FOR
IMMEDIATE RELEASE


October
31, 2008





Contact:
            Jesus
      R. Adia


President
      and Chief Executive Officer


(718)
      677-4414





Flatbush
Federal Bancorp, Inc. Reports 2008 Third Quarter Operating Results





Brooklyn,
NY – Flatbush Federal Bancorp, Inc. (the “Company”) (OTC Bulletin
Board:  FLTB), the holding company of Flatbush Federal Savings and
Loan Association (the “Association”), announced consolidated net income of
$78,000, or $0.03 per share for the quarter ended September 30, 2008 as compared
to net income of $31,000, or $0.01 per share for the same quarter in
2007.





The
Company’s assets decreased $5.9 million, or 4.0%, to $142.9 million at September
30, 2008 from $148.8 million at December 31, 2007.  Cash and cash
equivalents increased $1.3 million, or 26.0%, to $6.3 million at September 30,
2008 from $5.0 million at December 31, 2007.  Loans receivable
decreased $5.7 million, or 5.6%, to $95.8 million as of September 30, 2008 from
$101.5 million as of December 31, 2007.  Mortgage-backed securities
increased $3.3 million, or 13.0%, to $28.7 million as of September 30, 2008 from
$25.4 million as of December 31, 2007.  Investment securities
decreased $4.5 million, or 69.2%, to $2.0 million as of September 30, 2008 from
$6.5 million as of December 31, 2007.





Total
deposits decreased $5.2 million, or 5.1%, to $97.5 million at September 30, 2008
from $102.7 million at December 31, 2007. Borrowings from the Federal Home Loan
Bank of New York (“FHLB”) decreased $1.3 million, or 4.6%, to $27.0 million at
September 30, 2008 from $28.3 million at December 31, 2007.





Total
stockholders’ equity increased $110,000 to $15.7 million as of September 30,
2008 from $15.6 million as of December 31, 2007.





On August
30, 2007, 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 have been made from time to time and may be
effected through open market purchases, block trades and in privately negotiated
transactions.  Repurchased stock is held as treasury stock and will be
available for general corporate purposes.  During the quarter ended
September 30, 2008, the Company did not repurchase any shares. As of September
30, 2008, 5,060 shares have been repurchased as part of the Company’s current
repurchase program at a weighted average price of $5.67.








INCOME
INFORMATION – Three month periods ended September 30, 2008 and 2007





Net
income increased $47,000, to $78,000 for the quarter ended September 30, 2008
from $31,000 for the quarter ended September 30, 2007.  The increase
in net income for the quarter was primarily due to decreases of $150,000 in
interest expense on deposits, $100,000 in interest expense on borrowings from
the FHLB of New York, $90,000 in non-interest expense and an increase of $36,000
on non-interest income, which were partially offset by a decrease of $308,000 in
interest income and an increase of $21,000 in income taxes.





INCOME
INFORMATION – Nine month periods ended September 30, 2008 and 2007





Net
income decreased $327,000, to $89,000 for the nine months ended September 30,
2008 from $416,000 for the nine months ended September 30, 2007.  The
decrease in net income for the nine month period ended September 30, 2008 was
primarily due to decreases of $843,000 in interest income and $468,000 in
non-interest income and an increase of $78,000 in income taxes, which were
partially offset by decreases of $218,000 in interest expense on deposits,
$284,000 in interest expense on borrowings from the FHLB of New York, $558,000
in non-interest expense and $2,000 in provision for loan losses. For the nine
month period ended September 30, 2007, non-interest income included proceeds of
$500,000 from a life insurance





policy
the Association owned on the life of the Company’s former CEO and President,
Anthony J. Monteverdi. During the same period in 2007, non-interest expense
included the one time accrual of $221,000 for the accelerated vesting of stock
options and restricted stock following the death of Mr. Monteverdi.





Additional
financial information is included in the table that follows.  All
information is unaudited.





This
press release may contain certain “forward-looking statements” which may be
identified by the use of such words as “believe,” “expect,” “intend,”
“anticipate,” “should,” “planned,” “estimated,” and
“potential.”  Examples of forward-looking statements include, but are
not limited to, estimates with respect to our financial condition, results of
operations and business that are subject to various factors which could cause
actual results to differ materially from these estimates and most other
statements that are not historical in nature.  These factors include,
but are not limited to, general and local economic conditions, changes in
interest rates, deposit flows, demand for mortgages and other loans, real estate
values, and competition; changes in accounting principles, policies or
guidelines; changes in legislation or regulation; and other economic,
competitive, governmental, regulatory, and technological factors affecting our
operations, pricing, products and services.











SELECTED
      FINANCIAL CONDITION DATASeptember
      30,
            
            
            December
      31,2008
            
            
            2007(dollars
      in thousands)Total
      Assets
            
            $
            142,875
            
            
            $
            148,839Loans
      Receivable
            
            
            95,778
            
            
            
            101,483Investment
      Securities
            
            
            2,000
            
            
            
            6,492Mortgage-backed
      Securities
            
            
            28,720
            
            
            
            25,351Cash
      and Cash Equivalents
            
            
            6,252
            
            
            
            4,968Deposits
            
            
            97,536
            
            
            
            102,672Borrowings
            
            
            27,015
            
            
            
            28,252Stockholders’
      Equity
            
            
            15,672
            
            
            
            15,562CONDENSED
      OPERATING DATA




AT
      OR FOR THE THREE
            
            
            AT
      OR FOR THE NINEMONTHS
      ENDED SEPTEMBER 30,
            
            
            MONTHS
      ENDED SEPTEMBER 30,2008
            
            
            2007
            
            
            2008
            
            
            2007(dollars
      in thousands)
            
            
            (dollars
      in thousands)Total
      Interest Income
            
            $
            1,943
            
            
            $
            2,252
            
            
            $
            5,988
            
            
            $
            6,831Total
      Interest Expense on Deposits
            
            
            576
            
            
            
            726
            
            
            
            1,935
            
            
            
            2,153Total
      Interest Expense on Borrowings
            
            
            265
            
            
            
            365
            
            
            
            852
            
            
            
            1,137Net
      Interest Income
            
            
            1,102
            
            
            
            1,161
            
            
            
            3,200
            
            
            
            3,541Provision
      for Loan Losses
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            2Non-interest
      Income
            
            
            113
            
            
            
            77
            
            
            
            258
            
            
            
            726Non-interest
      Expense
            
            
            1,101
            
            
            
            1,191
            
            
            
            3,328
            
            
            
            3,886Income
      Taxes (Benefit)
            
            
            37
            
            
            
            16
            
            
            
            41
            
            
            
            (37
            )Net
      Income
            
            $
            78
            
            
            $
            31
            
            
            $
            89
            
            
            $
            416PERFORMANCE
      RATIOSReturn
      on Average Assets
            
            
            0.22
            %
            
            
            0.08
            %
            
            
            0.08
            %
            
            
            0.36
            %Return
      on Average Equity
            
            
            1.99
            %
            
            
            0.78
            %
            
            
            0.76
            %
            
            
            3.55
            %Interest
      Rate Spread
            
            
            3.10
            %
            
            
            3.01
            %
            
            
            2.93
            %
            
            
            3.01
            %ASSET
      QUALITY RATIOSAllowance
      for Loan Losses toTotal
      Loans Receivable
            
            
            0.20
            %
            
            
            0.19
            %
            
            
            0.20
            %
            
            
            0.19
            %Non-performing
      Loans to Total Assets
            
            
            0.52
            %
            
            
            0.20
            %
            
            
            0.52
            %
            
            
            0.20
            %CAPITAL
      RATIOAssociation’s
      Core Tier 1 Capital to Adjusted Total Assets
            
            
            11.25
            %
            
            
            10.79
            %
            
            
            11.25
            %
            
            
            10.79
            %