UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934
                         For the quarterly period ended June 30, 2007
                                                        ------------------------

[_]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                         For the transition period from __________ to __________
                         Commission file number 0-503777
                                                --------------------------------

                         FLATBUSH FEDERAL BANCORP, INC.
--------------------------------------------------------------------------------
       (Exact name of small business issuer as specified in this charter)

FEDERAL                                                               11-3700733
--------------------------------------------------------------------------------
(State or other jurisdiction of                                    (IRS Employer
incorporation or organization)                               Identification No.)

                 2146 NOSTRAND AVENUE, BROOKLYN, NEW YORK 11210
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (718) 859-6800
--------------------------------------------------------------------------------
                           (Issuer's telephone number)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

              As of August 10, 2007 the Registrant had outstanding
                        2,755,757 shares of common stock.
                        ---------

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

<page>

                 FLATBUSH FEDERAL BANCORP, INC. AND SUBSIDIARIES

                                      INDEX
                                                                           Page
                                                                          Number
                                                                          ------
PART I - FINANCIAL INFORMATION

     Item 1:  Financial Statements

              Consolidated Statements of Financial Condition
              at June 30, 2007 and December 31, 2006 (Unaudited)               1

              Consolidated Statements of Income for the Three months and
              Six months ended June 30, 2007 and 2006 (Unaudited)              2

              Consolidated Statements of Comprehensive Income for the
              Three months and Six months ended June 30, 2007 and 2006
              (Unaudited)                                                      3

              Consolidated Statements of Cash Flows for the Six months
              Ended June 30, 2007 and 2006 (Unaudited)                         4

              Notes to Consolidated Financial Statements  (Unaudited)      5 - 8

     Item 2:  Management's Discussion and Analysis or
              Plan of Operation                                           9 - 15

     Item 3:  Controls and Procedures                                         16

PART II - OTHER INFORMATION

     1.    Legal Proceedings                                                  17

     2.    Unregistered Sales of Equity Securities and Use of Proceeds        17

     3.    Defaults upon Senior Securities                                    17

     4.    Submission of Matters to a Vote of Securities Holders              17

     5.    Other Information                                                  18

     6.    Exhibits                                                           19


SIGNATURES                                                                    20

<page>

                         PART I - FINANCIAL INFORMATION
                          ITEM 1 - FINANCIAL STATEMENTS
                 FLATBUSH FEDERAL BANCORP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                   (Unaudited)
<table>
<caption>
                                                                   June 30,        December 31,
ASSETS                                                               2007              2006
------                                                           ------------------------------

                                                                  <c>              <c>
Cash and amounts due from depository institutions                $   2,370.985    $   2,399,344
Interest earning deposits in other banks                             1,148,054        1,007,542
Federal Funds sold                                                   2,800,000          600,000
                                                                 ------------------------------
    Cash and cash equivalents                                        6,319,039        4,006,886

Investment securities held to maturity; fair value of
    $6,818,205 in 2007 and $6,859,114 in 2006                        6,990,525        6,989,873
Mortgage-backed securities held to maturity; fair value of
   $26,422,274 in 2007 and $26,361,595 in 2006                      27,465,333       26,726,910
Loans receivable, net of allowance for loan losses of $202,639
   in 2007 and $200,347 in 2006                                    102,753,933      106,229,513
Premises and equipment                                               2,845,785        2,901,521
Federal Home Loan Bank of New York stock                             1,526,400        1,599,100
Accrued interest receivable                                            725,055          736,524
Bank owned life insurance                                            3,830,418        3,778,193
Other assets                                                         1,468,834        1,413,853
                                                                 ------------------------------
    Total assets                                                 $ 153,925,322    $ 154,382,373
                                                                 ==============================

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
  Non-interest bearing                                           $   4,190,113    $   4,415,706
  Interest bearing                                                 102,991,123      101,225,633
                                                                 ------------------------------
    Total Deposits                                                 107,181,236      105,641,339
Federal Home Loan Bank of New York advances                         28,552,079       30,486,579
Advance payments by borrowers for taxes and insurance                  680,861          348,083
Other liabilities                                                    1,758,494        2,860,195
                                                                 ------------------------------
    Total liabilities                                              138,172,670      139,336,196
                                                                 ------------------------------
Stockholders' equity:
Preferred stock $0.01 par value, 1,000,000 shares authorized;
     none issued and outstanding                                            --               --
Common stock $0.01 par value;  authorized 9,000,000 shares;
   issued (2007 and 2006) 2,799,657 shares;
   outstanding (2007) 2,755,757 shares; and (2006) 2,763,317
   shares                                                               27,998           27,998
Paid-in capital                                                     12,382,000       12,072,156
Retained earnings                                                    5,413,113        5,027,685
Unearned employees' stock ownership plan (ESOP) shares                (566,042)        (583,479)
Treasury stock,  43,900 shares and 36,340 shares, respectively        (350,649)        (294,925)
Accumulated other comprehensive loss                                (1,153,768)      (1,203,258)
                                                                 ------------------------------
    Total stockholders' equity                                      15,752,652       15,046,177
                                                                 ------------------------------

    Total liabilities and stockholders' equity                   $ 153,925,322    $ 154,382,373
                                                                 ==============================
</table>

See notes to consolidated financial statements.

                                       1
<page>
<table>
<caption>

                                           FLATBUSH FEDERAL BANCORP, INC. AND SUBSIDIARIES
                                                  CONSOLIDATED STATEMENTS OF INCOME
                                                             (Unaudited)

                                                                                Three months Ended             Six months Ended
                                                                                     June 30                        June 30
                                                                             -------------------------------------------------------
                                                                                2007           2006           2007          2006
                                                                             -------------------------------------------------------

                                                                              <c>           <c>            <c>            <c>
Interest Income
   Loans, including fees                                                     $1,745,880    $ 1,602,614    $ 3,528,401    $ 3,160,614
   Mortgage-backed securities                                                    356,632       398,048        721,742        756,949
   Investments                                                                   120,877       107,912        236,271        215,552
   Other interest earning assets                                                  61,537        32,804         92,583         80,478
                                                                             -----------   -----------    -----------    -----------
          Total interest income                                                2,284,926     2,141,378      4,578,997      4,213,593
                                                                             -----------   -----------    -----------    -----------

Interest Expense
   Deposits                                                                      739,025       575,719      1,426,687      1,107,334
   Borrowings                                                                    381,693       275,421        771,568        510,551
                                                                             -----------   -----------    -----------    -----------
          Total interest expense                                               1,120,718       851,140      2,198,255      1,617,885
                                                                             -----------   -----------    -----------    -----------

         Net Interest Income                                                   1,164,208     1,290,238      2,380,742      2,595,708
Provision for loan losses                                                             --        37,832          2,056         47,949
                                                                             -----------   -----------    -----------    -----------
          Net interest income after provision for loan losses                  1,164,208     1,252,406      2,378,686      2,547,759
                                                                             -----------   -----------    -----------    -----------

Non-interest income
   Fees and service charges                                                       36,209        40,163         72,323         95,594
   BOLI investment income                                                         37,292        35,886         73,458         71,214
   Life insurance proceeds                                                            --            --        500,000             --
   Other                                                                           2,179         1,639          2,639          3,359
                                                                             -----------   -----------    -----------    -----------
          Total non-interest income                                               75,680        77,688        648,420        170,167
                                                                             -----------   -----------    -----------    -----------

Non-interest expenses
   Salaries and employee benefits                                                650,513       706,229      1,337,585      1,481,942
   Net occupancy expense of premises                                             134,186       120,621        252,911        271,244
   Equipment                                                                     133,108       140,586        264,240        270,330
   Directors' compensation                                                        57,420       140,234        383,920        204,613
   Professional fees                                                              78,041        41,366        119,843         88,142
   Other insurance premiums                                                       37,870        40,707         76,982         81,750
   Other                                                                         145,249       136,475        259,583        249,733
                                                                             -----------   -----------    -----------    -----------
        Total non-interest expenses                                            1,236,387     1,326,218      2,695,064      2,647,754
                                                                             -----------   -----------    -----------    -----------

Income before income taxes                                                         3,501         3,876        332,042         70,172
Income taxes                                                                       1,406         8,086        (53,386)        31,642
                                                                             -----------   -----------    -----------    -----------

Net income (loss)                                                            $     2,095   $    (4,210)   $   385,428    $    38,530
                                                                             -----------   -----------    -----------    -----------

Net income (loss) per common share - Basic and diluted                       $     0.001   ($     .002)   $      0.14    $     0.014
Weighted average number of shares outstanding - Basic and
diluted                                                                        2,659,568     2,693,286      2,667,358      2,693,678


See notes to consolidated financial statements.


                                                                 2
</table>
<page>
<table>
<caption>

                              FLATBUSH FEDERAL BANCORP, INC. AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                                (Unaudited)


                                                  Three months ended June 30,    Six months ended June 30,
                                                      2007          2006            2007         2006
---------------------------------------------------------------------------------------------------------

                                                <c>           <c>             <c>          <c>
Net Income                                         $    2,095    $   (4,210)     $  385,428   $   38,530

Other comprehensive income, net of income taxes:
Benefit Plans, net of deferred taxes                   25,090            --          49,490           --
                                                   ----------    ----------      ----------   ----------

Comprehensive income                               $   27,185    $   (4,210)     $  434,918   $   38,530
                                                   ==========    ==========      ==========   ==========






See notes to consolidated financial statements.

                                                     3
</table>
<page>
<table>
<caption>

                                 FLATBUSH FEDERAL BANCORP, INC. AND SUBSIDIARIES
                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                   (Unaudited)
                                                                                      Six months ended June 30
                                                                                    ----------------------------
                                                                                        2007            2006
                                                                                    ----------------------------

                                                                                      <c>              <c>
Cash flow from operating activities:

 Net income                                                                         $    385,428    $     38,530
  Adjustments to reconcile net income to net cash
  used in operating activities:
     Depreciation and amortization of premises and equipment                              90,671          82,127
     Net amortization of premiums, discounts and
        deferred loan fees and costs                                                       8,375        (109,432)
     Provision for loan losses                                                             2,056          47,949
     ESOP shares committed to be released                                                 19,338          21,250
     MRP amortization                                                                    155,581          59,747
     Stock option amortization                                                           152,362          47,578
     Decrease (increase) in accrued interest receivable                                  (41,616)         11,469
     Increase in cash surrender value of BOLI                                            (52,225)        (71,214)
     Increase in other assets                                                            (90,598)       (498,533)
     Decrease in other liabilities                                                    (1,016,593)        (11,372)
                                                                                    ----------------------------
        Net cash Used in operating activities                                           (334,136)       (434,986)
                                                                                    ----------------------------

Cash flow from investing activities:
     Proceeds from calls and maturities of investment securities held to maturity             --         822,193
     Principal repayments on mortgage-backed securities held to maturity               1,909,447       2,522,498
     Purchases of mortgage-backed securities held to maturity                         (2,682,323)     (5,607,461)
     Purchases of loan participation interest                                         (2,044,529)     (5,675,215)
     Net change in loans receivable                                                    5,543,478        (345,628)
     Additions to premises and equipment                                                 (34,935)       (224,315)
     Redemption (purchase) of Federal Home Loan Bank of New York stock                    72,700        (400,000)
                                                                                    ----------------------------
        Net cash Provided by (Used in) investing activities                            2,763,838      (8,907,928)
                                                                                    ----------------------------

Cash flow from financing activities:
     Net  increase (decrease) in deposits                                              1,539,897        (833,894)
     Advances from Federal Home Loan Bank of New York                                  1,800,000      23,200,000
     Repayment of advances from Federal Home Loan Bank of New York                      (734,500)    (14,588,758)
     Net change to short-term borrowings                                              (3,000,000)             --
     Increase  in advance payments by borrowers
         for taxes and insurance                                                         332,778          94,200
     Cash dividend paid to stockholders                                                       --          (3,004)
     Purchase of Treasury Stock                                                          (55,724)        (98,825)
                                                                                    ----------------------------
        Net cash (Used in) Provided by financing activities                             (117,549)      7,769,719
                                                                                    ----------------------------
Net Increase (Decrease) in cash and cash equivalents                                   2,312,153      (1,573,195)
Cash and cash equivalents - beginning                                                  4,006,886       4,911,223
                                                                                    ----------------------------

Cash and cash equivalents - ending                                                  $  6,319,039    $  3,338,028
                                                                                    ============================
Supplemental disclosure of cash flow information
  Cash paid during the year for:
     Interest                                                                       $  2,219,151    $  1,595,189
                                                                                    ----------------------------
     Income taxes                                                                   $    146,021    $     31,642
                                                                                    ----------------------------

See notes to consolidated financial statements.

                                                        4
</table>
<page>

                 FLATBUSH FEDERAL BANCORP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

                                   (Unaudited)

NOTE 1.  PRINCIPLES OF CONSOLIDATION
------------------------------------

The consolidated financial statements include the accounts of Flatbush Federal
Bancorp, Inc. (the "Company"), the Flatbush Federal Savings and Loan Association
(the "Association") and the Association's subsidiary Flatbush REIT, Inc. The
Company's business is conducted principally through the Association. All
significant intercompany accounts and transactions have been eliminated in
consolidation.

NOTE 2.  BASIS OF PRESENTATION
------------------------------

The accompanying unaudited consolidated financial statements were prepared in
accordance with instructions for Form 10-QSB and Regulation S-B and do not
include information or footnotes necessary for a complete presentation of
financial condition, results of operations and cash flows in accordance with
U.S. generally accepted accounting principles. However, in the opinion of
management, all adjustments (consisting of normal recurring adjustments)
necessary for a fair presentation of the consolidated financial statements have
been included. The results of operations for the three months and six months
ended June 30, 2007, are not necessarily indicative of the results which may be
expected for the entire year.

NOTE 3.  NET INCOME PER COMMON SHARE
------------------------------------

Net income per common share was computed by dividing net income for three months
and six months ended June 30, 2007 and 2006 by the weighted average number of
shares of common stock outstanding adjusted for unearned shares of the ESOP.
Stock options and restricted stock awards granted are considered common stock
equivalents and therefore considered in diluted net income per share
calculations, if dilutive, using the treasury stock method.

NOTE 4.  CRITICAL ACCOUNTING POLICIES
-------------------------------------

The Company considers accounting policies involving significant judgments and
assumptions by management that have, or could have, a material impact on the
carrying value of certain assets or on income to be critical accounting
policies. Material estimates that are particularly susceptible to significant
changes relate to the determination of the allowance for loan losses.
Determining the amount of the allowance for loan losses necessarily involves a
high degree of judgment. Management reviews the level of the allowance on a
quarterly basis, at a minimum, and establishes the provision for loan losses
based on the composition of the loan portfolio, delinquency levels, loss
experience, economic conditions, and other factors related to the collectibility
of the loan portfolio. Management has allocated the allowance among categories
of loan types as well as classification status at each period-end date.
Assumptions and allocation percentages based on loan types and classification
status have been consistently applied. Management regularly evaluates various
risk factors related to the loan portfolio, such as type of loan, underlying
collateral and payment status, and the corresponding allowance allocation
percentages.

Although management believes that it uses the best information available to
establish the allowance for loan losses, future additions to the allowance may
be necessary based on estimates that are susceptible to change as a result of
changes in economic conditions and other factors. In addition, the regulatory
authorities, as an integral part of their examination process, periodically
review the allowance for loan losses. Such agencies may require management to
recognize adjustments to the allowance based on its judgments about information
available to it at the time of their examinations.

                                       5
<page>

NOTE 5.  RETIREMENT PLANS - COMPONENTS OF  NET PERIODIC PENSION COST
--------------------------------------------------------------------

Periodic pension expense was as follows:

<table>
<caption>
                                          Three months Ended         Six months Ended
                                        ------------------------------------------------
                                               June 30                   June 30
                                        ------------------------------------------------
                                           2007         2006         2007         2006
                                        ------------------------------------------------

                                      <c>           <c>         <c>           <c>
Service Cost                            $  24,814    $  43,121    $  73,056    $  86,242
Interest Cost                              68,343       62,996      141,885      125,992
Expected return on assets                (100,886)     (46,233)    (187,277)     (92,466)
Amortization of past service cost         (10,847)      (2,750)     (10,847)      (5,500)
Amortization of unrecognized net loss      31,556       15,551       61,925       31,102
                                        ------------------------------------------------
     Net periodic benefit cost          $  12,980    $  72,685    $  78,742    $ 145,370
                                        ------------------------------------------------
</table>

Periodic pension expense for other plans was as follows:

<table>
<caption>
                                          Three months Ended      Six months Ended
                                          -----------------------------------------
                                                June 30               June 30
                                          -----------------------------------------
                                            2007       2006       2007       2006
                                          -----------------------------------------

                                          <c>        <c>        <c>        <c>
Service Cost/Interest Cost                $ 24,346   $ 47,685   $ 48,692   $ 95,370
Amortization of unrecognized transition      4,268      4,292      8,536      8,584
obligation
Amortization of past service cost            5,278         --     10,556         --
Amortization of unrecognized net loss        2,045      1,006      4,090      2,012
                                          -----------------------------------------
     Net periodic benefit cost            $ 35,937   $ 52,983   $ 71,874   $105,966
                                          -----------------------------------------
</table>

NOTE 6. RECENT ACCOUNTING PRONOUNCEMENTS
----------------------------------------

EITF 06-11

In March 2007, the FASB ratified Emerging Issues Task Force No. 06-11, ("EITF
06-11"), "Accounting for Income Tax Benefits of Dividends on Share-Based Payment
Awards." EITF 06-11 requires companies to recognize the income tax benefit
realized from dividends or dividend equivalents that are charged to retained
earnings and paid to employees for nonvested equity-classified employee
share-based payment awards as an increase to additional paid-in capital. EITF
06-11 is effective for fiscal years beginning after September 15, 2007. The
Company does not expect EITF 06-11 will have a material impact on its
consolidated financial position, results of operations or cash flows.

EITF 06-10

In March 2007, the FASB ratified Emerging Issues Task Force Issue No. 06-10,
"Accounting for Collateral Assignment Split-Dollar Life Insurance Agreements"
("EITF 06-10"). EITF 06-10 provides guidance for determining a liability for the
postretirement benefit obligation as well as recognition and measurement of the
associated asset on the basis of the terms of the collateral assignment
agreement. EITF 06-10 is effective for fiscal years beginning after December 15,
2007. The Company is currently assessing the impact of EITF 06-10 on its
consolidated financial position and results of operations.

                                       6
<page>

EITF 06-5

On September 7, 2006, the Task Force reached a conclusion on Emerging Issues
Task Force 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" ("EITF 06-5"). The scope of
EITF 06-5 consists of six separate issues relating to accounting for life
insurance purchases by entities protecting against the loss of "key persons."
The six issues are clarifications of previously issued guidance on FASB
Technical Bulleting No. 85-4. EITF 06-5 is effective for fiscal years beginning
after December 15, 2006. The adoption of EITF 06-5 did not have a material
impact on the Company's consolidated financial statements.

EITF 06-4

In September 2006, the FASB's Emerging Issues Task Force issued EITF Issue No
06-4, "Accounting for Deferred Compensation and Postretirement Benefit Aspects
of Endorsement Split Dollar Life Insurance Arrangements" ("EITF 06-4"). EITF
06-4 requires the recognition of a liability related to the postretirement
benefits covered by an endorsement split-dollar life insurance arrangement. The
consensus highlights that the employer (who is also the policyholder) has a
liability for the benefit it is providing to its employee. As such, if the
policyholder has agreed to maintain the insurance policy in force for the
employee's benefit during his or her retirement, then the liability recognized
during the employee's active service period should be based on the future cost
of insurance to be incurred during the employee's retirement. Alternatively, if
the policy holder has agreed to provide the employee with a death benefit, then
the liability for the future death benefit should be recognized by following the
guidance in SFAS No. 106 or Accounting Principles Board (APB) Opinion No. 12, as
appropriate. For transition, an entity can choose to apply the guidance using
either of the following approaches: (a) a change in accounting principle through
retrospective application to all periods presented or (b) a change in accounting
principle through a cumulative-effect adjustment to the balance in retained
earnings at the beginning of the year of adoption. The EITF is effective for
fiscal years beginning after December 15, 2007, with early adoption permitted.
The Company does not believe that the implementation of this guidance will have
a material impact on the Company's consolidated financial statements.

FAS 159

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for the
Financial Assets and Financial Liabilities-Including an amendment of FASB
Statement No. 115. ("SFAS No. 159") SFAS No. 159 permits entities to choose to
measure many financial instruments and certain other items at fair value.
Unrealized gains and losses on items for which the fair value option has been
elected will be recognized in earnings at each subsequent reporting date. SFAS
No. 159 is effective for our Company January 1, 2008. The Company is evaluating
the impact that the adoption of SFAS No. 159 will have on its consolidated
financial statements.

FAS 157

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, which
defines fair value, establishes a framework for measuring fair value under
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS No. 157 applies to other accounting pronouncements that
require or permit fair value measurements. The new guidance is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and for interim periods within those fiscal years. The Company is currently
evaluating the potential impact, if any, of the adoption of SFAS No. 157 on its
consolidated financial position, results of operations and cash flows.

FSP FIN 48-1

In May 2007, the FASB issued FASB Staff Position ("FSP") FIN 48-1 "Definition of
Settlement in FASB Interpretation No. 48" (FSP FIN 48-1). FSP FIN 48-1 provides
guidance on how to determine whether a tax position

                                       7
<page>

is effectively settled for the purpose of recognizing previously unrecognized
tax benefits. FSP FIN 48-1 is effective retroactively to January 1, 2007. The
implementation of this standard did not have a material impact on our
consolidated financial position or results of operations

FSP FAS 158-1

In February 2007, the FASB issued FASB Staff Position ("FSP") FAS 158-1.
"Conforming Amendments to the Illustrations in FASB Statements No. 87, No. 88,
and No. 106 and to the Related Staff Implementation Guides." This FSP makes
conforming amendments to other FASB statements and staff implementation guides
and provides technical corrections to SFAS No. 158, "Employers' Accounting for
Defined Benefit Pension and Other Postretirement Plans." The conforming
amendments in this FSP shall be applied upon adoption of SFAS No. 158. We
believe our adoption of FSP FAS 158-1 will not have a material impact on our
consolidated financial statements or disclosures.


                                       8
<page>

ITEM 2
                 FLATBUSH FEDERAL BANCORP, INC. AND SUBSIDIARIES
            MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
            ---------------------------------------------------------

Forward-Looking Statements

         This Form 10-QSB may include certain forward-looking statements based
on current management expectations. The Company's actual results could differ
materially from those management expectations. Factors that could cause future
results to vary from current management expectations include, but are not
limited to, general economic conditions, legislative and regulatory changes,
monetary and fiscal policies of the federal government, changes in tax policies,
rates and regulations of federal, state and local tax authorities, changes in
interest rates, deposit flows, the cost of funds, demand for loan products,
demand for financial services, competition, changes in the quality or
composition of loan and investment portfolios of the Company, changes in
accounting principles, policies or guidelines, and other economic, competitive,
governmental and technological factors affecting the Company's operations,
markets, products, services and prices.

Comparison of Financial Condition June 30, 2007 and December 31, 2006

         The Company's assets as of June 30, 2007 were $153.9 million compared
to $154.4 million at December 31, 2006, a decrease of $457,000, or 0.3%. Loans
receivable decreased $3.4 million, or 3.2%, to $102.8 million at June 30, 2007
from $106.2 million at December 31, 2006. As a partial offset, cash and cash
equivalents increased $2.3 million, or 57.5%, to $6.3 million at June 30, 2007
from $4.0 million at December 31, 2006, and mortgage-backed securities increased
$738,000, or 2.8%, to $27.5 million at June 30, 2007 from $26.7 million as of
December 31, 2006.

         Total deposits increased $1.6 million, or 1.5%, to $107.2 million at
June 30, 2007 from $105.6 million as of December 31, 2006. As of June 30, 2007,
borrowings from Federal Home Loan Bank of New York ("FHLB") were $28.6 million
compared to $30.5 million as of December 31, 2006, a decrease of $1.9 million,
or 6.2%.

         Total stockholders' equity increased $707,000 to $15.8 million at June
30, 2007 from $15.0 million at December 31, 2006.

         On June 30, 2005, the Company approved a stock repurchase program and
authorized the repurchase of up to 50,000 shares of the Company's outstanding
shares of common stock. Stock repurchases will be made from time to time and may
be effected through open market purchases, block trades and in privately
negotiated transactions. Repurchased stock will be held as treasury stock and
will be available for general corporate purposes. As of June 30, 2007, 43,900
shares were acquired at a weighted average price of $7.99 per share.

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

         General. Net income increased by $6,000, to $2,000 for the quarter
ended June 30, 2007 from a loss of $4,000 for the same quarter in 2006. The
increase in net income for the quarter was primarily due to increases of
$144,000 in interest income, and decreases of $90,000 in non-interest expense,
$38,000 in provision for loan losses and $7,000 in income taxes. These, however,
were partially offset by increases of $163,000 in interest expense on deposits,
$107,000 in interest expense on borrowings from FHLB, and decreases of $2,000 in
non-interest income.

         Interest Income. Interest income increased $144,000, or 6.7%, to $2.3
million for the quarter ended June 30, 2007 from $2.1 million for the quarter
ended June 30, 2006. The increase in interest income can be attributed to a
higher average yield on a higher interest earning asset base. For the three
months ended June 30, 2007 the average balance of $144.4 million in
interest-earning assets earned an average yield of 6.33% compared to an average
yield of 6.14% on an average balance of $139.5 million for the three months
ended June 30, 2006.

         Interest income on loans increased $143,000, or 8.9%, to $1.7 million
for the quarter ended June 30, 2007 from $1.6 million for the same quarter in
2006. The average balance of loans increased $3.6 million to $104.0 million for
the quarter ended June 30, 2007 from $100.4 million for the quarter ended June
30, 2006. The average

                                       9
<page>

yield on loans increased by 33 basis points to 6.71% for the quarter ended June
30, 2007 from 6.38% for the quarter ended June 30, 2006.

         Interest income on mortgage-backed securities decreased $41,000, or
10.3%, to $357,000 for the quarter ended June 30, 2007 from $398,000 for the
quarter ended June 30, 2006. The average balance of mortgage-backed securities
increased $2.2 million to $26.7 million for the quarter ended June 30, 2007 from
$28.9 million for the quarter ended June 30, 2006. The average yield decreased
by 18 basis points to 5.34% for the quarter ended June 30, 2007 from 5.52% for
the same period in 2006.

         Interest income on investment securities increased $13,000, or 12.0%,
to $121,000 for the quarter ended June 30, 2007 from $108,000 for the quarter
ended June 30, 2006. The average yield on investment securities increased 41
basis points to 5.65% for the quarter ended June 30, 2007 from 5.24% for the
quarter ended June 30, 2006. The average balance of investment securities
increased by $318,000 to $8.6 million for the quarter ended June 30, 2007 from
$8.2 million at the quarter ended June 30, 2006.

         Interest income on other interest-earning assets, primarily
interest-earning deposits and federal funds sold, increased $29,000, or 87.9%,
to $62,000 for the quarter ended June 30, 2007 from $33,000 for the quarter
ended June 30, 2006. The average balance of other interest earning assets
increased $3.2 million to $5.2 million for the quarter ended June 30, 2007 from
$2.0 million for the quarter ended June 30, 2006. As a partial offset, the
average yield on other interest earning assets decreased by 184 basis points to
4.77% for the quarter ended June 30, 2007 from 6.61% for the quarter ended June
30, 2006.

         Interest Expense. Total interest expense, comprised of interest expense
on deposits and interest expense on FHLB advances, increased $270,000, or 31.7%,
to $1.1 million for the quarter ended June 30, 2007 from $851,000 for the
quarter ended June 30, 2006. The average cost of interest-bearing liabilities
increased by 71 basis points to 3.38% for the quarter ended June 30, 2007 from
2.67% for the quarter ended June 30, 2006. The average balance of
interest-bearing liabilities increased $5.3 million to $132.6 million for the
quarter ended June 30, 2007 from $127.3 million for the quarter ended June 30,
2006.

         Interest expense on deposits increased $163,000, or 28.3%, to $739,000
for the quarter ended June 30, 2007 from $575,000 for the quarter ended June 30,
2006. The average cost of interest-bearing deposits increased by 67 basis points
to 2.87% for the quarter ended June 30, 2007 from 2.20% for the quarter ended
June 30, 2006, reflecting the upward trend of interest rates on deposits.
However, the average balance of interest-bearing deposits decreased $1.4 million
to $103.0 million for the quarter ended June 30, 2007 from $104.4 million for
the quarter ended June 30, 2006.

         Interest expense on FHLB advances increased $107,000, or 38.9%, to
$382,000 for the quarter ended June 30, 2007, from $276,000 for the quarter
ended June 30, 2006. The average balance of FHLB advances increased $6.7 million
to $29.6 million for the quarter ended June 30, 2007, from $22.9 million for the
quarter ended June 30, 2006. The average cost of FHLB advances increased by 33
basis points to 5.16% for the quarter ended June 30, 2007, from 4.83% for the
quarter ended June 30, 2006.

         Net Interest Income. Net interest income decreased $126,000, or 9.8%,
to $1.2 million for the quarter ended June 30, 2007 from $1.3 million for the
same quarter in 2006. The interest rate spread was 2.95% for the quarter ended
June 30, 2007 compared to 3.47% for the quarter ended June 30, 2006, a decrease
of 52 basis points. Interest margin for the quarter ended June 30, 2007 was
3.22% compared to 3.70% for the quarter ended June 30, 2006, a decrease of 48
basis points. The decrease in interest rate spread and interest margin can be
attributed to the higher cost of interest-bearing liabilities.

         Provision for Loan Losses. The Company establishes provisions for loan
losses, which are charged to operations, at a level necessary to absorb known
and inherent losses that are both probable and reasonably estimable at the date
of the financial statements. In evaluating the level of the allowance for loan
losses, management considers historical loss experience, the types of loans and
the amount of loans in the loan portfolio, adverse situations that may affect
the borrower's ability to repay, the estimated value of any underlying
collateral, and prevailing economic conditions. This evaluation is inherently
subjective as it requires estimates that are susceptible to significant revision
as more information becomes available or as future events change. Based on the
evaluation of

                                       10
<page>

these factors, there was no provision recorded for the three months ended June
30, 2007. For the three months ended June 30, 2006, a provision of $38,000 was
recorded. The provision for loan losses was established to address probable and
estimable losses in the one to four residential and Visa credit card loan
portfolios as well as inherent losses that are probable and estimable in the
larger loan portfolio. The level of the allowance at June 30, 2007 is based on
estimates, and the ultimate losses may vary from the estimates.

         Non-Interest Income. Non-interest income decreased $2,000, to $76,000
for the quarter ended June 30, 2007 from $78,000 for the quarter ended June 30,
2006. This was primarily attributable to the decrease of fees and service
charges of $4,000. As a partial offset, BOLI investment income increased by
$1,000.

         Non-Interest Expense. Non-interest expense decreased $90,000, or 6.8%,
to $1.2 million for the quarter ended June 30, 2007. The net decrease of $90,000
to non-interest expense is primarily attributable to decreases to salaries and
employee benefits, director's compensation and equipment which, however, were
partially offset by increases in net occupancy expense of premises, professional
fees and other expenses. Director's compensation decreased by $83,000 to $57,000
for the three months ended June 30, 2007, from $140,000 for the three months
ended June 30, 2006. The decrease is primarily attributed to the one-time
expense accrual during the three months ended June 30, 2006 for the accelerated
vesting of benefits due to the death of a Flatbush Federal Bancorp director
during the same quarter in 2006. Salaries and employee benefits decreased
$55,000 to $651,000 for the three months ended June 30, 2007, from $706,000 for
the three months ended June 30, 2006, primarily due to the reduction in employee
pension expense as a result of an amendment, effective May 1, 2007, to the
Flatbush Federal Savings and Loan Defined Benefit Pension Plan. Professional
fees increased $37,000 to $78,000 for the three months ended June 30, 2007 from
$41,000 for the three months ended June 30, 2006, primarily due to the
additional legal services required for the amended pension plan, as well as
other normal banking operations, and additional accounting fees for the
compliance with SOX 404.

         Income Tax Expense. The provision for income taxes decreased $7,000, to
$1,000 for the quarter ended June 30, 2007 from $8,000 for the same quarter in
2006.

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

         General. Net income increased by $346,000, to $385,000 for the six
months ended June 30, 2007 from $39,000 for the same period in 2006. The
increase in net income for the six months ended June 30, 2007 was primarily due
to increases of $365,000 in interest income, $478,000 in non-interest income,
and decreases of $85,000 in income taxes, and $46,000 in provision for loan
losses. These, however, were partially offset by increases of $320,000 in
interest expense on deposits, $261,000 in interest expense on borrowings from
FHLB, and $47,000 in non-interest expense.

         Interest Income. Interest income increased $365,000, or 8.7%, to $4.6
million for the six months ended June 30, 2007 from $4.2 million for the six
months ended June 30, 2006. The increase in interest income can be attributed to
a higher average yield on a higher interest earning asset base. For the six
months ended June 30, 2007 the average balance of $144.7 million in
interest-earning assets earned an average yield of 6.33% compared to an average
yield of 6.08% on an average balance of $138.5 million for the six months ended
June 30, 2006.

         Interest income on loans increased $367,000, or 11.6%, to $3.5 million
for the six months ended June 30, 2007 from $3.2 million for the same quarter in
2006. The average balance of loans increased $6.4 million to $105.3 million for
the six months ended June 30, 2007 from $98.9 million for the six months ended
June 30, 2006. The average yield on loans increased by 31 basis points to 6.70%
for the six months ended June 30, 2007 from 6.39% for the six months ended June
30, 2006.

         Interest income on mortgage-backed securities decreased $35,000, or
4.6%, to $722,000 for the six months ended June 30, 2007 from $757,000 for the
six months ended June 30, 2006. The average balance of mortgage-backed
securities decreased $1.1 million to $26.7 million for the six months ended June
30, 2007 from $27.8 million for the six months ended June 30, 2006. The average
yield decreased by four basis points to 5.40% for the six months ended June 30,
2007 from 5.44% for the same period in 2006.

         Interest income on investment securities increased $20,000, or 9.3%, to
$236,000 for the six months ended June 30, 2007 from $216,000 for the six months
ended June 30, 2006. The average yield on investment securities increased 45
basis points to 5.50% for the six months ended

                                       11
<page>

June 30, 2007 from 5.05% for the six months ended June 30, 2006. The average
balance of investment securities increased by $53,000 to $8.6 million for the
six months ended June 30, 2007 from $8.5 million at the six months ended June
30, 2006.

         Interest income on other interest-earning assets, primarily
interest-earning deposits and federal funds sold, increased $12,000, or 15.0%,
to $92,000 for the six months ended June 30, 2007 from $80,000 for the six
months ended June 30, 2006. The average balance of other interest earning assets
increased $742,000 to $4.0 million for the six months ended June 30, 2007 from
$3.3 million for the six months ended June 30, 2006. As a partial offset, the
average yield on other interest earning assets decreased by 30 basis points to
4.58% for the six months ended June 30, 2007 from 4.88% for the six months ended
June 30, 2006.

         Interest Expense. Total interest expense, comprised of interest expense
on deposits and interest expense on FHLB advances, increased $580,000, or 35.8%,
to $2.2 million for the six months ended June 30, 2007 from $1.6 million for the
six months ended June 30, 2006. The average cost of interest-bearing liabilities
increased by 75 basis points to 3.31% for the six months ended June 30, 2007
from 2.56% for the six months ended June 30, 2006. The average balance of
interest-bearing liabilities increased $6.2 million to $132.7 million for the
six months ended June 30, 2007 from $126.5 million for the six months ended June
30, 2006.

         Interest expense on deposits increased $320,000, or 28.9%, to $1.4
million for the six months ended June 30, 2007 from $1.1 million for the six
months ended June 30, 2006. The average cost of interest-bearing deposits
increased by 67 basis points to 2.79% for the six months ended June 30, 2007
from 2.12% for the six months ended June 30, 2006, reflecting the upward trend
of interest rates on deposits. However, the average balance of interest-bearing
deposits decreased $2.2 million to $102.4 million for the six months ended June
30, 2007 from $104.6 million for the six months ended June 30, 2006.

         Interest expense on FHLB advances increased $261,000, or 51.1%, to
$772,000 for the six months ended June 30, 2007, from $511,000 for the six
months ended June 30, 2006. The average balance of FHLB advances increased $8.4
million to $30.3 million for the six months ended June 30, 2007, from $21.9
million for the six months ended June 30, 2006. The average cost of FHLB
advances increased by 43 basis points to 5.10% for the six months ended June 30,
2007, from 4.67% for the six months ended June 30, 2006.

         Net Interest Income. Net interest income decreased $215,000, or 8.3%,
to $2.4 million for the six months ended June 30, 2007 from $2.6 million for the
same quarter in 2006. The interest rate spread was 3.02% for the six months
ended June 30, 2007 compared to 3.52% for the six months ended June 30, 2006, a
decrease of 50 basis points. Interest margin for the six months ended June 30,
2007 was 3.29% compared to 3.75% for the six months ended June 30, 2006, a
decrease of 46 basis points. The decrease in interest rate spread and interest
margin can be attributed to the higher cost of interest-bearing liabilities.

         Provision for Loan Losses. The Company establishes provisions for loan
losses, which are charged to operations, at a level necessary to absorb known
and inherent losses that are both probable and reasonably estimable at the date
of the financial statements. In evaluating the level of the allowance for loan
losses, management considers historical loss experience, the types of loans and
the amount of loans in the loan portfolio, adverse situations that may affect
the borrower's ability to repay, the estimated value of any underlying
collateral, and prevailing economic conditions. This evaluation is inherently
subjective as it requires estimates that are susceptible to significant revision
as more information becomes available or as future events change. Based on the
evaluation of these factors, a provision of $2,000 was recorded for the six
months ended June 30, 2007. For the six months ended June 30, 2006, a provision
of $48,000 was recorded. The provision for loan losses was established to
address probable and estimable losses in the one to four residential and Visa
credit card loan portfolio as well as inherent losses that are probable and
estimable in the larger loan portfolio. The level of the allowance at June 30,
2007 is based on estimates, and the ultimate losses may vary from the estimates.

         Non-Interest Income. Non-interest income increased $478,000, to
$648,000 for the six months ended June 30, 2007 from $170,000 for the six months
ended June 30, 2006. This was primarily attributable to the proceeds of $500,000
from a life insurance policy the Association owned on the life of former
Flatbush Federal Bancorp Inc. CEO and President, Anthony J. Monteverdi who
passed away during the six month period. As a partial offset, income from fees
and service charges decreased by $23,000.

                                       12
<page>

         Non-Interest Expense. Non-interest expense increased $47,000, or 1.8%,
to $2.7 million for the six months ended June 30, 2007 from $2.6 million for the
six months ended June 30, 2006. The net increase of $47,000 to non-interest
expense is primarily attributable to increases to director's compensation,
professional fees, and other expenses which, however, were partially offset by
decreases in salaries and employee benefits, net occupancy expense of premises,
equipment, and other insurance premiums. Director's compensation increased by
$179,000 to $384,000 for the six months ended June 30, 2007, from $205,000 for
the six months ended June 30, 2006. The increase includes a one time accrual of
$221,000 for the accelerated vesting of stock options and restricted stock due
to the death of Mr. Monteverdi during the six months ended June 30, 2007, as
well as a one time accrual of $35,000 for the accelerated vesting of stock
options and restricted stock due to the retirement of director John F.
Antoniello. The six month period ending June 30, 2006 included a one-time
expense accrual for the accelerated vesting of benefits due to the death of a
Flatbush Federal Bancorp Inc. director during the same period. Salaries and
employee benefits decreased $144,000, to $1.3 million for the six months ended
June 30, 2007 from $1.5 million for the six months ended June 30, 2006. The
decrease primarily is due to the reduction of employee pension expense as a
result of an amendment, effective May 1, 2007, to the Flatbush Federal Savings
and Loan Defined Benefit Pension Plan, and to the reduction of senior level
personnel. Professional fees increased $32,000 to $120,000 for the six months
ended June 30, 2007 from $88,000 for the six months ended June 30, 2006,
primarily due to the additional legal services required for the amended pension
plan, as well as other normal banking operations, and additional accounting fees
for the compliance with SOX 404.

         Income Tax Expense. The provision for income taxes decreased $85,000,
to a $53,000 tax benefit for the six months ended June 30, 2007 from $32,000 tax
expense for the same period in 2006. The income tax benefit is primarily based
on the lower level of income before taxes, excluding the $500,000 non-taxable
life insurance proceeds, for the six months ended June 30, 2007 compared to the
six months ended June 30, 2006.

Liquidity and Capital Resources

         The Association is required to maintain levels of liquid assets under
the Office of Thrift Supervision (the "OTS") regulations sufficient to ensure
the Association's safe and sound operation. The Association's liquidity averaged
5.93% during the month of June 2007. The Association adjusts its liquidity
levels in order to meet funding needs for deposit outflows, payment of real
estate taxes from escrow accounts on mortgage loans, repayment of borrowings,
when applicable, and loan funding commitments. The Association also adjusts its
liquidity level as appropriate to meet its asset/liability objectives.

         The Association's primary sources of funds are deposits, borrowings,
amortization and prepayments of loans and mortgage-backed securities, maturities
of investment securities and funds provided from operations. While scheduled
loan and mortgage-backed securities amortization and maturing investment
securities are a relatively predictable source of funds, deposit flows and loan
and mortgage-backed securities prepayments are greatly influenced by market
interest rates, economic conditions and competition.

         The Association's liquidity, represented by cash and cash equivalents,
is a product of its operating, investing and financing activities.

         The primary sources of investing activity are lending and the purchase
of investment securities and mortgage-backed securities. Net loans totaled
$102.8 million and $106.2 million at June 30, 2007 and December 31, 2006,
respectively. Mortgage-backed and investment securities held to maturity totaled
$34.5 million and $33.7 million at June 30, 2007 and December 31, 2006,
respectively. In addition to funding new loans and mortgage-backed and
investment securities purchases through operating and financing activities, such
activities were funded by principal repayments on existing loans,
mortgage-backed securities, maturities of investment securities and advances
from FHLB.

         Liquidity management is both a daily and long-term function of business
management. Excess liquidity is generally invested in short-term investments,
such as federal funds and interest-bearing deposits. If the Association requires
funds beyond its ability to generate them internally, borrowing agreements exist
with the FHLB which provides an additional source of funds. At June 30, 2007,
the Company had $28.6 million in advances from the FHLB, and had an available
borrowing limit of $36.8 million. At December 31, 2006, advances from the FHLB
totaled $30.5 million.

                                       13
<page>

         The Association anticipates that it will have sufficient funds
available to meet its current loan commitments and obligations. At June 30,
2007, the Association had outstanding commitments to originate or purchase loans
of $7.1 million. Certificates of deposit scheduled to mature in one year or less
at June 30, 2007, totaled $54.0 million. Management believes that, based upon
its experience and the Association's deposit flow history, a significant portion
of such deposits will remain with the Association.

         Under OTS regulations, three separate measurements of capital adequacy
(the "Capital Rule") are required. The Capital Rule requires each savings
institution to maintain tangible capital equal to at least 1.5% and core capital
equal to 4.0% of its adjusted total assets. The Capital rule further requires
each savings institution to maintain total capital equal to at least 8.0% of its
risk-weighted assets.

         The following table sets forth the Association's capital position at
June 30, 2007, as compared to the minimum regulatory capital requirements:

<table>
<caption>
                                                                             Under Prompt
                                                   Minimal Capital        Corrective Actions
                                  Actual             Requirements             Provisions
                           --------------------------------------------------------------------------------
                              Amount    Ratio      Amount     Ratio       Amount        Ratio

                          <c>         <c>      <c>          <c>       <c>            <c>
                                                         (Dollars in Thousands)
Total Capital                $16,220     20.7%    $  6,263     8.0%      $  7,829       10.0%
(to risk-weighted assets)

Tier 1 Capital                16,033     20.5%          --      --          4,698        6.0%
(to risk-weighted assets)

Core (Tier 1) Capital         16,117     10.5%       6,123     4.0%         7,653        5.0%
(to adjusted total assets)

Tangible Capital              16,117     10.5%       2,296     1.5%            --         --
(to adjusted total assets)

</table>

Management of Interest Rate Risk

         The ability to maximize net interest income largely depends upon
maintaining a positive interest rate spread during periods of fluctuating market
interest rates. Interest rate sensitivity is a measure of the difference between
amounts of interest-earning assets and interest-bearing liabilities which either
reprice or mature within a given period of time. The difference, or the interest
rate repricing "gap", provides an indication of the extent to which an
institution's interest rate spread will be affected by changes in interest
rates. A gap is considered positive when the amount of interest-rate sensitive
assets exceeds the amount of interest-rate sensitive liabilities, and is
considered negative when the amount of interest-rate sensitive liabilities
exceeds the amount of interest-rate sensitive assets. Generally, during a period
of rising interest rates, a negative gap within shorter maturities would
adversely affect net interest income, while a positive gap within shorter
maturities would result in an increase in net interest income, and during a
period of falling interest rates, a negative gap within shorter maturities would
result in an increase in net interest income while a positive gap within shorter
maturities would result in a decrease in net interest income.

         The Association's current investment strategy is to maintain an overall
securities portfolio that provides a source of liquidity and that contributes to
the Association's overall profitability and asset mix within given quality and
maturity considerations.

                                       14
<page>

Net Portfolio Value

         The Association's interest rate sensitivity is monitored by management
through the use of the OTS model which estimates the change in the Association's
net portfolio value ("NPV") over a range of interest rate scenarios. NPV is the
present value of expected cash flows from assets, liabilities, and off-balance
sheet contracts. The NPV ratio, under any interest rate scenario, is defined as
the NPV in that scenario divided by the market value of assets in the same
scenario. The OTS produces its analysis based upon data submitted on the
Association's quarterly Thrift Financial Reports. The following table sets forth
the Association's NPV as of March 31, 2007, the most recent date the
Association's NPV was calculated by the OTS.

<table>
<caption>
                                                                        Net Portfolio Value as a
                                                                        Percentage of Present Value of
                       Net Portfolio Value                              Assets
Change in              ------------------------------------------       -------------------------------
Interest Rates         Estimated       Amount of       Percent of                       Change in Basis
(basis points)         NPV             Change          Change           NPV Ratio       Points
--------------         ----------      -----------     ----------       --------        --------------

                      <c>                <c>           <c>             <c>                <c>
                       (Dollars in Thousands)

+300                   $ 10,491         $   (9,791)       (48%)           7.03%             -547
+200                     13,904             (6,378)       (31%)           9.05%             -345
+100                     17,267             (3,016)       (15%)          10.92%             -158
   0                     20,282                 --          --           12.50%               --
-100                     22,163              1,880          9%           13.40%             + 90
-200                     22,636              2,354         12%           13.55%             +105

</table>

         Certain shortcomings are inherent in the methodology used in the above
interest rate risk measurement. Modeling changes in net portfolio value require
making certain assumptions that may or may not reflect the manner in which
actual yields and costs respond to changes in market interest rates. In this
regard, the net portfolio value table presented assumes that the composition of
interest-sensitive assets and liabilities existing at the beginning of a period
remains constant over the period being measured, and assumes that a particular
change in interest rates is reflected uniformly across the yield curve
regardless of the duration or repricing of specific assets and liabilities.
Accordingly, although the net portfolio value table provides an indication of
the Association's interest rate risk exposure at a particular point in time,
such measurements are not intended to and do not provide a precise forecast of
the effect of changes in market interest rates on its net interest income and
will differ from actual results.

Amendment to Defined Benefit Employee Pension Plan

         Effective May 1, 2007, the Flatbush Federal Savings and Loan
Association Pension Plan was amended as follows:

         Benefit Formula: A Participant's Accrued Benefit upon normal retirement
will be an amount equal to the greater of (1) or (2) as follows:

         (1)      2% of the Participant's Average Compensation, at April 30,
                  2007, multiplied by his or her Years of Benefit Service, at
                  April 30, 2007, to a maximum of 25 years.

         (2)      40% of the Participant's Average Compensation, multiplied by a
                  fraction, not to exceed one, the numerator of which is the
                  Participant's total Years of Benefit Service as of the date of
                  determination, and the denominator of which is the greater of:
                  (i) 25 years or (ii) the Participant's Years of Benefit
                  Service he or she would have completed if he or she continued
                  his or her employment to Normal Retirement Date.

          This amendment to the Flatbush Federal Savings and Loan Association
Pension Plan replaces the benefit formula in effect prior to May 1, 2007 which
provided participants with a retirement benefit equal to 2.00% of average
compensation multiplied by the number of credited years of service (not to
exceed 50% of such compensation).

           Also effective May 1, 2007, Flatbush Federal Savings & Loan
Association commenced a 401(k) Plan which provides employer matching
contributions of 50% of the first 6% of employee deferrals, up to a maximum of
3% of compensation, on a payroll basis. The employer may also provide an annual
discretionary matching contribution at any time, subject to Board approval.

                                       15
<page>

ITEM 3

                FLATBUSH FEDERAL BANCORP, INC. AND SUBSIDIARIES
                             CONTROLS AND PROCEDURES
                             -----------------------

As of the end of the period covered by this report, based on an evaluation of
the Company's disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Securities and Exchange Act of 1934), each of the Chief
Executive Officer and the Chief Financial Officer of the Company has concluded
that the Company's disclosure controls and procedures are effective to ensure
that information required to be disclosed by the Company in its Exchange Act
reports is recorded, processed, summarized and reported within the applicable
time periods specified by the SEC's rules and forms.

There were no significant changes in the Company's internal controls or in any
other factors which could significantly affect those controls subsequent to the
date of the most recent evaluation of the June 30, 2007 internal controls by the
Company, including any corrective actions with regard to any significant
deficiencies or material weaknesses.


                                       16
<page>

                 FLATBUSH FEDERAL BANCORP, INC. AND SUBSIDIARIES

                           PART II - OTHER INFORMATION


ITEM 1.  Legal Proceedings
         -----------------

         The Company is not involved in any pending legal proceedings other than
         routine legal proceedings occurring in the ordinary course of business,
         which involve amounts in the aggregate believed by management to be
         immaterial to the financial condition of the Company and the
         Association.

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

         On June 30, 2005, the Board of Directors approved a stock repurchase
         program and authorized the repurchase of up to 50,000 shares of the
         Company's outstanding shares of common stock. Stock repurchases will be
         made from time to time and may be effected through open market
         purchases, block trades and in privately negotiated transactions.
         Repurchased stock will be held as treasury stock and will be available
         for general corporate purposes. As of June 30, 2007, 42,560 shares have
         been repurchased with repurchases in the second quarter described in
         the following table:

<table>
<caption>
--------------------------------------------------------------------------------------------------------
                                   Company Purchases of Common Stock
--------------------------------------------------------------------------------------------------------
                                                                    Total number of       Maximum
                                                                         shares         number (or
                                                                      purchased as      approximate
                                                                        part of      dollar value) of
                                                                        publicly      shares that may
                                      Total number                     announced     yet be purchased
                                       of shares     Average price      plans or    under the plans or
                Period                 purchased    paid per share      programs         programs
--------------------------------------------------------------------------------------------------------

                                    <c>               <c>              <c>               <c>
April 1, 2007 through April 30,            -              -                -              12,750
2007
--------------------------------------------------------------------------------------------------------
May 1, 2007 through May 31,              4,310          $7.07            41,560            8,440
2007
--------------------------------------------------------------------------------------------------------
June 1, 2007 through June                1,000          $7.59            42,560            7,440
30, 2007
--------------------------------------------------------------------------------------------------------
</table>

ITEM 3.  Defaults Upon Senior Securities
         -------------------------------

         Not applicable.

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

         At the Company's Annual Meeting held on April 26, 2007, stockholders
         considered and voted on the following:

         1. The election of directors:     FOR        %      WITHHOLD       %
                                           ---        -      --------       -
             Patricia A. McKinley(3)    2,461,807    98.2    46,176        1.8
             Charles J. Vorbach  (3)    2,462,666    98.2    45,317        1.8
             Stan I. Cohen       (2)    2,464,888    98.3    43,095        1.7

         2.  The ratification of the appointment of Beard Miller Company LLP as
             independent auditors of the Company for the year ending December
             31, 2007.

                FOR          %       AGAINST        %        ABSTAIN        %
                ---          -       -------        -        -------        -

             2,489,499     99.3       14,065       0.6        4,419        0.2

                                       17
<page>

ITEM 5.  Other Information
         -----------------
          None

                                       18
<page>

ITEM 6.  Exhibits
         --------

         The following Exhibits are filed as part of this report.

                  11.0     Computation of earnings per share
                  31.1     Certification of Chief Executive Officer Pursuant to
                           Section 302 of the Sarbanes- Oxley Act of 2002 (filed
                           herewith).
                  31.2     Certification of Chief Financial Officer Pursuant to
                           Section 302 of the Sarbanes- Oxley Act of 2002 (filed
                           herewith).
                  32.1     Certification of Chief Executive Officer and Chief
                           Financial Officer Pursuant to 18 U.S.C. Section 1350,
                           as Adopted Pursuant to Section 906 of the
                           Sarbanes-Oxley Act of 2002 (filed herewith).


                                       19
<page>

                                   SIGNATURES
                                   ----------

Pursuant to the requirements 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.



                                      FLATBUSH FEDERAL BANCORP, INC.


Date:    August 14, 2007              By:  /s/ Jesus R. Adia
      ---------------------                ---------------------------------
                                           Jesus R. Adia
                                           President and
                                           Chief Executive Officer



Date:    August 14, 2007              By:  /s/ John S. Lotardo
      ---------------------                ---------------------------------
                                           John S. Lotardo
                                           Executive Vice President and Chief
                                           Financial Officer



                                       20