SYNF Synergy Financial Grp. (MM)

CRANFORD, N.J., Jan. 24 /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, 2006 of $1.005 million, or $0.09 per diluted share, compared to $1.160 million, or $0.10 per diluted share, for the same period last year. Net income for the twelve-month period ended December 31, 2006 was $4.095 million, or $0.38 per diluted share, compared to $4.493 million, or $0.40 per diluted share, for the same period last year. Results for the three- and twelve-month periods ended December 31, 2006 included $129,000, or $0.01 per diluted share, and $505,000, or $0.04 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 $986.3 million on December 31, 2006, an increase of 1.3%, or $12.4 million, from $973.9 million on December 31, 2005. The increase was primarily attributable to an increase of $31.8 million in net loans and $8.7 million in bank-owned life insurance, partially offset by a decline of $34.6 million in investment securities. Net loans increased 4.3%, to $765.0 million, on December 31, 2006, from $733.2 million on December 31, 2005. During the year of 2006, Synergy Bank sold approximately $9.1 million of loan participations that were providing yields below current market levels. On December 31, 2006, total loans were comprised of 42.3% in non-residential and multi-family mortgage loans, 18.9% in consumer loans, 16.7% in single-family real estate loans, 14.2% in home equity loans, 7.1% in commercial and industrial loans and 0.8% in construction loans. On December 31, 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 December 31, 2006 and December 31, 2005. Non-performing assets represented 0.04% of total assets on both December 31, 2006 and December 31, 2005. During the fourth quarter of 2006, an $825,000 non-residential loan that had been placed into non-performing status during the third quarter of 2006 was paid in full. Deposits reached $645.8 million on December 31, 2006, an increase of $39.3 million, or 6.5%, from the $606.5 million reported on December 31, 2005. Certificates of deposit increased by $48.9 million, or 13.4%, from the $366.5 million reported at year-end 2005, while core deposits, which consist of checking, savings, and money market accounts, decreased $9.6 million, or 4.0%. During the same period, Federal Home Loan Bank borrowings declined $30.9 million, or 11.6%, to $235.7 million on December 31, 2006. Stockholders' equity totaled $98.5 million on December 31, 2006, an increase of $3.2 million, or 3.4%, 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 December 27, 2006, the Company's Board of Directors announced a quarterly cash dividend of $0.06 per common share, which is payable on January 26, 2007 to stockholders of record on January 12, 2007. Net interest income declined $897,000, or 14.2%, for the three months ended December 31, 2006, to $5.4 million, from $6.3 million for the same period last year. For the twelve months ended December 31, 2006, net interest income decreased 5.1%, to $23.7 million, from $25.0 million last year. This 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. Other income increased $202,000, or 22.0%, for the three months ended December 31, 2006, to $1,119,000, from $917,000 for the same period last year. For the twelve months ended December 31, 2006, other income increased 7.1%, to $3.8 million. The increase for both the three- and twelve-month periods was primarily due to growth in commission income generated by Synergy Financial Services, Inc. and an increase in income from bank-owned life insurance. Other expenses increased $69,000, or 1.4%, for the three months ended December 31, 2006, to $5.0 million. For the twelve months ended December 31, 2006, other expenses increased $635,000, or 3.2%, to $20.3 million, from $19.7 million for the same period last year. For the three- and twelve-month periods of 2006, there was approximately $170,000 and $667,000, 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) December 31, December 31, 2006 2005 Assets: Cash and amounts due from banks $ 5,673 $ 4,635 Interest-bearing deposits with banks 4,458 1,948 Cash and cash equivalents 10,131 6,583 Investment securities available-for-sale, at fair value 68,417 85,319 Investment securities held-to-maturity (fairvalue of $76,263 and $93,575, respectively) 77,917 95,621 Federal Home Loan Bank of New York stock, at cost 11,981 13,263 Loans receivable, net 765,001 733,183 Accrued interest receivable 3,848 3,313 Property and equipment, net 20,106 18,570 Cash surrender value of bank-owned life insurance 21,816 13,138 Other assets 7,109 4,897 Total assets $986,326 $973,887 Liabilities: Deposits $645,816 $606,471 Other borrowed funds 235,675 266,600 Advance payments by borrowers for taxes and insurance 2,701 2,215 Accrued interest payable on borrowed funds 651 611 Other liabilities 2,983 2,740 Total liabilities 887,826 878,637 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 85,381 85,959 Retained earnings 34,582 32,794 Unearned ESOP shares (4,600) (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 (903) (1,351) Total stockholders' equity 98,500 95,250 Total liabilities and stockholders' equity $986,326 $973,887 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share data) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2006 2005 2006 2005 Interest income: Loans, including fees $12,555 $10,718 $48,011 $37,928 Investment securities 1,540 1,812 6,538 8,260 Other 188 181 714 572 Total interest income 14,283 12,711 55,263 46,760 Interest expense: Deposits 5,999 3,834 21,084 12,859 Borrowed funds 2,846 2,542 10,444 8,889 Total interest expense 8,845 6,376 31,528 21,748 Net interest income before provision for loan losses 5,438 6,335 23,735 25,012 Provision for loan losses 101 545 969 1,859 Net interest income after provision for loan losses 5,337 5,790 22,766 23,153 Other income: Service charges and other fees on deposit accounts 555 543 2,125 2,105 Net losses on sales of investments - - - (26) Commissions 288 195 913 855 Other 276 179 797 647 Total other income 1,119 917 3,835 3,581 Other expenses: Salaries and employee benefits 3,259 2,540 12,463 10,801 Premises and equipment 633 820 2,600 3,046 Occupancy 571 569 2,286 2,164 Professional services 126 237 734 796 Advertising 64 249 405 926 Other operating 342 511 1,828 1,948 Total other expenses 4,995 4,926 20,316 19,681 Income before income tax expense 1,461 1,781 6,285 7,053 Income tax expense 456 621 2,190 2,560 Net income $ 1,005 $ 1,160 $ 4,095 $ 4,493 Per share of common stock: Basic earnings per share $ 0.10 $ 0.11 $ 0.39 $ 0.41 Diluted earnings per share $ 0.09 $ 0.10 $ 0.38 $ 0.40 Basic weighted average shares outstanding 10,455 10,669 10,376 10,911 Diluted weighted average shares outstanding 10,881 11,057 10,760 11,306 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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