, N.J., July 27 /PRNewswire-FirstCall/ -- 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, 2005 of $1.1 million, or $0.10 per basic and diluted share. This represents an increase of $195,000, or 21.4%, from $0.9 million, or $0.08 per basic and diluted share, for the same three-month period last year. Net income for the six-month period ended June 30, 2005 was $2.2 million, or $0.20 per basic and $0.19 per diluted share. This represents an increase of $310,000, or 16.2%, from $1.9 million, or $0.18 per basic and diluted share, for the same six-month period in 2004. (Logo: http://www.newscom.com/cgi-bin/prnh/20040128/SYNFDLOGO ) Total assets reached $923.0 million, on June 30, 2005, an increase of 7.2%, or $62.3 million, from $860.7 million on December 31, 2004. The increase was primarily attributable to increases of $92.4 million in net loans and $2.3 million in Federal Home Loan Bank of New York stock, offset by a decline of $31.7 million in investment securities. Net loans increased 16.5%, to $654.1 million, on June 30, 2005, from $561.7 million on December 31, 2004. On June 30, 2005, total loans were comprised of 29.5% in non-residential and multi-family mortgage loans, 29.1% in consumer loans, 20.0% in single-family real estate loans, 17.5% in home equity loans, 2.3% in commercial and industrial loans and 1.6% in construction loans. On June 30, 2005, the allowance for loan and lease losses was $5.1 million, compared to $4.4 million on December 31, 2004. The ratio of the allowance to total loans was 0.78 % on both June 30, 2005 and December 31, 2004. Non-performing assets to total assets was 0.04% on June 30, 2005, compared to 0.03% on December 31, 2004. Deposits reached $558.0 million on June 30, 2005, an increase of $19.1 million, or 3.5%, from the $538.9 million reported on December 31, 2004. Certificates of deposit increased by $27.2 million, or 10.8%, from the $252.7 million reported at year-end 2004, while core deposits, which consist of checking, savings, and money market accounts, decreased $8.1 million, or 2.8%. During the same period, borrowings increased $49.6 million, or 23.4%, to $262.0 million on June 30, 2005. Stockholders' equity totaled $98.9 million on June 30, 2005, a decrease of 4.9%, or $5.1 million, from $104.0 million on December 31, 2004. The decline was attributable to the repurchase of common stock in open market transactions to satisfy the Company's 2004 Restricted Stock Plan and the 5% stock repurchase program that was announced on January 26, 2005, as well as the effect of the net unrealized investment portfolio market value adjustment, offset by the net income for the quarter. Additionally, on June 29, 2005, the Company's Board of Directors declared a quarterly cash dividend of $0.05 per common share, which represented an increase of $0.01, or 25.0%, over the prior quarterly dividend. The dividend is payable on July 29, 2005 to stockholders of record on July 15, 2005. Net interest income increased $893,000, or 16.2%, for the three months ended June 30, 2005, to $6.4 million, from $5.5 million for the same period last year. For the six months ended June 30, 2005, net interest income increased 11.2%, to $12.4 million, from $11.2 million for the same period last year. Other income increased $348,000, or 66.4%, for the three months ended June 30, 2005, to $872,000, from $524,000 for the same period last year. For the six months ended June 30, 2005, other income increased 51.6%, to $1.8 million from $1.2 million for the same period last year. The increase was primarily attributable to growth in commission income generated by Synergy Financial Services, Inc. and an increase in income generated from bank-owned life insurance. Other expenses increased $795,000, or 18.7%, for the three months ended June 30, 2005, to $5.0 million, from $4.2 million for the same period last year. For the six months ended June 30, 2005, other expenses increased $1.2 million, or 14.1%, to $9.8 million, from $8.6 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. 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, Morris, and Union counties 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. SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except share data) June 30, December 31, 2005 2004 (unaudited) (audited) Assets: Cash and amounts due from banks $4,083 $4,687 Interest-bearing deposits with banks 57 1,759 Cash and cash equivalents 4,140 6,446 Investment securities available-for-sale, at fair value 102,743 134,360 Investment securities held-to-maturity (fair value of $110,267 and $111,154, respectively) 110,538 110,584 Federal Home Loan Bank of New York stock, at cost 13,101 10,771 Loans receivable, net 654,068 561,687 Accrued interest receivable 3,014 2,751 Property and equipment, net 17,610 16,814 Cash surrender value of bank-owned life insurance 12,884 12,637 Other assets 4,918 4,627 Total assets $923,016 $860,677 Liabilities: Deposits $558,003 $538,916 Federal Home Loan Bank advances 262,022 212,414 Advance payments by borrowers for taxes and insurance 2,159 1,702 Accrued interest payable on advances 593 385 Dividend payable 623 498 Other liabilities 711 2,720 Total liabilities 824,111 756,635 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 - 12,466,903 in 2005 and 12,452,011 in 2004 Outstanding - 11,552,566 in 2005 and 12,064,968 in 2004 1,246 1,245 Additional paid-in-capital 86,085 86,177 Retained earnings 31,694 30,603 Unearned ESOP shares (5,622) (5,962) Unearned RSP compensation (2,986) (3,391) Treasury stock held for the RSP, at cost; 413,488 and 387,043 shares at June 30, 2005 and December 31, 2004, respectively (4,662) (4,343) Treasury stock, at cost; 500,849 and - 0 - shares at June 30, 2005 and December 31, 2004, respectively (6,050) - Accumulated other comprehensive loss, net of taxes (800) (287) Total stockholders' equity 98,905 104,042 Total liabilities and stockholders' equity $923,016 $860,677 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2005 2004 2005 2004 (unaudited) (unaudited) (unaudited) (unaudited) Interest income: Loans, including fees $9,081 $6,669 $17,255 $13,369 Investment securities 2,244 1,653 4,514 3,163 Other 143 23 234 45 Total interest income 11,468 8,345 22,003 16,577 Interest expense: Deposits 3,013 2,190 5,733 4,285 Borrowed funds 2,037 630 3,830 1,106 Total interest expense 5,050 2,820 9,563 5,391 Net interest income before provision for loan losses 6,418 5,525 12,440 11,186 Provision for loan losses 477 336 922 704 Net interest income after provision for loan losses 5,941 5,189 11,518 10,482 Other income: Service charges and other fees on deposit accounts 503 564 1,012 1,048 Net (loss) gain on sale of investments (34) 1 (34) 1 Commissions 201 18 449 33 Other 202 (59) 410 130 Total other income 872 524 1,837 1,212 Other expenses: Salaries and employee benefits 2,834 2,238 5,477 4,493 Premises and equipment 956 934 1,828 1,915 Occupancy 527 474 1,051 947 Professional services 199 118 394 246 Advertising 246 186 453 362 Other operating 274 291 556 590 Total other expenses 5,036 4,241 9,759 8,553 Income before income tax expense 1,777 1,472 3,596 3,141 Income tax expense 672 562 1,371 1,226 Net income $1,105 $910 $2,225 $1,915 Per share of common stock: Basic earnings per share $0.10 $0.08 $0.20 $0.18 Diluted earnings per share $0.10 $0.08 $0.19 $0.18 Basic weighted average shares outstanding 11,043 11,495 11,136 10,575 Diluted weighted average shares outstanding 11,395 11,713 11,536 10,787 http://www.newscom.com/cgi-bin/prnh/20040128/SYNFDLOGODATASOURCE: Synergy Financial Group, Inc. CONTACT: Kevin M. McCloskey, Senior Vice President and Chief Operating Officer of Synergy Financial Group, Inc., 1-800-693-3838, extension 3292 Web site: http://www.synergyonthenet.com/

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