SYNF Synergy Financial Grp. (MM)

CRANFORD, N.J., April 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 March 31, 2007 of $841 thousand, or $0.08 per diluted share, compared to $1.049 million, or $0.10 per diluted share, for the same period last year. (Logo: http://www.newscom.com/cgi-bin/prnh/20040128/SYNFDLOGO ) Total assets were $966.5 million on March 31, 2007, a decrease of 2.0%, or $19.8 million, from $986.3 million on December 31, 2006. The decrease was primarily attributable to a decrease of $10.4 million in net loans, coupled with a decline of $8.0 million in investment securities. Net loans decreased 1.4%, to $754.5 million, on March 31, 2007, from $765.0 million on December 31, 2006. Over the past year, the Company has reduced the origination of automobile loans and deployed its cash into higher- yielding, commercial-based products. Automobile loans declined $15.8 million from December 31, 2006, while multi-family/non-residential loans and commercial loans increased $11.5 million, collectively. On March 31, 2007, total loans were comprised of 44.1% in multi-family/non-residential loans, 17.0% in consumer loans, 16.2% in single-family real estate loans, 14.1% in home equity loans, 7.5% in commercial and industrial loans and 1.1% in construction loans. On March 31, 2007, the allowance for loan losses was $5.9 million, compared to $6.0 million on December 31, 2006. The ratios of the allowance for loan losses to total loans and of non-performing assets to total assets were 0.78% and 0.04%, respectively, on both March 31, 2007 and December 31, 2006. Deposits reached $677.7 million on March 31, 2007, an increase of $31.9 million, or 4.9%, from the $645.8 million reported on December 31, 2006. Core deposits, which consist of checking, savings, and money market accounts, increased $40.8 million, or 17.7%, while certificates of deposit decreased by $8.9 million, or 2.1%, from the $415.4 million reported at year-end 2006. During the same period, Federal Home Loan Bank borrowings declined $52.3 million, or 22.2%, to $183.4 million on March 31, 2007 due primarily to the growth in deposits and lower loan volume. Stockholders' equity totaled $99.6 million on March 31, 2007, an increase of $1.1 million, or 1.1%, from $98.5 million on December 31, 2006. The increase was primarily attributable to net income for the period and stock benefit plan activity, partially offset by the March 28, 2007 declaration of a quarterly cash dividend of $0.06 per common share, which is payable on April 27, 2007 to stockholders of record on April 13, 2007. Net interest income declined $936,000 or 14.7%, for the three months ended March 31, 2007, to $5.4 million, from $6.4 million for the same period last year. The 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. Compared to the fourth quarter of 2006, net interest income increased $3,000. The net interest margin for the first quarter of 2007 increased to 2.37%, from 2.34% for the fourth quarter of 2006, but was down 36 basis points from the 2.73% for the first quarter of 2006. Other income increased $143,000, or 16.3%, for the three months ended March 31, 2007, to $1,019,000, from $876,000 for the same period last year. The change was primarily due to an increase in income from bank-owned life insurance. Other expenses declined $83,000, or 1.6%, for the three months ended March 31, 2007, to $5.1 million, from $5.2 million for the same period last year. The decrease was primarily attributable to reduced spending, as the Company remains focused on controlling costs. 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) March 31, December 31, 2007 2006 Assets: Cash and amounts due from banks $5,676 $5,673 Interest-bearing deposits with banks 5,348 4,458 Cash and cash equivalents 11,024 10,131 Investment securities available-for-sale, at fair value 63,615 68,417 Investment securities held-to-maturity (fairvalue of $73,310 and $76,263, respectively) 74,737 77,917 Federal Home Loan Bank of New York stock, at cost 9,629 11,981 Loans receivable, net 754,467 765,001 Accrued interest receivable 3,882 3,848 Property and equipment, net 20,602 20,106 Cash surrender value of bank-owned life insurance 22,043 21,816 Other assets 6,541 7,109 Total assets $966,540 $986,326 Liabilities: Deposits $677,687 $645,816 Other borrowed funds 183,400 235,675 Advance payments by borrowers for taxes and insurance 2,694 2,701 Accrued interest payable on advances 608 651 Other liabilities 2,542 2,983 Total liabilities 866,931 887,826 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 2007 and 2006 Outstanding - 11,382,143 in 2007 and 2006 1,251 1,251 Additional paid-in-capital 85,938 85,381 Retained earnings 34,784 34,582 Unearned ESOP shares (4,430) (4,600) Treasury stock acquired for the RSP, at cost; 266,223 in 2007 and 271,613 in 2006 (3,024) (3,086) Treasury stock, at cost; 1,127,493 in 2007 and 2006 (14,125) (14,125) Accumulated other comprehensive loss, net (785) (903) Total stockholders' equity 99,609 98,500 Total liabilities and stockholders' equity $966,540 $986,326 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share data) (Unaudited) Three Months Ended March 31, 2007 2006 Interest income: Loans, including fees $12,455 $11,340 Investment securities 1,452 1,763 Other 223 173 Total interest income 14,130 13,276 Interest expense: Deposits 6,215 4,357 Other borrowed funds 2,474 2,542 Total interest expense 8,689 6,899 Net interest income before provision for loan losses 5,441 6,377 Provision for loan losses 56 416 Net interest income after provision for loan losses 5,385 5,961 Other income: Service charges and other fees on deposit accounts 507 494 Commissions 226 230 Other 286 152 Total other income 1,019 876 Other expenses: Salaries and employee benefits 3,176 3,077 Premises and equipment 630 662 Occupancy 616 562 Professional services 204 197 Advertising 45 114 Other operating 412 554 Total other expenses 5,083 5,166 Income before income tax expense 1,321 1,671 Income tax expense 480 622 Net income $841 $1,049 Per share of common stock: Basic earnings per share $0.08 $0.10 Diluted earnings per share $0.08 $0.10 Basic weighted average shares outstanding 10,481 10,358 Diluted weighted average shares outstanding 10,910 10,671 http://www.newscom.com/cgi-bin/prnh/20040128/SYNFDLOGO http://photoarchive.ap.org/ DATASOURCE: Synergy Financial Group, Inc. CONTACT: Kevin M. McCloskey, Senior Vice President and Chief Operating Officer, Synergy Financial Group, Inc., 1-800-693-3838, extension 3292 Web site: http://www.synergyonthenet.com/

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