UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2009

oTRANSITION REPORT PURSUANT TO 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 registrant as specified in its charter)
FEDERAL	11-3700733
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
2146 NOSTRAND AVENUE, BROOKLYN, NEW YORK  11210
(Address of principal executive offices)
(718) 859-6800
(Registrant’s telephone number)
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 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 ý  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).         Yes o  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer  o	Accelerated filer o
Non-accelerated filer (Do not check if a smaller reporting company) o	Smaller reporting company ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No ý

APPLICABLE ONLY TO CORPORATE ISSUERS

As of  May 14, 2009  the Registrant had outstanding 2,736,907 shares of common stock.

FLATBUSH FEDERAL BANCORP, INC. AND SUBSIDIARIES

INDEX

			Page
			Number
PART I – FINANCIAL INFORMATION
	Item 1:	Financial Statements
		Consolidated Statements of Financial Condition at March 31, 2009 and December 31, 2008 (Unaudited)	1
		Consolidated Statements of Income for the Three months ended March 31, 2009 and 2008 (Unaudited)	2
		Consolidated Statements of Comprehensive Income for the Three months ended March 31, 2009 and 2008 (Unaudited)	3
		Consolidated Statements of Cash Flows for the Three months ended March 31, 2009 and 2008 (Unaudited)	4
		Notes to Consolidated Financial Statements (Unaudited)	5 – 9
	Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operation	10 – 15
	Item 3:	Quantitative and Qualitative Disclosure About Market Risk	16
	Item 4T:	Controls and Procedures	16
PART II – OTHER INFORMATION
	Item 1:	Legal Proceedings	17
	Item 1A:	Risk Factors	17
	Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	17
	Item 3:	Defaults upon Senior Securities	17
	Item 4:	Submission of Matters to a Vote of Securities Holders	17
	Item 5:	Other Information	17
	Item 6:	Exhibits	18
SIGNATURES			19

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

FLATBUSH FEDERAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

	March 31,			December 31,
ASSETS	2009			2008
Cash and amounts due from depository institutions	$	2,126,213		$	2,611,611
Interest earning deposits in other banks		4,758,770			2,966,877
Federal Funds sold		2,150,000			2,100,000
Cash and cash equivalents		9,034,983			7,678,488
Mortgage-backed securities held to maturity; fair value of    $34,296,917  in (2009) and $33,975,054 in (2008)		32,939,771			32,926,053
Loans receivable, net of allowance for loan losses of $187,439    in (2009) and $190,630 in (2008)		98,540,041			98,240,898
Premises and equipment		2,572,259			2,,616,747
Federal Home Loan Bank of New York stock		1,367,400			1,521,600
Accrued interest receivable		606,739			617,235
Bank owned life insurance		4,099,970			4,060,415
Other assets		1,919,010			1,989,544
Total assets	$	151,080,173		$	149,650,980
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest bearing	$	4,442,314		$	3,868,320
Interest bearing		103,341,321			97,807,392
Total Deposits		107,783,635			101,675,712
Federal Home Loan Bank of New York advances		25,165,397			28,592,884
Advance payments by borrowers for taxes and insurance		612,577			764,797
Other liabilities		2,498,739			3,983,403
Total liabilities		136,060,348			135,016,796
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 (2009 and 2008) 2,799,657 shares;    outstanding (2009) 2,736,907 and (2008)  2,737,907 shares		27,998			27,998
Paid-in capital		12,531,325			12,514,942
Retained earnings		5,478,679			5,154,812
Unearned employees’ stock ownership plan (ESOP) shares		(505,013	)		(513,731	)
Treasury stock, 62,750, (2009) and 61,750, (2008) shares		(446,534	)		(442,984	)
Accumulated other comprehensive loss		(2,066,630	)		(2,106,853	)
Total stockholders’ equity		15,019,825			14,634,184
Total liabilities and stockholders’ equity	$	151,080,173		$	149,650,980

See notes to consolidated financial statements.

1

FLATBUSH FEDERAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three months ended
	March 31,
	2009		2008
Interest Income
Loans, including fees	$	1,546,198	$	1,572,501
Mortgage-backed securities		454,555		343,243
Investments		11,151		103,196
Other interest earning assets		1,919		44,791
Total interest income		2,013,823		2,063,731
Interest Expense
Deposits		599,251		714,231
Borrowings		259,135		309,519
Total interest expense		858,386		1,023,750
Net Interest Income		1,155,437		1,039,981
Provision for loan losses		-		-
Net interest income after provision for loan losses		1,155,437		1,039,981
Non-interest income
Fees and service charges		25,007		26,878
BOLI income		39,555		39,195
Other		740		465
Total non-interest income		65,302		66,538
Non-interest expenses
Salaries and employee benefits		130,493		570,109
Net occupancy expense of premises		115,558		126,537
Equipment		127,777		124,480
Directors’ compensation		43,454		42,572
Professional fees		90,200		82,441
Other insurance premiums		35,581		36,738
Other		138,913		119,047
Total non-interest expenses		681,976		1,101,924
Income before income taxes		538,763		4,595
Income taxes		214,896		2,466
Net income	$	323,867	$	2,129
Net income  per common share – Basic and diluted	$	0.12	$	0.001
Weighted average number of shares outstanding – Basic and diluted		2,660,218		2,643,551

See notes to consolidated financial statements.

2

FLATBUSH FEDERAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three months ended March 31,
	2009			2008
Net Income	$	323,867		$	2,129
Other comprehensive income,
net of income taxes:
Benefit Plans		69,170			28,460
Deferred income taxes		(28,947	)		(12,570	)
		40,223			15,890
Comprehensive income	$	364,090		$	18,019

See notes to consolidated financial statements.

3

FLATBUSH FEDERAL BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three months ended March 31,
	2009			2008
Cash flow from operating activities:
Net income	$	323,867		$	2,129
Adjustments to reconcile net income to net cash   (used in) provided by operating activities:
Depreciation and amortization of premises and equipment		46,024			45,525
Net (accretion) amortization of (discounts), premiums and         deferred loan fees and costs		(1,615	)		(44,064	)
ESOP shares committed to be released		4,539			6,804
MRP amortization		10,146			10,146
Stock option amortization		10,416			10,416
Decrease in accrued interest receivable		10,496			91,696
Increase in cash surrender value of BOLI		(39,555	)		(39,195	)
Decrease in other assets		41,587			33,431
Decrease in other liabilities		(1,415,494	)		(2,570	)
Net cash  (used in) provided by operating activities		(1,009,589	)		114,318
Cash flow from investing activities:
Proceeds from calls and maturities of investment securities held to maturity		-			2,500,000
Principal repayments on mortgage-backed securities held to maturity		903,692			1,234,668
Purchases of mortgage-backed securities held to maturity		(905,604	)		(493,108	)
Purchases of loan participation interests		(1,030,417	)		(407,093	)
Net change in loans receivable		721,083			3,948,533
Additions to premises and equipment		(1,536	)		(1,975	)
Redemption of Federal Home Loan Bank of New York stock		154,200			126,300
Net cash (used in) provided by investing activities		(158,582	)		6,907,325
Cash flow from financing activities:
Net increase (decrease)  in deposits		6,107,923			(93,802	)
Advances from Federal Home Loan Bank of New York		-			2,000,000
Repayment of advances from Federal Home Loan Bank of New York		(1,427,487	)		(2,807,309	)
Net change to short-term borrowings		(2,000,000	)		(2,000,000	)
(Decrease) increase  in advance payments by borrowers          for taxes and insurance		(152,220	)		250,100
Purchase of treasury stock		(3,550	)		-
Net cash provided by (used in) financing activities		2,524,666			(2,651,011	)
Net increase in cash and cash equivalents		1,356,495			4,370,632
Cash and cash equivalents – beginning		7,678,488			4,967,580
Cash and cash equivalents – ending	$	9,034,983		$	9,338,212
Supplemental disclosure of cash flow information
Cash paid during the year for:
Interest	$	862,918		$	1,030,365
Income taxes	$	173,050		$	400

See notes to consolidated financial statements.

4

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-Q and Regulation S-X 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 ended March 31, 2009, 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 the three months ended March 31, 2009 and 2008 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. At and for the three months ended March 31, 2009, there was no dilutive effect of stock options.

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 their judgments about information available to them at the time of their examinations.

5

NOTE 5.  RETIREMENT PLANS – COMPONENTS OF  NET PERIODIC PENSION COST

Periodic pension expense was as follows:

	Three months ended
	March 31,
	2009			2008
Service Cost	$	18,391		$	24,151
Interest Cost		77,553			82,145
Expected return on assets		(68,126	)		(104,895	)
Amortization of past service cost		(15,799	)		(15,799	)
Amortization of unrecognized net loss		79,019			36,497
Curtailment Credit		(507,058	)		-
Net periodic benefit (credit) cost	$	(416,020	)	$	22,099

Periodic pension expense for other plans was as follows:                                                                                                           

	Three months Ended
	March 31,
	2009		2008
Service Cost	$	4,344	$	4,191
Interest Cost		17,711		20,813
Amortization of unrecognized transition obligation		-		1,134
Amortization of past service cost		5,278		5,278
Amortization of unrecognized net loss		672		1,350
Net periodic benefit cost	$	28,005	$	32,766

NOTE 6. FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement No. 157, Fair Value Measurements (“SFAS”), which defines fair value, establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements.  SFAS 157 applies to other accounting pronouncements that require or permit fair value measurements.  The Association adopted SFAS 157 effective for its fiscal year beginning January 1, 2008.

In December 2007, the FASB issued FASB Staff Position 157-2, Effective Date of FASB Statement No. 157 (“FSP 157-2”).  FSP 157-2 delays the effective date of SFAS 157 for all non-financial assets and liabilities, except those that are recognized or disclosed at fair value on a recurring basis (at least annually) to fiscal years beginning after November 15, 2008 and interim periods within those fiscal years.  As such, the Corporation only partially adopted the provisions of SFAS 157, and began to account and report for non-financial assets and liabilities in 2009.  In October 2008, the FASB issued FASB Staff Position 157-3, Determining the Fair Value of a Financial Asset When the Market for that Asset is Not Active (“FSP 157-3”), to clarify the application of the provisions of SFAS 157 in an inactive market and how an entity would determine fair value in an inactive market.  FSP 157-3 is effective immediately and applies to the Company’s March 31, 2009 consolidated financial statements.  The adoption of SFAS 157 and FSP 157-3 had no impact on the amounts reported in the consolidated financial statements.

6

NOTE 6. FAIR VALUE MEASUREMENTS AND FAIR VALUES OF FINANCIAL INSTRUMENTS CONT’D

SFAS 157 established a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value hierarchy under SFAS 157 are as follows:

Level 1:  Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2:  Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.

Level 3:  Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The Company had no financial assets which are required to be measured on a recurring or non-recurring basis at March 31, 2009.

NOTE 7.  RECENT ACCOUNTING PRONOUNCEMENTS

FSP FAS 157-4

In April 2009, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) No. FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly(FSP FAS 157-4).  FASB Statement 157, Fair Value Measurements, defines fair value as the price that would be received to sell the asset or transfer the liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. FSP FAS 157-4 provides additional guidance on determining when the volume and level of activity for the asset or liability has significantly decreased. The FSP also includes guidance on identifying circumstances when a transaction may not be considered orderly.

FSP FAS 157-4 provides a list of factors that a reporting entity should evaluate to determine whether there has been a significant decrease in the volume and level of activity for the asset or liability in relation to normal market activity for the asset or liability. When the reporting entity concludes there has been a significant decrease in the volume and level of activity for the asset or liability, further analysis of the information from that market is needed and significant adjustments to the related prices may be necessary to estimate fair value in accordance with Statement 157.

This FSP clarifies that when there has been a significant decrease in the volume and level of activity for the asset or liability, some transactions may not be orderly. In those situations, the entity must evaluate the weight of the evidence to determine whether the transaction is orderly. The FSP provides a list of circumstances that may indicate that a transaction is not orderly. A transaction price that is not associated with an orderly transaction is given little, if any, weight when estimating fair value.

This FSP is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009.  An entity early adopting FSP FAS 157-4 must also early adopt FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-

7

NOTE 7.  RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

Temporary Impairments.  The Company is currently reviewing the effect this new pronouncement will have on its consolidated financial statements.

FSP FAS 115-2 and FAS 124-2

In April 2009, the FASB issued FSP No. FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments (FSP FAS 115-2 and FAS 124-2).   FSP FAS 115-2 and FAS 124-2 clarifies the interaction of the factors that should be considered when determining whether a debt security is other-than-temporarily impaired. For debt securities, management must assess whether (a) it has the intent to sell the security and (b) it is more likely than not that it will be required to sell the security prior to its anticipated recovery. These steps are done before assessing whether the entity will recover the cost basis of the investment. Previously, this assessment required management to assert it has both the intent and the ability to hold a security for a period of time sufficient to allow for an anticipated recovery in fair value to avoid recognizing an other-than-temporary impairment. This change does not affect the need to forecast recovery of the value of the security through either cash flows or market price.

In instances when a determination is made that an other-than-temporary impairment exists but the investor does not intend to sell the debt security and it is not more likely than not that it will be required to sell the debt security prior to its anticipated recovery, FSP FAS 115-2 and FAS 124-2 changes the presentation and amount of the other-than-temporary impairment recognized in the income statement. The other-than-temporary impairment is separated into (a) the amount of the total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and (b) the amount of the total other-than-temporary impairment related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-temporary impairment related to all other factors is recognized in other comprehensive income.

This FSP is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009.  An entity early adopting FSP FAS 115-2 and FAS 124-2 must also early adopt FSP FAS 157-4,Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.  The Company is currently reviewing the effect this new pronouncement will have on its consolidated financial statements.

FSP FAS 107-1 and APB 28-1

In April 2009, the FASB issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments (FSP FAS 107-1 and APB 28-1).  FSP FAS 107-1 and APB 28-1 amends FASB Statement No. 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods.

8

NOTE 7.  RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

This FSP is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009.  An entity early adopting FSP FAS 107-1 and APB 28-1 must also early adopt FSP FAS 157-4,Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly and FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments.  The Company is currently reviewing the effect this new pronouncement will have on its consolidated financial statements.

9

ITEM 2

FLATBUSH FEDERAL BANCORP, INC. AND SUBSIDIARIES

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION

Forward-Looking Statements

This Form 10-Q 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 at March 31, 2009 and December 31, 2008

The Company’s total assets as of March 31, 2009 were $151.1 million compared to $149.7 million at December 31, 2008, an increase of $1.4 million, or 0.9%. Loans receivable increased $299,000, or 0.3%, to $98.5 million at March 31, 2009 from $98.2 million at December 31, 2008.  Included in the increase of loans receivable was a $20,000 inter-company loan issued by Flatbush Federal Bancorp Inc. on March 16, 2009 to Flatbush Federal Bancorp MHC. Mortgage-backed securities increased $14,000,  or 0.01%, to $32.9 million at March 31, 2009 from $32.9 million as of December 31, 2008. Cash and cash equivalents increased $1.3 million, or 16.9%, to $9.0 million at March 31, 2009 from $7.7 million at December 31, 2008.

           Total deposits increased $6.1 million, or 6.0%, to $107.8 million at March 31, 2009 from $101.7 million at  December 31, 2008.  As of March 31, 2009, borrowings from the Federal Home Loan Bank of New York (“FHLB”) were $25.2 million compared to $28.6 million as of December 31, 2008, a decrease of $3.4 million, or 11.9%.

Total stockholders’ equity increased $386,000 to $15.0 million at March 31, 2009 from $14.6 million at December 31, 2008.

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 are 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 March 31, 2009, the Company repurchased a total of 1,000 shares. As of March 31, 2009, under the current program, 12,750 shares were repurchased at a weighted average price of $4.44 per share.

Comparison of Operating Results for the Three Months Ended March 31, 2009 and March 31, 2008

General.   Net income increased by $322,000, to $324,000 for the quarter ended March 31, 2009 from $2,000 for the same quarter in 2008.  The increase in net income for the quarter was primarily due to decreases of $420,000 in non-interest expense, $115,000 in interest expense on deposits, and $50,000 in interest expense on borrowings from the FHLB. These decreases were partially offset by decreases of $50,000 in total interest income, $1,000 in non-interest income and an increase of $212,000 in income taxes.

On February 26, 2009, the Company froze its defined benefit pension plan effective March 31, 2009.  The freezing of the Plan is consistent with ongoing cost reduction strategies.  The changes included a discontinuation of accrual of future service cost in the defined benefit pension plan and fully preserving retirement benefits that employees have earned as of March 31, 2009. As a result of freezing the plan, the Company recognized a pre-tax curtailment credit of $416,000, net of actuarial expenses, ($230,000 net of taxes), in the quarter ended March 31, 2009.

10

Interest Income.  Total interest income decreased $50,000, or 2.4%, to $2.0 million for the quarter ended March 31, 2009 from $2.1 million for the quarter ended March 31, 2008. The decrease in interest income can be primarily attributed to a lower average yield partially offset by a higher interest earning asset base.  For the three months ended March 31, 2009, the average balance of $140.6 million in interest-earning assets earned an average yield of 5.73% compared to an average yield of 6.05% on an average balance of $136.4 million for the three months ended March 31, 2008.

Interest income on loans decreased $26,000, or 1.7%, to $1.5 million for the quarter ended March 31, 2009 from $1.6 million for the same quarter in 2008.  The average balance of loans decreased $559,000 to $98.3 million for the quarter ended March 31, 2009 from $98.9 million for the quarter ended March 31, 2008.  The average yield on loans decreased by seven basis points to 6.29% for the quarter ended March 31 2009 from 6.36% for the quarter ended March 31, 2008.

Interest income on mortgage-backed securities increased $112,000, or 32.7%, to $455,000 for the quarter ended March 31, 2009 from $343,000 for the quarter ended March 31, 2008.  The average balance of mortgage-backed securities increased $8.3 million, or 33.2%, to $33.3 million for the quarter ended March 31, 2009 from $25.0 million for the quarter ended March 31, 2008.  The average yield decreased by three basis points to 5.46% for the quarter ended March 31, 2009 from 5.49% for the same period in 2008.

Interest income on investment securities decreased $92,000, or 89.3%, to $11,000 for the quarter ended March 31, 2009 from $103,000 for the quarter ended March 31, 2008. The average balance of investment securities decreased by $4.4 million, or 75.9%, to $1.4 million for the quarter ended March 31, 2009 from $5.8 million for the quarter ended March 31, 2008.  The average yield on investment securities decreased 392 basis points to 3.21%, primarily due to a lower dividend received on FHLB stock, for the quarter ended March 31, 2009 from an average yield of 7.13% for the quarter ended March 31, 2008.

Interest income on other interest-earning assets, primarily interest-earning deposits and federal funds sold, decreased $43,000, or 95.6%, to $2,000 for the quarter ended March 31, 2009 from $45,000 for the quarter ended March 31, 2008.   The average yield on other interest earning assets decreased by 257 basis points to 0.10% for the quarter ended March 31, 2009 from 2.67% for the quarter ended March 31, 2008 primarily due to the decline in interest rates on interest-earning deposits and federal funds sold. As a partial offset, the average balance of other interest earning assets increased $835,000, or 12.5%, to $7.5 million for the quarter ended March 31, 2009 from $6.7 million for the quarter ended March 31, 2008.

Interest Expense.   Total interest expense, comprised of interest expense on deposits and interest expense on FHLB borrowings, decreased $165,000, or 16.2%, to $858,000 for the quarter ended March 31, 2009 from $1.0 million for the quarter ended March 31, 2008. The average cost of interest-bearing liabilities decreased by 61 basis points to 2.66% for the quarter ended March 31, 2009 from 3.27% for the quarter ended March 31, 2008.  The average balance of interest-bearing liabilities increased $3.6 million, or 2.9% to $128.8 million for the quarter ended March 31, 2009 from $125.2 million for the quarter ended March 31, 2008.

Interest expense on deposits decreased $115,000, or 16.1%, to $599,000 for the quarter ended March 31, 2009 from $714,000 for the quarter ended March 31, 2008.  The average cost of interest-bearing deposits decreased by 59 basis points to 2.32% for the quarter ended March 31, 2009 from 2.91% for the quarter ended March 31, 2008, reflecting the declining trend of interest rates on deposits.  As a partial offset, the average balance of interest-bearing deposits increased $5.0 million, or 5.1%, to $103.2 million for the quarter ended March 31, 2009 from $98.2 million for the quarter ended March 31, 2008.

Interest expense on FHLB borrowings decreased $50,000, or 16.2%, to $259,000 for the quarter ended March 31, 2009, from $309,000 for the quarter ended March 31, 2008.  The average balance of FHLB borrowings decreased $1.4 million, or 5.2%, to $25.6 million for the quarter ended March 31, 2009, from $27.0 million for the quarter ended March 31, 2008. The average cost of FHLB borrowings decreased by 54 basis points to 4.04% for the quarter ended March 31, 2009, from 4.58% for the quarter ended March 31, 2008.

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Net Interest Income.  Net interest income increased $115,000, or 11.1%, to $1.1 million for the quarter ended March 31, 2009 from $1.0 million for the same quarter in 2008.  The interest rate spread was 3.06% for the quarter ended March 31, 2009 compared to 2.78% for the quarter ended March 31, 2008, an increase of 28 basis points.  Interest margin for the quarter ended March 31, 2009 was 3.29% compared to 3.05% for the quarter ended March 31, 2008 an increase of 24 basis points.  The increase in interest rate spread and interest margin can be attributed primarily to the decrease in the average yield of interest-bearing deposits and FHLB borrowings, as well as the average balance of FHLB borrowings.

Provision for Loan Losses.  The Company establishes the provision for loan losses, which is 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 these factors, no provision was recorded for the three months ended March 31, 2009 and 2008.   The level of the allowance at March 31, 2009 is based on estimates, and the ultimate losses may vary from the estimates.  Non-performing loans increased to $891,000, or 0.59% of total assets as of March 31, 2009 from $79,000 or 0.05% of total assets as of March 31, 2008. As of March 31, 2009, the non-performing loans total included four 1-4 residential loans totaling $891,000 which, at quarter-end, did not warrant a specific provision for loan loss.

Non-Interest Income.  Non-interest income decreased $1,000, or 1.5%, to $65,000 for the quarter ended March 31, 2009 from $66,000 for the quarter ended March 31, 2008.  This was primarily attributable to a  decrease of $1,000 in fees and service charges.

Non-Interest Expenses.   Non-interest expenses decreased $420,000, or 38.1%, to $682,000 for the quarter ended March 31, 2009 from $1.1 million for the quarter ended March 31, 2008.  The net decrease of $420,000 in non-interest expenses is primarily attributable to decreases to salaries and employee benefits, net occupancy expense of premises and other insurance premiums, partially offset by increases to equipment expenses, directors’ compensation, professional fees and other expenses. Salaries and employee benefits decreased $440,000 to $130,000 for the three months ended March 31, 2009, from $570,000 for the three months ended March 31, 2008, primarily due to the pre-tax curtailment credit of $416,000, net of actuarial expenses, resulting from the freezing of the defined benefit pension plan.

The Company anticipates a significant increase in the cost of federal deposit insurance from current levels of five to seven basis points.  The FDIC has recently proposed to increase the assessment rate for the most highly rated institutions to between 12 and 14 basis points for the first quarter of 2009 and to between 10 and 14 basis points thereafter.  Assessment rates could be further increased if an institution’s FHLB advances exceed 15% of deposits.  The FDIC has also established a program under which it fully guarantees all non-interest bearing transaction accounts and senior unsecured debt of a bank or its holding company.  Institutions that did not opt out of the program, such as the Company, will be assessed ten basis points for non-interest bearing transaction account balances in excess of $250,000 and 75 basis points of the amount of debt issued.

The FDIC also adopted an interim rule imposing an emergency special assessment of 20 basis points on the industry on June 30, 2009. The assessment is to be collected on September 30, 2009. The cost of this special assessment is anticipated to be up to approximately $230,000. The interim rule would also permit the FDIC to impose an emergency special assessment after June 30, 2009, of up to 10 basis points if necessary to maintain public confidence in federal deposit insurance. While the interim rule imposing the special assessment is final, the FDIC has indicated a willingness to decrease the special assessment under certain circumstances concerning the overall financial health of the insurance fund. No determination has been made to date to decrease the amount of the special assessment.

Income Tax Expense.  The provision for income taxes increased $212,000, to $215,000 for the quarter ended March 31, 2009 from $2,000 for the same quarter in 2008 primarily due to an increase in income before income taxes of $534,000.

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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 9.32% during the month of March 2009.  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.

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 $98.5 million and $98.2 million at March 31, 2009 and December 31, 2008, respectively.  Mortgage-backed securities held to maturity totaled $32.9 million at March 31, 2009 and December 31, 2008.  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 and maturities of investment securities.

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 March 31, 2009, the Company had a borrowing limit of $73.1 million from the FHLB, of which $25.2 million was advanced. At December 31, 2008, advances from the FHLB totaled $28.6 million.

The Association anticipates that it will have sufficient funds available to meet its current loan commitments and obligations.  At March 31, 2009, the Association had outstanding commitments to originate or purchase loans of $8.6 million.  Certificates of deposit scheduled to mature in one year or less at March 31, 2009, totaled $55.4 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.

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The following table sets forth the Association’s capital position at March 31, 2009, as compared to the minimum regulatory capital requirements:

	Actual					Minimal Capital Requirements		Under Prompt Corrective Actions Provisions
	Amount		Ratio			Amount	Ratio	Amount	Ratio
	(Dollars in Thousands)
Total Capital	$	16,258		20.51	%	>$6,341	>8.00%	>$7,926	>10.00%
(to risk-weighted assets)
Tier 1 Capital		16,079		20.29	%	> -	> -	>4,756	>  6.00%
(to risk-weighted assets)
Core (Tier 1) Capital		16,163		10.81	%	> 5,982	>4.00%	>7,478	>  5.00%
(to adjusted total assets)
Tangible Capital		16,163		10.81	%	> 2,243	>1.50%	>-	>-
(to adjusted total assets)

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.

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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 December 31, 2008, the most recent date the Association’s NPV was calculated by the OTS.

		Net Portfolio Value								Net Portfolio Value as a Percentage of Present Value of Assets
Change in Interest Rates (basis points)		Estimated NPV		Amount of Change			Percent of Change			NPV Ratio			Change in Basis Points
		(Dollars in Thousands)
	+300	$	11,432	$	(5,750	)		(33	%)		7.77	%		-324
	+200		14,350		(2,832	)		(16	%)		9.50	%		-151
	+100		16,421		(761	)		(4	%)		10.65	%		- 36
	+ 50		16,930		(252	)		( 1	%)		10.90	%		- 10
	0		17,182		—			—			11.01	%		—
	- 50		17,117		(65	)		-	%		10.93	%		- 8
	-100		16,831		(351	)		(2	%)		10.74	%		- 27

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.

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ITEM 3. Quantitative and Qualitative Disclosure About Market Risk

As a smaller reporting company, the Company is not required to provide the information required of this item.

ITEM 4T. FLATBUSH FEDERAL BANCORP, INC. AND SUBSIDIARIES CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2009 (the “Evaluation Date”).  Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective in timely alerting them in a timely manner to material information relating to us (or our consolidated subsidiary) required to be included in our periodic SEC filings.

(b) Changes in Internal Controls over Financial Reporting.

There were no significant changes made in our internal controls during the period covered by this report or, to our knowledge, in other factors that has materially affected or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

See the Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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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 1A.Risk Factors

A smaller reporting company is not required to provide the information required of this item.

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 March 31, 2009, 62,750 total shares have been repurchased by the Company. During the quarter ended March 31, 2009, one thousand shares were repurchased. These total repurchased shares do not include the stock dividend shares of 1,340 which, along with the repurchased shares, are held as treasury stock.

Company Purchases of Common Stock
Period	Total number of shares purchased	Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs	Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
January 1, 2009 through January 31, 2009	-	$         -	61,750	38,250
February 1, 2009 through February 28, 2009	1,000	3.50	62,750	37,250
March 1, 2009 through March 31, 2009	-	-	62,750	37,250

ITEM 3. Defaults Upon Senior Securities

Not applicable.

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

None

ITEM 5. Other Information

None

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ITEM 6. Exhibits

The following Exhibits are filed as part of this report.

3.1	Federal Stock Charter of Flatbush Federal Bancorp, Inc.*
3.2	Bylaws of Flatbush Federal Bancorp, Inc.*
4.0	Form of common stock certificate of Flatbush Federal Bancorp, Inc.
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).

*Incorporated by reference to the Registration Statement on Form SB-2 of Flatbush Federal Bancorp, Inc. (file no. 333-106557), originally filed with the Securities and Exchange Commission on June 27, 2003.

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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:	May 15, 2009	By:	/s/ Jesus R. Adia
			Jesus R. Adia
			President and
			Chief Executive Officer
Date:	May 15, 2009	By:	/s/  John S. Lotardo
			John S. Lotardo
			Executive Vice President and Chief
			Financial Officer

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