SYNF Synergy Financial Grp. (MM)

Synergy Financial Group, Inc. Announces Third Quarter, 2004 Earnings CRANFORD, N.J., Oct. 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 September 30, 2004 of $1.1 million, or $0.10 per basic and $0.09 per diluted share, based on weighted average basic and diluted shares of 11,496,365 and 11,743,123, respectively. This represents an increase of $355,000, or 48.0 percent, from $739,000, or $0.23 per basic and diluted share for the same three-month period last year, based on weighted average basic and diluted shares of 3,234,025 and 3,266,038, respectively. Net income for the nine-month period ended September 30, 2004 was $3.0 million, or $0.28 per basic and $0.27 per diluted share, based on weighted average basic and diluted shares of 10,886,342 and 11,113,381, respectively. This represents an increase of $707,700, or 30.8 percent, from $2.3 million, or $0.71 per basic and diluted share, for the same nine-month period of 2003, based on weighted average basic and diluted shares of 3,234,116 and 3,239,900, respectively. Per share data for the three- and nine-month periods ended September 30, 2003 are dissimilar, as the Company did not complete its second-step conversion from the mutual holding company form of organization to a full stock corporation until January 20, 2004. (Logo: http://www.newscom.com/cgi-bin/prnh/20040128/SYNFDLOGO ) Total assets reached $837.8 million on September 30, 2004, an increase of 33.3 percent, or $209.2 million, from $628.6 million on December 31, 2003. Net loans increased 19.6 percent, or $85.0 million, to $519.6 million on September 30, 2004, from $434.6 million on December 31, 2003. On September 30, 2004, total loans were comprised of 25.1 percent in single-family real estate loans, 21.6 percent in home equity loans, 24.8 percent in non-residential and multi- family mortgage loans, 25.9 percent in consumer loans and 1.8 percent in commercial and industrial loans. At the end of the second quarter of 2004, Synergy Bank expanded its lending product line to include commercial and industrial loans via the addition of two experienced lenders who were previously employed by a local commercial bank. As a result, the Company expects to experience an increase in this loan category in future periods. On September 30, 2004, the allowance for loan and lease losses was $4.1 million, or 0.79 percent of total loans, compared to $3.3 million, or 0.75 percent of total loans, on December 31, 2003. Non-performing assets to total assets was 0.04 percent on September 30, 2004, down from 0.08 percent on December 31, 2003. Between December 31, 2003 and September 30, 2004, investment securities increased $105.1 million, or 66.9 percent, from $157.0 million to $262.0 million. The increase is primarily the result of investing the net capital received of $69.2 million from the Company's second-step stock offering that was completed on January 20, 2004. During the quarter ended September 30, 2004, the Company invested $10.0 million in bank-owned life insurance. The return on this investment is utilized to fund the cost of officer benefit plans. The Company's investment in bank-owned life insurance totaled $12.5 million on September 30, 2004. Deposits reached $522.4 million on September 30, 2004, an increase of $48.8 million, or 10.3 percent, from the $473.5 million reported on December 31, 2003. Core deposits, consisting of checking, savings, and money market accounts, represented 55.1 percent of total deposits on September 30, 2004, up from 54.3 percent on December 31, 2003. During the same period, borrowings increased $132.8 million, or 182.2 percent, to $205.7 million on September 30, 2004. Stockholders' equity totaled $105.7 million on September 30, 2004, an increase of 158.3 percent, or $64.8 million, from $40.9 million on December 31, 2003. As stated above, the Company raised net capital of $69.2 million via a second-step stock offering that was completed on January 20, 2004. On September 29, 2004, the Company's Board of Directors declared a quarterly cash dividend of $0.04 per common share, consistent with the prior quarterly dividend. The dividend is payable on October 28, 2004 to stockholders of record on October 14, 2004. Net interest income for the three months ended September 30, 2004 was $6.0 million, compared to $4.5 million for the same period last year, an increase of 33.0 percent. For the nine months ended September 30, 2004, net interest income increased 22.0 percent, to $17.2 million from $14.1 million for the same period in 2003. Other expenses increased $1.1 million, or 28.9 percent, for the three months ended September 30, 2004, to $4.9 million, from $3.8 million for the same period one year ago. For the nine months ended September 30, 2004, other expenses increased $1.9 million, or 16.3 percent, to $13.4 million. The increase was primarily attributable to wages and benefits associated with the Company's growth strategy, as well as to 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 18 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) September 30, December 31, 2004 2003 (unaudited) (audited) Assets: Cash and amounts due from banks $4,750 $4,481 Interest-bearing deposits with banks 3,750 2,811 Cash and cash equivalents 8,500 7,292 Investment securities available-for-sale, at fair value 146,151 123,779 Investment securities held-to-maturity (fair value of $116,618 and $33,216, respectively) 115,888 33,214 Federal Home Loan Bank of New York stock, at cost 10,506 3,644 Loans receivable, net 519,575 434,585 Accrued interest receivable 2,774 2,021 Property and equipment, net 17,083 17,620 Cash surrender value of bank-owned life insurance 12,525 2,475 Other assets 4,778 3,988 Total assets $837,780 $628,618 Liabilities: Deposits $522,358 $473,535 Federal Home Loan Bank advances 205,675 72,873 Advance payments by borrowers for taxes and insurance 1,496 1,582 Accrued interest payable on advances 395 119 Stock subscriptions payable - 38,322 Dividend payable 492 - Other liabilities 1,650 1,259 Total liabilities 732,066 587,690 Commitments and contingencies - - 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 September 30, 2004 - 12,452,011, December 31, 2003 - 3,344,252 1,245 334 Additional paid-in-capital 86,063 15,008 Retained earnings 29,913 27,858 Unearned ESOP shares (6,131) (1,009) Unearned RSP compensation (3,594) (1,011) Treasury stock acquired for the RSP (1,503) (103) Accumulated other comprehensive income (loss), net of taxes (279) (149) Total stockholders' equity 105,714 40,928 Total liabilities and stockholders' equity $837,780 $628,618 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share data) For the Three Months For the Nine Months Ended September 30, Ended September 30, 2004 2003 2004 2003 (unaudited) (unaudited) (unaudited) (unaudited) Interest income: Loans, including fees $7,278 $6,351 $20,647 $18,882 Investment securities 2,463 882 5,626 3,173 Other 42 11 88 104 Total interest income 9,783 7,244 26,361 22,159 Interest expense: Deposits 2,329 2,288 6,615 6,785 Borrowed funds 1,432 441 2,538 1,266 Total interest expense 3,761 2,729 9,153 8,051 Net interest income before provision for loan losses 6,022 4,515 17,208 14,108 Provision for loan losses 429 253 1,133 723 Net interest income after provision for loan losses 5,593 4,262 16,075 13,385 Other income: Service charges and other fees on deposit accounts 556 479 1,604 1,211 Net gain on sale of loans - 18 - 18 Net gain on sale of investments 38 148 38 148 Commissions 153 38 186 89 Other 205 89 336 352 Total other income 952 772 2,164 1,818 Other expenses: Salaries and employee benefits 2,687 2,021 7,180 5,710 Premises and equipment 939 903 2,854 2,851 Occupancy 490 458 1,436 1,422 Professional services 156 86 403 362 Advertising 241 226 603 584 Other operating 384 105 974 633 Total other expenses 4,897 3,799 13,450 11,562 Income before income tax expense 1,648 1,235 4,789 3,641 Income tax expense 554 496 1,780 1,339 Net income $1,094 $739 $3,009 $2,302 Per share of common stock: Basic earnings per share $0.10 $0.23 $0.28 $0.71 Diluted earnings per share $0.09 $0.23 $0.27 $0.71 Basic weighted average shares outstanding 11,496,365 3,234,025 10,886,342 3,234,116 Diluted weighted average shares outstanding 11,743,123 3,266,038 11,113,381 3,239,900 http://www.newscom.com/cgi-bin/prnh/20040128/SYNFDLOGODATASOURCE: Synergy Financial Group, Inc. CONTACT: Ralph A. Fernandez, Senior Vice President and Chief Financial Officer, Synergy Financial Group, Inc., 1-800-693-3838, extension 3292 Web site: http://www.synergyonthenet.com/

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