SYNF Synergy Financial Grp. (MM)

CRANFORD, N.J., April 26 /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, 2006 of $1.049 million, or $0.10 per diluted share, compared to $1.120 million, or $0.10 per diluted share, for the same period last year. Results for the first quarter of 2006 included $118,000, or $0.01 per diluted share, 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 $979.2 million on March 31, 2006, an increase of 0.5%, or $5.3 million, from $973.9 million on December 31, 2005. The increase was primarily attributable to an increase of $13.6 million in net loans, partially offset by a decline of $9.9 million in investment securities. Net loans increased 1.9%, to $746.8 million, on March 31, 2006, from $733.2 million on December 31, 2005. During the quarter, Synergy Bank sold approximately $7.1 million of loans that were providing yields below current market levels. On March 31, 2006, total loans were comprised of 38.3% in non- residential and multi-family mortgage loans, 23.9% in consumer loans, 17.3% in single-family real estate loans, 15.0% in home equity loans, 4.4% in commercial and industrial loans and 1.1% in construction loans. On March 31, 2006 the allowance for loan and lease losses was $5.9 million, compared to $5.8 million on December 31, 2005. The ratios of the allowance for loan and lease losses to total loans and of non-performing assets to total assets were 0.78% and 0.04%, respectively, on both March 31, 2006 and December 31, 2005. Deposits reached $671.2 million on March 31, 2006, an increase of $64.7 million, or 10.7%, from the $606.5 million reported on December 31, 2005. Certificates of deposit increased by $52.9 million, or 14.4%, from the $366.5 million reported at year-end 2005, while core deposits, which consist of checking, savings, and money market accounts, increased $11.8 million, or 4.9%. During the same period, Federal Home Loan Bank borrowings declined $57.1 million, or 21.4%, to $209.5 million on March 31, 2006 due primarily to the growth in deposits. Stockholders' equity totaled $94.0 million on March 31, 2006, a decrease of 1.3%, or $1.3 million, from $95.3 million on December 31, 2005. The decline was attributable to the repurchase of 185,393 shares of the Company's common stock in open market transactions, partially offset by net income for the period. On February 23, 2006, the Company announced a new program to repurchase up to an additional 5% of its outstanding common stock, or approximately 572,294 shares. Additionally, on March 29, 2006, the Company's Board of Directors declared a quarterly cash dividend of $0.05 per common share, which is payable on April 28, 2006 to stockholders of record on April 14, 2006. Net interest income increased $309,000 or 5.1%, for the three months ended March 31, 2006, to $6.4 million, from $6.1 million for the same period last year. Other income decreased $23,000, or 2.6%, for the three months ended March 31, 2006, to $876,000, from $899,000 for the same period last year. The decrease in other income was primarily due to a decline in commission income at Synergy Financial Services, Inc. Other expenses increased $460,000, or 9.8%, for the three months ended March 31, 2006, to $5.2 million, from $4.7 million for the same period last year. The increase was primarily attributable to salaries and benefits associated with the Company's growth strategy of expanding its branch network, coupled with approximately $158,000 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 20 branch offices located in Middlesex, Monmouth, Morris, 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) March 31, December 31, 2006 2005 (unaudited) (audited) Assets: Cash and amounts due from banks $ 5,175 $ 4,635 Interest-bearing deposits with banks 4,173 1,948 Cash and cash equivalents 9,348 6,583 Investment securities available-for-sale, at fair value 79,972 85,319 Investment securities held-to-maturity (fair value of $88,756 and $93,575, respectively) 91,054 95,621 Federal Home Loan Bank of New York stock, at cost 10,694 13,263 Loans receivable, net 746,770 733,183 Accrued interest receivable 3,358 3,313 Property and equipment, net 18,549 18,570 Cash surrender value of bank-owned life insurance 15,088 13,138 Other assets 4,335 4,897 Total assets $ 979,168 $ 973,887 Liabilities: Deposits $ 671,170 $ 606,471 Other borrowed funds 209,500 266,600 Advance payments by borrowers for taxes and insurance 2,670 2,215 Accrued interest payable on advances 606 611 Dividend payable 624 623 Other liabilities 632 2,117 Total liabilities 885,202 878,637 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 - 12,471,481 in 2006 and 2005 Outstanding - 11,360,488 in 2006 and 11,545,881 in 2005 1,247 1,247 Additional paid-in-capital 86,275 85,959 Retained earnings 33,276 32,794 Unearned ESOP shares (5,112) (5,282) Unearned RSP compensation (2,367) (2,567) Treasury stock acquired for the RSP, at cost; 363,037 in 2006 and 2005 (4,124) (4,124) Treasury stock, at cost; 1,110,993 in 2006 and 925,600 in 2005 (13,883) (11,426) Accumulated other comprehensive loss, net (1,346) (1,351) Total stockholders' equity 93,966 95,250 Total liabilities and stockholders' equity $ 979,168 $ 973,887 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share data) Three Months Ended March 31, 2006 2005 (unaudited) (unaudited) Interest income: Loans, including fees $ 11,340 $ 8,220 Investment securities 1,763 2,270 Other 173 91 Total interest income 13,276 10,581 Interest expense: Deposits 4,357 2,720 Other borrowed funds 2,542 1,793 Total interest expense 6,899 4,513 Net interest income before provision for loan losses 6,377 6,068 Provision for loan losses 416 445 Net interest income after provision for loan losses 5,961 5,623 Other income: Service charges and other fees on deposit accounts 494 508 Net gains on sales of investment securities - - Commissions 230 248 Other 152 143 Total other income 876 899 Other expenses: Salaries and employee benefits 3,077 2,643 Premises and equipment 662 693 Occupancy 562 504 Professional services 197 195 Advertising 114 175 Other operating 554 496 Total other expenses 5,166 4,706 Income before income tax expense 1,671 1,816 Income tax expense 622 696 Net income $ 1,049 $ 1,120 Per share of common stock: Basic earnings per share $ 0.10 $ 0.10 Diluted earnings per share $ 0.10 $ 0.10 Basic weighted average shares outstanding 10,358 11,231 Diluted weighted average shares outstanding 10,793 11,680 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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