Flatbush Federal Bancorp, Inc. Reports 2004 Third Quarter Operating
Results BROOKLYN, N.Y., Nov. 9 /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 $110,000
or $0.05 per share for the quarter ended September 30, 2004 as
compared to $13,000 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 September 30, 2003 were not
reported. The Company's assets as of September 30, 2004 were $135.8
million compared to $142.9 million at December 31, 2003, a decrease
of $7.1 million or 5%. Cash and cash equivalents decreased $20.7
million or 70.6% at September 30, 2004 from $29.3 million at
December 31, 2003. As a partial offset, mortgage-backed securities
increased $11.9 million or 215.8% to $17.4 million at September 30,
2004 from $5.5 million as of December 31, 2003. In addition, loans
receivable increased $3.1 million or 3.4% to $93.6 million at
September 30, 2004 from $90.6 million as of December 31, 2003. Net
decrease in assets was predominantly a result of a decrease in
total deposits. Total deposits decreased $7.7 million, or 6.1%, to
$118.3 million at September 30, 2004 from $126.0 million as of
December 31, 2003. Deposit outflow may be attributed to competitive
rates. Total stockholders' equity increased $216,000 to $15.8
million at September 30, 2004 from $15.6 million as of December 31,
2003. The increase reflects the addition of net income of $180,000,
the market appreciation of ESOP shares released of $10,000 and
amortization of $26,000 of unearned ESOP shares. INCOME INFORMATION
-- Three month periods ended September 30, 2004 and 2003 Net income
increased by $97,000, or 752.1%, to $110,000 for the quarter ended
September 30, 2004 from $13,000 for the same quarter in 2003. The
increase in earnings for the quarter was primarily due to an
increase of $199,000 in interest income, decreases of $82,000 in
interest expense and $7,000 in provision for loan losses, partially
offset by a decrease of $9,000 in non-interest income and increases
of $132,000 in non-interest expense and $50,000 in income taxes.
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 mortgage-backed securities and loans. The
average yield on interest earning assets increased 155 basis points
to 5.46% for the quarter ended September 30, 2004 from 3.91% for
the quarter ended September 30, 2003. The decrease in interest
expense was due to the lower average balance of interest-bearing
deposits for the quarter ended September 30, 2004. The average
balance of interest-bearing deposits decreased by $11.4 million to
$114.6 million for the quarter ended September 30, 2004 from $126.0
million for the same quarter in 2003. In addition, the average cost
of funds decreased 12 basis points to 1.57% for the quarter ended
September 30, 2004 from 1.69% for the quarter ended September 30,
2003. The average balance of deposits for the quarter ended
September 30, 2003 increased as a result of funds deposited for the
stock offering of October 17, 2003. The Association experienced
diminished activity in fee-generating transactions, resulting in a
decrease in non-interest income. Non-interest expense increased
$132,000 to $1.2 million for the quarter ended September 30, 2004
from $1.1 million for the same period in 2003. The increase in
non-interest expense included increases of $66,000 in salaries and
employee benefits, $5,000 in occupancy expense, $23,000 in
directors' compensation, $27,000 in legal fees, $6,000 in other
insurance premium and $49,000 in miscellaneous expenses, partially
offset by decreases of $38,000 in equipment expense, $4,000 in
advertising and $1,000 in federal insurance premium. INCOME
INFORMATION -- Nine-month periods ended September 30, 2004 and 2003
Net income increased by $141,000, or 365.7%, to $180,000 for nine
months ended September 30, 2004 from $39,000 for the same period in
2003. The increase was primarily due to an increase of $191,000 in
interest income, decreases of $389,000 in interest expense and
$8,000 in provision for loan losses, partially offset by a decrease
of $35,000 in non-interest income and increases of $327,000 in
non-interest expense and $85,000 in income taxes. The increase in
interest income was attributed to the shift in interest-earning
assets from short-term lower yielding investments to long-term
higher yielding mortgage-backed securities and loans. The average
yield on interest-earning assets increased 51 basis points to 5.14%
for nine months ended September 30, 2004 from 4.63% for nine months
ended September 30, 2003. The decrease in interest expense was due
to the lower average balance of interest-bearing deposits for nine
months ended September 30, 2004. The average balance of
interest-bearing deposits decreased by $8.4 million to $117.0 for
nine months ended September 30, 2004 from $125.5 million for nine
months ended September 30, 2003. In addition, the average cost of
funds decreased 30 basis points to 1.56% for nine months ended
September 30, 2004 from 1.86% for the same period in 2003. The
average balance of deposits for nine months ended September 30,
2003 increased as a result of funds deposited for the stock
offering of October 17, 2003. The Association experienced
diminished activity in fee-generating transactions, resulting in a
decrease in non-interest income. Non-interest expense increased by
$327,000 to $3.7 million for nine months ended September 30, 2004
from $3.4 million for nine months ended September 30, 2003. The
increase in non-interest expense included increases of $180,000 in
salary and employee benefits, $14,000 in occupancy expense, $16,000
in directors' compensation, $66,000 in legal fees, $2,000 in
federal insurance premium, $12,000 in other insurance premiums and
$108,000 in miscellaneous expenses. As a partial offset, the
Association experienced a net decrease of $71,000 attributed to
equipment expense. 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) SEPTEMBER 30 DECEMBER 31 2004 2003 ------------
----------- Total Assets $135,806 $142,937 Loans Receivable 93,677
90,571 Investment Securities 13,030 14,212 Mortgage-backed
Securities 17,436 5,521 Cash and Cash Equivalents 8,601 29,260
Deposits 118,273 126,032 Stockholders Equity 15,841 15,625 SELECTED
OPERATING DATA AT OR FOR THE THREE AT OR FOR THE NINE MONTHS ENDED
SEPTEMBER 30 MONTHS ENDED SEPTEMBER 30 (in thousands) 2004 2003
2004 2003 ---------- --------- --------- ---------- Total Interest
Income $1,810 $1,611 $5,193 $5,002 Total Interest Expense 450 532
1,366 1,754 Net Interest Income 1,360 1,079 3,827 3,248 Provision
for Loan Loss 0 7 0 8 Non-interest Income 65 74 193 228
Non-interest Expense 1,244 1,112 3,705 3,378 Income Taxes 71 21 135
51 Net Income $110 $13 $180 $39 PERFORMANCE RATIOS Return on
Average Assets 0.32% 0.03% 0.17% 0.03% Return on Average Equity
2.78% 0.61% 1.53% 0.61% Interest Rate Spread 3.89% 2.22% 3.59%
2.76% ASSET QUALITY RATIOS Allowance for Loan Losses to Total Loans
Receivable 0.19% 0.21% 0.19% 0.21% Non-performing Loans to Total
Assets 0.23% 0.02% 0.23% 0.02% CAPITAL RATIO Equity to Total Assets
10.92% 3.63% 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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