SYNF Synergy Financial Grp. (MM)

CRANFORD, N.J., Jan. 18 /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 December 31, 2005 of $1.160 million, or $0.10 per diluted share, compared to $1.194 million, or $0.10 per diluted share, for the same period last year. Net income for the twelve-month period ended December 31, 2005 was $4.493 million, or $0.40 per diluted share. This represents an increase of $290,000, or 6.9%, from the $4.203 million, or $0.37 per diluted share, reported for the same period in 2004. (Logo: http://www.newscom.com/cgi-bin/prnh/20040128/SYNFDLOGO ) Total assets reached $973.9 million on December 31, 2005, an increase of 13.2%, or $113.2 million, from $860.7 million on December 31, 2004. The increase was primarily attributable to an increase of $171.4 million in net loans, partially offset by a decline of $64.0 million in investment securities. Net loans increased 30.5%, to $733.2 million on December 31, 2005, from $561.7 million on December 31, 2004. On December 31, 2005, total loans were comprised of 36.7% in non-residential and multi-family mortgage loans, 25.7% in consumer loans, 17.6% in single-family real estate loans, 15.3% in home equity loans, 3.4% in commercial and industrial loans and 1.3% in construction loans. On December 31, 2005, the allowance for loan and lease losses was $5.8 million, compared to $4.4 million on December 31, 2004. The ratio of the allowance to total loans was 0.78% on both December 31, 2005 and December 31, 2004. Non-performing assets to total assets was 0.04% on December 31, 2005, compared to 0.03% on December 31, 2004. Deposits reached $606.5 million on December 31, 2005, an increase of $67.6 million, or 12.5%, from the $538.9 million reported on December 31, 2004. Certificates of deposit increased by $113.7 million, or 45.0%, from the $252.7 million reported at year-end 2004, while core deposits, which consist of checking, savings, and money market accounts, decreased $46.1 million, or 16.1%. The increase in certificates of deposit was the result of initiatives directed toward attracting funds with extended maturities in response to the current interest rate environment, coupled with the placement of approximately $23.6 million of brokered certificates of deposit. Despite the decline in total core deposits during the twelve-month period ended December 31, 2005, checking accounts increased by $5.5 million or 9.8%. During the same period, Federal Home Loan Bank borrowings increased $54.2 million, or 25.5%, to $266.6 million on December 31, 2005. Stockholders' equity totaled $95.3 million on December 31, 2005, a decrease of 8.4%, or $8.8 million, from $104.0 million on December 31, 2004. The decline was attributable to the repurchase of 989,451 shares of common stock in open market transactions to fund the Company's 2004 Restricted Stock Plan and its stock repurchase programs, as well as the effect of the net unrealized investment portfolio market value adjustment, offset by the net income for the period. On August 24, 2005, the Company announced a new program to repurchase up to an additional 5% of its outstanding common stock, or approximately 577,628 shares. During the fourth quarter, the Company repurchased 275,000 shares. As a result, it has now completed in excess of 52% of the current program, at an average price of $12.72 per share. Additionally, on December 21, 2005, the Company's Board of Directors declared a quarterly cash dividend of $0.05 per common share, which is payable on January 27, 2006 to stockholders of record on January 13, 2006. Net interest income increased $283,000, or 4.7%, for the three months ended December 31, 2005, to $6.3 million, from $6.0 million for the same period last year. For the twelve months ended December 31, 2005, net interest income increased 7.0%, to $24.8 million, from $23.2 million for the same period last year. Other income decreased $130,000, or 11.6%, for the three months ended December 31, 2005, to $990,000, from $1,120,000 for the same period last year. The decrease in other income from the fourth quarter of last year was primarily due to a decline in commission income generated by Synergy Financial Services, Inc. ("SFSI"). For the twelve months ended December 31, 2005, other income increased 17.3%, to $3.9 million, from $3.3 million for the same period last year. The increase was primarily attributable to growth in commission income generated by SFSI and an increase in income generated from bank-owned life insurance. Other expenses increased $14,000, or 0.3%, for the three months ended December 31, 2005, to $4.945 million, from $4.931 million for the same period last year. For the twelve months ended December 31, 2005, other expenses increased $1.4 million, or 7.5%, to $19.8 million, from $18.4 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, coupled with higher operating expenses associated with a larger branch network. During 2005, Synergy Bank opened branch offices in Elizabeth, Spotswood and Summit and closed a Union Township facility. 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 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) December 31, December 31, 2005 2004 (unaudited) (audited) Assets: Cash and amounts due from banks $4,635 $4,687 Interest-bearing deposits with banks 1,948 1,759 Cash and cash equivalents 6,583 6,446 Investment securities available-for-sale, at fair value 85,319 134,360 Investment securities held-to-maturity (fair value of $93,575 and $111,154, respectively) 95,621 110,584 Federal Home Loan Bank of New York stock, at cost 13,263 10,771 Loans receivable, net 733,183 561,687 Accrued interest receivable 3,313 2,751 Property and equipment, net 18,570 16,814 Cash surrender value of bank-owned life insurance 13,138 12,637 Other assets 4,897 4,627 Total assets $973,887 $860,677 Liabilities: Deposits $606,471 538,916 Federal Home Loan Bank advances 266,600 212,414 Advance payments by borrowers for taxes and insurance 2,215 1,702 Accrued interest payable on advances 611 385 Dividend payable 623 498 Other liabilities 2,117 2,720 Total liabilities 878,637 756,635 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 - 12,471,481 in 2005 and 12,452,011 in 2004 Outstanding - 11,545,881 in 2005 and 12,452,011 in 2004 1,247 1,245 Additional paid-in-capital 85,959 86,177 Retained earnings 32,794 30,603 Unearned ESOP shares (5,282) (5,962) Unearned RSP compensation (2,567) (3,391) Treasury stock held for the RSP, at cost; 363,037 and 387,043 shares in 2005 and 2004, respectively (4,124) (4,343) Treasury stock, at cost; 925,600 and - 0 - shares in 2005 and 2004, respectively (11,426) - Accumulated other comprehensive loss, net of taxes (1,351) (287) Total stockholders' equity 95,250 104,042 Total liabilities and stockholders' equity $973,887 $860,677 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2005 2004 2005 2004 (unaudited) (unaudited) (unaudited) (audited) Interest income: Loans, including fees $10,664 $7,610 $37,738 $28,258 Investment securities 1,813 2,354 8,261 7,980 Other 181 74 572 162 Total interest income 12,658 10,038 46,571 36,400 Interest expense: Deposits 3,834 2,499 12,859 9,114 Borrowed funds 2,542 1,540 8,889 4,078 Total interest expense 6,376 4,039 21,748 13,192 Net interest income before provision for loan losses 6,282 5,999 24,823 23,208 Provision for loan losses 546 358 1,860 1,492 Net interest income after provision for loan losses 5,736 5,641 22,963 21,716 Other income: Service charges and other fees on deposit accounts 543 578 2,105 2,182 Net (loss) gain on sale of investments - - (26) 38 Commissions 195 331 855 517 Other 252 211 917 547 Total other income 990 1,120 3,851 3,284 Other expenses: Salaries and employee benefits 2,540 2,768 10,801 9,948 Premises and equipment 1,018 946 3,807 3,800 Occupancy 590 475 2,245 1,911 Professional services 236 300 796 703 Advertising 252 219 975 822 Other operating 309 223 1,137 1,197 Total other expenses 4,945 4,931 19,761 18,381 Income before income tax expense 1,781 1,830 7,053 6,619 Income tax expense 621 636 2,560 2,416 Net income $1,160 $1,194 $4,493 $4,203 Per share of common stock: Basic earnings per share $0.11 $0.10 $0.41 $0.38 Diluted earnings per share $0.10 $0.10 $0.40 $0.37 Basic weighted average shares outstanding 10,669 11,374 10,911 11,009 Diluted weighted average shares outstanding 11,057 11,734 11,306 11,276 First Call Analyst: FCMN Contact: 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, ext. 3292 Web site: http://www.synergyonthenet.com/

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