Flatbush Federal Bancorp, Inc. Reports 2004 Second Quarter
Operating Results BROOKLYN, N.Y., Aug. 11 /PRNewswire-FirstCall/ --
Flatbush Federal Bancorp, Inc., (OTC:FLTB) (BULLETIN BOARD: FLTB) ,
the holding company of Flatbush Federal Savings and Loan
Association ("the Association"), announced consolidated net income
of $36,000 or $0.02 per share for the quarter ended June 30, 2004
as compared to $8,000 for the same quarter in 2003. The Company
issued common stock on October 17, 2003, and therefore earnings per
share for the three months ended June 30, 2003 was not reported.
The Company's assets as of June 30, 2004 were $140.8 million
compared to $142.9 million at December 31, 2003, a decrease of $2.1
million or 1.46%. Cash and cash equivalents decreased $12.2 million
or 41.85% to $17.0 million at June 30, 2004 from $29.3 million at
December 31, 2003. As a partial offset, mortgage-backed securities
increased $11 million or 200.20% to $16.6 million at June 30, 2004
from $5.5 million as of December 31, 2003. Loans receivable had a
net increase of $336,000 or 0.37% to $90.9 million at June 30, 2004
from $90.6 million as of December 31, 2003. Consistent with its
strategy, management moved assets from liquid investments to
long-term investments and loans, as interest rates started to rise.
Net decrease in assets was predominantly a result of a decrease in
total deposits. Total deposits decreased $2.5 million or 2.01% to
$123.5 million at June 30, 2004 from $126.0 million as of December
31, 2003. Deposit outflow may be attributed to competitive rates.
Total stockholders' equity increased $95,000 to $15.7 million at
June 30, 2004 from $15.6 million as of December 31, 2003. The
increase reflects the addition of net income of $70,000, the market
appreciation of ESOP shares released of $8,000 and an amortization
of $17,000 in unearned ESOP shares. INCOME INFORMATION --
Three-month periods ended June 30, 2004 and 2003 Net income
increased by $28,000 to $36,000 for the quarter ended June 30, 2004
from $8,000 for the same quarter in 2003. The increase in earnings
for the quarter was primarily due to decreases of $124,000 in
interest expense and $1,000 in provision for loan losses, an
increase of $47,000 in interest income offset by a decrease of
$17,000 in non-interest income and increases of $104,000 in
non-interest expense and $23,000 in income taxes. The average
balance of interest-bearing deposits decreased by $7.6 million to
$117.3 million for the quarter ended June 30, 2004 from $124.9
million for the quarter ended June 30, 2003 resulting in lower
interest expense for the quarter. In addition, the average cost of
funds decreased by 30 basis points to 1.56% for quarter ended June
30, 2004 from 1.86% for the same quarter in 2003. The increase in
interest income was due to a shift in the interest earning assets
from short-term lower yielding investments to long-term higher
yielding loans and mortgage-backed securities, in line with the
operating strategy being followed. The Association experienced
diminished activity in fee-generating transactions resulting in a
decrease in non-interest income. Non-interest expense increased
$104,000 to $1.2 million for quarter ended June 30, 2004 from $1.1
million for the same period in 2003. Salaries and employee benefits
increased by $42,000 to $732,000 for quarter ended June 30, 2004
from $690,000 for quarter ended June 30, 2003. This amount included
$12,000 in ESOP expense. Miscellaneous expenses increased $45,000
to $148,000 for quarter ended June 30, 2004 from $103,000 for
quarter ended June 30, 2003. The increase was primarily from
expenses attributed to the preparations of the annual report and
the Shareholders' meeting. Legal expenses increased by $33,000
during the current quarter. As a partial offset, the Association
experienced a net decrease of $16,000 attributable to equipment
costs, directors' fees, federal insurance premium and other
insurance premiums. INCOME INFORMATION -- Six-month periods ended
June 30, 2004 and 2003 Net income increased by $44,000 to $70,000
for six months ended June 30, 2004 from $26,000 for the same period
in 2003. The increase was primarily due to decreases of $306,000 in
interest expense and $1,000 in provision for loan loss, offset by a
decrease of $8,000 in interest income, $25,000 in non- interest
income and increases of $195,000 in non-interest expense and
$35,000 in income taxes. The average balance of interest-bearing
deposits decreased by $6.9 million to $118.2 million for six months
ended June 30, 2004 from $125.1 million for six months ended June
30, 2003. The average cost of funds decreased by 40 basis points to
1.55% for quarter ended June 30, 2004 from 1.95% for the same
period in 2003. These factors resulted in lowering interest
expense. Interest income decreased by $8,000 for six months ended
June 30, 2004 from the same period in 2003. The average balance of
interest earning assets decreased by $1.5 million to $135.7 million
for six months ended June 30, 2004 from $137.2 million for six
months ended June 30, 2003. However, the average yield increased by
4 basis points to 4.98% at June 30, 2004 from 4.94% at June 30,
2003. Non-interest income decreased by $25,000 to $129,000 for six
months ended June 30, 2004 from $154,000 for six months ended June
30, 2003. The decline was partially caused by the $8,000 decrease
in gain on sale of loans. The Association experienced diminished
activity in fee-generating transactions during the first half of
2004 resulting in a decrease of $17,000 in miscellaneous
non-interest income. Non-interest expense increased by $195,000 to
$2.5 million for six months ended June 30, 2004 from $2.3 million
for six months ended June 30, 2003. Salaries and employee benefits
increased by $114,000, which included $25,000 in ESOP expense.
Miscellaneous expenses increased $59,000 to $286,000 from $227,000.
The increase was primarily from expenses attributed to the
preparations of the annual report and Shareholders' meeting. Other
increases totaling $62,000 were attributed to legal expenses,
occupancy costs, advertising, federal insurance premium and other
insurance premiums. As a partial offset, the Association
experienced a net decrease of $40,000, attributed to equipment
costs and directors' fees. 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 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 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) JUNE 30 DECEMBER 31 2004 2003 ---------- ----------
Total Assets $140,849 $142,937 Loans Receivable 90,907 90,571
Investment Securities 13,185 14,212 Mortgage-backed Securities
16,574 5,521 Cash and Cash Equivalents 17,015 29,260 Deposits
123,499 126,032 Stockholders Equity 15,720 15,625 SELECTED
OPERATING DATA AT OR FOR THE THREE AT OR FOR THE SIX MONTHS ENDED
JUNE 30 MONTHS ENDED JUNE 30 (in thousands) 2004 2003 2004 2003
---------- ---------- ---------- ---------- Total Interest Income
$1,712 $1,665 $3,383 $3,391 Total Interest Expense 456 580 916
1,222 Net Interest Income 1,256 1,085 2,467 2,169 Provision for
Loan Loss 0 (1) 0 (1) Non-interest Income 59 76 129 154
Non-interest Expense 1,245 1,141 2,462 2,267 Income Taxes 34 11 64
29 Net Income $36 $8 $70 $26 PERFORMANCE RATIOS Return on Average
Assets 0.10% 0.02% 0.10% 0.04% Return on Average Equity 0.92% 0.38%
0.89% 0.62% Interest Rate Spread 3.50% 2.95% 3.43% 2.99% ASSET
QUALITY RATIOS Allowance for Loan Losses to Total Loans Receivable
0.20% 0.21% 0.20% 0.21% Non-performing Loans to Total Assets 0.07%
0.01% 0.07% 0.01% CAPITAL RATIO Equity to Total Assets 11.16% 6.00%
DATASOURCE: Flatbush Federal Bancorp, Inc. CONTACT: Anthony J.
Monteverdi, President and Chief Executive Officer of Flatbush
Federal Bancorp, Inc., +1-718-677-4414 Web site:
http://www.flatbush.com/
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