Flatbush Bancorp Inc. Reports Earnings for Quarter and Year Ended
December 31, 2003 BROOKLYN, N.Y., Feb. 27 /PRNewswire-FirstCall/ --
Flatbush Bancorp Inc., (BULLETIN BOARD: FLTB) , the holding company
of Flatbush Federal Savings & Loan Association("the
Association"), announced consolidated net income of $43,000 or
$0.02 per share, for the quarter ended December 31, 2003 as
compared to $31,000 for the same quarter in 2002. Net income for
the year ended December 31, 2003 was $81,000 compared to $330,000
for the year ended December 31, 2002. On October 20, 2003, the
Company issued 2,314,375 shares of common stock consisting of
1,226,619 shares to the Flatbush Federal MHC, 87,020 shares to the
Employee Stock Ownership Plan (ESOP) and 1,000,736 shares to
eligible depositors at $8.00 per share. The Company received net
proceeds of $7.1 million, exclusive of reorganization and offering
expenses of $900,000. Earnings per share is calculated beginning
with the date of the reorganization and offering, therefore, no
earnings per share is reported for prior periods. The Company's
assets as of December 31, 2003 were $142.7 million, an increase of
$1.2 million or 0.8% from $141.5 million at December 31, 2002. Net
loans receivable increased 0.30% to $90.6 million at December 31,
2003 from $90.3 million at December 31, 2002. Mortgage-backed
securities increased $3.5 million to $5.5 million at December 31,
2003 from $2 million in 2002. In 2003, the Association experienced
high volumes of prepayments from long-term investments and loans,
which resulted in cash and cash equivalents increasing by $17
million to $29.2 million at December 31, 2003, up from $12.2
million at December 31, 2002. Net proceeds of $7.1 million from the
reorganization and offering also contributed to the increase in
cash and cash equivalents. During the period of historically low
interest rates in 2003, management opted to maintain a high level
of its assets in liquid investments rather than in long-term
investments andloans. Total deposits decreased $5.3 million to
$126.0 at December 31, 2003 from $131.3 million as of December 31,
2002. $2.3 million of the decline were deposits that converted to
common stock. Other deposit outflows may be attributed to the
impactof the reorganization and offering. Total stockholders'
equity increased $7.2 million to $15.6 million at December 31, 2003
from $8.4 million at December 31, 2002. The increase primarily
reflects the impact of the reorganization and offering, receiptof
$7.8 million in net proceeds, a decrease in other comprehensive
loss by $145,000 and net income of $81,000, partially offset by
ESOP expense in the amount of $687,000. INCOME INFORMATION -
Three-month periods ended December 31, 2003 and 2002 Net income
increased by $12,000 to $43,000 for the quarter ended December 31,
2003 from $31,000 for the same quarter in 2002. The increase in
earnings for the quarter was primarily due to decreases of $183,000
in interest expense, $10,000 in non-interest expense, partially
offset by decreases of $96,000 in interest income and $36,000 in
non-interest income. For quarter ended December 31, 2003, the
Association had a lower average balance of interest-bearing
liabilities, reflecting withdrawals in connectionwith the
reorganization and offering. This resulted in lower interest
expense for the three months ended December 31, 2003. The decline
in non-interest income is partially attributed to a $20,000
decrease in the gain on sale of loans, and $16,000 decrease in
miscellaneous non-interest income. No sale of loans were made
during the quarter ended December 31, 2003. Non-interest expense
decreased $10,000 to $1.1 million for quarter ended December 31,
2003. Legal expenses for quarter ended December 31, 2003 were
$80,000 less than the same period in 2002. As an offset, salary and
benefits increased by $85,000 to $716,000 in 2003 from $631,000 in
2002, which includes a $14,000 ESOP expense for the fourth quarter
2003. Miscellaneous non-interest expense decreased by $5,000.
INCOME INFORMATION - Year ended December 31, 2003 and 2002 Net
income decreased by $249,000 to $81,000 for the year ended December
31, 3003 from $330,000 for the same period in 2002. Net interest
rate spread decreased by 76 basis points to 2.85% from 3.61% while
the net interest margin decreased 69 basis points to 3.10% from
3.79%. The decrease in net interest rate spread and net interest
margin reflects the downward repricing of interest-earning assets
in excess of the repricing cost of funds. The declining interest
rate environment significantly affected the Association's net
interest income as long-term, higher yielding investments repay and
reprice downward and loans originate or refinance at lower rates.
Non-interest income decreased by $26,000 to $284,000 in 2003 from
$310,000 in 2002. The decline was partially caused by the $12,000
decrease in gain on sale of loans. In 2003, the Association
experienced diminished activity in fee-generating transactions
resulting in a decrease of $14,000 in miscellaneous non-interest
income. Non-interest expense increased by $10,000 to $4.57 million
in 2003 from $4.56 million in 2002. Salary and benefits increased
by $110,000 to $2.73 million in 2003 from $2.63 million in 2002.
The increase includes a $14,000 ESOP expense for year ended 2003.
As an offset, legal expenses decreased by $120,000 in 2003.
Miscellaneous non-interest expenses increased by $20,000. The
provision for loan losses was $8,000 for the year ended 2003. The
allowance for loan losses totaled $180,000 at December 31, 2003 and
$174,000 at December 31, 2002. The provision reflected risks
associated with our SBA loans and credit card accounts. There were
no additional loan loss provisions warranted for the Association's
mortgage loan portfolio. Other 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 useof 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 condition, changes in
interest rates, deposit flows, demand for mortgage 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 DATA
(in thousands) At December 31 2003 2002 ----------------
------------------ Total Assets $142,719 $141,474 Loans Receivable
90,571 90,276 Investment Securities 14,212 33,855 Mortgage-backed
Securities 5,521 2,002 Cash and Cash Equivalents 29,260 12,230
Deposits 126,032 131,338 Stockholders Equity 15,626 8,371 SELECTED
OPERATING DATA At Or For The Years At Or For The Three Ended
December 31 Months Ended December 31 (in thousands) 2003 2002 2003
2002 --------------- ------- ------------ ----------- Total
Interest Income $6,723 $7,646 $1,720 $1,816 Total Interest Expense
2,271 2,804 517 700 Net Interest Income 4,452 4,842 1,203 1,116
Provision for Loan Loss (8) (3) 0 (1) Non-interest Income 284 310
57 93 Non-interest Expense 4,570 4,559 1,191 1,201 Income Taxes 77
260 26 (24) Net Income $81 $330 $43 $31 PERFORMANCE RATIOS Return
on Average Assets 0.05% 0.25% 0.12% 0.09% Return on Average Equity
0.78% 3.89% 1.10% 1.45% Interest Rate Spread 2.85% 3.61% 3.24%
3.20% ASSET QUALITY RATIOS Allowance for Loan Losses to Total Loans
Receivable 0.20% 0.19% 0.20% 0.19% Non-performing Loans to Total
Assets 0.03% 0.24% 0.03% 0.24% CAPITAL RATIO Equity toTotal Assets
10.95% 5.92% DATASOURCE: Flatbush Bancorp Inc. CONTACT: Anthony
Monteverdi, President and Chief Executive Officer of Flatbush
Bancorp Inc., +1-718-677-4414 Web site: http://www.flatbush.com/
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