SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)
[X]  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

     For the quarterly period ended:   March 31, 2004
                                       --------------

[ ]  Transition  report  pursuant  to  Section  13 or  15(d)  of the  Securities
     Exchange Act of 1934

     For the transition period from ________ to ________

                           SEC File Number: 000-50467


                          SYNERGY FINANCIAL GROUP, INC.
                          -----------------------------
             (Exact name of registrant as specified in its charter)

              New Jersey                                       52-2413926
-------------------------------------                          ----------
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                             Identification No.)

310 North Avenue East, Cranford, New Jersey                      07016
---------------------------------------------                 -----------
(Address of principal executive offices)                       (Zip Code)

                                 (800) 693-3838
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


         Check whether the registrant:  (1) has filed all reports required to be
filed by Sections 13 or 15(d) of the Securities  Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days. Yes  X     No
                      ---       ---

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes       No  X
                                                ---      ---


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Number of shares outstanding of common stock as of May 14, 2004:

$0.10 Par Value Common Stock                    12,452,098
----------------------------            ---------------------------
        Class                               Shares Outstanding

<PAGE>

                 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S>                                                                                                           <C>
PART I        FINANCIAL INFORMATION                                                                            Page
------        ---------------------                                                                            ----

Item 1.       Financial Statements

              Consolidated Balance Sheets as of March 31, 2004 (unaudited), and
                  December 31, 2003 (audited).....................................................................1

              Consolidated Statements of Income for the three months ended March 31, 2004
                  and 2003 (unaudited)............................................................................2

              Consolidated Statement of Changes in Stockholders' Equity for the three months ended
                  March 31, 2004 and 2003 (unaudited).............................................................3

              Consolidated Statements of Cash Flows for the three months ended March 31, 2004
                  and 2003 (unaudited)............................................................................4

              Notes to Consolidated Financial Statements (unaudited)..............................................5

Item 2.       Management's Discussion and Analysis of Financial
                  Condition and Results of Operations............................................................13

Item 3.       Quantitative and Qualitative Disclosures about Market Risk.........................................21

Item 4.       Controls and Procedures............................................................................22


PART II       OTHER INFORMATION
-------       -----------------

Item 1.       Legal Proceedings..................................................................................23

Item 2.       Changes in Securities, Use of Proceeds and
                  Issuer Purchases of Equity Securities..........................................................23

Item 3.       Defaults Upon Senior Securities....................................................................25

Item 4.       Submission of Matters to a Vote of Security Holders................................................25

Item 5.       Other Information..................................................................................25

Item 6.       Exhibits and Reports on Form 8-K...................................................................25

Signatures.......................................................................................................26

</TABLE>

<PAGE>

                 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets
                                 (In thousands)

<TABLE>
<CAPTION>
                                                          March 31,   December 31,
                                                            2004          2003
                                                         (unaudited)   (audited)
                                                         -----------   ---------
<S>                                                    <C>          <C>
Assets:
Cash and amounts due from banks                          $   5,738    $   4,481
Interest-bearing deposits with banks                         5,892        2,811
                                                         ---------    ---------
Cash and cash equivalents                                   11,630        7,292
Investment securities, available-for-sale,
   at fair value                                           154,936      123,779
Investment securities held-to-maturity (fair
   value of $45,070 and $33,216, respectively)              44,839       33,214
Federal Home Loan Bank of New York
   stock, at cost                                            4,248        3,644
Loans receivable, net                                      448,720      434,585
Accrued interest receivable                                  2,281        2,021
Property and equipment, net                                 17,585       17,620
Cash surrender value of officer life insurance               2,564        2,475
Other assets                                                 3,858        3,988
                                                         ---------    ---------
     Total assets                                        $ 690,661    $ 628,618
                                                         =========    =========

Liabilities:
Deposits                                                 $ 495,471    $ 473,535
Federal Home Loan Bank advances                             84,952       72,873
Advance payments by borrowers
   for taxes and insurance                                   1,688        1,582
Accrued interest payable on advances                           157          119
Stock subscriptions payable                                      -       38,322
Other liabilities                                            2,837        1,259
                                                         ---------    ---------
     Total liabilities                                     585,105      587,690
                                                         ---------    ---------

Commitments and contingencies                                    -            -

Stockholders' equity:
Preferred stock; $.10 par value, 2,000,000 shares
   authorized; issued and outstanding - none                     -            -
Common stock; $.10 par value, 18,000,000 shares
   authorized; issued March 31, 2004 - 12,452,098,
   December 31, 2003 - 3,344,252                             1,245          334
Additional paid-in-capital                                  83,456       15,008
Retained earnings                                           28,863       27,858
Unearned ESOP shares                                        (6,471)      (1,009)
Unearned RSP compensation                                     (951)      (1,011)
Treasury stock acquired for the RSP                           (862)        (103)
Accumulated other comprehensive
   income (loss), net of taxes                                 276         (149)
                                                         ---------    ---------
     Total stockholders' equity                            105,556       40,928
                                                         ---------    ---------
     Total liabilities and stockholders' equity          $ 690,661    $ 628,618
                                                         =========    =========
</TABLE>
                                      -1-
<PAGE>

                 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
                        Consolidated Statements of Income
                      (In thousands, except per share data)
<TABLE>
<CAPTION>
                                                          For the quarter ended March 31,
                                                                  2004          2003
                                                             (unaudited)   (unaudited)
                                                             -----------   -----------
<S>                                                        <C>           <C>
Interest income:
   Loans, including fees                                    $     6,716   $     6,267
   Investment securities                                          1,511         1,197
   Other                                                             21            44
                                                            -----------   -----------
     Total interest income                                        8,248         7,508
                                                            -----------   -----------
Interest expense:
   Deposits                                                       2,095         2,258
   Borrowed funds                                                   476           416
                                                            -----------   -----------
     Total interest expense                                       2,571         2,674
                                                            -----------   -----------
     Net interest income before provision for loan losses         5,677         4,834
                                                            -----------   -----------
Provision for loan losses                                           368           118
                                                            -----------   -----------
     Net interest income after provision for loan losses          5,309         4,716
                                                            -----------   -----------
Other income:
   Service charges and other fees on deposit accounts               484           311
   Commissions                                                       15            35
   Other                                                            173            36
                                                            -----------   -----------
     Total other income                                             672           382
                                                            -----------   -----------
Other expenses:
   Salaries and employee benefits                                 2,255         1,862
   Premises and equipment                                         1,009           793
   Occupancy                                                        473           507
   Professional services                                            128           158
   Advertising                                                      176           162
   Other operating                                                  271           288
                                                            -----------   -----------
     Total other expenses                                         4,312         3,770
                                                            -----------   -----------
     Income before income tax expense                             1,669         1,328
                                                            -----------   -----------
Income tax expense                                                  664           492
                                                            -----------   -----------
     Net income                                             $     1,005   $       836
                                                            ===========   ===========

Per share of common stock:
   Basic earnings per share                                 $      0.10   $      0.26
   Diluted earnings per share                               $      0.10   $      0.26

Basic weighted average shares outstanding                    10,086,963     3,233,206
Diluted weighted average shares outstanding                  10,312,989     3,233,206
</TABLE>

                                      -2-

<PAGE>

                 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
            Consolidated Statement of Changes in Stockholders' Equity
                    For the Three Months Ended March 31, 2004
                  (Dollars in thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                                                                    Accu-
                                                                                                                    mulated
                                                                                                           Treasury Compre-
                                    Common stock                                                            stock   hensive
                                  -------------------  Additional               Unearned    Unearned       acquired income
                                   Shares       Par     paid-in-   Retained       ESOP         RSP         for the  (loss),
                                   issued      value    capital    earnings      shares   compensation       RSP     net     TOTAL
                                ----------------------------------------------------------------------------------------------------

<S>                              <C>         <C>        <C>         <C>        <C>         <C>             <C>    <C>      <C>
BALANCE AT JANUARY 1, 2004        3,344,252   $  334     $15,008     $27,858    $(1,009)    $(1,011)        $(103) $(149)   $40,928
    Net income                            -        -           -       1,005          -           -             -      -      1,005
    Other comprehensive
       income, net of
       reclassification
       adjustment and taxes               -        -           -           -          -           -             -    425        425
-----------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income                                                                                                    1,430
-----------------------------------------------------------------------------------------------------------------------------------
    Net proceeds of stock
       offering and issuance
       of common stock            9,107,846      911      68,351           -          -           -             -      -     69,282
    Common stock acquired by
       ESOP (562,873 shares)              -        -          -            -     (5,628)          -             -      -     (5,628)
    Common stock held by ESOP
       committed to be
       released (24,906 shares)           -        -         97            -        166           -             -      -        263
    Compensation recognized
       under RSP Plan                     -        -          -            -          -          60             -      -         60
    Common stock repurchased
       for RSP Plan
       (90,614 shares)                                                                                       (759)             (759)

BALANCE AT MARCH 31, 2004        12,452,098   $1,245    $83,456      $28,863    $(6,471)       (951)        $(862) $ 276   $105,556
                                ===================================================================================================
</TABLE>

                                     -3- .
<PAGE>

                 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                For the quarter
                                                                                ended March 31,
                                                                                ---------------
                                                                               2004         2003
                                                                            (unaudited) (unaudited)
                                                                            -----------------------
<S>                                                                        <C>         <C>
Operating activities
   Net income                                                                $  1,005    $    836
   Adjustments to reconcile net income to net cash
         provided by operating activities
     Depreciation and amortization                                                369         353
     Provision for loan losses                                                    368         118
     Deferred income taxes                                                         73           1
     Amortization of deferred loan fees                                            (5)         16
     Amortization of premiums on investment securities                            284         266
     Release of ESOP shares                                                       263          53
     Compensation under RSP plan                                                   60           -
     Increase in accrued interest receivable                                     (261)       (389)
     Decrease (increase) in other assets                                           57        (656)
     Increase in other liabilities                                              1,580         404
     (Increase) decrease in cash surrender value of officer life insurance        (90)         20
     Increase (decrease) in accrued interest payable on advances                   38          (7)
                                                                             --------    --------
Net cash provided by operating activities                                       3,741       1,015
                                                                             --------    --------
Investing activities
   Purchase of investment securities held-to-maturity                         (14,269)     (6,514)
   Purchase of investment securities available-for-sale                       (38,708)    (40,716)
   Maturity and principal repayments of investment
     securities held-to-maturity                                                2,563       3,769
   Maturity and principal repayments of investment
     securities available-for-sale                                              7,775      10,072
   Purchase of property and equipment                                            (336)       (793)
   Purchase of FHLB Stock                                                        (604)     (1,234)
   Loan originations, net of principal repayments                             (13,687)     (6,891)
   Purchase of loans                                                             (811)          -
   Cash consideration paid to acquire First Bank of Central Jersey                  -      (2,269)
   Cash and equivalents acquired from First Bank of Central Jersey                  -       7,773
                                                                             --------    --------
         Net cash used in investing activities                                (58,077)    (36,803)
                                                                             --------    --------
Financing activities
   Net increase in deposits                                                    21,936      18,731
   Net advances from (repayments to) FHLB                                      12,079      15,646
   Increase in advance payments by borrowers
     for taxes and insurance                                                      106          35
   Decrease in stock subscriptions payable                                    (38,322)          -
   Net proceeds from issuance of common stock                                  69,262           -
   Purchase of common stock for ESOP                                           (5,628)          -
   Purchase of treasury stock for the RSP Plan                                   (759)          -
                                                                             --------    --------
         Net cash provided by financing activities                             58,674      34,412
                                                                             --------    --------
         Net increase in cash and cash equivalents                              4,338      (1,377)
Cash and cash equivalents at beginning of year                                  7,292       7,886
                                                                             --------    --------
Cash and cash equivalents at end of year                                     $ 11,630    $  6,509
                                                                             ========    ========
Supplemental disclosure of cash flow information
   Cash paid during the year for income taxes                                $    925    $    435
                                                                             ========    ========
Interest paid on deposits and borrowed funds                                 $  2,714    $  2,668
                                                                             ========    ========
</TABLE>
                                      -4-
<PAGE>

                 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (unaudited)


1. BASIS OF FINANCIAL STATEMENT PRESENTATION

The  accounting   policies  followed  by  Synergy  Financial  Group,  Inc.  (the
"Company")  conforms to accounting  principles  generally accepted in the United
States of America and to predominant practice within the banking industry.

The consolidated  financial  statements  include the accounts of the Company and
its wholly-owned subsidiaries, Synergy Bank, Synergy Financial Services, Inc.and
Synergy Capital  Investments,  Inc.. All significant  intercompany  accounts and
transactions have been eliminated in consolidation.

In preparing the financial statements,  management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities,  the
disclosure  of  contingent  assets and  liabilities  at the date of the  balance
sheets,  and the reported  amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

The principal  estimates that are susceptible to significant  change in the near
term relate to the allowance for loan and lease  losses.  The  evaluation of the
adequacy of the allowance for loan and lease losses  includes an analysis of the
individual loans and overall risk characteristics and size of the different loan
portfolios, and takes into consideration current economic and market conditions,
the capability of specific  borrowers to pay specific loan obligations,  as well
as current loan  collateral  values.  However,  actual losses on specific loans,
which also are encompassed in the analysis, may vary from estimated losses.

Statement of Financial  Accounting  Standards (SFAS) No. 131,  Disclosures about
Segments of an Enterprise and Related Information, establishes standards for the
way business  enterprises  report information about operating segments in annual
financial statements.  The Bank has one operating segment and, accordingly,  has
one reportable  segment,  "Community  Banking." All of the Bank's activities are
interrelated,  and each activity is dependent and assessed  based on how each of
the activities of the Bank supports the others. For example,  commercial lending
is  dependent  upon the ability of the Bank to fund itself with retail  deposits
and other borrowings and to manage interest rate and credit risk. This situation
is also similar for  consumer,  residential,  multi-family  and  non-residential
mortgage lending.  Accordingly,  all significant  operating  decisions are based
upon analysis of the Bank as one operating segment.

2. REORGANIZATION AND STOCK CONVERSION

          The  Company  completed  its  second-step  conversion  from the mutual
holding  company  form  of  organization  to  a  full  stock   corporation  (the
"Conversion").  on January 20, 2004. Upon closing,  Synergy,  MHC and the former
Mid-Tier Stock Holding Company were eliminated.

         The Company sold 7,035,918 shares of its common stock in the Conversion
at $10.00 per share. In addition,  each share of common stock held by the public
stockholders  of its former  Mid-Tier Stock Holding  Company were converted into
3.7231  shares of common  stock of the  Company,  resulting  in an  aggregate of
5,416,180  exchange  shares.  Cash  was  issued  in lieu of  fractional  shares.
Accordingly,  the Company now has 12,452,098 total shares outstanding  following
the Conversion, which was the adjusted maximum of the estimated valuation range.

                                      -5-
<PAGE>

                 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (unaudited)


3. EARNINGS PER SHARE

Basic  earnings  per share is computed by dividing  income  available  to common
stockholders by the weighted average number of common shares outstanding for the
period.  Diluted  earnings per share reflects the potential  dilution that could
occur if  securities  or other  contracts  to issue  common stock (such as stock
options)  were  exercised  or resulted in the  issuance of common  stock.  These
potentially  dilutive  shares would then be included in the  weighted  number of
shares outstanding for the period using the treasury stock method. Shares issued
and shares  reacquired  during any period are  weighted  for the  portion of the
period that they were outstanding.

The  computation of both basic and diluted  earnings per share includes the ESOP
shares previously  allocated to participants and shares committed to be released
for the allocation to participants and RSP shares which have vested or have been
allocated to participants.  ESOP and RSP shares that have been purchased but not
committed to be released have not been considered in computing basic and diluted
earnings per share.

The following is a  reconciliation  of the  numerators and  denominators  of the
basic and diluted  earnings  per share  computation  for the three  months ended
March 31, 2004 (dollars in thousands, except per share data):

<TABLE>
<CAPTION>
                                                                      Weighted
                                                        Income     average shares        Per
                                                    (numerator)     (denominator)    share amount
                                                    -----------     -------------    ------------
<S>                                                  <C>            <C>             <C>
    Basic earnings per share
       Income available to common stockholders         $   1,005      10,086,963      $    0.10
       Effect of dilutive common stock equivalents                       226,026              -
                                                       ---------      ----------      ---------
    Diluted earnings per share
    Income available to common stockholders            $   1,005      10,312,989      $    0.10
                                                       =========      ==========      =========
</TABLE>

                                      -6-

<PAGE>

                 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (unaudited)


The following is a  reconciliation  of the  numerators and  denominators  of the
basic and diluted  earnings  per share  computation  for the three  months ended
March 31, 2003 (dollars in thousands, except per share data):

<TABLE>
<CAPTION>
                                                                      Weighted
                                                        Income     average shares        Per
                                                    (numerator)     (denominator)    share amount
                                                    -----------     -------------    ------------
<S>                                                 <C>            <C>             <C>
    Basic earnings per share
       Income available to common stockholders        $     836        3,233,206       $    0.26
       Effect of dilutive common stock equivalents                             -               -
                                                      ---------       ----------       ---------

    Diluted earnings per share
    Income available to common stockholders           $     836        3,233,206       $   0.26
                                                      ==========    ============       =========
</TABLE>

4. STOCK-BASED COMPENSATION

The Company's stock option plan and the restricted  stock plan are accounted for
in accordance with the provisions of Accounting  Principles  Board Opinion (APB)
No. 25, Accounting for Stock Issued to Employees, and released  Interpretations.
Accordingly,  no  compensation  expense has been recognized for the stock option
plan.  Expense for the restricted  stock plan in the amount of the fair value of
the common  stock at the date of grant is  recognized  ratable  over the vesting
period. Prior to April 22, 2003, the Company did not have a Stock Option Plan or
a Restricted Stock Plan.

Had an expense for the Company's stock option plan been determined  based on the
fair value at the grant date for the Company's stock options consistent with the
method outlined in SFAS No. 123, the Company's net income and earnings per share
for all expenses  related to stock options and stock  granted in its  restricted
stock plan would have been  reduced  to the pro forma  amounts  that  follow (in
thousands, except per share data):

<TABLE>
<CAPTION>
                                                                For the quarter ended
                                                           March 31, 2004      March 31, 2003
                                                           --------------      --------------
<S>                                                        <C>                 <C>
Net income, as reported                                      $   1,005           $     836
Add expense recognized for the restricted stock plan,
   net of related tax effect                                        36                   -
Less total stock option and restricted stock plan expense,
   determined under the fair value method,
   net of related tax effect                                       (84)                  -
                                                             ---------           ---------

Net income, pro forma                                        $     957           $     836
                                                             =========           =========

Basic earnings per share
   As reported                                               $    0.10           $    0.26
   Pro forma                                                 $    0.09           $    0.26
Diluted earnings per share
   As reported                                               $    0.10           $    0.26
   Pro forma                                                 $    0.09           $    0.26
</TABLE>

                                      -7-
<PAGE>
                 SYNERGY FINANCIAL GROUP, INC. AND AUDSIDIARIES
                   Notes to Consolidated Financial Statements
                                  (unaudited)


The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes   options  price  model  with  the  following   weighted   average
assumptions  used  for  grants  in  2003:  dividend  yield  of  0.00%;  expected
volatility of 29.44 %;  risk-free  interest rate of 3.01%;  and expected life of
five years.

The Company has  established  an Employee Stock  Ownership Plan (ESOP)  covering
eligible employees with one year of service, as defined by the ESOP. The Company
accounts for the ESOP in  accordance  with the  American  Institute of Certified
Public Accountants'  Statement of Position (SOP) No. 93-6, Employers' Accounting
for Employee Stock  Ownership  Plans.  SOP No. 93-6 addresses the accounting for
shares of stock issued to employees by an ESOP.  SOP No. 93-6  requires that the
employer  record  compensation  expense in the amount equal to the fair value of
shares committed to be released from the ESOP to employees.

Compensation  expense for the ESOP is recorded at an amount  equal to the shares
allocated by the ESOP  multiplied by the average fair market value of the shares
during the year. The Company  recognizes  compensation  expense ratably over the
year for the ESOP  shares  to be  allocated  based  upon the  Company's  current
estimate  of the number of shares  expected to be  allocated  by the ESOP during
each calendar year. The difference between the average fair market value and the
cost of the  shares  allocated  by the  ESOP is  recorded  as an  adjustment  to
additional paid-in-capital.

5. RECENT ACCOUNTING PRONOUNCEMENTS

The SEC recently  released  Staff  Accounting  Bulletin No. 105,  Application of
Accounting  Principles to Loan Commitments.  SAB 105 provides guidance about the
measurement  of loan  commitments  recognized at fair value under FASB Statement
No. 133, Accounting for Derivative  Instruments and Hedging Activities.  SAB 105
also  requires  companies  to disclose  their  accounting  policy for those loan
commitments  including  methods and assumptions  used to estimate fair value and
associated  hedging  strategies.  SAB 105 is effective for all loan  commitments
accounted  for as  derivatives  that are entered into after March 31, 2004.  The
adoption of SAB 105 is not expected to have a material  effect on the  Company's
consolidated financial statements.

On March 31, 2004,  the  Financial  Accounting  Standards  Board (FASB) issued a
proposed Statement,  Share-Based Payment an Amendment of FASB Statements No. 123
and  APB  No.  95,  that  addresses  the  accounting  for  share-based   payment
transactions in which an enterprise  receives  employee services in exchange for
(a) equity  instruments of the enterprise or (b)  liabilities  that are based on
the fair value of the enterprise's  equity instruments or that may be settled by
the issuance of such equity instruments. Under the FASB's proposal, all forms of
share-based  payments to employees,  including employee stock options,  would be
treated the same as other forms of  compensation by recognizing the related cost
in the income statement. The expense of the award would generally be measured at
fair value at the grant date.  Current  accounting  guidance  requires  that the
expense  relating  to  so-called  fixed  plan  employee  stock  options  only be
disclosed in the footnotes to the financial  statements.  The proposed Statement
would eliminate the ability to account for share-based compensation transactions
using APB Opinion No. 25, Accounting for Stock Issued to Employees.  The Company
is currently  evaluating this proposed  statement and its effects on its results
of operations.

In  January  2003,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Interpretation No. 46,  Consolidation of Variable Interest Entities (FIN 46). In
general, a variable interest entity (VIE) is a corporation,  partnership,  trust
or any other legal structure used for business purposes that either (a) does not
have equity investors with voting rights or (b) has equity investors that do not
provide sufficient financial resources for the entity to support its activities.
FIN 46 requires  certain VIEs to be consolidated  by the primary  beneficiary if
the  investors  do not  have  the  characteristics  of a  controlling  financial
interest or do not have sufficient  equity at risk for the entity to finance its
activities without additional subordinated financial support

                                      -8-
<PAGE>
                 SYNERGY FINANCIAL GROUP, INC. AND AUDSIDIARIES
                   Notes to Consolidated Financial Statements
                                  (unaudited)

from other parties. For public companies, the consolidation  requirements of FIN
46 applied immediately to interest entities created after September 15, 2003. In
December 2003,  the FASB issued FIN 46R with respect to VIEs,  which among other
things revised the  implementation  date for small business  filers to the first
fiscal year or interim period ending after December 15, 2004, with the exception
of Special Purpose Entities (SPEs). The Bank currently has no SPEs. The adoption
of this statement did not have a material  impact on the financial  condition or
results of operations of the Bank.


6. INVESTMENT SECURITIES

The amortized cost,  gross  unrealized  gains and losses,  and fair value of the
Company's  investment  securities available for sale and held to maturity are as
follows (in thousands):

                                       March 31, 2004 (unaudited)
                                ------------------------------------------
                                            Gross      Gross
                               Amortized  unrealized unrealized    Fair
                                  cost       gains     losses      value
                                --------   --------   --------    --------

Available-for-sale
   U.S. government obligations   $  3,518   $     10   $    (23)   $  3,505
   Mortgage-backed securities
      FHLMC                        87,134        407       (156)     87,385
      FNMA                         62,818        439       (213)     63,044
   Equity securities                1,028          6        (32)      1,002
                                 --------   --------   --------    --------

             Total               $154,498   $    862   $   (424)   $154,936
                                 ========   ========   ========    ========


                                       March 31, 2004 (unaudited)
                                ------------------------------------------
                                            Gross      Gross
                               Amortized  unrealized unrealized    Fair
                                  cost       gains     losses      value
                                --------   --------   --------    --------

Held-to-maturity
   Mortgage-backed securities
      FHLMC                     $ 17,354   $     54   $    (55)   $ 17,353
      FNMA                        20,923        156        (53)     21,026
      GNMA                         6,552        129          -       6,681
   Other debt securities              10          -          -          10
                                --------   --------   --------    --------

             Total              $ 44,839   $    339   $   (108)   $ 45,070
                                ========   ========   ========    ========

                                      -9-
<PAGE>
                 SYNERGY FINANCIAL GROUP, INC. AND AUDSIDIARIES
                   Notes to Consolidated Financial Statements
                                  (unaudited)

                                        December 31, 2004 (unaudited)
                                 ------------------------------------------
                                             Gross      Gross
                                Amortized  unrealized unrealized    Fair
                                   cost       gains     losses      value
                                 --------   --------   --------    --------

Available-for-sale
   U.S. government obligations   $  3,527   $      9   $    (69)   $  3,467
   Mortgage-backed securities
      FHLMC                        64,136        282       (320)     64,098
      FNMA                         55,332        241       (324)     55,249
   Equity securities                1,017          3        (55)        965
                                 --------   --------   --------    --------

             Total               $124,012   $    535   $   (768)   $123,779
                                 ========   ========   ========    ========


                                        December 31, 2004 (unaudited)
                                 ------------------------------------------
                                             Gross      Gross
                                Amortized  unrealized unrealized    Fair
                                   cost       gains     losses      value
                                 --------   --------   --------    --------

Held-to-maturity
   Mortgage-backed securities
      FHLMC                     $  5,623   $     20   $    (84)   $  5,559
      FNMA                        20,285         69        (98)     20,256
      GNMA                         7,296         95          -       7,391
   Other debt securities              10          -          -          10
                                --------   --------   --------    --------

             Total              $ 33,214   $    184   $   (182)   $ 33,216
                                ========   ========   ========    ========


7. LOANS RECEIVABLE

Major groupings of loans are as follows (in thousands):

                                            March 31,       December 31,
                                              2004              2003
                                           ---------         ---------
Mortgages
   Residential, 1-4 family                 $ 226,619         $ 226,085
   Residential, multi-family                  37,642            33,971
   Non-residential                            60,730            56,694
Automobile                                   115,340           109,277
Commercial                                     8,023             7,838
Credit card                                       61                71
Other loans                                    3,609             3,745
                                           ---------         ---------

                                             452,024           437,681
Deferred loan fees and costs                     169               178
Allowance for loan and lease losses           (3,473)           (3,274)
                                           ---------         ---------

                                           $ 448,720         $ 434,585
                                           =========         =========

                                      -10-
<PAGE>
                 SYNERGY FINANCIAL GROUP, INC. AND AUDSIDIARIES
                   Notes to Consolidated Financial Statements
                                  (unaudited)

A summary  of the  activity  in the  allowance  for loan and lease  losses is as
follows (in thousands):

                                                  Three Months Ended
                                            -------------------------
                                               March 31,    March 31,
                                                 2004          2003
                                              -------       -------

Balance, beginning of period                  $ 3,274       $ 2,231
Provision for loan and lease losses               368           118
Acquisition of First Bank of Central Jersey         -           823
Recoveries                                         91           119
Loans charged-off                                (260)         (378)
                                              -------       -------

Balance, end of period                        $ 3,473       $ 2,913
                                              =======       =======



8. DEPOSITS

Deposits are summarized as follows (in thousands):

                                             March 31,   December 31,
                                               2004          2003
                                             --------      --------

Checking accounts                            $ 49,242      $ 45,259
Interest-bearing checking                       1,213           708
Money market accounts                         151,360       139,121
Savings and club accounts                      71,709        72,061
Certificates accounts                         221,947       216,386
                                             --------      --------
                                             $495,471      $473,535
                                             ========      ========


9. FHLB of New York Advances

   1. Short-term FHLB Advances
      ------------------------

Short-term  FHLB Advances  generally have  maturities of less than one year. The
details of these advances are present below (in thousands, except percentages):


                                                At or For the Three Months Ended
                                                --------------------------------
                                                    March 31,     December 31,
                                                       2004            2003
                                                   -----------     -----------

Average balance outstanding                          $39,453         $35,413
Maximum amount outstanding
    at any month-end during the period                44,304          69,300
Balance outstanding at period end                     41,025          38,299
Weighted-average interest rate during the period        1.28%           1.21%
Weighted-average interest rate at period end            1.35%           1.17%

                                      -11-

<PAGE>
                 SYNERGY FINANCIAL GROUP, INC. AND AUDSIDIARIES
                   Notes to Consolidated Financial Statements
                                  (unaudited)

   2. Long-term FHLB Advances
      -----------------------

At March 31,  2004,  long-term  advances  from the Federal Home Loan Bank (FHLB)
totaled $43,927. Advances consist of fixed-rate advances that will mature within
one to nine years.  The  advances are  collateralized  by FHLB stock and certain
first  mortgage  loans and  mortgage-backed  securities.  These  advances  had a
weighted average interest rate of 3.61%.

As of March 31, 2004 long-term FHLB advances mature as follows (in thousands):

       2004                                           $  6,188
       2005                                              2,739
       2006                                              7,000
       2007                                             13,000
       2008                                             13,000
       Thereafter                                        2,000
                                                      --------

                                                      $ 43,927
                                                      ========

                                      -12-
<PAGE>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations


General

         Management's discussion and analysis of financial condition and results
of  operations  is  intended  to  provide   assistance  in   understanding   our
consolidated  financial condition and results of operations.  The information in
this section should be read with the consolidated  interim financial  statements
and the notes thereto included in this Form 10-Q.

         Our results of operations  are primarily  dependent on our net interest
income.  Net interest  income is a function of the balances of interest  earning
assets  outstanding in any one period, the yields earned on those assets and the
interest paid on deposits and borrowed funds that were  outstanding in that same
period.  To a lesser extent,  our results of operations are also affected by the
relative  levels  of our  other  income  and other  expenses.  Our other  income
consists primarily of fees and service charges and gains (losses) on the sale of
loans  and  investments.  The  other  expenses  consist  primarily  of  employee
compensation  and benefits,  occupancy and equipment  expenses,  data processing
costs,  marketing  costs,  professional  fees,  office  supplies,  telephone and
postage costs. Our results of operations are also significantly  impacted by the
amount of  provisions  for loan and lease losses which,  in turn,  are dependent
upon,  among  other  things,  the size and  makeup of the loan  portfolio,  loan
quality and loan trends.


Forward-Looking Statements

         This report  contains  certain  forward-looking  statements  within the
meaning  of  Section  27A of  the  Securities  Act  of  1933,  as  amended  (the
"Securities  Act"), and Section 21 E of the Securities  Exchange Act of 1934, as
amended  (the  "Exchange  Act").   The  Company  intends  such   forward-looking
statements  to be  covered by the safe  harbor  provisions  for  forward-looking
statements  contained  in the  Private  Securities  Reform  Act of 1995,  and is
including  this  statement  for the  purpose  of these safe  harbor  provisions.
Forward-looking statements,  which are based on certain assumptions and describe
future  plans,  strategies  and  expectations  of  the  Company,  are  generally
identified  by use of the words  "believe,"  "expect,"  "intend,"  "anticipate,"
"estimate," "project," or similar expressions.  The Company's ability to predict
results  or the  actual  effect  of future  plans or  strategies  is  inherently
uncertain.  Factors which could have a material adverse effect on the operations
of the Company and its subsidiaries  include, but are not limited to, changes in
interest rates,  general economic  conditions,  legislative/regulatory  changes,
monetary and fiscal policies of the U.S.  Government,  including policies of the
U.S.  Treasury and the Federal Reserve Board,  the quality or composition of the
loan  or  investment  portfolios,  demand  for  loan  products,  deposit  flows,
competition,  demand for  financial  services in the  Company's  market area and
accounting  principles and guidelines.  These risks and uncertainties  should be
considered in evaluating  forward-looking  statements and undue reliance  should
not be placed on such statements. Further information concerning the Company and
its business,  including  additional  factors that could  materially  effect the
Company's  financial  results,  is included in the  Company's  filings  with the
Securities and Exchange Commission (the "SEC").

         The  Company  does  not  undertake  - and  specifically  disclaims  any
obligation - to release  publicly the results of any revisions which may be made
to any  forward-looking  statements to reflect events or circumstances after the
date  of  such  statements  or to  reflect  the  occurrence  of  anticipated  or
unanticipated events.

                                      -13-
<PAGE>

Critical Accounting Policies, Judgments and Estimates

       The  accounting  and reporting  policies of the Company  conform with the
accounting  principals  generally  accepted in the United  States of America and
general practices within the financial services industry. The preparation of the
financial statements in conformity with accounting principles generally accepted
in the United  States of  America  requires  management  to make  estimates  and
assumptions that affect the amounts reported in the financial statements and the
accompanying notes. Actual results could differ from those estimates.

       Allowance  for Loan and Lease  Losses.  The  Company  considers  that the
determination  of the  allowance  for loan and lease  losses  involves  a higher
degree  of  judgment  and  complexity  than  its  other  significant  accounting
policies.  The balance in the allowance  for loan losses is determined  based on
management's  review and  evaluation  of the loan  portfolio in relation to past
loss  experience,  the size and composition of the portfolio,  current  economic
events and  conditions,  and other  pertinent  factors,  including  management's
assumptions  as to future  delinquencies,  recoveries  and losses.  All of these
factors may be susceptible to significant  change. To the extent actual outcomes
differ from  management's  estimates,  additional  provisions for loan and lease
losses may be required that would adversely impact earnings in future periods.

       Intangible  Assets.  Intangible  assets  such as  goodwill  and the  core
deposit intangible associated with the January 2003 acquisition of First Bank of
Central  Jersey are subject to annual  impairment  tests and, in the case of the
core deposit intangible,  amortization of the asset through a charge to expense.
To the extent the  outcome of the  impairment  tests  differ  from the  carrying
value,  additional  charges to expense  could be required to reduce the carrying
value, which would adversely impact earnings in future periods.

       Income  Taxes.  Under the  liability  method,  deferred  tax  assets  and
liabilities  are  determined  based  on the  difference  between  the  financial
statement  and tax basis of assets  and  liabilities.  Deferred  tax  assets are
subject to  management's  judgment  based upon  available  evidence  that future
realization is more likely than not. If management  determines  that the Company
may be unable  to  realize  all or part of the net  deferred  tax  assets in the
future,  a direct  charge to income tax  expense  may be  required to reduce the
recorded value of the net deferred tax assets to the expected realizable amount,
thereby impacting earnings.
Comparison of Financial Condition at March 31, 2004 and December 31, 2003

       Assets. Total assets increased $62.0 million, or 9.87%, to $690.7 million
at March 31, 2004 from $628.6  million at December  31,  2003.  The  increase in
total assets  resulted  primarily from the investment of recently raised capital
in investment securities and loans.

       The Company increased investment securities and cash and cash equivalents
by $42.8  million or 27.25%,  and $4.3  million  or  59.49%,  respectively.  The
increase in investment  securities reflects $53.0 million in purchases offset by
$10.2  million  in  maturities  and  principal  repayments,  as well as  premium
amortization.  Investment  purchases  were  exclusively  federal  agency  issued
mortgage-backed securities.

                                      -14-
<PAGE>

       During the first quarter of 2004, net loans receivable increased by $14.1
million or 3.25%. The automobile loan, non-residential and multi-family mortgage
loan  portfolios  increased  by $6.1  million,  $4.0  million and $3.7  million,
respectively.  Residential,  1-4 family,  mortgage  loans and  commercial  loans
accounted  for the remainder of the  increase.  Auto loans  increased due to our
alliance with an  internet-based  lending  referral agent.  Non-residential  and
multi-family  mortgage  loans  increased due to our continued  emphasis on these
credits to diversify the loan  portfolio  and manage the  Company's  exposure to
risk posed by a potential increase in interest rates.

       Liabilities.  Total  liabilities  decreased  $2.6 million,  or 0.44%,  to
$585.1  million at March 31, 2004 from $587.7  million at December 31, 2003. The
decline in total  liabilities  resulted  primarily from the elimination of $38.3
million in stock subscriptions payable,  offset by an increase of $21.9 million,
or 4.63%,  in deposits and a $12.1 million or 16.58%  increase in FHLB advances.
The balance of the change is  attributable  to a $1.6 million  increase in other
liabilities,  which  represented an amount payable related to the purchase of an
undelivered investment security.

       The  majority of the  deposit  growth  consisted  of an increase in money
 market deposit  accounts of $12.2 million.  This is primarily the result of the
 promotion of this type of account.

       The increase in FHLB advances was to fund both the purchase of investment
securities and the origination of loans during this period. It is projected that
the deposit flow from  existing  and new branches  will be used to fund our loan
demand and pay down the FHLB advances.

       Equity. Total equity increased $64.6 million or 157.91% to $105.6 million
at March 31,  2004 from $40.9  million at December  31,  2003.  The  increase in
equity  is  largely  attributable  to $69.2  million  in net  proceeds  from the
completion  of a  second  step  stock  conversion  on  January  20,  2004 . This
transaction   resulted   in  an  increase   to  common   stock  and   additional
paid-in-capital of $911,000 and $68.4 million, respectively.  This was offset by
an  increase  in  unearned  ESOP  shares  of $5.5  million  as a  result  of the
transaction.

       The increase in equity also  reflects  $1.0 million in net income for the
three  months  ended  March  31,  2004  and an  increase  in  accumulated  other
comprehensive  income net of tax effect of  $425,000,  offset by an  increase in
treasury stock repurchased for the restricted stock plan of $759,000.

                                      -15-
<PAGE>

Average Balance Sheet.  The following  table sets forth certain  information for
the three months ended March 31, 2004 and 2003. The average yields and costs are
derived  by  dividing  income or  expense  by the  average  balance of assets or
liabilities,  respectively,  for the periods  presented.  Average  balances  are
derived from daily  average  balances.  The table does not include the allowance
for  loan  and  lease  losses  in the  average  balances  of  loans  receivable.
Management  does not believe  that this causes any material  differences  in the
information presented.

<TABLE>
<CAPTION>
                                                                        For the Three Months Ended March 31,
                                                    -----------------------------------------------------------------------------
                                                                   2004                                     2003
                                                    ------------------------------------     ------------------------------------
                                                     Average                  Average        Average                   Average
                                                     Balance     Interest    Yield/Cost      Balance      Interest    Yield/Cost
                                                     -------     --------    ----------      -------      --------    ----------
<S>                                               <C>           <C>         <C>          <C>           <C>           <C>
Interest-earning assets:
 Loans receivable, net(1)                           $442,045      $6,716        6.08%        $336,434      $6,267        7.45%
 Securities(2)                                       174,772       1,511        3.46          117,853       1,197        4.06
Other interest-earning assets(3)                       3,702          21        2.27            6,988          44        2.52
                                                    --------      ------                     --------      ------
     Total interest-earning assets                   620,519       8,248        5.32          461,275       7,508        6.51
Non-interest-earning assets                           35,858                                   26,870
                                                    --------                                 --------
     Total assets                                   $656,377                                 $488,145
                                                    ========                                 ========
Interest-bearing liabilities:
 Checking accounts                                  $ 44,874      $    2        0.02         $ 50,734      $    2        0.02
 Savings and club accounts                            70,031          87        0.50           69,767         183        1.05
 Money market accounts                               145,121         605        1.67           54,250         238        1.75
 Certificates of deposit                             217,417       1,401        2.58          227,409       1,835        3.23
 FHLB advances                                        68,158         453        2.66           47,774         416        3.48
Stock subscriptions payable                           23,207          23        0.40                -           -           -
                                                                  ------                                   ------
     Total interest-bearing liabilities              568,808       2,571        1.81          449,934       2,674        2.38
                                                                  ------                                   ------
Non-interest-bearing liabilities                       3,193                                    6,853
                                                    --------                                 --------
     Total liabilities                               572,001                                  456,787
Stockholders' equity                                  84,376                                   31,358
                                                    --------                                 --------
     Total liabilities and stockholders' equity     $656,377                                 $488,145
                                                    ========                                 ========
Net interest income                                               $5,677                                   $4,834
Interest rate spread(4)                                                          3.51%                                   4.13%
                                                                               ======                                  ======
Net yield on interest-earning assets(5)                                          3.66%                                   4.19%
                                                                               ======                                  ======
Ratio of average interest-earning assets to
   average interest-bearning liabilities                                       109.09%                                 102.52%
                                                                               ======                                  ======
</TABLE>

-------------------------------
(1)  Non-accruing  loans have been included in loans receivable,  and the effect
     of such inclusion was not material.
(2)  Includes  U.S.  government  obligations,   mortgage-backed  securities  and
     interest-bearing deposits in banks.
(3)  Includes  FHLB  stock  at cost  and  term  deposits  with  other  financial
     institutions.
(4)  Interest rate spread represents the difference between the average yield on
     interest-earning   assets  and  the   average   cost  of   interest-bearing
     liabilities.
(5)  Net yield on  interest-earning  assets  represents net interest income as a
     percentage of average interest-earning assets.

                                      -16-
<PAGE>

Comparison of Operating Results for Three Months Ended March 31, 2004 and 2003

         Net Income.  Net income  increased  by $169,000 to $1.0 million for the
three  months  ended March 31, 2004  compared to $836,000 for the same period in
2003, a 20.22% increase.  The increase was attributable  primarily to a $843,000
increase in net interest income and a $290,000 increase in other income,  offset
by a $250,000  increase in the provisions for loan and lease losses,  a $542,000
increase in other  expenses  and a $172,000  increase in income tax expense as a
result of higher earnings.

         Net Interest Income. Net interest income grew $843,000,  or 17.44%, for
the three months ended March 31, 2004 compared to the same period in 2003. Total
interest  income  increased by $740,000,  to $8.2 million,  for the three months
ended March 31,  2004,  while  total  interest  expense  declined by $103,000 to
approximately $2.6 million, for the three months ended March 31, 2004.

         The 9.86%  increase in total  interest  income was  primarily  due to a
$159.2 million,  or 34.52%,  increase in the average balance of interest-earning
assets,  offset by a 119 basis point  decrease in the  average  yield  earned on
these investments.  The increase in interest-earning  assets was a direct result
of management's growth strategy. The decrease in the average yield was primarily
attributable to lower market interest rates.

         The 3.85% decrease in total interest expense resulted  primarily from a
57 basis  point  decrease  in the  average  cost of funds  offset  by an  26.42%
increase in the average balance of  interest-bearing  liabilities . The decrease
in the average cost of interest-bearing  liabilities was primarily  attributable
to pricing  strategies  and lower  market  interest  rates.  The majority of the
increase in the average  balance of  interest-bearing  liabilities  for the 2004
period was  comprised  of a $90.9  million or 167.50%  increase  in the  average
balance of money market accounts and a $20.4 million, or 42.67%, increase in the
average balance of advances from the Federal Home Loan Bank.

         Provision for Loan and Lease Losses.  We maintain an allowance for loan
and lease losses  through  provisions for loan and lease losses that are charged
to earnings.  The  provision is made to adjust the total  allowance for loan and
lease losses to an amount that represents  management's  best estimate of losses
known and inherent in the loan portfolio at the balance sheet date that are both
probable and  reasonable to estimate.  In estimating the known and inherent loan
losses in the loan  portfolio that are both probable and reasonable to estimate,
management  considers  factors such as an internal  analysis of credit  quality,
general levels of loan  delinquencies,  collateral values, the bank's historical
loan and lease loss experience, changes in loan concentrations by loan category,
peer group information and economic and market trends affecting our market area.
The  provision  established  for loan  and  lease  losses  each  month  reflects
management's  assessment  of  these  factors  in  relation  to the  level of the
allowance at such time. Management allocates the allowance to various categories
based on its classified assets,  historical loan and lease loss experience,  and
its  assessment  of the  risk  characteristics  of each  loan  category  and the
relative  balances at month end of each loan category.  Management's  estimation
did not change either in estimation methods or assumptions during either period.

         The  provision  for loan and lease losses  increased  by  $250,000,  or
211.86%, to $368,000 for the three months ended March 31, 2004 from $118,000 for
the same period in 2003. Total  charge-offs  amounted to $260,000 and recoveries
amounted to $91,000 for a net charge-off amount of $169,000 for the three months
ended March 31, 2004.  This  represents a decrease in net charge-offs of $90,000
over the same period in 2003.

         Other Income.  Other income increased  $290,000 or 75.92%,  to $672,000
for the three  months  ended  March 31, 2004  compared to $382,000  for the same
period in 2003.  The  increase is primarily  attributable  to higher fees and an
increase in other income (primarily late charges and the value of the bank-owned
life

                                      -17-
<PAGE>

insurance policy), which increased $173,000 and $137,000,  respectively,  offset
by a $20,000 decrease in commissions.

         Other  Expenses.  Other expenses  increased  $542,000 or 14.26% to $4.3
million for the three months  ended March 31, 2004  compared to $3.8 million for
the same period in 2003. The increase was primarily  attributable  to a $393,000
or 21.11%  increase in  compensation  expense,  specifically  the Company's 2003
Restricted Stock Plan, its Employee Stock Ownership Plan and customary  employee
merit  increases,  and an increase in premises  and  equipment  expenditures  of
$216,000,  or 27.24%, offset by a $64,000 decrease in occupancy and professional
service expenses.

         Income Tax  Expense.  Income tax  expense  increased  by  $172,000,  or
34.96%,  during the three-  months  ended March 31, 2004 as compared to the same
period in 2003, reflecting higher taxable income for the 2004 period.

Liquidity

       The Bank maintains  liquid assets at levels we consider  adequate to meet
liquidity needs. The liquidity of the Bank reflects its ability to provide funds
to meet loan requests,  accommodate possible outflows in deposits,  fund current
and  planned   expenditures   and  take   advantage  of  interest   rate  market
opportunities  in  connection  with asset and liability  management  objectives.
Funding of loan  requests,  providing for liability  outflows and  management of
interest rate  fluctuations  require  continuous  analysis in order to match the
maturities  of earning  assets with specific  types of deposits and  borrowings.
Bank  liquidity  is  normally  considered  in terms of the nature and mix of the
bank's sources and uses of funds.

       The  Bank's  primary   sources  of  liquidity  are  deposits,   scheduled
amortization  and  prepayment  of  loans  and  mortgage-backed   securities.  In
addition,  the Bank invests excess funds in overnight federal funds investments,
which  provide  liquidity.  Our cash and cash  equivalents,  defined as cash and
deposits in other  financial  institutions  with  original  maturities  of three
months or less, totaled $11.6 million at March 31, 2004. To a lesser extent, the
earnings  and  funds  provided  from our  operating  activities  are a source of
liquidity.

       Liquidity  management is both a daily and long-term  function of business
management.  While scheduled  principal  repayments on loans and mortgage-backed
securities are a relatively  predictable source of funds, deposit flows and loan
and securities  prepayments  are greatly  influenced by general  interest rates,
economic  conditions and competition.  If we require funds beyond our ability to
generate them  internally,  we have the ability to obtain advances from the FHLB
of New York,  which provides an additional  source of funds.  At March 31, 2004,
the Bank's  borrowing  limit with the FHLB of New York was  $156.2  million.  At
March 31, 2004, Bank had $84.9 million of borrowings outstanding.

       Management is not aware of any trends,  events or uncertainties that will
have  or are  reasonably  likely  to have a  material  effect  on the  Company's
liquidity,  capital or operations nor are we aware of any current recommendation
by regulatory authorities,  which, if implemented,  would have a material effect
on liquidity,  capital or operations. The total amount of the Bank's commitments
to extend credit for mortgage and consumer  loans as of March 31, 2004 was $46.2
million,  excluding  commitments on unused lines of credit,  which totaled $23.1
million.

       Management  intends  to grow the Bank's  branch  network  either  through
opening or acquiring  branch offices.  We currently plan to open four additional
new  branch  locations  over the next four  years.  We also  intend to  actively
consider the  acquisition of local  financial  institutions as part of expanding
our banking  operations.  We do not, however,  have any current  understandings,
agreements or arrangements for the expansion of our business, other than opening
new branch office locations.

                                      -18-
<PAGE>

The following table discloses our contractual obligations as of March 31, 2004:

                                  Total   Less Than 1-3 Years 4-5 Years    After
                                           1 Year                        5 Years
                                 -------  --------- --------- ---------  -------

FHLB advances (1)                $84,952   $47,213   $24,739   $13,000   $     -
Rental under operating leases      4,714       423     1,608       470     2,213
                                 -------   -------   -------   -------   -------
Total                            $89,666   $47,636   $26,347   $13,470   $ 2,213
                                 =======   =======   =======   =======   =======

----------------
(1) At March 31, 2004, we had $84.9 million of borrowings  outstanding  with the
FHLB. At March 31, 2004, our borrowing limit with the FHLB was $156.2 million.

     The following  table  discloses our commercial  commitments as of March 31,
2004:

<TABLE>
<CAPTION>
                                     Total   Less Than  1-3 Years 4-5 Years  After
                                             1 Year                         5 Years
                                    -------  ---------  --------- --------- -------

<S>                                <C>       <C>       <C>       <C>       <C>
Lines of Credit (1)                 $23,000   $    95   $   350   $   205   $22,350
Other commitments to extend credit   46,000    46,000         -         -         -
                                    -------   -------   -------   -------   -------
Total                               $69,000   $46,095   $   350   $   205   $22,350
                                    =======   =======   =======   =======   =======
</TABLE>

----------------
(1)  Represents amounts committed to customers.

                                      -19-

<PAGE>

Regulatory Capital Requirements

         The Bank is subject to federal  regulations that impose certain minimum
capital requirements. Quantitative measures, established by regulation to ensure
capital  adequacy,  require the Bank to maintain  amounts and ratios of tangible
and core capital to adjusted  total assets and of total  risk-basked  capital to
risk-weighted  assets. On March 31, 2004, the Bank was in compliance with all of
its regulatory capital  requirements.  The following table sets forth the Bank's
capital position and relativity to regulatory requirements as of March 31, 2004:

<TABLE>
<CAPTION>
                                                                  OTS Requirements
                                     -------------------------------------------------------------------------
                                                                                             Regulatory
                                                                      Minimum           for classification as
                                            Bank actual           capital adequacy        well-capitalized
                                            -----------           ----------------        ----------------
                                        Amount       Ratio       Amount      Ratio       Amount       Ratio
                                        ------       -----       ------      -----       ------       -----
<S>                                  <C>          <C>         <C>          <C>        <C>          <C>
Total risk-based capital (to           $89,399      20.59%      $34,730      8.00%      $43,412      10.00%
   risk-weighted assets)
Tier 1 capital (to risk-weighted        85,926      19.79%        N/A         N/A        26,047       6.00%
   assets)
Tier 1 capital (to adjusted total       85,926      12.67%       27,120      4.00%       33,900       5.00%
   assets)
Tangible capital (to adjusted total     85,926      12.67%       10,170      1.50%        N/A          N/A
   assets)
</TABLE>


Impact of Inflation and Changes Prices

         The consolidated financial statements of the Company and notes thereto,
presented  elsewhere  herein,  have been prepared in accordance  with  Generally
Accepted  Accounting  Principles,  which  require the  measurement  of financial
position  and  operating   results  in  terms  of  historical   dollars  without
considering the change in the relative  purchasing  power of money over time and
due to inflation.  The impact of inflation is reflected in the increased cost of
the Company's  operations,  primarily those at the Bank.  Unlike most industrial
companies, nearly all the assets and liabilities of the Bank are financial. As a
result,  interest rates have a greater impact on the Bank's  performance than do
the effects of general levels of inflation.  Interest  rates do not  necessarily
move in the same  direction  or to the same  extent  as the  prices of goods and
services.

                                      -20-

<PAGE>

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Management of Interest Rate Risk and Market Risk

Qualitative  Analysis.  Because the majority of our interest-earning  assets and
interest-bearing  liabilities  are  sensitive  to changes in interest  rates,  a
significant  form of market risk for the Bank is interest  rate risk, or changes
in interest  rates.  We are  vulnerable to an increase in interest  rates to the
extent that  interest-bearing  liabilities  mature or reprice  more rapidly than
interest-earning   assets.  Our  assets  include  long-term,   fixed  loans  and
investments, while our primary sources of funds are deposits and borrowings with
substantially shorter maturities.  Although having interest-bearing  liabilities
that  reprice  more  frequently  than   interest-earning   assets  is  generally
beneficial to net interest  income during a period of declining  interest rates,
this type of asset/liability mismatch is generally detrimental during periods of
rising interest rates.

The Board of Directors has  established  an Asset and Liability  Management  and
Budget Committee that consists of Directors Scott (Chairman),  De Perez,  Fiore,
LaCorte and Stender.  The Committee  meets  quarterly with  management to review
current investments: average lives, durations and repricing frequencies of loans
and securities;  loan and deposit pricing and production volumes and alternative
funding sources; interest rate risk analysis; liquidity and borrowing needs; and
a variety of other assets and liability management topics. The executive session
of the  Committee is held  monthly  with  Director  Fiore  presiding  and senior
management in attendance.  The results of the quarterly and monthly  meetings of
the  Committee  are  reported  to the full  Board at its  regular  meetings.  In
addition,  the Committee  generally  meets during October and November each year
with  the  goal  of  developing  an  annual  business  and  operating  plan  for
presentation to the full Board.

To reduce the effect of interest rate changes on net interest  income,  the Bank
has  adopted  various  strategies  to  enable  it to  improve  the  matching  of
interest-earning asset maturities to interest-bearing  liability maturities. The
main elements of these strategies include seeking to:

o    originate  loans  with  adjustable-rate  features  or fixed rate loans with
     short maturities, such as home equity and consumer loans;

o    lengthen the  maturities of time deposits and  borrowings  when it would be
     cost effective through the aggressive pricing and promotion of certificates
     of deposits and utilization of FHLB advances;

o    increase core deposits (i.e.,  transaction and savings accounts) which tend
     to be less interest rate sensitive; and

o    purchase  intermediate  and  adjustable-rate   investment  securities  that
     provide a stable cash flow,  thereby providing  investable funds in varying
     interest rate cycles.

Quantitative  Analysis.  Management  actively  monitors its  interest  rate risk
exposure.   The  Bank's   objective  is  to  maintain  a  consistent   level  of
profitability  within  acceptable  risk  tolerances  across  a  broad  range  of
potential  interest  rate  environments.  The Bank  uses the  Office  of  Thrift
Supervision  ("OTS") Net Portfolio  Value (NPV) Model to monitor its exposure to
interest rate risk,  which calculates  changes in net portfolio  value.  Reports
generated from  assumptions  provided and modified by management are reviewed by
the  Asset and  Liability  Management  Committee  and  reported  to the Board of
Directors quarterly. The Interest Rate Sensitivity of Net Portfolio Value Report
shows the degree to which balance  sheet line items and the net portfolio  value
are  potentially  affected by a 100 to 300 basis point  (1/100th of a percentage
point) upward and downward shift (shock) in the Treasury yield curve.

Management of the Company  believes  that there has not been a material  adverse
change in market risk during the three months ended March 31, 2004.

                                      -21-

<PAGE>

Item 4. Controls and Procedures

         Evaluation  of  disclosure  controls  and  procedures.  Based  on their
         -----------------------------------------------------
evaluation of the Company's  disclosure  controls and  procedures (as defined in
Rule 13a-15(e) under the Securities  Exchange Act of 1934 (the "Exchange Act")),
the Company's  principal  executive officer and principal financial officer have
concluded that as of the end of the period  covered by this Quarterly  Report on
Form 10-Q such  disclosure  controls and procedures are effective to ensure that
information  required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded,  processed,  summarized and reported
within the time periods  specified in Securities and Exchange  Commission  rules
and forms.

         Changes in internal  controls.  During the quarter under report,  there
         -----------------------------
was no change in the Company's  internal  control over financial  reporting that
has  materially  affected,  or is reasonable  likely to materially  affect,  the
Company's internal control over financial reporting.

                                      -22-

<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings.
        ------------------

         The Company and its subsidiaries,  from time to time, may be a party to
routine  litigation,  which  arises in the normal  course of  business,  such as
claims to enforce  liens,  condemnation  proceedings  on properties in which the
Bank, the  wholly-owned  subsidiary of the Company,  holds  security  interests,
claims  involving  the making and servicing of real  property  loans,  and other
issues incident to its business.  There were no lawsuits  pending or known to be
contemplated  at March 31, 2004 that would be expected to have a material effect
on the Company's operations or income.

Item 2. Changes in Securities , Use of Proceeds and Issuer Purchases of Equity
        ----------------------------------------------------------------------
        Securities.
        -----------

         Synergy Financial Group,  Inc. (the "Company"),  the holding company of
Synergy Bank and Synergy  Financial  Services,  Inc.,  completed its second-step
conversion  from the mutual holding company form of organization to a full stock
corporation  (the  "Conversion")  on January 20, 2004.  Upon  completion  of the
conversion,  Synergy,  MHC and the former  Mid-Tier  Stock Holding  Company were
eliminated.

         Shares of the Company commenced trading on Wednesday,  January 21, 2004
on the Nasdaq National  Market.  The stock trades under the symbol "SYNF," which
is the same symbol  formerly used by the Mid-Tier  Stock Holding  Company on the
OTC Bulletin Board.

         The Company's  registration statement on Form S-1 (File No. 333-108884)
registering its common stock, par value $0.10 per share, was declared  effective
by the Securities and Exchange Commission on November 12, 2003. The subscription
offering  commenced on November 20, 2003 and  terminated on December 15, 2003. A
community  offering  commenced on December 18, 2003 and terminated on January 7,
2004. The stock sale occurred on January 20, 2004.

         The Company sold 7,035,918 shares of its common stock in the Conversion
at $10.00 per share for an aggregate  sales price of  $70,359,180.  In addition,
each  share of  common  stock  held by the  public  stockholders  of its  former
Mid-Tier Stock Holding Company were converted into 3.7231 shares of common stock
of the Company, resulting in an aggregate of 5,416,180 exchange shares. Cash was
issued in lieu of fractional shares. Accordingly, the Company now has 12,452,098
total  shares  outstanding  following  the  Conversion,  which was the  adjusted
maximum of the estimated valuation range.

         Net  proceeds of the  offering  were $69.2  million,  reflecting  total
offering expenses of approximately $1.2 million,  including total  underwriter's
fees and  expenses of $425,000.  The net proceeds  have been applied as follows:
(i) $58.0 million was used to make a capital  contribution  to Synergy Bank, for
general  business  purposes,  including  funding  the  origination  of loans and
investments  in  securities;  (ii) $5.6  million  was  loaned  to the  Company's
employee  stock  ownership  plan cash to enable the plan to buy 8% of the shares
sold in the offering;  and (iii) $5.6 million was retained by the Company as its
initial  capitalization  to be used for  general  business  purposes  which  may
include  investment in securities,  repurchasing  shares of the Company's common
stock, or paying cash dividends.  The Company initially has invested the portion
of the proceeds retained by it in intermediate term  mortgage-backed  securities
issued by government sponsored enterprises.

                                      -23-
<PAGE>

                                           ISSUER PURCHASES OF EQUITY SECURITIES
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
           Period           (a) Total       (b) Average      (c) Total Number of       (d) Maximum Number (or
                            Number of     Price Paid per      Shares (or Units)       Approximate Dollar Value)
                            Shares (or    Share (or Unit)    Purchased as Part of     of Shares (or Units) that
                              Units)                          Publicly Announced     May Yet Be Purchased Under
                            Purchased                         Plans or Programs         the Plans or Programs
-------------------------------------------------------------------------------------------------------------------
<S>                        <C>              <C>                  <C>                        <C>
January 1-31, 2004                 -               -                     -                     192,428
-------------------------------------------------------------------------------------------------------------------
February 1-29, 2004           45,600           10.64                45,600                     146,828
-------------------------------------------------------------------------------------------------------------------
March 1-31, 2004              26,400           10.37                26,400                     120,428
-------------------------------------------------------------------------------------------------------------------
Total                         72,000           10.53                72,000
-------------------------------------------------------------------------------------------------------------------
</TABLE>

---------------
1    On June 3, 2003, Synergy Financial Group Inc. (Company) announced its plans
     to purchase shares of its common stock in open market  transactions for use
     by the Company's 2003 Restricted Stock Plan.
2    The Company intends to purchase up to 192,428 shares of its common stock.
3    Currently  there is no expiration  date for the repurchase of the Company's
     stock.
4    There has been no expiration  of any plan during the period  covered by the
     table above.
5    The Company has determined not to terminate any plan prior to expiration.


                                      -24-
<PAGE>

Item 3. Defaults Upon Senior Securities.
        --------------------------------

         None.

Item 4. Submission of Matters to a Vote of SecurityHolders.
        ---------------------------------------------------

         None.

Item 5. Other Information.
        ------------------

         None.


Item 6. Exhibits and Reports on Form 8-K.
        ---------------------------------

         a) Exhibits:

               31   Certification pursuant to Section 302 of the Sarbanes-Oxley
                    Act of 2002.
               32   Certification pursuant to Section 906 of the Sarbanes-Oxley
                    Act of 2002.

         b) Reports on Form 8-K:

         During the quarter ended March 31, 2004,  the Company filed a Report on
Form 8-K dated  January 20, 2004 to announce the  successful  completion  of the
Plan of Conversion and  Reorganization  by which the Company  converted from the
mutual  holding  company form of  organization  into a full stock  company.  The
Company  also  filed a Report  on Form 8-K  dated  January  28,  2004 to  report
consolidated earnings for the year ended December 31, 2003.

                                      -25-
<PAGE>

                                   SIGNATURES



          Pursuant to the requirements of Sections 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                       SYNERGY FINANCIAL GROUP, INC.



Date: May 14, 2004                     By: /s/John S. Fiore
                                           -------------------------------------
                                           John S. Fiore
                                           President and Chief Executive Officer
                                           (Duly Authorized Representative)

          Pursuant to the  requirement of the  Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
<S>                                             <C>

/s/John S. Fiore                                    /s/Ralph A. Fernandez
-------------------------------------               -------------------------------------------------
John S. Fiore                                       Ralph A. Fernandez
President and Chief Executive Officer               Senior Vice President and Chief Financial Officer
(Principal Executive Officer)                       (Principal Financial and Accounting Officer)

Date: May 14, 2004                                   Date: May 14, 2004
</TABLE>

                                      -26-