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: June 30, 2007
                                     -------------

[ ]  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)

                                 (908) 272-3838
              ----------------------------------------------------
              (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 a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer" and "large  accelerated  filer" in Rule 12b-2 of the Exchange Act.
(Check one):
Large accelerated  filer ____ Accelerated  filer X  Non-accelerated  filer ____

Indicate by check mark whether the  registrant is a shell company (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 July 31, 2007:

$0.10 Par Value Common Stock                                11,382,143
----------------------------                        --------------------------
         Class                                          Shares Outstanding

<PAGE>

                 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS


PART I   FINANCIAL INFORMATION                                              Page
------   ---------------------                                              ----

Item 1.  Financial Statements  (unaudited)

         Consolidated Balance Sheets as of June 30, 2007 and
             December 31, 2006.................................................1

         Consolidated Statements of Income for the three and six months ended
             June 30, 2007 and 2006............................................2

         Consolidated Statement of Changes in Stockholders' Equity for the
             six months ended June 30, 2007....................................3

         Consolidated Statements of Cash Flows for the six months ended
             June 30, 2007 and 2006............................................4

         Notes to Consolidated Financial Statements............................5

Item 2.  Management's Discussion and Analysis of Financial Condition
             and Results of Operations........................................14

Item 3.  Quantitative and Qualitative Disclosures about Market Risk...........23

Item 4.  Controls and Procedures..............................................24


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

Item 1.  Legal Proceedings....................................................25

Item 1A. Risk Factors.........................................................25

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds..........25

Item 3.  Defaults Upon Senior Securities......................................26

Item 4.  Submission of Matters to a Vote of Security Holders..................26

Item 5.  Other Information....................................................26

Item 6.  Exhibits.............................................................26

Signatures....................................................................27

<PAGE>

                 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets
                        (In thousands, except share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                June 30,       December 31,
                                                                                  2007             2006
                                                                                  ----             ----
<S>                                                                        <C>               <C>
Assets:
Cash and amounts due from banks                                              $     4,487       $     5,673
Interest-bearing deposits with banks                                               2,698             4,458
                                                                             -----------       -----------
Cash and cash equivalents                                                          7,185            10,131
Investment securities available-for-sale, at fair value                           58,534            68,417
Investment securities held-to-maturity (fair
   value of $68,188 and $76,263, respectively)                                    70,290            77,917
Federal Home Loan Bank of New York stock, at cost                                 11,643            11,981
Loans receivable, net                                                            730,533           765,001
Accrued interest receivable                                                        3,798             3,848
Property and equipment, net                                                       20,681            20,106
Cash surrender value of bank-owned life insurance                                 22,274            21,816
Other assets                                                                       7,536             7,109
                                                                             -----------       -----------
     Total assets                                                            $   932,474       $   986,326
                                                                             ===========       ===========

Liabilities:
Deposits                                                                     $   598,563       $   645,816
Other borrowed funds                                                             227,500           235,675
Advance payments by borrowers for taxes and insurance                              2,945             2,701
Accrued interest payable on advances                                                 511               651
Other liabilities                                                                  3,104             2,983
                                                                             -----------       -----------
     Total liabilities                                                           832,623           887,826
                                                                             -----------       -----------

Stockholders' equity:
Preferred stock; $0.10 par value, 5,000,000 shares
   authorized; issued and outstanding - none                                           -                 -
Common stock; $0.10 par value, 20,000,000 shares authorized;
   Issued - 12,509,636 in 2007 and 2006
   Outstanding  - 11,382,143 in 2007 and 2006                                      1,251             1,251
Additional paid-in-capital                                                        86,114            85,381
Retained earnings                                                                 34,350            34,582
Unearned ESOP shares                                                              (4,363)           (4,600)
Treasury stock acquired for the RSP, at cost;
   229,450 in 2007 and 271,613 in 2006                                            (2,607)           (3,086)
Treasury stock, at cost; 1,127,493 in 2007 and 2006                              (14,125)          (14,125)
Accumulated other comprehensive loss, net of taxes                                  (769)             (903)
                                                                             -----------       -----------
     Total stockholders' equity                                                   99,851            98,500
                                                                             -----------       -----------
     Total liabilities and stockholders' equity                              $   932,474       $   986,326
                                                                             ===========       ===========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                      -1-

<PAGE>

                 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
                        Consolidated Statements of Income
                      (In thousands, except per share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                   For the Three Months            For the Six Months
                                                                       ended June 30,                ended June 30,
                                                                       --------------                --------------
                                                                     2007          2006              2007         2006
                                                                     ----          ----              ----         ----
<S>                                                              <C>           <C>              <C>          <C>
Interest income:
   Loans, including fees                                          $  12,185     $ 11,917         $  24,640    $  23,257
   Investment securities                                              1,371        1,658             2,823        3,421
   Other                                                                214          172               437          345
                                                                  ---------     --------         ---------    ---------
     Total interest income                                           13,770       13,747            27,900       27,023
                                                                  ---------     --------         ---------    ---------
Interest expense:
   Deposits                                                           5,793        5,057            12,008        9,414
   Borrowed funds                                                     2,476        2,429             4,950        4,971
                                                                  ---------     --------         ---------    ---------
     Total interest expense                                           8,269        7,486            16,958       14,385
                                                                  ---------     --------         ---------    ---------
     Net interest income before provision for loan losses             5,501        6,261            10,942       12,638
Provision for loan losses                                                24          252                80          668
                                                                  ---------     --------         ---------    ---------
     Net interest income after provision for loan losses              5,477        6,009            10,862       11,970
                                                                  ---------     --------         ---------    ---------
Other income:
   Service charges and other fees on deposit accounts                   526          519             1,033        1,013
   Commissions                                                          184          184               410          414
   Other                                                                280          181               566          333
                                                                  ---------     --------         ---------    ---------
     Total other income                                                 990          884             2,009        1,760
                                                                  ---------     --------         ---------    ---------
Other expenses:
   Salaries and employee benefits                                     2,987        3,047             6,163        6,124
   Premises and equipment                                               605          671             1,235        1,333
   Occupancy                                                            615          564             1,231        1,126
   Professional services                                                178          262               382          459
   Advertising                                                          149          146               194          260
   Merger-related                                                       835            -               835            -
   Other operating                                                      472          489               884        1,043
                                                                  ---------     --------         ---------    ---------
     Total other expenses                                             5,841        5,179            10,924       10,345
                                                                  ---------     --------         ---------    ---------
     Income before income tax expense                                   626        1,714             1,947        3,385
Income tax expense                                                      346          654               826        1,276
                                                                  ---------     --------         ---------    ---------
     Net income                                                   $     280     $  1,060         $   1,121    $   2,109
                                                                  =========     ========         =========    =========

Per share of common stock:
   Basic earnings per share                                       $    0.03     $   0.10         $    0.11    $    0.20
                                                                  =========     ========         =========    =========
   Diluted earnings per share                                     $    0.03     $   0.10         $    0.10    $    0.20
                                                                  =========     ========         =========    =========

Basic weighted average shares outstanding                            10,538       10,313            10,510       10,335
                                                                     ======       ======            ======       ======
Diluted weighted average shares outstanding                          10,891       10,705            10,900       10,688
                                                                     ======       ======            ======       ======
</TABLE>

        The accompanying notes are an integral part of these statements.

                                      -2-

<PAGE>

                 SYNERGY FINANCIAL GROUP, INC. AND SUBSIDIARIES
            Consolidated Statement of Changes in Stockholders' Equity
                     For the Six Months Ended June 30, 2007
                      (In thousands, except share amounts)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                         Treasury
                                      Common stock                                        stock                 Accumulated
                                    ----------------- Additional              Unearned   acquired              comprehensive
                                    Shares       Par    paid-in-  Retained      ESOP     for the    Treasury   income (loss),
                                    issued      value   capital   earnings     shares      RSP       Stock         net        TOTAL
-----------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>          <C>      <C>        <C>        <C>        <C>        <C>           <C>          <C>
BALANCE AT JANUARY 1, 2007        12,509,636   $1,251   $85,381    $34,582    $(4,600)   $(3,086)   $(14,125)     $(903)    $98,500

    Net income                             -        -         -      1,121          -          -           -          -       1,121

    Other comprehensive income,
       net of reclassification
       adjustment and taxes                -        -         -          -          -          -           -        134         134
                                                                                                                            -------
Total comprehensive income                                                                                                    1,255

    Dividends declared
       ($0.13 per share)                   -        -         -     (1,353)         -          -           -          -      (1,353)

    Common stock held by
       ESOP committed to be
       released (34,382 shares)            -        -       301          -        237          -           -          -         538

    Common stock issued by RSP
       (42,163 shares)                     -        -      (479)         -          -        479           -          -           -

    Other stock compensation plan
       activity, including
       tax benefits                        -        -       149          -          -          -           -          -         149

    Compensation recognized under
       stock plans                         -        -       762          -          -          -           -          -         762
                                  -------------------------------------------------------------------------------------------------

BALANCE AT JUNE 30, 2007          12,509,636   $1,251   $86,114    $34,350    $(4,363)   $(2,607)   $(14,125)     $(769)    $99,851
                                  =================================================================================================
</TABLE>

        The accompanying notes are an integral part of these statements.

                                      -3-

<PAGE>

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

<TABLE>
<CAPTION>
                                                                   For the Six Months
                                                                     Ended June 30,
                                                                     --------------
                                                                    2007        2006
                                                                  --------    --------
<S>                                                             <C>         <C>
Operating activities:
     Net income                                                   $  1,121    $  2,109
     Adjustments to reconcile net income to net cash
       provided by operating activities
     Depreciation and amortization                                     660         749
     Provision for loan losses                                          80         668
     Deferred income tax expense (benefit)                             (97)       (314)
     Amortization of deferred loan fees and costs                      (23)        (83)
     Amortization of premiums on investment securities                 200         268
     Release of ESOP shares                                            538         698
     Stock plan activity and compensation                              911         740
     Decrease (increase) in accrued interest receivable                 50        (240)
     (Increase) decrease in other assets                              (329)        220
     Decrease (increase) in other liabilities                          133      (2,159)
     Increase in cash surrender value of bank-owned life insurance    (458)       (466)
     Decrease in accrued interest payable on advances                 (140)       (108)
                                                                  --------    --------
     Net cash provided by operating activities                       2,646       2,082
                                                                  --------    --------

Investing activities:
     Purchase of investment securities available-for-sale                -      (1,000)
     Maturity and principal repayments of investment
       securities held-to-maturity                                   7,582       9,240
     Maturity and principal repayments of investment
       securities available-for-sale                                 9,862      11,517
     Purchase of property and equipment                             (1,235)       (483)
     Redemption of FHLB stock                                          338         965
     Purchase of bank owned life insurance                              -      (1,820)
     Decrease (increase) in loans                                   34,411     (47,177)
     Proceeds from sale of loans                                         -       9,117
                                                                  --------    --------
     Net cash provided by (used in) investing activities            50,958     (19,641)
                                                                  --------    --------
Financing activities:
     Net (decrease) increase in deposits                           (47,253)     51,946
     Increase (decrease) in short-term FHLB advances                 9,325      (6,245)
     Proceeds from long-term FHLB advances                          47,000      17,000
     Repayments of long-term FHLB advances                         (64,500)    (34,650)
     Increase in advance payments by borrowers
       for taxes and insurance                                         244         622
     Dividends paid                                                 (1,366)     (1,136)
     Purchase of treasury stock                                          -      (2,699)
     Common stock issued for options exercised                           -           2
                                                                  --------    --------
     Net cash (used in) provided by financing activities           (56,550)     24,840
                                                                  --------    --------
     Net increase in cash and cash equivalents                      (2,946)      7,281
 Cash and cash equivalents at beginning of year                     10,131       6,583
                                                                  --------    --------
 Cash and cash equivalents at end of period                       $  7,185    $ 13,864
                                                                  ========    ========

 Supplemental disclosure of cash flow information:
     Cash paid during the period for income taxes                 $  1,553    $  1,563
                                                                  ========    ========
     Interest paid on deposits and borrowed funds                 $ 17,049    $ 14,278
                                                                  ========    ========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                      -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")  conform 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 (the "Bank") and Synergy Financial
Services, Inc. All significant inter-company accounts and transactions have been
eliminated  in  consolidation.  Certain  amounts  previously  reported have been
reclassified to conform to the current year's presentation.

The accompanying  unaudited  condensed  consolidated  financial  statements were
prepared in accordance with  instructions to Form 10-Q, and,  therefore,  do not
include  information  or  footnotes  necessary  for a complete  presentation  of
financial position,  results of operations,  changes in equity and cash flows in
conformity with accounting principles generally accepted in the United States of
America.  However,  all normal  recurring  adjustments  that,  in the opinion of
management,  are necessary for a fair presentation of the consolidated financial
statements  have been included.  These  financial  statements  should be read in
conjunction  with  the  audited   consolidated   financial  statements  and  the
accompanying  notes thereto included in the Company's Annual Report on Form 10-K
for the period ended  December  31,  2006.  The results for the six months ended
June 30, 2007 are not necessarily indicative of the results that may be expected
for the fiscal year ending December 31, 2007 or any other period.

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 losses.  The evaluation of the adequacy of
the allowance for loan 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.


2. 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  re-acquired  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
Employee  Stock   Ownership  Plan  ("ESOP")  shares   previously   allocated  to
participants  and shares committed to be released for allocation to participants
and restricted stock plan ("RSP") shares that have vested or have been allocated
to participants.

                                      -5-

<PAGE>

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


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 (in thousands, except per share
data):

<TABLE>
<CAPTION>
                                                                     For the Three Months Ended June 30, 2007
                                                                     ----------------------------------------
                                                                                    Weighted
                                                               Income            average shares              Per
                                                             (numerator)          (denominator)         share amount
                                                           ---------------      -----------------      ---------------
<S>                                                           <C>                <C>                     <C>
    Basic earnings per share:
       Income available to common stockholders                 $    280                 10,538              $  0.03
       Effect of dilutive common stock equivalents                    0                    353                 0.00
                                                               --------           ------------              -------

    Diluted earnings per share:
       Income available to common stockholders                 $    280                 10,891              $  0.03
                                                               ========           ============              =======
</TABLE>

<TABLE>
<CAPTION>
                                                                     For the Three Months Ended June 30, 2006
                                                                     ----------------------------------------
                                                                                    Weighted
                                                               Income            average shares              Per
                                                             (numerator)          (denominator)         share amount
                                                           ---------------      -----------------      ---------------
<S>                                                         <C>                <C>                     <C>

    Basic earnings per share:
       Income available to common stockholders                 $ 1,060                  10,313              $  0.10
       Effect of dilutive common stock equivalents                   0                     392                 0.00
                                                               -------            ------------              -------

    Diluted earnings per share:
       Income available to common stockholders                 $ 1,060                  10,705              $  0.10
                                                               =======            ============              =======
</TABLE>

<TABLE>
<CAPTION>
                                                                    For the Six Months Ended June 30, 2007
                                                                    --------------------------------------
                                                                                    Weighted
                                                               Income            average shares              Per
                                                             (numerator)          (denominator)         share amount
                                                           ---------------      -----------------      ---------------
<S>                                                         <C>                <C>                     <C>
    Basic earnings per share:
       Income available to common stockholders                 $ 1,121                  10,510              $  0.11
       Effect of dilutive common stock equivalents                   0                     390                (0.01)
                                                               -------            ------------              -------

    Diluted earnings per share:
       Income available to common stockholders                 $ 1,121                  10,900              $  0.10
                                                               =======            ============              =======
</TABLE>

                                      -6-

<PAGE>

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


<TABLE>
<CAPTION>
                                                                     For the Six Months Ended June 30, 2006
                                                                     --------------------------------------
                                                                                    Weighted
                                                               Income            average shares              Per
                                                             (numerator)          (denominator)         share amount
                                                           ---------------      -----------------      ---------------
<S>                                                         <C>                <C>                     <C>
    Basic earnings per share:
       Income available to common stockholders                 $  2,109                 10,335              $  0.20
       Effect of dilutive common stock equivalents                    0                    353                 0.00
                                                               --------           ------------              -------

    Diluted earnings per share:
       Income available to common stockholders                 $  2,109                 10,688              $  0.20
                                                               ========           ============              =======
</TABLE>


3. STOCK-BASED COMPENSATION

Stock Option and Restricted Stock Plans
---------------------------------------
At the  Annual  Meeting  held on April 22,  2003,  stockholders  of the  Company
approved the Company's 2003 Stock Option Plan making available 165,746 shares of
common stock for granting  under the plan.  Prior to April 22, 2003, the Company
did not have a stock option plan.  Under the 2003 Stock Option Plan,  each stock
option granted entitles the holder to purchase one share of the Company's common
stock at an exercise  price of not less than the fair market value of a share of
common stock at the date of grant.  Options granted vest over a five-year period
from the date of grant and will  expire  no later  than 10 years  following  the
grant date. During the year ended December 31, 2003, the Company granted 165,746
options to purchase common shares of the Company. As a result of the January 20,
2004 second-step mutual-to-stock conversion, the shares associated with the 2003
Stock Option Plan converted at the exchange ratio of 3.7231 to 617,086 shares.

At the Annual Meeting held on August 25, 2004 and reconvened on August 31, 2004,
stockholders of the Company approved the Company's 2004 Stock Option Plan making
available 703,591 shares of common stock for granting under the plan. During the
year ended December 31, 2004, the Company  granted  694,569  options to purchase
common  shares of the  Company.  Under the 2004 Stock  Option  Plan,  each stock
option granted entitles the holder to purchase one share of the Company's common
stock at an exercise  price of not less than the fair market value of a share of
common stock at the date of grant.  Options granted vest over a five-year period
from the date of grant and will  expire  no later  than 10 years  following  the
grant date.

Effective  January  1, 2006,  the  Company  adopted  SFAS  123(R),  "Share-Based
Payment."  Under the  accounting  requirements,  the Company is now  required to
recognize  compensation expenses related to stock options outstanding based upon
the fair value of such  awards at the date of grant  over the  period  that such
awards  are  earned.  For the three  months  ended June 30,  2007 and 2006,  the
Company  recognized  approximately  $170,000  and  $169,000,   respectively,  of
compensation  expense  relating  to its stock  option  plans  and  approximately
$41,000 of income tax  benefit  resulting  from this  expense  for each of these
periods. For the six months ended June 30, 2007 and 2006, the Company recognized
approximately  $340,000 and  $328,000,  respectively,  of  compensation  expense
relating  to its stock  option  plans and  approximately  $82,000  of income tax
benefit resulting from this expense for each of these periods.

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes  options price model. The following  weighted average  assumptions
were  utilized for grants in 2006,  which have a weighted  average fair value of
$3.60:  dividend  yield of  1.50%;  expected  volatility  of  25.45%;  risk-free
interest rate of 4.63%; and, an expected life of five years.

                                      -7-
<PAGE>

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


The Company  continues  to recognize  compensation  expense for shares of common
stock awarded under the  restricted  stock plans over the vesting  period at the
fair  market  value of the shares on the dates they are  awarded.  For the three
months  ended  June 30,  2007 and 2006,  the  Company  recognized  approximately
$211,000 and $212,000,  respectively,  of compensation  expense  relating to the
restricted  stock  plans,  and  approximately  $84,000  of  income  tax  benefit
resulting from this expense for each of these periods.  For the six months ended
June 30,  2007 and 2006,  the  Company  recognized  approximately  $422,000  and
$412,000, respectively, of compensation expense relating to the restricted stock
plans,  and  approximately  $168,000 and $164,000,  respectively,  of income tax
benefit resulting from this expense for these periods.

As of June 30, 2007, there was approximately  $1.3 million of total unrecognized
compensation  expense  relating to unvested  stock  options and $1.7  million of
total unrecognized  compensation  expense relating to unvested  restricted stock
plan shares.  These costs are expected to be recognized over a weighted  average
period of 1.8 years for both the stock option plans and restricted stock plans.

The  following  is a summary of the  Company's  stock  option  plans for the six
months ended June 30, 2007:

                                                        Weighted      Aggregate
                                                        Average       Intrinsic
                                          Shares     Exercise Price     Value
                                          ------     --------------     -----
Outstanding at beginning of period      1,257,646        $8.68
Granted..........................               -            -
Exercised........................               -            -
Forfeited........................               -            -
Expired..........................               -            -
                                        ---------
Outstanding at end of period            1,257,646        $8.68        $5,880,649
                                        =========
Exercisable at end of period.....         664,478        $7.62        $3,802,351
                                        =========

Weighted average remaining
    contractual life.............       6.7 years

The following is a summary of the Company's  restricted  stock plans for the six
months ended June 30, 2007:

                                                            Weighted
                                                         Average Grant
                                            Shares      Date Fair Value
                                            ------      ---------------
Outstanding at beginning of period          270,336          $9.44
Granted                                           -              -
Vested                                      (42,163)          6.66
Forfeited                                         -              -
Expired                                           -              -
                                           --------          -----
Outstanding at end of period                228,173          $9.95
                                           ========          =====

                                       -8-

<PAGE>

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


Employee Stock Ownership Plan
-----------------------------
The Company has established an ESOP covering eligible employees with one year of
service, as defined by the ESOP.  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.


4. RECENT ACCOUNTING PRONOUNCEMENTS

In February 2006, the Financial  Accounting Standards Board ("FASB") issued SFAS
No. 155,  "Accounting  for Certain  Hybrid  Instruments:  an  amendment  of FASB
Statements No. 133 and 140." SFAS No. 155 allows financial instruments that have
embedded  derivatives  to be accounted for as a whole  (eliminating  the need to
bifurcate the derivative  from its host) if the holder elects to account for the
whole  instruments  on a fair value basis.  This  Statement is effective for all
financial  instruments  acquired or issued  after the  beginning  of an entity's
first fiscal year that begins  after  September  15, 2006.  The adoption of this
Statement did not have a material effect on the Company's  results of operations
or financial condition.

In March  2006,  the FASB  issued SFAS No. 156,  "Accounting  for  Servicing  of
Financial Assets." This Statement amends SFAS No. 140, "Accounting for Transfers
and  Servicing of Financial  Assets and  Extinguishments  of  Liabilities,"  and
requires  that  all  separately   recognized   servicing  assets  and  servicing
liabilities be initially measured at fair value, if practicable, and permits the
entities  to elect  either  fair value  measurement  with  changes in fair value
reflected in earnings or the  amortization  and impairment  requirements of SFAS
No. 140 for subsequent  measurement.  The  subsequent  measurement of separately
recognized  servicing assets and servicing  liabilities at fair value eliminates
the necessity for entities  that manage the risks  inherent in servicing  assets
and  servicing  liabilities  with  derivatives  to qualify for hedge  accounting
treatment  and  eliminates  the  characterization  of  declines in fair value as
impairments  or  direct  write-downs.  This  Statement  is  effective  as of the
beginning of an entity's first fiscal year that begins after September 15, 2006.
The adoption of this  Statement did not have a material  effect on the Company's
results of operations or financial condition.

In June 2006, the FASB issued FASB Interpretation No. ("FIN") 48 "Accounting for
Uncertainty in Income Taxes - an  interpretation  of FASB Statement No. 109," to
clarify  certain  aspects of accounting for uncertain tax  positions,  including
issues related to the  recognition  and measurement of those tax positions taken
or  expected  to be taken in a tax  return.  FIN 48 also  provides  guidance  on
de-recognition,  classification,  interest and penalties,  accounting in interim
periods, disclosure, and transition. This interpretation is effective for fiscal
years beginning  after December 15, 2006.The  Company has assessed the impact of
FIN 48 and has determined  that there are no significant  positions taken in the
preparation of its tax return that create any uncertainties  and therefore,  the
adoption of FIN 48 did not have a material  impact on its results of  operations
or financial condition.

In September 2006, the FASB Emerging Issues Task Force ("EITF")  finalized Issue
No. 06-4,  "Accounting  for Deferred  Compensation  and  Postretirement  Benefit
Aspects of Endorsement  Split-Dollar  Life Insurance  Arrangements."  This issue
requires  that  a  liability  be  recorded  during  the  service  period  when a
split-dollar life insurance agreement  continues after participants'  employment
or  retirement.  The  required  accrued  liability  will be based on either  the
post-employment  benefit cost for the continuing  life insurance or based on the
future

                                       -9-

<PAGE>

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


death benefit  depending on the contractual  terms of the underlying  agreement.
This issue is effective for fiscal years  beginning after December 15, 2007. The
Company has not completed its evaluation of the impact of adoption of EITF 06-4.

In September  2006,  the FASB EITF  finalized  Issue No. 06-5,  "Accounting  for
Purchases of Life  Insurance - Determining  the Amount That Could Be Realized in
Accordance  with FASB Technical  Bulletin No. 85-4  (Accounting for Purchases of
Life Insurance)." This issue requires that a policyholder  consider  contractual
terms of a life  insurance  policy  in  determining  the  amount  that  could be
realized  under the  insurance  contract.  It also requires that if the contract
provides for a greater surrender value if all individual policies in a group are
surrendered at the same time,  that the surrender  value be determined  based on
the assumption that policies will be surrendered on an individual basis. Lastly,
the issue  discusses  whether the cash surrender value should be discounted when
the policyholder is contractually  limited in its ability to surrender a policy.
This issue is effective for fiscal years  beginning after December 15, 2006. The
adoption  of this  Statement  did not have a  material  effect on the  Company's
results of operations or financial condition.

In September 2006, the FASB issued SFAS No. 157, "Fair Value  Measurements." The
Statement  defines fair value,  establishes a framework for measuring fair value
in generally accepted accounting  principles  ("GAAP"),  and expands disclosures
about fair  value  measurements.  This  Statement  is  effective  for  financial
statements  issued for fiscal years  beginning  after  November  15,  2007,  and
interim periods within those fiscal years. The adoption of this Statement is not
expected to have a material  effect on the  Company's  results of  operations or
financial condition.

In February  2007,  the FASB issued  SFAS No.  159,  "The Fair Value  Option for
Financial Assets and Financial  Liabilities."  Statement 159 provides  companies
with an option to report  selected  financial  assets  and  liabilities  at fair
value.  Statement 159's objective is to reduce both complexity in accounting for
financial instruments and the volatility in earnings caused by measuring related
assets  and  liabilities  differently.  Statement  159  is  effective  as of the
beginning of an entity's  first fiscal year  beginning  after November 15, 2007.
Early  adoption is  permitted as of the  beginning  of the previous  fiscal year
provided  that the entity makes that choice in the first 120 days of that fiscal
year and also elects to apply the  provisions  of Statement  157. The Company is
still  evaluating  the impact the adoption of Statement No. 159 will have on its
future consolidated financial statements.


5. MERGER AGREEMENT

On May 13, 2007,  the Company  announced  the signing of a definitive  agreement
pursuant to which it will merge with and into New York Community  Bancorp,  Inc.
(NYSE: NYB). The Company's shareholders will receive 0.80 of a share of New York
Community  Bancorp,  Inc. common stock in a tax-free  exchange for each share of
the Company's  common stock held at the closing date.  The merger is expected to
close  during the fourth  quarter of 2007,  pending  approval  of the  Company's
shareholders and that of certain regulatory agencies.

                                      -10-

<PAGE>

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


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):

<TABLE>
<CAPTION>
                                                                                 June 30, 2007
                                                          ---------------------------------------------------------
                                                                             Gross         Gross
                                                            Amortized      unrealized    unrealized         Fair
                                                               cost          gains         losses           value
                                                          ---------------------------------------------------------
<S>                                                       <C>              <C>             <C>           <C>
   Available-for-sale
   ------------------
     U.S. government obligations                          $    1,999       $      -      $     (62)      $   1,937
     Mortgage-backed securities:
       FHLMC                                                  39,392             51           (752)         38,691
       FNMA                                                   16,335             12           (360)         15,987
     Equity securities                                         2,000              -            (81)          1,919
                                                          ----------       --------      ---------       ---------

         Total                                            $   59,726       $     63      $  (1,255)      $  58,534
                                                          ==========       ========      =========       =========
</TABLE>

<TABLE>
<CAPTION>
                                                                                 June 30, 2007
                                                          ---------------------------------------------------------
                                                                             Gross         Gross
                                                            Amortized      unrealized    unrealized         Fair
                                                               cost          gains         losses           value
                                                          ---------------------------------------------------------
<S>                                                       <C>              <C>             <C>           <C>
   Held-to-maturity
   ----------------
     Mortgage-backed securities:
       FHLMC                                              $   29,022       $      1      $    (900)      $  28,123
       FNMA                                                   39,115              1         (1,135)         37,981
       GNMA                                                    2,143              3            (72)          2,074
     Other debt securities                                        10              -              -              10
                                                          ----------       --------      ---------       ---------

         Total                                            $   70,290       $      5      $  (2,107)      $  68,188
                                                          ==========       ========      =========       =========
</TABLE>

<TABLE>
<CAPTION>
                                                                                December 31, 2006
                                                          ---------------------------------------------------------
                                                                             Gross         Gross
                                                            Amortized      unrealized    unrealized         Fair
                                                               cost          gains         losses           value
                                                          ---------------------------------------------------------
<S>                                                       <C>              <C>             <C>           <C>
   Available-for-sale
   ------------------
     U.S. government obligations                          $    2,000       $      -      $     (72)      $   1,928
     Mortgage-backed securities:
       FHLMC                                                  45,723             34           (908)         44,849
       FNMA                                                   20,092             17           (410)         19,699
     Equity securities                                         2,000              -            (59)          1,941
                                                          ----------       --------      ---------       ---------

         Total                                            $   69,815       $     51      $  (1,449)      $  68,417
                                                          ==========       ========      =========       =========
</TABLE>
                                      -11-

<PAGE>

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

<TABLE>
<CAPTION>
                                                                                December 31, 2006
                                                          ---------------------------------------------------------
                                                                             Gross         Gross
                                                            Amortized      unrealized    unrealized         Fair
                                                               cost          gains         losses           value
                                                          ---------------------------------------------------------
<S>                                                       <C>              <C>             <C>           <C>
   Held-to-maturity
   ----------------
     Mortgage-backed securities:
       FHLMC                                              $  32,397        $      1      $    (804)      $  31,594
       FNMA                                                  43,150               1           (816)         42,335
       GNMA                                                   2,360               4            (40)          2,324
     Other debt securities                                       10               -              -              10
                                                          ---------        --------      ---------       ---------

         Total                                            $  77,917        $      6      $  (1,660)      $  76,263
                                                          =========        ========      =========       =========
</TABLE>


7. LOANS RECEIVABLE

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

<TABLE>
<CAPTION>
                                                                            June 30,                December 31,
                                                                              2007                      2006
                                                                       -----------------------------------------
<S>                                                                    <C>                       <C>
   Mortgages:
     Residential, 1-4 family                                             $   221,833               $   237,857
     Multi-family / non-residential                                          332,156                   326,225
     Construction                                                             10,346                     6,487
   Automobile                                                                111,220                   142,033
   Commercial                                                                 57,332                    54,854
   Other consumer                                                              3,331                     3,467
                                                                         -----------               -----------

   Loans receivable                                                          736,218                   770,923
   Deferred loan fees and costs                                                   44                        68
   Allowance for loan losses                                                  (5,729)                   (5,990)
                                                                         -----------               -----------

   Loans receivable, net                                                 $   730,533               $   765,001
                                                                         ===========               ===========
</TABLE>


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

<TABLE>
<CAPTION>
                                                                                  For the Six Months Ended
                                                                       --------------------------------------------
                                                                             June 30,                  June 30,
                                                                               2007                      2006
                                                                       --------------------------------------------
<S>                                                                     <C>                       <C>
   Balance, beginning of period                                          $     5,990               $     5,763
   Provision for loan losses                                                      80                       668
   Recoveries                                                                    180                       228
   Loans charged-off                                                            (521)                     (569)
                                                                         -----------               -----------

   Balance, end of period                                                $     5,729               $     6,090
                                                                         ===========               ===========
</TABLE>

                                      -12-

<PAGE>

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


8. DEPOSITS

Deposits are summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                                            June 30,                December 31,
                                                                              2007                      2006
                                                                       -----------------------------------------
<S>                                                                    <C>                       <C>
     Non-interest-bearing checking accounts                                $  61,585                 $  59,587
     Interest-bearing checking accounts                                        2,000                     1,080
     Savings and club accounts                                                45,869                    46,306
     Money market accounts                                                   148,721                   123,433
     Certificate of deposit accounts                                         340,388                   415,410
                                                                           ---------                 ---------
                                                                           $ 598,563                 $ 645,816
                                                                           =========                 =========
</TABLE>

9. OTHER BORROWED FUNDS

1. Short-Term Borrowings
   ---------------------

Short-term  borrowings,  which  consist  primarily  of  Federal  Home  Loan Bank
("FHLB") advances,  generally have maturities of less than one year. The details
of these borrowings are presented below (in thousands, except percentages):

<TABLE>
<CAPTION>
                                                                                       At or For The
                                                                       --------------------------------------------
                                                                           Six Months               Twelve Months
                                                                              Ended                     Ended
                                                                            June 30,                December 31,
                                                                              2007                      2006
                                                                       --------------------------------------------
<S>                                                                    <C>                       <C>
Average balance outstanding                                                $  65,308                 $  72,669
Maximum amount outstanding at any month end during the period                 86,200                    93,950
Balance outstanding at period end                                             86,200                    76,875
Weighted average interest rate during the period                                5.42%                     5.23%
Weighted average interest rate at period end                                    5.47%                     5.38%
</TABLE>

2. Long-Term Borrowings
   --------------------

At June 30, 2007, long-term borrowings,  which consist of FHLB advances, totaled
$141.3 million.  Advances consist of fixed-rate advances that will mature within
one to eight years.  The advances are  collateralized  by FHLB stock and certain
first  mortgage  loans,   first-lien  home  equity  loans  and   mortgage-backed
securities. These advances had a weighted average interest rate of 4.42%.

As of June 30, 2007, long-term FHLB advances mature as follows (in thousands):

   2007                                                          $  16,500
   2008                                                             37,100
   2009                                                              8,000
   2010                                                              7,500
   2011                                                             10,000
   Thereafter                                                       62,200
                                                                 ---------
                                                                 $ 141,300
                                                                 =========

                                      -13-

<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,  the relative  levels of our other income and other
expenses  also  affect our  results of  operations.  Our other  income  consists
primarily of fees and service  charges,  commissions and gains and 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 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  Litigation 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  affect the
Company's financial results, is included in the Company's filings with 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.

                                      -14-

<PAGE>

Critical Accounting Policies, Judgments and Estimates

       The  accounting  and reporting  policies of the Company  conform with the
accounting  principles  generally  accepted in the United  States of America and
with 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 Losses.  The Company recognizes that the determination
of the  allowance  for loan  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 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 Company's  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 June 30, 2007 and December 31, 2006

       Assets.  Total assets were $932.5 million on June 30, 2007, a decrease of
5.5%, or $53.8 million,  from $986.3 million on December 31, 2006. This decrease
was  primarily  attributable  to a decrease of $34.5  million in net loans and a
$17.5 million decline in investment securities.

       Between  December  31,  2006  and June 30,  2007,  investment  securities
decreased $17.5 million,  or 12.0%, from $146.3 million to $128.8 million.  This
decrease was due to  maturities  and principal  repayments  during the first six
months of 2007.  FHLB stock  holdings  decreased  2.8%,  or  $338,000,  to $11.6
million at June 30,  2007,  from $12.0  million at December  31, 2006 due to the
decreased level of borrowings from the FHLB.

       Net loans decreased 4.5%, or $34.5 million, to $730.5 million at June 30,
2007,  from $765.0 million at December 31, 2006.  During the first six months of
2007, there were $49.0 million in loan  originations  and purchases,  which were
more than offset by principal  repayments  of $83.7  million.  Automobile  loans
declined  $30.8  million from  December  31, 2006 to $111.2  million at June 30,
2007,  while  multi-family/non-residential  loans and commercial loans increased
$5.9   million   and   $2.5   million,   respectively.   At   June   30,   2007,
multi-family/non-residential loans totaled $332.2 million while commercial loans
totaled  $57.3  million.  Over  the past  year,  the  Company  has  reduced  the
origination  of  automobile  loans and deployed  its cash into  higher-yielding,
commercial-based products.

                                      -15-

<PAGE>

       At June 30, 2007,  total loans of $736.3  million were comprised of 45.1%
in multi-family/non-residential mortgage loans, 16.0% in one-to-four family real
estate loans,  15.6% in consumer loans,  comprised  mostly of direct  automobile
loans  for both new and used  vehicles,  14.1%  in home  equity  loans,  7.8% in
commercial loans and 1.4% in construction loans.

       The  allowance  for  loan  losses  was $5.7  million  at  June 30,  2007,
compared to $6.0  million at December 31, 2006.  This  reflects a provision  for
loan losses of $80,000 for the six-month  period ended June 30, 2007,  offset by
net charge-offs of $341,000. The ratio of the allowance for loan losses to total
loans was 0.78% on both June 30,  2007 and  December  31,  2006.  Non-performing
assets  represented  0.02%  and 0.04% of total  assets  as of June 30,  2007 and
December 31, 2006, respectively.

       Liabilities.  Total  liabilities  decreased  $55.2  million,  or 6.2%, to
$832.6  million at June 30, 2007,  from $887.8 million at December 31, 2006. The
decrease resulted primarily from a decline in FHLB advances of $8.2 million,  or
3.5%, and a decrease in deposits of $47.3 million, or 7.3%.

       Deposits  were  $598.6  million at June 30,  2007,  a  decrease  of $47.2
million,  or 7.3%,  from the $645.8 million  reported at December 31, 2006. Core
deposits,  which  consist  of  checking,  savings  and  money  market  accounts,
increased $27.8 million,  or 12.1%,  while  certificates of deposit decreased by
$75.0 million,  or 18.1%, from the $415.4 million reported at year-end 2006. The
Company  has  remained  focused on growing  core  deposits  while  strategically
allowing  high  cost  certificates  of  deposit  to run off in an effort to help
improve net interest income and margin. At June 30, 2007, brokered  certificates
of deposit  totaled  $44.3  million,  an increase of $1.0 million from the $43.3
million at December 31, 2006.

       Equity.  Stockholders'  equity totaled $99.9 million at June 30, 2007, an
increase of $1.4 million,  or 1.4%, from $98.5 million at December 31, 2006. The
increase  was  primarily  attributable  to net  income  and stock  benefit  plan
activity  for the six  month  period,  partially  offset by the  declaration  of
quarterly  cash  dividends of $0.06 per common share  declared on March 28, 2007
and $0.07 per common  share  declared on June 27, 2007.  On June 27,  2007,  the
Company's  Board of Directors  declared a quarterly  cash  dividend of $0.07 per
common share,  which  represented an increase of $0.01, or 16.7%, over the prior
quarterly  cash  dividend.  The  dividend  was  payable  on  July  27,  2007  to
stockholders  of  record  on July  13,  2007.  Additionally,  accumulated  other
comprehensive loss, net of taxes, declined by $134,000.

                                      -16-

<PAGE>

Average Balance Sheet.  The following  table sets forth certain  information for
the three months ended June 30, 2007 and 2006.  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 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 June 30,
                                                    --------------------------------------------------------------------
                                                               2007                                  2006
                                                    ---------------------------------   --------------------------------
                                                    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)                         $739,684   $12,185        6.59%       $762,211   $11,917      6.25%
  Securities(2)                                     135,882     1,371        4.04         166,505     1,658      3.98
  Other interest-earning assets(3)                   11,098       214        7.71          11,879       172      5.79
                                                   --------   -------        ----        --------   -------      ----
     Total interest-earning assets                  886,664    13,770        6.21         940,595    13,747      5.85
Non-interest-earning assets                          55,613                                48,034
                                                   --------                              --------
     Total assets                                  $942,277                              $988,629
                                                   ========                              ========
Interest-bearing liabilities:
 Checking accounts(4)                              $ 63,570         9        0.06%       $ 64,714         9      0.06%
 Savings and club accounts                           47,506        62        0.52          58,456        79      0.54
 Money market accounts                              146,262     1,300        3.56         117,882       837      2.84
 Certificates of deposit                            365,961     4,422        4.83         415,538     4,132      3.98
 Other borrowed funds                               215,434     2,476        4.60         235,254     2,429      4.13
                                                    -------   -------        ----        --------    ------      ----
   Total interest-bearing liabilities               838,733     8,269        3.94         891,844     7,486      3.36
                                                              -------                                ------
Non-interest-bearing liabilities                      3,548                                 2,651
                                                   --------                              --------
     Total liabilities                              842,281                               894,495
Stockholders' equity                                 99,996                                94,134
                                                   --------                              --------
     Total liabilities and stockholders' equity    $942,277                              $988,629
                                                   ========                              ========
Net interest income                                           $ 5,501                               $ 6,261
                                                              =======                               =======
Net interest rate spread(5)                                                  2.27%                               2.49%
Net interest margin(6)                                                       2.48%                               2.66%
Ratio of average interest-earning assets to
   average interest-bearing liabilities                                    105.71%                             105.47%
</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.
(4)  Includes both interest-bearing and non-interest-bearing checking accounts.
(5)  Net interest  rate spread  represents  the  difference  between the average
     yield on  interest-earning  assets and the average cost of interest-bearing
     liabilities (including non-interest-bearing checking accounts).
(6)  Net  interest  margin  represents  net interest  income as a percentage  of
     average interest-earning assets.

                                      -17-

<PAGE>

Average Balance Sheet.  The following  table sets forth certain  information for
the six months  ended June 30, 2007 and 2006.  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 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 Six Months Ended June 30,
                                                    --------------------------------------------------------------------
                                                               2007                                  2006
                                                    ---------------------------------   --------------------------------
                                                    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)                        $750,282    $24,640        6.57%       $752,817   $23,257       6.18%
  Securities(2)                                    141,224      2,823        4.00         171,619     3,421       3.99
  Other interest-earning assets(3)                  11,234        437        7.78          12,359       345       5.58
                                                  --------    -------        ----        --------   -------       ----
     Total interest-earning assets                 902,740     27,900        6.18         936,795    27,023       5.77
Non-interest-earning assets                         55,376                                 47,697
                                                  --------                               --------
     Total assets                                 $958,116                               $984,492
                                                  ========                               ========
Interest-bearing liabilities:
 Checking accounts(4)                             $ 61,944         15        0.05%       $ 62,746        23       0.07%
 Savings and club accounts                          46,626        123        0.53          59,023       153       0.52
 Money market accounts                             138,078      2,439        3.53         112,604     1,405       2.50
 Certificates of deposit                           389,909      9,431        4.84         406,060     7,833       3.86
 Other borrowed funds                              218,759      4,950        4.53         246,994     4,971       4.03
                                                  --------      -----        ----        --------     -----       ----
   Total interest-bearing liabilities              855,316     16,958        3.97         887,427    14,385       3.24
                                                              -------                               -------
Non-interest-bearing liabilities                     3,338                                  2,758
                                                  --------                               --------
     Total liabilities                             858,654                                890,185
Stockholders' equity                                99,462                                 94,307
                                                  --------                               --------
     Total liabilities and stockholders' equity   $958,116                               $984,492
                                                  ========                               ========
Net interest income                                           $10,942                               $12,638
                                                              =======                               =======
Net interest rate spread(5)                                                  2.21%                                2.53%
Net interest margin(6)                                                       2.42%                                2.70%
Ratio of average interest-earning assets to
   average interest-bearing liabilities                                    105.54%                              105.56%
</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.
(4)  Includes both interest-bearing and non-interest-bearing checking accounts.
(5)  Net interest  rate spread  represents  the  difference  between the average
     yield on  interest-earning  assets and the average cost of interest-bearing
     liabilities (including non-interest-bearing checking accounts).
(6)  Net  interest  margin  represents  net interest  income as a percentage  of
     average interest-earning assets.

                                      -18-

<PAGE>

Comparison  of  Operating  Results for the Three  Months Ended June 30, 2007 and
2006

         Net Income.  Net income  decreased  by $780,000,  to $280,000,  for the
three months ended June 30, 2007, compared to $1.060 million for the same period
in 2006, a 73.6% decline.  Diluted net income per common share was $0.03 for the
second  quarter  of 2007,  compared  to $0.10 for the same  period in 2006.  The
decrease in net income was primarily  attributable to a $760,000 decrease in net
interest income and an increase of $662,000 in other expenses,  partially offset
by an increase in other income of $106,000, a $228,000 decrease in the provision
for loan losses and a $308,000  decrease in income tax expense.  Results for the
three-month period ended June 30, 2007 includes  $710,000,  or $0.07 per diluted
share, of after-tax merger-related expenses relating to the proposed merger with
New York Community Bancorp, Inc.

         Net Interest Income. Net interest income declined  $760,000,  or 12.1%,
to $5.5  million  for the three  months  ended June 30,  2007,  compared to $6.3
million for the same period in 2006. Total interest income increased by $23,000,
to $13.8 million, for the three months ended June 30, 2007, while total interest
expense increased by $783,000,  to $8.3 million, when compared to the same three
month  period  last year.  The  year-over-year  decline was the result of margin
compression  stemming from the flat to inverted yield curve,  increased  funding
costs and a slowdown in asset growth. Compared to the first quarter of 2007, net
interest  income  increased  $60,000.  The net  interest  margin  for the second
quarter of 2007  increased to 2.48%,  from 2.37% for the first  quarter of 2007,
but was down 18 basis points from the 2.66% for the second quarter of 2006.

         The 0.2% increase in total interest income for the second quarter 2007,
as compared to the same quarter last year, was primarily due to a 36 basis point
increase  in the yield  earned on  average  interest-earning  assets,  partially
offset by lower average interest-earning assets. This increase was primarily the
result of the  rebalancing  of our loan  portfolio,  which has  resulted  in the
replacement  of amortizing  lower yield  automobile  loans with  higher-yielding
multi-family/non-residential  and commercial  loans, as well as generally higher
yields on loans as a result of increases in market interest rates. Additionally,
the  investment  portfolio,  which yielded 4.04% in the second  quarter of 2007,
continued to decline, as the cash flow has been utilized to pay down higher cost
borrowings and/or fund loan activity. The increase in the dividend yield on FHLB
stock also contributed to the increase in our asset yield.

         The 10.5%  increase in total  interest  expense for the second  quarter
2007, as compared to the same quarter last year, was primarily due to a 58 basis
point increase in the average cost of funds when compared to the same quarter of
the prior year. The increase in the average cost of interest-bearing liabilities
was primarily attributable to higher market interest rates over the past year.

         Provision  for Loan Losses.  We maintain an  allowance  for loan losses
through  provisions for loan losses that are charged to earnings.  The provision
is made to  adjust  the  total  allowance  for loan  losses  to an  amount  that
represents  management's  best  estimate of incurred and probable  losses in the
loan  portfolio at the balance sheet date that are  reasonable  to estimate.  In
estimating  the  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  loss   experience,   changes  in  loan
concentrations  by loan category,  peer group information and economic and other
trends affecting our market area. The provision established for loan 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 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  assessment
did not change either in estimation method or assumptions during either period.

         The provision for loan losses declined by $228,000, to $24,000, for the
three months ended June 30,  2007,  from  $252,000 for the same quarter in 2006.
The decrease in the provision was primarily due to lower loan production  during
the second  quarter of 2007 as  compared  to the same  period  last year.  Total
charge-offs

                                      -19-

<PAGE>

amounted to $303,000  and  recoveries  amounted to $73,000,  resulting  in a net
charge-off  amount of $230,000 for the three  months  ended June 30, 2007.  This
represents  a $169,000  increase in net  charge-offs  when  compared to the same
quarter in 2006.

         Other Income.  Other income increased  $106,000,  or 12.0%, to $990,000
for the three  months  ended June 30,  2007,  compared to $884,000  for the same
quarter in 2006.  The change was  primarily  due to an  increase  in income from
bank-owned life insurance.

         Other Expenses.  Other expenses increased  $662,000,  or 12.8%, to $5.8
million for the three months  ended June 30,  2007,  compared to the same period
last year. This was primarily  attributable to approximately $835,000 of per-tax
expenses relating to the proposed merger with New York Community  Bancorp,  Inc.
Excluding these  merger-related  expenses,  core expenses  declined 3.3% for the
three-month  period  of 2007.  This  decrease  in core  expenses  was  primarily
attributable to reduced spending,  as the Company remains focused on controlling
costs.

         Income Tax Expense. Income tax expense decreased by $308,000, or 47.1%,
during the three months ended June 30, 2007 when compared to the same quarter in
2006, reflecting lower taxable income for the 2007 period.

Comparison of Operating Results for the Six Months Ended June 30, 2007 and 2006

         Net Income.  Net income decreased by $988,000,  to $1.121 million,  for
the six months  ended June 30,  2007,  compared  to $2.109  million for the same
period in 2006, a 46.8%  decline.  Diluted net income per common share was $0.10
for the six months ended June 30, 2007  compared to $0.20 for the same period in
2006.  The decrease in net income was primarily  attributable  to a $1.7 million
decrease  in net  interest  income  coupled  with a $579,000  increase  in other
expenses,  partially  offset by a $249,000  increase in other income, a $588,000
decrease in the provision for loan losses and a $450,000  decrease in income tax
expense. Results for the six-month period ended June 30, 2007 includes $710,000,
or $0.07 per diluted share, of after-tax merger-related expenses relating to the
proposed merger with New York Community Bancorp, Inc.

         Net Interest Income.  Net interest income declined by $1.7 million,  or
13.4%,  to $10.9  million for the six months  ended June 30,  2007,  compared to
$12.6 million for the same period in 2006.  Total interest  income  increased by
$877,000,  to $27.9 million, for the six months ended June 30, 2007, while total
interest expense increased by $2.6 million,  to $17.0 million,  when compared to
the same six-month period last year. The  year-over-year  decline was the result
of margin compression stemming from the prolonged, flat to inverted yield curve,
increased funding costs and a slowdown in asset growth.  The net interest margin
for the first six months of 2007 declined 28 basis points,  to 2.42%, from 2.70%
in the same period last year.

         The 3.2% increase in total interest  income for the first six months of
2007, as compared to the same period last year,  was primarily due to a 41 basis
point increase in the yield earned on average  interest-earning assets. This was
primarily  the  result  of the  rebalancing  of our loan  portfolio,  which  has
resulted in the  replacement  of amortizing  lower yield  automobile  loans with
higher-yielding  multi-family/non-residential  and commercial  loans, as well as
generally  higher  yields on loans as a result of increases  in market  interest
rates. Additionally,  the investment portfolio, which yielded 4.00% in the first
six months of 2007,  continued to decline, as the cash flow has been utilized to
pay down higher cost borrowings  and/or fund loan activity.  The increase in the
dividend  yield on FHLB  stock also  contributed  to the  increase  in our asset
yield.

         The 17.9% increase in total  interest  expense for the first six months
of 2007 as compared to the same period last year was primarily due to a 73 basis
point  increase  in the average  cost of funds when  compared to the same period
last year. The increase in the average cost of interest-bearing  liabilities was
primarily attributable to higher market interest rates over the past year.

                                      -20-

<PAGE>

         Provision  for Loan Losses.  We maintain an  allowance  for loan losses
through  provisions for loan losses that are charged to earnings.  The provision
is made to  adjust  the  total  allowance  for loan  losses  to an  amount  that
represents  management's  best  estimate of incurred and probable  losses in the
loan  portfolio at the balance sheet date that are  reasonable  to estimate.  In
estimating  the  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  loss   experience,   changes  in  loan
concentrations  by loan category,  peer group information and economic and other
trends affecting our market area. The provision established for loan 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 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  assessment
did not change either in estimation method or assumptions during either period.

         The provision for loan losses declined by $588,000, to $80,000, for the
six months ended June 30, 2007,  from $668,000 for the same period in 2006.  The
decrease in the provision was primarily due to lower loan production  during the
six months  ended June 30, 2007 as compared to the same period last year.  Total
charge-offs amounted to $521,000 and recoveries amounted to $180,000,  resulting
in a net  charge-off  amount of $341,000 for the six months ended June 30, 2007.
This represents no change in net charge-offs when compared to the same period in
2006.

         Other  Income.  Other  income  increased  $249,000,  or 14.1%,  to $2.0
million for the six months ended June 30, 2007. This was primarily the result of
an increase in income from bank-owned life insurance.

         Other Expenses.  Other expenses increased  $579,000,  or 5.6%, to $10.9
million for the six months  ended June 30, 2007,  compared to $10.3  million for
the same  period  in 2006.  This was  primarily  attributable  to  approximately
$835,000  of per-tax  expenses  relating  to the  proposed  merger with New York
Community Bancorp, Inc. Excluding these merger-related  expenses,  core expenses
declined 2.5% for the six-month  period of 2007.  This decrease in core expenses
was primarily  attributable to reduced spending,  as the Company remains focused
on controlling costs.

         Income Tax Expense. Income tax expense decreased by $450,000, or 35.3%,
during the six months  ended June 30,  2007 when  compared to the same period in
2006, due primarily to lower taxable income for the 2007 period.


Liquidity

       The Bank maintains liquid assets at levels it considers  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  opportunities in
connection  with  asset  and  liability  management  objectives.   Funding  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  any  excess  funds  in  overnight  federal  funds
investments, which provide liquidity. Its cash and cash equivalents,  defined as
cash and deposits in other financial  institutions  with original  maturities of
three months or less, totaled $7.2 million at June 30, 2007. To a lesser extent,
the  earnings  and funds  provided  from  operating  activities  are a source of
liquidity.

                                      -21-

<PAGE>
       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 the Bank  requires  funds beyond its
ability to generate them internally,  it has the ability to obtain advances from
the FHLB,  which provides an additional  source of funds.  At June 30, 2007, the
Bank's  borrowing limit with the FHLB was $290.5 million,  subject to collateral
requirements.  At June 30, 2007,  the Bank had $227.5  million of FHLB  advances
outstanding,  including $100.5 million in repurchase agreement advances with the
FHLB.

       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 is it 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 June 30, 2007 was $19.3
million,  excluding  commitments on unused lines of credit,  which totaled $28.5
million.

       Management  intends to expand the Bank's branch  network  either  through
opening or acquiring branch offices.  One new office in Howell,  New Jersey, was
opened in May 2007 and two new  offices  and the  relocation  of one  branch are
planned for 2007 and 2008.

       The following  table discloses the Bank's  contractual  obligations as of
June 30, 2007 (in thousands):

<TABLE>
<CAPTION>
                                      Total   Less Than   1-3 Years   4-5 Years     After
                                               1 Year                              5 Years
                                    --------  ---------   ---------   ---------   --------
<S>                                <C>        <C>        <C>          <C>        <C>
Certificates of deposit             $340,388   $316,315   $ 23,000     $    517   $    556
FHLB advances (1)                    227,500    125,000     25,300       15,000     62,200
Rental under operating leases         11,468        901      1,712        1,507      7,348
                                    --------   --------   --------     --------   --------
Total                               $579,356   $442,216   $ 50,012     $ 17,024   $ 70,104
                                    ========   ========   ========     ========   ========
</TABLE>
----------------
(1)  At June 30, 2007, other borrowed funds consisted of FHLB advances.  At June
     30, 2007,  our  borrowing  limit with FHLB was $290.5  million,  subject to
     collateral requirements.

         The following  table  discloses the Bank's  commitments  as of June 30,
2007 (in thousands):

<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)                  $28,491    $ 2,607   $   289      $ 1,317    $24,278
Other commitments to extend credit    19,287     19,287         -            -          -
                                     -------    -------   -------      -------    -------
Total                                $47,778    $21,894   $   289      $ 1,317    $24,278
                                     =======    =======   =======      =======    =======
</TABLE>

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


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-based  capital to
risk-weighted  assets.  On June 30, 2007, the Bank was in compliance with all of
its regulatory capital  requirements.

                                      -22-
<PAGE>

The following  table sets forth the Bank's  capital  position and  relativity to
regulatory requirements as of June 30, 2007:

<TABLE>
<CAPTION>
                                                                               OTS Requirements
                                                                 ------------------------------------------
                                                                      Minimum            Classification for
                                            Bank actual           capital adequacy        well-capitalized
                                            -----------           ----------------        ----------------
                                        Amount       Ratio       Amount      Ratio       Amount       Ratio
                                        ------       -----       ------      -----       ------       -----
<S>                                   <C>          <C>         <C>          <C>        <C>          <C>
Total risk-based capital
   (to risk-weighted assets)           $96,985      13.27%      $58,464      8.00%      $73,080      10.00%
Tier 1 capital (to risk-weighted        91,257      12.49%          N/A       N/A        43,848       6.00%
assets)
Tier 1 capital (to adjusted total       91,257       9.83%       37,145      4.00%       46,432       5.00%
assets)
Tangible capital (to adjusted total     91,257       9.83%       13,930      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 accounting
principles generally accepted in the United States of America, 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 of 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.


Item 3. Quantitative and Qualitative Disclosures About Market Risk

Management of Interest Rate Risk and Market Risk

         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  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/
Liability Management and Budget 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 200 basis point (1/100th of a percentage point)
upward and downward shift (shock) in the Treasury yield curve.

         Management believes that there has not been any material adverse change
in market risk during the three month period ended June 30, 2007.

         Qualitative   Analysis.    Because   the   majority   of   the   Bank's
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.  The Bank is vulnerable to an
increase  in  interest  rates to the extent  that  interest-bearing  liabilities
mature or re-price more rapidly than interest-earning assets. Our assets include
long-term,  fixed-rate loans and investments, while our primary sources of funds
are deposits and borrowings  with

                                      -23-

<PAGE>

substantially shorter maturities.  Although having interest-bearing  liabilities
that  re-price  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  a Budget and  Asset/Liability
Management  Committee.  The Committee  meets quarterly with management to review
current  investments:  average lives,  durations and  re-pricing  frequencies of
loans  and  securities;   loan  and  deposit  pricing,  production  volumes  and
alternative  funding  sources;  interest  rate  risk  analysis;   liquidity  and
borrowing needs; and a variety of other asset and liability  management  topics.
The  management  session of the Committee is held monthly with  President  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 the fourth quarter
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    expand  commercial  and industrial  loans,  which  predominantly  have
          variable rates of interest;
     o    increase production in higher yielding commercial real estate 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.,  checking,  savings and money  market
          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.

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  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.

         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.

                                      -24-

<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 June 30, 2007 that would be expected to have a material  effect
on the Company's operations or income.

Item 1A. Risk Factors.
         ------------

         There  has  been no  material  change  in the risk  factors  previously
disclosed in the Company's 2006 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
        -----------------------------------------------------------

                      ISSUER PURCHASES OF EQUITY SECURITIES

The following table reports information  regarding  repurchases of the Company's
common stock during the second  quarter of 2007 and the stock  repurchase  plans
approved by the Company's Board of Directors.

<TABLE>
<CAPTION>
----------------------------- --------------- ---------------- ------------------------- ----------------------------
                                                                Total Number of Shares    Maximum Number of Shares
                               Total Number                      Purchased as Part of     that May Yet Be Purchased
                                of Shares      Average Price      Publicly Announced         Under the Plans or
                                Purchased     Paid per Share    Plans or Programs (1)           Programs (1)
           Period
----------------------------- --------------- ---------------- ------------------------- ----------------------------
<S>                           <C>                <C>              <C>                       <C>
April 1-30, 2007                    -                -                     -                        470,401
----------------------------- --------------- ---------------- ------------------------- ----------------------------
May 1-31, 2007                      -                -                     -                        470,401
----------------------------- --------------- ---------------- ------------------------- ----------------------------
June 1-30, 2007                     -                -                     -                        470,401
----------------------------- --------------- ---------------- ------------------------- ----------------------------
Total                               -                -                     -
----------------------------- --------------- ---------------- ------------------------- ----------------------------
</TABLE>

-----------------
(1)  On February 23, 2006, the Company  announced that it intends to purchase up
     to five  percent of its common  stock  outstanding  (approximately  572,294
     shares) in open market  transactions.  This repurchase program incorporates
     the  174,628  shares  that  remained  available  for  repurchase  under the
     Company's  August 2005  repurchase  program.  Such purchases are to be made
     from time to time in the open market,  based on stock  availability,  price
     and the  Company's  financial  performance.  This program has no expiration
     date and has 470,401 shares yet to be purchased as of June 30, 2007.

                                      -25-

<PAGE>

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

          None.

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

          The Annual Meeting of Stockholders  (the "Meeting") of the Company was
          held on April 24, 2007. There were outstanding and entitled to vote at
          the Meeting  11,382,143  shares of Common Stock of the Company.  There
          were  present  at the  meeting or by proxy the  holders of  10,520,319
          shares of Common Stock  representing 92.4% of the total eligible votes
          to be cast.  Proposal 1 was to elect three  directors  of the Company.
          Proposal 2 was to ratify the  appointment of the  independent  auditor
          for the December 31, 2007 fiscal year. The result of the voting at the
          Meeting is as follows (percentages in terms of votes cast):

          Proposal 1

<TABLE>
<CAPTION>
                                                                                          VOTES
                                                       VOTES FOR                         WITHHELD
                                        ----------------------------------      ------------------------------
                                            Number           Percentage           Number          Percentage
                                           of Votes         of Votes Cast        of Votes        of Votes Cast
                                           --------         -------------        --------        -------------
<S>                                      <C>                   <C>               <C>                <C>
  David H. Gibbons, Jr.                   10,426,459            99.1%             93,860             0.9%

  Paul T. LaCorte                         10,423,500            99.1%             96,819             0.9%

  Albert N. Stender                       10,421,768            99.1%             98,551             0.9%
</TABLE>

          Proposal 2
          Ratification of the appointment of Crowe Chizek and Company LLC as the
          Company's independent auditor for the year ending December 31, 2007.

                               Number of       Percentage of
                                 Votes          Votes Cast
                                 -----          ----------

FOR                          10,464,948            99.5%

AGAINST                          43,014             0.4%

ABSTAIN                          12,357             0.1%


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

          None.


Item 6. Exhibits.
        --------

          a) Exhibits:
<TABLE>
<CAPTION>
<S>                     <C>
                  31       Certification pursuant to ss.302 of the Sarbanes-Oxley Act of 2002
                  32       Certification pursuant to ss.906 of the Sarbanes-Oxley Act of 2002
</TABLE>

                                      -26-

<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: August 9, 2007                  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 date indicated.

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

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

Date: August 9, 2007                             Date: August 9, 2007

</TABLE>

                                      -27-