SYNF Synergy Financial Grp. (MM)

CRANFORD, N.J., Oct. 25 /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 September 30, 2006 of $981 thousand, or $0.09 per diluted share, compared to $1.108 million, or $0.10 per diluted share, for the same period last year. Net income for the nine-month period ended September 30, 2006 was $3.090 million, or $0.29 per diluted share, compared to $3.333 million, or $0.29 per diluted share, for the same period last year. Results for the three- and nine-month periods ended September 30, 2006 included $129,000, or $0.01 per diluted share, and $376,000, or $0.03 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. (Logo: http://www.newscom.com/cgi-bin/prnh/20040128/SYNFDLOGO ) Total assets reached $993.3 million on September 30, 2006, an increase of 2.0%, or $19.4 million, from $973.9 million on December 31, 2005. The increase was primarily attributable to an increase of $36.0 million in net loans and $8.4 million in bank-owned life insurance, partially offset by a decline of $26.7 million in investment securities. Net loans increased 4.9%, to $769.1 million, on September 30, 2006, from $733.2 million on December 31, 2005. During the first nine months of 2006, Synergy Bank sold approximately $9.1 million of loan participations that were providing yields below current market levels. On September 30, 2006, total loans were comprised of 40.5% in non-residential and multi-family mortgage loans, 20.2% in consumer loans, 16.6% in single-family real estate loans, 14.6% in home equity loans, 6.8% in commercial and industrial loans and 1.3% in construction loans. On September 30, 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 September 30, 2006 and December 31, 2005. Non-performing assets represented 0.13% of total assets on September 30, 2006, compared to 0.04% on December 31, 2005. The increase was due to an $825,000 non-residential loan, which was placed into non-performing status during the third quarter of 2006. Deposits reached $635.3 million on September 30, 2006, an increase of $28.8 million, or 4.8%, from the $606.5 million reported on December 31, 2005. Certificates of deposit increased by $31.8 million, or 8.7%, from the $366.5 million reported at year-end 2005, while core deposits, which consist of checking, savings, and money market accounts, decreased 3.0 million, or 1.2%. During the same period, Federal Home Loan Bank borrowings declined $11.9 million, or 4.4%, to $254.8 million on September 30, 2006. Stockholders' equity totaled $96.5 million on September 30, 2006, an increase of $1.2 million, or 1.3%, 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 September 27, 2006, the Company's Board of Directors declared a quarterly cash dividend of $0.06 per common share, which is payable on October 27, 2006 to stockholders of record on October 13, 2006. Net interest income declined $491,000, or 8.0%, for the three months ended September 30, 2006, to $5.7 million, from $6.2 million for the same period last year. For the nine months ended September 30, 2006, net interest income decreased 2.0%, to $18.3 million, from $18.7 million for the same period last year. This year-over-year decline was the result of margin compression stemming from the prolonged, flat yield curve and increased funding costs, coupled with a slowdown in asset growth. Other income increased $2,000, or 0.2%, for the three months ended September 30, 2006, to $956,000, from $954,000 for the same period last year. For the nine months ended September 30, 2006, other income increased 1.9%, to $2.7 million. The increase for both the three- and nine-month periods was primarily due to an increase in income generated from bank-owned life insurance. Other expenses decreased $60,000, or 1.2%, for the three months ended September 30, 2006, to $5.0 million. For the nine months ended September 30, 2006, other expenses increased $566,000, or 3.8%, to $15.3 million, from $14.8 million for the same period last year. For the three- and nine-month periods of 2006, there was approximately $169,000 and $497,000, 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. 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 (Dollars in thousands) (Unaudited) September 30, December 31, 2006 2005 Assets: Cash and amounts due from banks $5,108 $4,635 Interest-bearing deposits with banks 414 1,948 Cash and cash equivalents 5,522 6,583 Investment securities available-for-sale, at fair value 72,640 85,319 Investment securities held-to-maturity (fair value of $79,359 and $93,575, respectively) 81,582 95,621 Federal Home Loan Bank of New York stock, at cost 12,840 13,263 Loans receivable, net 769,135 733,183 Accrued interest receivable 3,785 3,313 Property and equipment, net 19,504 18,570 Cash surrender value of bank-owned life insurance 21,581 13,138 Other assets 6,655 4,897 Total assets $993,244 $973,887 Liabilities: Deposits $635,329 $606,471 Other borrowed funds 254,750 266,600 Advance payments by borrowers for taxes and insurance 2,737 2,215 Accrued interest payable on advances 674 611 Other liabilities 3,293 2,740 Total liabilities 896,783 878,637 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 84,447 85,959 Retained earnings 33,953 32,794 Unearned ESOP shares (4,770) (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 (1,209) (1,351) Total stockholders' equity 96,461 95,250 Total liabilities and stockholders' equity $993,244 $973,887 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2006 2005 2006 2005 Interest income: Loans, including fees $12,199 $9,868 $35,456 $27,210 Investment securities 1,577 1,934 4,998 6,448 Other 181 157 526 391 Total interest income 13,957 11,959 40,980 34,049 Interest expense: Deposits 5,671 3,292 15,085 9,025 Borrowed funds 2,627 2,517 7,598 6,347 Total interest expense 8,298 5,809 22,683 15,372 Net interest income before provision for loan losses 5,659 6,150 18,297 18,677 Provision for loan losses 200 392 868 1,314 Net interest income after provision for loan losses 5,459 5,758 17,429 17,363 Other income: Service charges and other fees on deposit accounts 557 550 1,570 1,562 Net gain (loss) on sale of investments - 8 - (26) Commissions 211 211 625 660 Other 188 185 521 468 Total other income 956 954 2,716 2,664 Other expenses: Salaries and employee benefits 3,080 2,784 9,204 8,261 Premises and equipment 634 765 1,967 2,226 Occupancy 589 583 1,715 1,595 Professional services 149 165 608 559 Advertising 81 262 341 677 Other operating 443 477 1,486 1,437 Total other expenses 4,976 5,036 15,321 14,755 Income before income tax expense 1,439 1,676 4,824 5,272 Income tax expense 458 568 1,734 1,939 Net income $981 $1,108 $3,090 $3,333 Per share of common stock: Basic earnings per share $0.09 $0.10 $0.30 $0.30 Diluted earnings per share $0.09 $0.10 $0.29 $ 0.29 Basic weighted average shares outstanding 10,379 10,711 10,350 10,993 Diluted weighted average shares outstanding 10,874 11,102 10,824 11,390 http://www.newscom.com/cgi-bin/prnh/20040128/SYNFDLOGODATASOURCE: Synergy Financial Group, Inc. CONTACT: Kevin M. McCloskey, Senior Vice President and Chief Operating Officer, Synergy Financial Group, Inc., 1-800-693-3838, ext. 3292 Web site: http://www.synergyonthenet.com/

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