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 September 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 Identification No.)
incorporation or organization)

                 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 November 13, 2007 the Registrant had outstanding 2,748,397 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 September 30, 2007 and December 31, 2006 (Unaudited)     1

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

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

              Consolidated Statements of Cash Flows for the Nine months
              Ended September 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                                           17-18

      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>
                                                                      September 30,    December 31,
                                                                               2007            2006
                                                                      -----------------------------
<S>                                                                   <C>             <C>
ASSETS
------

Cash and amounts due from depository institutions                     $   1,741.831   $   2,399,344
Interest earning deposits in other banks                                    143,746       1,007,542
Federal Funds sold                                                        1,100,000         600,000
                                                                      ------------------------------
    Cash and cash equivalents                                             2,985,577       4,006,886

Investment securities held to maturity; fair value of
   $6,955,300 in 2007 and $6,859,114 in 2006                              6,990,857       6,989,873
Mortgage-backed securities held to maturity; fair value of
   $25,668,064  in 2007 and $26,361,595 in 2006                          26,152,465      26,726,910
Loans receivable, net of allowance for loan losses of $202,298
   in 2007 and $200,347 in 2006                                         104,324,900     106,229,513
Premises and equipment                                                    2,821,184       2,901,521
Federal Home Loan Bank of New York stock                                  1,553,500       1,599,100
Accrued interest receivable                                                 682,783         736,524
Bank owned life insurance                                                 3,867,590       3,778,193
Other assets                                                              1,518,818       1,413,853
                                                                      ------------------------------
    Total assets                                                      $ 150,897,674   $ 154,382,373
                                                                      ==============================

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities:
------------
Deposits:
  Non-interest bearing                                                $   3,868,028   $   4,415,706
  Interest bearing                                                       99,720,254     101,225,633
                                                                      ------------------------------
    Total Deposits                                                      103,588,282     105,641,339
Federal Home Loan Bank of New York advances                              29,154,499      30,486,579
Advance payments by borrowers for taxes and insurance                       565,211         348,083
Other liabilities                                                         1,791,942       2,860,195
                                                                      ------------------------------
    Total liabilities                                                   135,099,934     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) 2,748,397 shares; and (2006) 2,763,317 shares          27,998          27,998
Paid-in capital                                                          12,410,199      12,072,156
Retained earnings                                                         5,443,783       5,027,685
Unearned employees' stock ownership plan (ESOP) shares                     (557,324)       (583,479)
Treasury stock,  51,260 shares and 36,340 shares, respectively             (398,238)       (294,925)
Accumulated other comprehensive loss                                     (1,128,678)     (1,203,258)
                                                                      ------------------------------
    Total stockholders' equity                                           15,797,740      15,046,177
                                                                      ------------------------------

    Total liabilities and stockholders' equity                        $ 150,897,674   $ 154,382,373
                                                                      ==============================
</TABLE>

See notes to consolidated financial statements.

                                        1

<PAGE>

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

<TABLE>
<CAPTION>
                                                                        Three months Ended             Nine months Ended
                                                                           September 30,                 September 30,
                                                                    ----------------------------------------------------------
                                                                        2007           2006           2007            2006
                                                                    ----------------------------------------------------------
<S>                                                                 <C>            <C>            <C>             <C>
Interest Income
   Loans, including fees                                            $  1,724,854   $  1,732,122   $  5,253,255    $  4,892,736
   Mortgage-backed securities                                            376,234        415,207      1,097,976       1,172,155
   Investments                                                           120,922        105,694        357,193         321,245
   Other interest earning assets                                          29,728         23,505        122,311         103,984
                                                                    ----------------------------------------------------------
      Total interest income                                            2,251,738      2,276,528      6,830,735       6,490,120
                                                                    ----------------------------------------------------------

Interest Expense
   Deposits                                                              726,462        622,470      2,153,149       1,729,804
   Borrowings                                                            365,170        350,281      1,136,738         860,832
                                                                    ----------------------------------------------------------
      Total interest expense                                           1,091,632        972,751      3,289,887       2,590,636
                                                                    ----------------------------------------------------------

      Net Interest Income                                              1,160,106      1,303,777      3,540,848       3,899,484
Provision for loan losses                                                     45            595          2,101          48,544
                                                                    ----------------------------------------------------------
      Net interest income after provision for loan losses              1,160,061      1,303,182      3,538,747       3,850,940
                                                                    ----------------------------------------------------------

Non-interest income
   Fees and service charges                                               33,805         39,639        106,128         135,234
   BOLI income                                                            37,172         36,449        110,630         107,663
   Life insurance proceeds                                                    --             --        500,000              --
   Other                                                                   6,355            569          8,994           3,928
                                                                    ----------------------------------------------------------
      Total non-interest income                                           77,332         76,657        725,752         246,825
                                                                    ----------------------------------------------------------

Non-interest expenses
   Salaries and employee benefits                                        642,801        705,899      1,980,386       2,187,839
   Net occupancy expense of premises                                     131,857        114,949        384,768         386,194
   Equipment                                                             122,973        136,841        387,213         407,171
   Directors' compensation                                                42,920         89,319        426,840         293,932
   Professional fees                                                      88,424         37,923        208,266         126,066
   Other insurance premiums                                               37,004         42,232        113,986         123,982
   Other                                                                 124,705        104,184        384,288         353,917
                                                                    ----------------------------------------------------------
      Total non-interest expenses                                      1,190,684      1,231,347      3,885,747       3,879,101
                                                                    ----------------------------------------------------------

Income before income taxes                                                46,709        148,492        378,752         218,664
Income taxes (benefit)                                                    16,039         50,286        (37,346)         81,928
                                                                    ----------------------------------------------------------

Net income                                                          $     30,670   $     98,206   $    416,098    $    136,736
                                                                    ==========================================================

Net income per common share - Basic and diluted                     $       0.01   $       0.04   $       0.16    $       0.05
Weighted average number of shares outstanding - Basic and diluted      2,655,047      2,685,311      2,663,209       2,690,858
</TABLE>

See notes to consolidated financial statements.

                                        2

<PAGE>

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

<TABLE>
<CAPTION>
                                                   Three months ended September 30,   Nine months ended September 30,
                                                   ------------------------------------------------------------------
                                                          2007          2006                 2007          2006
                                                   ------------------------------------------------------------------
<S>                                                     <C>           <C>                 <C>           <C>
Net Income                                              $ 30,670      $ 98,206            $ 416,098     $ 136,736

Other comprehensive income, net of income taxes:
Benefit Plans, net of deferred taxes                      25,090            --               74,580            --
                                                   ------------------------------------------------------------------

Comprehensive income                                    $ 55,760      $ 98,206            $ 490,678     $ 136,736
                                                   ==================================================================
</TABLE>

See notes to consolidated financial statements.

                                        3

<PAGE>

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

<TABLE>
<CAPTION>
                                                                                     Nine months ended September 30,
                                                                                     -------------------------------
                                                                                         2007              2006
                                                                                     -------------------------------
<S>                                                                                  <C>               <C>
Cash flow from operating activities:

Net income                                                                           $    416,098      $    136,736
   Adjustments to reconcile net income to net cash used in operating activities:
      Depreciation and amortization of premises and equipment                             135,715           123,439
      Net amortization of premiums, discounts and deferred loan fees and costs            (40,894)         (123,553)
      Provision for loan losses                                                             2,101            48,544
      ESOP shares committed to be released                                                 27,657            31,435
      MRP amortization                                                                    165,727            75,642
      Stock option amortization                                                           170,814            64,732
      Decrease (increase) in accrued interest receivable                                   53,741           (35,757)
      Increase in cash surrender value of BOLI                                            (89,397)         (107,663)
      Increase in other assets                                                           (158,640)         (390,464)
      (Decrease) increase in other liabilities                                           (939,998)           74,227
                                                                                     -------------------------------
         Net cash used in operating activities                                           (257,076)         (102,682)
                                                                                     -------------------------------

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               3,250,983         4,498,666
      Purchases of mortgage-backed securities held to maturity                         (2,682,323)       (5,776,928)
      Purchases of loan participation interests                                        (2,578,133)       (7,739,835)
      Net change in loans receivable                                                    4,526,340        (1,812,181)
      Additions to premises and equipment                                                 (55,378)         (245,610)
      Redemption (purchase) of Federal Home Loan Bank of New York stock                    45,600          (524,000)
                                                                                     -------------------------------
         Net cash provided by (used in) investing activities                            2,507,089       (10,777,695)
                                                                                     -------------------------------

Cash flow from financing activities:
      Net (decrease) increase in deposits                                              (2,053,057)          268,017
      Advances from Federal Home Loan Bank of New York                                  5,800,000        49,200,000
      Repayment of advances from Federal Home Loan Bank of New York                    (7,132,080)      (37,833,737)
      Increase in advance payments by borrowers for taxes and insurance                   217,128           220,915
      Cash dividend paid to stockholders                                                       --            (3,004)
      Purchase of treasury stock                                                         (103,313)         (150,360)
                                                                                     -------------------------------
         Net cash (used in) provided by financing activities                           (3,271,322)       11,701,831
                                                                                     -------------------------------
Net (decrease) increase in cash and cash equivalents                                   (1,021,309)          821,454
Cash and cash equivalents - beginning                                                   4,006,886         4,911,223
                                                                                     -------------------------------

Cash and cash equivalents - ending                                                   $  2,985,577      $  5,732,677
                                                                                     ==============================
Supplemental disclosure of cash flow information
   Cash paid during the year for:
      Interest                                                                       $  3,295,442      $  2,544,413
                                                                                     -------------------------------
      Income taxes                                                                   $    205,229      $    134,131
                                                                                     -------------------------------
</TABLE>

See notes to consolidated financial statements.

                                        4

<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 nine months
ended  September 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 nine months ended September 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      Nine months Ended
                                                     ----------------------------------------------
                                                         September 30,           September 30,
                                                     ----------------------------------------------
                                                        2007        2006        2007        2006
                                                     ----------------------------------------------
<S>                                                  <C>         <C>         <C>         <C>
Service Cost                                         $  13,100   $  43,121   $  86,156   $ 129,363
Interest Cost                                           65,744      62,996     207,629     188,988
Expected return on assets                             (108,134)    (46,233)   (295,411)   (138,699)
Amortization of past service cost                      (15,642)     (2,750)    (26,489)     (8,250)
Amortization of unrecognized net loss                   31,521      15,551      93,446      46,653
                                                     ----------------------------------------------
   Net periodic benefit cost                         $ (13,411)  $  72,685   $  65,331   $ 218,055
                                                     ----------------------------------------------
</TABLE>

Periodic pension expense for other plans was as follows:

<TABLE>
<CAPTION>
                                                       Three months Ended      Nine months Ended
                                                     ----------------------------------------------
                                                         September 30,           September 30,
                                                     ----------------------------------------------
                                                        2007        2006        2007        2006
                                                     ----------------------------------------------
<S>                                                  <C>         <C>         <C>         <C>
Service Cost/Interest Cost                           $  26,432   $  47,685   $  75,124   $ 143,055
Amortization of unrecognized transition obligation       4,292       4,292      12,828      12,876
Amortization of past service cost                        5,278          --      15,834          --
Amortization of unrecognized net loss                    2,045       1,006       6,135       3,018
                                                     ----------------------------------------------
   Net periodic benefit cost                         $  38,047   $  52,983   $ 109,921   $ 158,949
                                                     ----------------------------------------------
</TABLE>

NOTE 6. 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).

                                        6

<PAGE>

      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.

NOTE 7.  RECENT ACCOUNTING PRONOUNCEMENTS
-----------------------------------------

EITF 06-11

In March 2007, the FASB ratified Emerging Issues Task Force No. 06-11, ("EITF
No. 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.

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 Bulletin 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

                                        7

<PAGE>

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 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 the adoption of FSP FAS 158-1 did 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 September 30, 2007 and December 31, 2006

      The Company's assets as of September 30, 2007 were $150.9 million compared
to $154.4  million at December 31, 2006,  a decrease of $3.5  million,  or 2.3%.
Loans receivable decreased $1.9 million, or 1.8%, to $104.3 million at September
30, 2007 from $106.2  million at December 31, 2006.  Mortgage-backed  securities
decreased  $575,000,  or 2.2%, to $26.2 million at September 30, 2007 from $26.7
million as of  December  31,  2006.  Cash and cash  equivalents  decreased  $1.0
million,  or 25.0%,  to $3.0 million at September  30, 2007 from $4.0 million at
December 31, 2006.

      Total  deposits  decreased  $2.0 million,  or 1.9%,  to $103.6  million at
September 30, 2007 from $105.6  million as of December 31, 2006. As of September
30, 2007,  borrowings  from the Federal Home Loan Bank of New York ("FHLB") were
$29.2  million  compared to $30.5 million as of December 31, 2006, a decrease of
$1.3 million, or 4.3%.

      Total  stockholders'   equity  increased  $752,000  to  $15.8  million  at
September 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. On August 30, 2007, the Company  approved a second 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.  During
the quarter ended  September 30, 2007, the Company  repurchased a total of 7,360
shares at weighted  average  price of $6.47.  As of September  30, 2007,  51,260
shares were acquired at a weighted average price of $7.77 per share.

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

      General. Net income decreased by $67,000, to $31,000 for the quarter ended
September  30, 2007 from $98,000 for the same  quarter in 2006.  The decrease in
net income for the quarter was  primarily  due to a decrease of $25,000 in total
interest income, and increases of $104,000 in interest expense on deposits,  and
$15,000 in  interest  expense on  borrowings  from FHLB.  These,  however,  were
partially offset by decreases of $40,000 in non-interest  expenses,  and $34,000
in income taxes.

      Interest  Income.  Interest income decreased  $25,000,  or 1.1%, to $2.252
million for the quarter  ended  September  30, 2007 from $2.277  million for the
quarter  ended  September  30,  2006.  The  decrease in  interest  income can be
attributed to a lower  interest  earning asset base.  For the three months ended
September  30, 2007 the average  balance of $141.0  million in  interest-earning
assets earned an average yield of 6.39% compared to an average yield of 6.35% on
an average  balance of $143.4  million for the three months ended  September 30,
2006.

                                        9

<PAGE>

      Interest income on loans decreased  $7,000, or 0.4%, to $1.725 million for
the quarter ended September 30, 2007 from $1.732 million for the same quarter in
2006. The average  balance of loans decreased $1.0 million to $103.9 million for
the quarter ended  September 30, 2007 from $104.9  million for the quarter ended
September 30, 2006.  The average yield on loans  increased by three basis points
to 6.64% for the  quarter  ended  September  30, 2007 from 6.61% for the quarter
ended September 30, 2006.

      Interest income on mortgage-backed  securities decreased $39,000, or 9.4%,
to $376,000  for the quarter  ended  September  30, 2007 from  $415,000  for the
quarter  ended  September  30,  2006.  The  average  balance of  mortgage-backed
securities  decreased  $711,000 to $26.6 million for the quarter ended September
30, 2007 from $27.3  million for the  quarter  ended  September  30,  2006.  The
average  yield  decreased  by 43 basis  points  to 5.65% for the  quarter  ended
September 30, 2007 from 6.08% for the same period in 2006.

      Interest income on investment  securities  increased $15,000, or 14.2%, to
$121,000 for the quarter ended  September 30, 2007 from $106,000 for the quarter
ended September 30, 2006. The average yield on investment  securities  increased
69 basis points to 5.68% for the quarter ended September 30, 2007 from 4.99% for
the  quarter  ended  September  30,  2006.  The  average  balance of  investment
securities  increased by $48,000 to $8.5 million for the quarter ended September
30, 2007 from $8.5 million for the quarter ended September 30, 2006.

      Interest   income   on   other    interest-earning    assets,    primarily
interest-earning deposits and federal funds sold, increased $6,000, or 25.0%, to
$30,000 for the quarter  ended  September  30, 2007 from $24,000 for the quarter
ended  September 30, 2006.  The average yield on other  interest  earning assets
increased by 239 basis points to 5.83% for the quarter ended  September 30, 2007
from 3.44% for the quarter ended  September 30, 2006. As a partial  offset,  the
average  balance of other  interest  earning assets  decreased  $697,000 to $2.0
million  for the quarter  ended  September  30,  2007 from $2.7  million for the
quarter ended September 30, 2006.

      Interest Expense. Total interest expense, comprised of interest expense on
deposits and interest expense on FHLB advances, increased $119,000, or 12.2%, to
$1.1  million for the quarter  ended  September  30, 2007 from  $973,000 for the
quarter  ended  September  30,  2006.  The  average  cost  of   interest-bearing
liabilities  increased  by 41  basis  points  to  3.38%  for the  quarter  ended
September  30, 2007 from 2.97% for the quarter  ended  September  30, 2006.  The
average balance of interest-bearing liabilities decreased $1.9 million to $129.1
million for the quarter  ended  September  30, 2007 from $131.0  million for the
quarter ended September 30, 2006.

      Interest expense on deposits increased $104,000, or 16.7%, to $726,000 for
the quarter  ended  September  30,  2007 from  $622,000  for the  quarter  ended
September 30, 2006. The average cost of  interest-bearing  deposits increased by
47 basis points to 2.89% for the quarter ended September 30, 2007 from 2.42% for
the quarter ended  September 30, 2006,  reflecting  the upward trend of interest
rates on deposits.  However,  the average balance of  interest-bearing  deposits
decreased  $2.5 million to $100.5  million for the quarter  ended  September 30,
2007 from $103.0 million for the quarter ended September 30, 2006.

      Interest expense on FHLB advances increased $15,000,  or 4.3%, to $365,000
for the quarter ended  September  30, 2007,  from $350,000 for the quarter ended
September 30, 2006. The average balance of FHLB advances  increased  $703,000 to
$28.6 million for the quarter ended  September 30, 2007,  from $27.9 million for
the  quarter  ended  September  30,  2006.  The  average  cost of FHLB  advances
increased by 8 basis points to 5.10% for the quarter  ended  September 30, 2007,
from 5.02% for the quarter ended September 30, 2006.

      Net Interest Income. Net interest income decreased $144,000,  or 11.0%, to
$1.2 million for the quarter ended  September 30, 2007 from $1.3 million for the
same quarter in 2006.  The interest  rate spread was 3.01% for the quarter ended
September 30, 2007 compared to 3.38% for the quarter ended September 30, 2006, a
decrease of 37 basis points. Interest margin for the quarter ended September 30,
2007 was 3.29%  compared to 3.64% for the quarter  ended  September  30, 2006, a
decrease of 35 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

                                       10

<PAGE>

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
$45 of was recorded for the three months ended September 30, 2007. For the three
months ended September 30, 2006, a provision of $595 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 September  30, 2007 is based on estimates,  and the ultimate
losses may vary from the estimates.  Non-performing loans increased to $316,000,
or 0.2% of total assets as of September 30, 2007, from $84,000 or 0.05% of total
assets as of September  30,  2006.  Total  non-performing  loans of $316,000 for
September  30, 2007  included  one  construction  loan in the amount of $245,000
which was subsequently paid in full on October 19, 2007.

      Non-Interest Income.  Non-interest income increased $1,000, to $77,000 for
the  quarter  ended  September  30,  2007 from  $76,000  for the  quarter  ended
September  30,  2006.  This  was  primarily  attributable  to  the  increase  of
miscellaneous  income of $6,000,  and  increases of BOLI income of $1,000.  As a
partial offset, income from fees and service charges decreased by $6,000.

      Non-Interest  Expenses.  Non-interest expenses decreased $40,000, or 3.2%,
to $1.2 million for the quarter ended  September  30, 2007.  The net decrease of
$40,000 to  non-interest  expense is  primarily  attributable  to  decreases  to
salaries and employee benefits,  director's  compensation,  equipment, and other
insurance premiums,  which,  however,  were partially offset by increases in net
occupancy expense of premises,  professional fees and other expenses. Director's
compensation  decreased  by  $46,000  to  $43,000  for the  three  months  ended
September 30, 2007,  from $89,000 for the three months ended September 30, 2006.
The decrease is primarily  attributed to the  reduction of outside  directors to
five at  September  30, 2007 from seven at  September  30,  2006.  Salaries  and
employee  benefits  decreased  $63,000 to $643,000  for the three  months  ended
September 30, 2007, from $706,000 for the three months ended September 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 $50,000 to $88,000 for
the three months  ended  September  30, 2007,  from $38,000 for the three months
ended  September  30,  2006,  primarily  due to the  additional  legal  services
required for the voluntary  separation  program which was implemented during the
fourth  quarter of this year, as well as other normal  banking  operations,  and
additional  accounting  fees for the  compliance  with the  Sarbanes-Oxley  Act,
Section 404.

      Income Tax Expense.  The provision for income taxes decreased $34,000,  to
$16,000  for the quarter  ended  September  30,  2007 from  $50,000 for the same
quarter in 2006.

Comparison of Operating Results for the Nine Months Ended September 30, 2007 and
September 30, 2006

      General. Net income increased by $279,000, to $416,000 for the nine months
ended September 30, 2007 from $137,000 for the same period in 2006. The increase
was  primarily  due to  increases  of $341,000 in interest  income,  $479,000 in
non-interest  income,  and decreases of $119,000 in income taxes, and $47,000 in
provision for loan losses. These, however, were partially offset by increases of
$423,000  in interest  expense on  deposits,  $276,000  in  interest  expense on
borrowings from the FHLB, and $7,000 in non-interest expense.

      Interest  Income.  Interest income  increased  $341,000,  or 5.3%, to $6.8
million for the nine months ended  September  30, 2007 from $6.5 million for the
nine months ended  September  30, 2006.  The increase in interest  income can be
attributed to a higher  average yield on a higher  interest  earning asset base.
For the nine months  ended  September  30,  2007 the  average  balance of $143.4
million in interest-earning  assets earned an average yield of 6.35% compared to
an average yield of 6.17% on an average  balance of $140.2  million for the nine
months ended September 30, 2006.

      Interest income on loans increased $361,000,  or 7.4%, to $5.3 million for
the nine months ended  September 30, 2007 from $4.9 million for the same quarter
in 2006. The average  balance of loans  increased $3.9 million to $104.8 million
for the nine months ended  September  30, 2007 from $100.9  million for the nine
months ended  September  30, 2006.  The average  yield on loans  increased by 21
basis  points to 6.68% for the nine months ended  September  30, 2007 from 6.47%
for the nine months ended September 30, 2006.

                                       11

<PAGE>

      Interest income on mortgage-backed  securities decreased $74,000, or 6.3%,
to $1.1 million for the nine months ended  September  30, 2007 from $1.2 million
for  the  nine  months  ended   September  30,  2006.  The  average  balance  of
mortgage-backed  securities decreased $1.0 million to $26.7 million for the nine
months  ended  September  30, 2007 from $27.7  million for the nine months ended
September 30, 2006. The average yield  decreased by 17 basis points to 5.48% for
the nine months ended September 30, 2007 from 5.65% for the same period in 2006.

      Interest income on investment  securities  increased $36,000, or 11.2%, to
$357,000 for the nine months ended September 30, 2007 from $321,000 for the nine
months ended  September 30, 2006.  The average  yield on  investment  securities
increased 53 basis points to 5.56% for the nine months ended  September 30, 2007
from 5.03% for the nine months ended  September 30, 2006. The average balance of
investment  securities  increased by $51,000 to $8.6 million for the nine months
ended  September 30, 2007 from $8.5 million for the nine months ended  September
30, 2006.

      Interest   income   on   other    interest-earning    assets,    primarily
interest-earning  deposits and federal funds sold,  increased $18,000, or 17.3%,
to $122,000 for the nine months ended  September  30, 2007 from $104,000 for the
nine months ended  September  30, 2006.  The average  balance of other  interest
earning  assets  increased  $263,000 to $3.4  million for the nine months  ended
September  30, 2007 from $3.1  million for the nine months ended  September  30,
2006. The average yield on other interest  earning assets  increased by 38 basis
points to 4.84% for the nine months ended  September 30, 2007 from 4.46% for the
nine months ended September 30, 2006.

      Interest Expense. Total interest expense, comprised of interest expense on
deposits and interest expense on FHLB advances, increased $699,000, or 27.0%, to
$3.3 million for the nine months ended  September 30, 2007 from $2.6 million for
the nine months ended  September 30, 2006. The average cost of  interest-bearing
liabilities  increased  by 64 basis  points to 3.34% for the nine  months  ended
September 30, 2007 from 2.70% for the nine months ended  September 30, 2006. The
average balance of interest-bearing liabilities increased $3.5 million to $131.5
million for the nine months ended September 30, 2007 from $128.0 million for the
nine months ended September 30, 2006.

      Interest expense on deposits increased $424,000, or 24.5%, to $2.2 million
for the nine months  ended  September  30,  2007 from $1.7  million for the nine
months ended September 30, 2006. The average cost of  interest-bearing  deposits
increased by 60 basis points to 2.82% for the nine months  ended  September  30,
2007 from 2.22% for the nine months ended  September  30, 2006,  reflecting  the
upward trend of interest  rates on  deposits.  However,  the average  balance of
interest-bearing  deposits decreased $2.3 million to $101.8 million for the nine
months ended  September  30, 2007 from $104.1  million for the nine months ended
September 30, 2006.

      Interest expense on FHLB advances  increased  $276,000,  or 32.0%, to $1.1
million for the nine months ended September 30, 2007, from $861,000 for the nine
months ended September 30, 2006. The average balance of FHLB advances  increased
$5.8 million to $29.7 million for the nine months ended September 30, 2007, from
$23.9 million for the nine months ended  September 30, 2006. The average cost of
FHLB  advances  increased  by 30 basis points to 5.10% for the nine months ended
September 30, 2007, from 4.80% for the nine months ended September 30, 2006.

      Net Interest Income. Net interest income decreased  $358,000,  or 9.2%, to
$3.5 million for the nine months ended  September 30, 2007 from $3.9 million for
the same period in 2006.  The interest rate spread was 3.01% for the nine months
ended  September 30, 2007 compared to 3.47% for the nine months ended  September
30, 2006, a decrease of 46 basis points. Net interest margin for the nine months
ended  September 30, 2007 was 3.29%  compared to 3.71% for the nine months ended
September 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

                                       12

<PAGE>

these  factors,  a provision  of $2,000 was  recorded  for the nine months ended
September 30, 2007. For the nine months ended September 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 September 30, 2007
is based on  estimates,  and the  ultimate  losses may vary from the  estimates.
Non-performing  loans  increased  to  $316,000,  or 0.2% of total  assets  as of
September  30, 2007,  from $84,000 or 0.05% of total assets as of September  30,
2006. Total non-performing loans of $316,000 for September 30, 2007 included one
construction  loan in the amount of $245,000 which was subsequently paid in full
on October 19, 2007.

      Non-Interest Income.  Non-interest income increased $479,000,  to $726,000
for the nine months ended  September  30, 2007 from $247,000 for the nine months
ended  September 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 2007. As a partial  offset,  income from fees and service
charges decreased by $29,000.

      Non-Interest Expenses. Non-interest expenses increased $7,000, or 0.2%, to
$3.9 million for the nine months ended  September 30, 2007 from $3.9 million for
the  nine  months  ended   September  30,  2006.   This  increase  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 $133,000 to $427,000
for the nine months ended  September 30, 2007, from $294,000 for the nine months
ended  September 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,  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 nine month period ending September 30, 2006
included a one-time expense accrual for the accelerated  vesting of benefits due
to the death of a  director  of  Flatbush  Federal  Bancorp  Inc.  Salaries  and
employee benefits decreased $207,000,  to $2.0 million for the nine months ended
September  30, 2007 from $2.2  million for the nine months ended  September  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  $82,000 to $208,000 for the nine
months  ended  September  30,  2007,  from  $126,000  for the nine months  ended
September 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 compliance with the Sarbanes-Oxley  Act, Section
404.

      Effective  January 1, 2007,  the Federal  Deposit  Insurance  Corporation,
(FDIC),  created a new risk framework of four risk  categories  and  established
assessment  rates to  coincide  with each  category.  Assessment  rates for Risk
Category I institutions,  which includes the Association range from 5 to 7 basis
points.  The FDIC  also  approved  a  one-time  assessment  credit  for banks in
existence on December 31, 1996, that paid a deposit  insurance  assessment prior
to that date. Management believes that the one-time credit will more than offset
the new FDIC  assessment  cost for 2007. It anticipates  that the credit will be
depleted in the fourth quarter of 2008. Accordingly,  the Association will begin
to recognize the FDIC assessment cost at that time.

      Income Tax Expense. The provision for income taxes decreased $119,000,  to
a $37,000 tax benefit for the nine months ended  September 30, 2007 from $82,000
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 nine months ended  September 30,
2007 compared to the nine months ended September 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
4.14% during the month of September 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.

                                       13

<PAGE>

      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 $104.3
million  and  $106.2  million at  September  30,  2007 and  December  31,  2006,
respectively. Mortgage-backed and investment securities held to maturity totaled
$33.1  million and $33.7  million at  September  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 the 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 September 30,
2007,  the  Company  had $29.2  million in  advances  from the FHLB,  and had an
available  borrowing limit of $46.5 million. At December 31, 2006, advances from
the FHLB totaled $30.5 million.

      The Association  anticipates  that it will have sufficient funds available
to meet its current loan commitments and obligations. At September 30, 2007, the
Association had  outstanding  commitments to originate or purchase loans of $5.4
million.  Certificates  of  deposit  scheduled  to mature in one year or less at
September 30, 2007, totaled $48.7 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
September 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
                                --------    -----  --------   -----    ------     ------
                                                   (Dollars in Thousands)
<S>                             <C>         <C>    <C>        <C>     <C>         <C>
Total Capital                   $ 16,280    21.0%  $ >6,201    >8.0%  $ >7,751    >10.0%
(to risk-weighted assets)

Tier 1 Capital                    16,101    20.8%       > -     > -     >4,651     >6.0%
(to risk-weighted assets)

Core (Tier 1) Capital             16,185    10.8%   > 6,002    >4.0%    >7,502     >5.0%
(to adjusted total assets)

Tangible Capital                  16,185    10.8%   > 2,251    >1.5%    >-         >-
(to adjusted total assets)
</TABLE>

                                       14

<PAGE>

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.

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  June  30,  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
--------------   -----------   ---------   ----------   ----------   ------------------
                 (Dollars in Thousands)
<S>              <C>           <C>         <C>          <C>          <C>
+300             $  8,413      $ (10,318)     (55%)        5.84%       -609
+200               11,876         (6,855)     (37%)        8.01%       -393
+100               15,382         (3,349)     (18%)       10.08%       -186
+ 50               17,103         (1,628)      (9%)       11.05%        -89
   0               18,731             --       --         11.94%         --
- 50               20,209          1,478        8%        12.72%        +78
-100               21,442          2,711       14%        13.35%       +142
-200               22,866          4,135       22%        14.02%       +209
</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.

                                       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 September 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.  On August 30, 2007,  the
      Company  approved a second 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 September 30,
      2007,  49,920 shares have been  repurchased  with repurchases in the third
      quarter described in the following table:

<TABLE>
<CAPTION>
                                       Company Purchases of Common Stock
-----------------------------------------------------------------------------------------------------------------
                                                                                                   Maximum
                                                                            Total number of       number (or
                                                                                shares           approximate
                                                                             purchased as      dollar value) of
                                                                           part 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
-----------------------------------------------------------------------------------------------------------------
<S>                                        <C>            <C>              <C>                <C>
July 1, 2007 through July 31, 2007                 -               -                 -               7,440
-----------------------------------------------------------------------------------------------------------------
August 1, 2007 through August 31, 2007         1,360          $ 6.20            43,920              56,080
-----------------------------------------------------------------------------------------------------------------
September 1, 2007 through September 30,        6,000          $ 6.52            49,920              50,080
2007
-----------------------------------------------------------------------------------------------------------------
</TABLE>

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

        Not applicable.

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

        None

ITEM 5. Other Information
        -----------------

      Consistent  with its ongoing  efforts to manage  expenses  and  long-range
      staffing  needs,   Flatbush  Federal  Savings  &  Loan  Association,   the
      wholly-owned  subsidiary of Flatbush Federal Bancorp, Inc. (together,  the
      "Company")  implemented a voluntary  separation  program that completed on
      October 22, 2007.  Eight  employees,  or 19% of the Company's 42 full-time
      employees,  fit the criteria for eligibility and were offered the program.
      As  of  October  22,  2007,  all  eight  eligible   employees  elected  to
      participate in the program.

      The cost of the  voluntary  separation  program  resulted in the  one-time
      expense to the Company of approximately  $265,000 net of tax. After giving
      effect to the estimated cost to hire replacements for certain

                                       17

<PAGE>

      employees,  the  projected  annual  cost  savings,  net of  tax,  will  be
      approximately  $195,000.  The one-time  expense will be  recognized in the
      fourth quarter of 2007.

      In  addition  to  the  voluntary  separation  program,  the  Company  also
      implemented a  reduction-in-force  and elimination of part-time positions.
      Four out of six part-time  positions at the Company were  eliminated.  The
      one-time expense to the Company,  recognized in the third quarter of 2007,
      was  approximately  $9,000,  net of tax. The projected annual cost savings
      for the reduction-in-force, net of tax, would be $30,000.

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


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

                                     20