##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
     Form 10-K
    þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended
    December 31, 2006.o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to          .   Commission File Number
    000-51194
  Benjamin
    Franklin Bancorp, Inc.
 (Exact name of Registrant as
    specified in its Charter )
  Massachusetts

04-3336598(State of
    incorporation)

(I.R.S. Employer Identification
    No.)   P.O. Box 309
 58 Main Street
 Franklin, Massachusetts 02038-0309
 (508) 528-7000
 (Address and telephone number of
    principal executive offices)
  SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE
    ACT
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, no par value

NASDAQ Global Market   SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE
    ACT  None
     o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 o þ o
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




---



##### 



TABLE OF
    CONTENTS
  
  PagePART I.





2Item 1.


Business


2General


2Market Area and
    Competition


2Lending
    Activities


3Asset
    Quality


11Investment
    Activities


17Sources of
    Funds


19Employees


22Subsidiary
    Activities


22Regulation and
    Supervision


23Forward-Looking
    Statements


31Item 1A.


Risk Factors
    That May Affect Future Results


31Item 1B.


Unresolved Staff
    Comments


35Item 2.


Properties


35Item 3.


Legal
    Proceedings


36Item 4.


Submission of
    Matters to a Vote of Security Holders


36PART II.





36Item 5.


Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


36Item 6.


Selected
    Financial Data


39Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


40Item 7A.


Quantitative and
    Qualitative Disclosures about Market Risk


54Item 8.


Financial
    Statements and Supplementary Data


58Item 9.


Changes in and
    Disagreements With Accountants on Accounting and Financial
    Disclosure


58Item 9A.


Controls and
    Procedures


58Item 9B.


Other
    Information


61PART III.





61Item 10.


Directors,
    Executive Officers and Corporate Governance


61Item 11.


Executive
    Compensation


61Item 12.


Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters


61Item 13.


Certain
    Relationships and Related Transactions, and Director
    Independence


61Item 14.


Principal
    Accountant Fees and Services


61PART IV





61Item 15.


Exhibits and
    Financial Statement Schedules


61EX-23.1 Independent Registered Public Accounting Firm's ConsentEX-31.1 Section 302 Certification of C.E.O.EX-31.2 Section 302 Certification of C.F.O.EX-32.1 Section 906 Certification of C.E.O.EX-32.2 Section 906 Certification of C.F.O.




---



##### Table of Contents



PART I  Item 1.
    Business General  mutual-to-stock
      www.benfranklinbank.com www.benfranklinbank.com Form 10-K www.sec.gov 1-800-SEC-0330.
 Market
    Area and Competition     2




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##### Table of Contents



PerCapita


Median Household


UnemploymentIncome(1)


Income(2)


Rate(3)Norfolk County

$
51,627


$
82,000



4.1
%Middlesex County


50,692



82,000



3.9Worcester County


35,384



71,700



5.3Massachusetts


42,176



60,800



4.9United States


33,050



49,600



4.5     (1)
    
    Bureau of Economic Analysis, as of April 2006.(2)
    
    Housing and Urban Development and U.S. Census Bureau, 2006.(3)
    
    Mass. Department of Workforce Development.  1 2 3
      1
  2
  3
 Lending
    Activities  General. one-to-four-family lines-of-credit,
   3




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##### Table of Contents



At December 31,2006


2005


2004


2003


2002Amount


Percent


Amount


Percent


Amount


Percent


Amount


Percent


Amount


Percent(Dollars in thousands)Mortgage loans on real estate:Residential

$
275,861
(1)


42.79%


$
286,204



46.95%


$
241,090



62.56%


$
172,123



59.22%


$
165,007



62.58%Commercial


231,372



35.89%



209,009



34.29%



85,911



22.29%



68,652



23.62%



51,357



19.48%Construction


68,877



10.68%



60,399



9.91%



28,651



7.43%



23,936



8.23%



21,082



8.00%Home equity


36,546



5.67%



32,419



5.32%



23,199



6.02%



18,171



6.25%



16,507



6.26%612,656



95.04%



588,031



96.46%



378,851



98.30%



282,882



97.32%



253,953



96.32%Other loans:Commercial


28,871



4.48%



19,162



3.14%



4,375



1.14%



5,559



1.92%



6,552



2.49%Consumer


3,110



0.48%



2,395



0.39%



2,170



0.56%



2,219



0.76%



3,157



1.20%31,981



4.96%



21,557



3.54%



6,545



1.70%



7,778



2.68%



9,709



3.68%Total loans


644,637



100.00%



609,588



100.00%



385,396



100.00%



290,660



100.00%



263,662



100.00%Other items:Deferred loan origination costs


913







1,214







1,149







725







583Allowance for loan losses


(5,781
)






(5,670
)






(3,172
)






(2,523
)






(2,312
)Total loans, net

$
639,769






$
605,132






$
383,373






$
288,862






$
261,933     (1)
    
    Includes $63.7 million of loans held for sale 4




---



##### Table of Contents



Residential Real Estate Loans.
        loan-to-value loan-to-value
    Commercial Real Estate Loans.
 5




---



##### Table of Contents



Construction Loans.
  loan-to-value
   6




---



##### Table of Contents



one-to-four loan-to-value loan-to-cost
    Home Equity
    Lines-of-Credit
    and Loans. lines-of-credit lines-of-credit lines-of-credit
  lines-of-credit one-to-four lines-of-credit lines-of-credit
  Commercial Business Loans.
     7




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##### Table of Contents



Consumer and Other Loans.
  Loan Origination and Underwriting.
  lines-of-credit
  page F-7.
 8




---



##### Table of Contents



For the Years Ended December 31,2006


2005


2004


2003


2002(Dollars in thousands)Loans, including loans held for
    sale, at beginning of year

$
609,588


$
385,396


$
290,660


$
263,662


$
258,169Originations:Mortgage loans on real estate:Residential


52,965



61,132



116,866



183,263



151,241Commercial


64,744



81,759



26,167



27,105



23,383Construction


46,361



49,376



43,661



16,176



22,524Home equity


17,221



17,990



15,947



17,115



14,509181,291



210,257



202,642



243,659



211,657Other loans:Commercial


23,213



11,682



3,338



1,584



1,310Consumer


3,186



1,993



1,659



1,625



1,95326,399



13,675



4,996



3,209



3,263Total loans originated


207,690



223,932



207,638



246,869



214,920Loans acquired through acquisition
    of Chart Bank






185,847











Purchases of mortgage loans


16,118







34,207



26,546



1,298Deduct:Principal loan repayments and
    prepayments


153,041



162,348



115,907



149,623



140,554Loan sales


33,205



23,160



31,185



96,256



69,752Charge-offs


152



79



17



537



419Writedown on transfer of loans to
    held for sale


2,361















Total deductions


188,759



185,587



147,109



246,416



210,725Net increase in loans


35,049



224,192



94,736



26,998



5,493Loans, including loans held for
    sale, at end of year

$
644,637


$
609,588


$
385,396


$
290,660


$
263,662      9




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##### Table of Contents



Loan Maturity.
  Residential Mortgage(1)


Commercial Mortgage


ConstructionWeighted





Weighted





WeightedAverage





Average





AverageAmount


Rate


Amount


Rate


Amount


Rate(Dollars in thousands)Due less than one year

$
21,451



5.14
%

$
23,801



7.18
%

$
31,133



8.67
%Due after one year to five years


48,835



4.98
%


49,229



6.67
%


18,454



7.72
%Due after five years


205,575



4.83
%


158,342



6.59
%


19,290



7.22
%Total

$
275,861



4.88
%

$
231,372



6.67
%

$
68,877



8.01
%   Commercial


Consumer


TotalWeighted





Weighted





WeightedAverage





Average





AverageAmount


Rate


Amount


Rate


Amount


Rate(Dollars in thousands)Due less than one year

$
18,333



8.84
%

$
9,807



8.13
%

$
104,525



7.59
%Due after one year to five years


7,099



7.51
%


4,691



6.58
%


128,308



6.22
%Due after five years


3,439



7.85
%


25,158



7.52
%


411,804



5.81
%Total

$
28,871



8.40
%

$
39,656



7.56
%

$
644,637



6.18
%     (1)
    
    Includes loans held for sale. 10




---



##### Table of Contents



Fixed


Adjustable


Total(Dollars in thousands)Residential mortgage(1)

$
79,376


$
175,035


$
254,410Commercial mortgage


36,575



170,996



207,571Construction


29,511



8,233



37,744Commercial


6,551



3,987



10,538Home equity, consumer and other


11,834



18,015



29,849Total Loans

$
163,847


$
376,265


$
540,112     (1)
    
    Includes loans held for sale. Asset
    Quality  General.
  Delinquent Loans. one-to-four
 11




---



##### Table of Contents



Loans Delinquent For60-89 Days


90 Days and Over


TotalNumber


Amount


Number


Amount


Number


Amount(Dollars in thousands)At December 31,
    2006Residential mortgage


3


$
272



1


$
230



4


$
502Commercial mortgage


1



437



2



1,256



3



1,693Construction






















Commercial






















Consumer


11



112



1



25



12



137Total


15


$
821



4


$
1,511
(1)


19


$
2,332At December 31,
    2005Residential mortgage


2


$
157






$




2


$
157Commercial mortgage






















Construction






















Commercial


1



11



1



40



2



51Consumer


10



169



4



27



14



196Total


13


$
337



5


$
67



18


$
404At December 31,
    2004Residential mortgage


2


$
163






$




2


$
163Commercial mortgage






















Construction






















Commercial


1



32











1



32Consumer


2



1



4



3



6



4Total


5


$
196



4


$
3



9


$
199     (1)
    
    The increase in loans delinquent 90 days or more at
    December 31, 2006 from a year earlier was primarily due to
    the addition of one commercial relationship, consisting of two
    loans totaling $1.3 million.  Other Real Estate Owned.
  Classification of Assets and Loan
    Review.
 12




---



##### Table of Contents



Non-Performing Assets.
  At December 31,2006


2005


2004


2003


2002(Dollars in thousands)Non-accrual loans:Residential mortgage

$
230


$
184


$



$



$
Commercial mortgage


1,257















Construction


















Commercial






256



334



458



Consumer and other


61



25











Total non-performing
    loans

$
1,548
(2)

$
465


$
334


$
458


$
Loans greater than 90 days
    delinquent and still accruing:Residential mortgage

$



$



$



$



$
Commercial mortgage


















Construction


















Commercial


















Consumer and other






2



3



5



2Total loans 90 days and
    still accruing

$



$
2


$
3


$
5


$
2Total non-performing
    assets

$
1,548


$
467


$
337


$
463


$
2Ratios:Non-performing loans to total
    loans(1)


0.24
%


0.08
%


0.09
%


0.16
%


0.00
%Non-performing assets to total
    assets


0.17
%


0.05
%


0.07
%


0.10
%


0.00
%  13




---



##### Table of Contents



(1)
    
    Total loans includes loans held for sale(2)
    
    The increase in non-accrual loans at December 31, 2006 from
    a year earlier is due primarily to the addition of one
    commercial relationship, consisting of two loans totaling
    $1.3 million.  and/or
  Allowance for Loan Losses.
    non-classified
     14




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##### Table of Contents



At or For the Years Ended December 31,2006


2005


2004


2003


2002(Dollars in thousands)Balance at beginning of
    year

$
5,670


$
3,172


$
2,523


$
2,312


$
1,177Allowance added from
    acquisition of Chart Bank






1,812











Charge-offs:Mortgage loans on real estate


































Other loans:Commercial


(40
)


(68
)






(43
)


(389
)Consumer


(112
)


(11
)


(17
)


(494
)


(30
)Total other loans


(152
)


(79
)


(17
)


(537
)


(419
)Total charge-offs


(152
)


(79
)


(17
)


(537
)


(419
)Recoveries:Mortgage loans on real estate















Other loans:Commercial


37



71



35



100



132Consumer


40



8



11



23



10Total other loans


77



79



46



123



142Total recoveries


77



79



46



123



142Net (charge-offs) / recoveries


(75
)






29



(414
)


(277
)Provision for loan losses


186



686



620



625



1,412Balance at end of
    year

$
5,781


$
5,670


$
3,172


$
2,523


$
2,312Ratios:Net (charge-offs)/recoveries to
    average loans outstanding(1)


(0.01
)%


0.00
%


0.01
%


(0.15
)%


(0.11
)%Allowance for loan losses to
    non-performing loans at end of year


373.46
%


1214.13
%


940.56
%


544.82
%


115600.00
%Allowance for loan losses to total
    loans at end of year(1)


0.90
%


0.93
%


0.82
%


0.87
%


0.88
%     (1)
    
    Total loans include loans held for sale. 15




---



##### Table of Contents



At December 31,2006


2005


2004Percent








Percent








Percentof Loans








of Loans








of LoansLoan


in Each





Loan


in Each





Loan


in EachAllowance


Balances


Category


Allowance


Balances


Category


Allowance


Balances


Categoryfor Loan


by


to Total


for Loan


by


to Total


for Loan


by


to TotalLosses


Category


Loans


Losses


Category


Loans


Losses


Category


Loans(Dollars in thousands)Mortgage loans on real estate:Residential(2)

$
534


$
275,861



42.79
%

$
727


$
286,204



46.95
%

$
612


$
241,090



62.56
%Commercial


2,753



231,372



35.89
%


2,652



209,009



34.29
%


1,295



85,911



22.29
%Construction


1,203



68,877



10.69
%


947



60,399



9.91
%


505



28,651



7.43
%Home equity


287



36,546



5.67
%


270



32,419



5.32
%


193



23,199



6.02
%4,777



612,656



95.04
%


4,596



588,031



96.46
%


2,605



378,851



98.30
%Other loans:Commercial


597



28,871



4.48
%


714



19,162



3.14
%


325



4,375



1.14
%Consumer


82



3,110



0.48
%


50



2,395



0.39
%


27



2,170



0.56
%Unallocated(1)


325



0



0.00
%


310



0



0.00
%


215



0



0.00
%1,004



31,981



4.96
%


1,074



21,557



3.54
%


567



6,545



1.70
%Total

$
5,781


$
644,637



100.00
%

$
5,670


$
609,588



100.00
%

$
3,172


$
385,396



100.00
%   At December 31,2003


2002Percent








Percentof Loans








of LoansLoan


in Each





Loan


in EachAllowance


Balances


Category


Allowance


Balances


Categoryfor Loan


by


to Total


for Loan


by


to TotalLosses


Category


Loans


Losses


Category


Loans(Dollars in thousands)Mortgage loans on real estate:Residential

$
485


$
172,123



59.22
%

$
552


$
165,007



62.58
%Commercial


1,136



68,652



23.62
%


549



51,357



19.48
%Construction


338



23,936



8.24
%


422



21,082



8.00
%Home equity


108



18,171



6.25
%


82



16,507



6.26
%2,067



282,882



97.32
%


1,605



253,953



96.32
%Other loans:Commercial


421



5,559



1.91
%


181



6,552



2.48
%Consumer


27



2,219



0.76
%


276



3,157



1.20
%Unallocated(1)


8



0



0.00
%


250



0



0.00
%456



7,778



2.68
%


707



9,709



3.68
%Total

$
2,523


$
290,660



100.00
%

$
2,312


$
263,662



100.00
%     (1)
    
    The unallocated portion of the allowance for loan losses is
    intended to capture the exposure, if any, that may exist as a
    result of a number of qualitative factors that are difficult to
    quantify with precision. The Company increased the unallocated
    portion of the allowance in 2004 and 2005, compared to 2003,
    based 16




---



##### Table of Contents



on managements analysis of general business and economic
    conditions, the seasoning of the loan portfolio, the level of
    real estate values in Massachusetts, changes in the composition
    of the loan officer and support staff, and the allowance as a
    percentage of total loans.  (2)
    
    Includes loans held for sale. Investment
    Activities  General.
    Government-sponsored Enterprise
    Obligations.
  Municipal Obligations.
  Mortgage-Backed Securities. 250-300 basis
  Restricted Equity Securities.
 17




---



##### Table of Contents



At December 31,2006


2005


2004Amortized Cost


Fair Value


Amortized Cost


Fair Value


Amortized Cost


Fair Value(Dollars in thousands)Securities available for
    sale:Government-sponsored enterprise
    obligations

$
97,723


$
97,502


$
86,141


$
85,494


$
33,607


$
33,306Municipal obligations


1,707



1,687



2,211



2,191







99,430



99,189



88,352



87,685



33,607



33,306Corporate bonds and other
    obligations










2,508



2,500



5,056



5,01499,430



99,189



90,860



90,185



38,663



38,320Mortgage-backed securities


29,677



27,793



34,107



32,194



49,246



47,750Total debt securities


129,107



126,982



124,967



122,379



87,909



86,070Total available for sale securities

$
129,107


$
126,982


$
124,967


$
122,379


$
87,909


$
86,070Securities held to
    maturity:Mortgage-backed securities

$
31


$
31


$
109


$
109


$
217


$
221Restricted equity
    securities:Federal Home Loan Bank of
    Boston stock

$
8,470


$
8,470


$
7,496


$
7,496


$
4,459


$
4,459Access Capital Strategies
    Community Investment Fund


1,965



1,965



2,000



2,000



2,000



2,000SBLI & DIF stock


516



516



516



516



516



516Total restricted equity securities

$
10,951


$
10,951


$
10,012


$
10,012


$
6,975


$
6,975  18




---



##### Table of Contents



More than One Year


More than Five YearsOne Year or Less


through Five Years


through Ten YearsWeighted





Weighted





WeightedAmortized


Average


Amortized


Average


Amortized


AverageCost


Yield


Cost


Yield


Cost


Yield(Dollars in thousands)Securities available for
    sale:Government-sponsored enterprise
    obligations

$
53,496



4.29
%

$
44,227



5.07
%

$




0.00
%Municipal obligations


499



2.91
%

$
1,208



2.85
%






0.00
%Mortgage-backed securities






0.00
%






0.00
%


3,062



3.83
%Total debt securities


53,995



4.28
%


45,435



5.01
%


3,062



3.83
%Securities held to
    maturity:Mortgage-backed securities






0.00
%






0.00
%






0.00
%Total securities

$
53,995



4.28
%

$
45,435



5.01
%

$
3,062



3.83
%   More than Ten Years


Total SecuritiesWeighted








WeightedAmortized


Average


Amortized


Fair


AverageCost


Yield


Cost


Value


Yield(Dollars in thousands)Securities available for
    sale:Government-sponsored enterprise
    obligations

$




0.00
%

$
97,723


$
97,502



4.64
%Municipal obligations






0.00
%


1,707



1,687



2.87
%Mortgage-backed securities


26,615



4.08
%


29,677



27,793



4.05
%Total debt securities


26,615



4.08
%


129,107



126,982



4.48
%Securities held to
    maturity:Mortgage-backed securities


31



6.00
%


31



31



6.00
%Total securities

$
26,646



4.08
%

$
129,138


$
127,013



4.48
%  Sources
    of Funds  General.
  Deposits.
 19




---



##### Table of Contents



Years Ended December 31,2006


2005Weighted








WeightedAverage





Average


Average





AverageBalance


Percent


Rate


Balance


Percent


Rate(Dollars in thousands)Deposit type:Demand deposits

$
126,894



19.98
%


0.00
%

$
114,483



20.19
%


0.00
%NOW deposits


27,155



4.28
%


0.27
%


31,742



5.60
%


0.20
%Money market deposits


100,741



15.87
%


2.28
%


95,638



16.86
%


1.62
%Regular and other savings


91,201



14.36
%


0.50
%


102,781



18.12
%


0.50
%Total transaction and savings
    accounts


345,991



54.49
%


0.82
%


344,644



60.77
%


0.62
%Certificates of deposit


288,969



45.51
%


4.05
%


222,500



39.23
%


2.86
%Total deposits

$
634,960



100.00
%


2.29
%

$
567,144



100.00
%


1.50
%   Year Ended December 31, 2004WeightedAverage





AverageBalance


Percent


Rate(Dollars in thousands)Deposit type:Demand deposits

$
87,969



22.12
%


0.00
%NOW deposits


23,657



5.95
%


0.15
%Money market deposits


53,246



13.39
%


1.00
%Regular and other savings


98,753



24.83
%


0.50
%Total transaction and savings
    accounts


263,625



66.29
%


0.40
%Certificates of deposit


134,034



33.71
%


2.47
%Total deposits

$
397,659



100.00
%


1.10
%  20




---



##### Table of Contents



At December 31,2006


2005


2004(Dollars in thousands)Interest RateLess than 2%

$



$
267


$
36,9822.00%-2.99%


3,748



49,698



75,5243.00%-3.99%


53,435



150,838



12,2414.00%-4.99%


121,230



62,001



10,3325.00%-5.99%


129,637



19



1,4066.00%-6.99%










736Total

$
308,050


$
262,823


$
137,221     Year Ending December 31,


After December 31,2007


2008


2009


2010


2011


Total(Dollars in thousands)Interest RateLess than 2%

$



$



$



$



$



$
2.00%-2.99%


3,641



103







4







3,7483.00%-3.99%


43,549



7,713



1,844



329







53,4354.00%-4.99%


102,494



10,815



3,930



2,939



1,052



121,2305.00%-5.99%


124,781



656



2,629



1,044



527



129,637Total

$
274,465


$
19,287


$
8,403


$
4,316


$
1,579


$
308,050     At December 31, 2006(Dollars in thousands)Three months or less

$
48,158Over three months through six
    months


43,473Over six months through one year


28,436Over one year to three years


9,181Over three years


2,125$
131,373   Borrowings.
 21




---



##### Table of Contents



At or For the Years Ended December 31,2006


2005


2004(Dollars in thousands)Balance at end of year

$
149,969


$
128,936


$
76,250Average balance during year


130,908



101,181



51,497Maximum outstanding at any month
    end


150,963



128,936



76,250Weighted average interest rate at
    end of year


4.54
%


4.00
%


3.87
%Weighted average interest rate
    during year


4.32
%


3.94
%


3.95
%   3-month
   Employees   Subsidiary
    Activities    Benjamin Franklin Bank Capital Trust I
  Benjamin Franklin Securities Corp
  Creative Strategic Solutions, Inc. (CSSI),
 22




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##### Table of Contents



The
    Benjamin Franklin Bank Charitable Foundation
   Regulation
    and Supervision  General.
      Massachusetts
    Bank Regulation.
  General.
    Activities and Investments.
   23




---



##### Table of Contents



Lending Activities.
  Dividends.
  Regulatory Enforcement Authority.
  Insurance Sales.
  DIF.
  Federal
    Regulations.
  Capital Requirements.
   24




---



##### Table of Contents



Standards for Safety and Soundness.
  Investment Activities.
  Interstate Banking and Branching.
 25




---



##### Table of Contents



Prompt Corrective Regulatory Action.
      Transactions with Affiliates.
   26




---



##### Table of Contents



Enforcement.
  Insurance of Deposit Accounts.
     27




---



##### Table of Contents



notice-and-comment
    Federal
    Reserve System.
    Federal
    Home Loan Bank System.
      Holding
    Company Regulation.
  General.
 28




---



##### Table of Contents



Dividends.
    Financial Modernization.
 29




---



##### Table of Contents



Miscellaneous
    Regulation.
  Community Reinvestment Act.
    Consumer Protection And Fair Lending
    Regulations.
  Sarbanes-Oxley Act of 2002.
   30




---



##### Table of Contents



Forward-Looking
    Statements    
    statements of our goals, intentions and expectations;
    statements regarding our business plans and prospects and growth
    and operating strategies;
    statements regarding the asset quality of our loan and
    investment portfolios; and
    estimates of our risks and future costs and benefits.    
    our ability to enter new markets successfully and take advantage
    of growth opportunities;
    significantly increased competition among depository and other
    financial institutions;
    inflation, changes in the interest rate environment (including
    changes in the shape of the yield curve) that reduce our margins
    or reduce the fair value of financial instruments;
    general economic conditions, either nationally or in our market
    areas, that are worse than expected;
    adverse changes in the securities markets;
    legislative or regulatory changes that adversely affect our
    business;
    changes in consumer spending, borrowing and savings habits;
    changes in accounting policies and practices, as may be adopted
    by the bank regulatory agencies, the Financial Accounting
    Standards Board and the Public Company Accounting Oversight
    Board;
    changes in our organization, compensation and benefit
    plans; and
    the risk factors described below.   Item 1.A.  Risk
    Factors That May Affect Future Results    Our
    Commercial Real Estate, Construction And Commercial Business
    Loans May Expose Us To Increased Credit Risks, And This Risk
    Will Increase If We Succeed In Increasing These Types Of
    Loans.
   31




---



##### Table of Contents



Our
    Continuing Concentration Of Loans In Our Primary Market Area May
    Increase Our Risk.
    Our
    Return On Equity May Be Low Compared To Other Financial
    Institutions. A Low Return Could Lower The Trading Price Of Our
    Common Stock.
    We May
    Have Difficulty Meeting Our Branch Expansion Goals, And Our
    Branch Expansion Strategy May Not Be Accretive To
    Earnings.
   32




---



##### Table of Contents



Strong
    Competition Within Our Market Area May Limit Our Growth And
    Profitability.
    Our
    Ability to Grow May Be Limited if We Cannot Make
    Acquisitions.
    We
    Operate In A Highly Regulated Environment And May Be Adversely
    Affected By Changes In Law And Regulations.
       33




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##### Table of Contents



Truth-in-Lending
  Changes
    in Market Interest Rates Could Adversely Affect Our Financial
    Condition and Results of Operations.
      Our
    Stock-Based Benefit Plans Will Increase Our Costs, Which Will
    Reduce Our Income.
    Our
    Stock Value May Suffer From Anti-Takeover Provisions That May
    Impede Potential Takeovers.
   34




---



##### Table of Contents



Item 1.B.  Unresolved
    Staff Comments    Item 2.
    Properties    Year Opened/



Expiration of

RenewalAcquired

Owned or Leased

Lease

OptionsMain Office:58 Main StreetFranklin, MA 02038

1935

Owned



Branch Offices:231 East Central St. 
    Franklin, MA 02038

1998

Leased

December 2021

Three
    5-year
    renewal terms4 North Main St. 
    Bellingham, MA 02019

1982

Leased

December 2021

Three
    5-year
    renewal terms1 Mechanic St. 
    Foxborough, MA 02035

1998

Leased

December 2021

Three
    5-year
    renewal terms76 North Street 
    Medfield, MA 02052

1998

Owned



221 Main Street 
    Milford, MA 01757

1992

Leased

December 2021

Three
    5-year
    renewal terms40 Austin Street 
    Newton, MA 02460

2005

Leased

December 2021

Three
    5-year
    renewal terms1290 Main Street, 
    Waltham, MA 02451

2005

Leased

December 2021

Three
    5-year
    renewal terms75 Moody Street 
    Waltham MA 02453

2005

Leased

March 2008

Four
    10-year
    renewal terms330 Washington Street 
    Wellesley MA 02481

2006

Leased

December 2010

Two
    5-year
    renewal terms  35




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##### Table of Contents



Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market Information.
    Dividends DeclaredHigh


Low


per Share2005First Quarter

$



$



$
Second Quarter


11.59



9.91Third Quarter


14.40



11.11



0.03Fourth Quarter


14.80



13.20



0.032006First Quarter

$
14.25


$
13.00


$
0.03Second Quarter


14.19



13.58



0.03Third Quarter


14.20



13.76



0.03Fourth Quarter


16.36



13.81



0.04   Holders.
    Dividends.
     36




---



##### Table of Contents



Securities Authorized for Issuance under
    Equity Compensation Plans.
    Number of SecuritiesRemaining AvailableNumber of Securities





for Future Issuanceto be Issued


Weighted-Average


Under Equity CompensationUpon Exercises of


Exercise Price of


Plans (Excluding SecuritiesPlan Category

Outstanding Options (a)


Outstanding Options (b)


Reflected in Column (a))(c)Equity compensation plans approved
    by security shareholders:Stock options


448,750


$
13.95



148,991Restricted stock










20,761Equity compensation plans not
    approved by security shareholders










Total


448,750


$
13.95



169,752  37




---



##### Table of Contents



Performance Graph.
    Total
    Return Performance
  
  Period EndingIndex

04/05/05


12/31/05


03/31/06


06/30/06


09/30/06


12/31/06Benjamin Franklin Bancorp


100.00



140.46



139.46



137.96



140.06



164.23Russell 2000


100.00



110.55



125.96



119.63



120.15



130.85SNL New England Thrift Index


100.00



109.80



115.38



116.28



130.05



143.09SNL New England Bank Index


100.00



111.99



121.60



117.92



122.74



132.18   Use of Proceeds.
  Repurchases of Equity Securities.
   38




---



##### Table of Contents



Item 6.
    Selected
    Financial Data    At December 31,2006


2005


2004


2003


2002(Dollars in thousands)Selected Financial Condition
    Data:Total assets

$
913,678


$
867,057


$
517,393


$
458,844


$
452,230Loans, net(3)


639,769



605,132



383,373



288,862



261,933Securities(2)


137,964



132,500



93,262



110,254



114,728Deposits


633,179



611,673



396,499



380,257



373,300Short-term borrowings


10,000







4,250







Long-term debt(1)


148,969



140,339



81,000



45,000



45,000Stockholders equity


109,405



108,112



31,328



29,301



29,814     (1)
    
    Long-term debt includes advances from the Federal Home
    Loan Bank of Boston and subordinated debt. See
    Business of Benjamin Franklin Bancorp  Sources
    of Funds  Borrowings(2)
    
    Includes restricted equity securities.(3)
    
    Includes loans held for sale.  For the Years Ended December 31,2006(3)


2005(1)(2)


2004


2003


2002(Dollars in thousands, except per share data)Selected Operating
    Data:Interest and dividend income

$
44,259


$
35,135


$
20,795


$
19,532


$
21,406Interest expense


20,863



13,117



7,032



6,752



7,594Net interest income


23,396



22,018



13,763



12,780



13,812Provision for loan losses


186



686



620



625



1,412Net interest income after
    provision for loan losses


23,210



21,332



13,143



12,155



12,400Non-interest income


3,549



3,487



2,148



2,990



1,285Gain (loss) on sales of
    securities, net


(25
)






(24
)


86



1,569Non-interest expense


22,352



23,276



12,686



12,724



12,115Income before income tax expense


4,382



1,543



2,581



2,507



3,139Income tax expense (benefit)


(358
)


1,112



892



819



443Net income

$
4,740


$
431


$
1,689


$
1,688


$
2,696Dividends paid per common share:

$
0.13


$
0.06



n/a



n/a



n/aEarnings per share (basic and
    diluted):

$
0.60



n/a



n/a



n/a



n/aDividend payout ratio


21.67
%


n/a



n/a



n/a



n/a     (1)
    
    Operating results for 2005 reflect the acquisition of Chart
    Bank, the conversion from mutual to stock form, and the
    $4.0 million pre-tax contribution to the Benjamin Franklin
    Bank Charitable Foundation, all occurring on April 4, 2005.
    For further information refer to Item 7. Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.(2)
    
    The Companys
    mutual-to-stock
    conversion was completed on April 4, 2005. Because shares
    were not issued and outstanding for the entire period, earnings
    per share have not been reported for the year ended 39




---



##### Table of Contents



December 31, 2005. Earnings per share (both basic and
    diluted) were $.16 in each of the third and fourth quarters of
    2005. Cash dividends paid per share were $.03 in each of the
    third and fourth quarters of 2005.(3)
    
    Operating results for 2006 reflect the effect of the sale and
    leaseback of six of the Banks branch locations as well as
    a loss incurred upon the designation of $63.7 million of
    loans as held for sale at December 31, 2006. For further
    information refer to Item 7. Managements Discussion
    and Analysis of Financial Condition and Results of Operations.  At or For the Years Ended December 31,2006


2005


2004


2003


2002Selected Financial Ratios and
    Other Data:Performance Ratios:Return on average assets (ratio of
    net income to average total assets)


0.53
%


0.06
%


0.34
%


0.36
%


0.61
%Return on average equity (ratio of
    net income to average equity)


4.35
%


0.49
%


5.59
%


5.65
%


9.45
%Net interest rate spread(1)


2.45
%


2.79
%


2.63
%


2.76
%


3.32
%Net interest margin(2)


3.01
%


3.21
%


3.00
%


2.98
%


3.47
%Efficiency ratio(3)


72.24
%


67.79
%


79.09
%


84.78
%


75.69
%Non-interest expense to average
    total assets


2.51
%


2.99
%


2.58
%


2.73
%


2.76
%Average interest-earning assets to
    average interest bearing liabilities


120.06
%


121.90
%


123.91
%


114.38
%


108.04
%Asset Quality Ratios:Non-performing assets to total
    assets


0.17
%


0.05
%


0.07
%


0.10
%


0.00
%Non-performing loans to total
    loans(4)


0.27
%


0.08
%


0.09
%


0.16
%


0.00
%Allowance for loan losses to
    non-performing loans


373.46
%


1214.13
%


941.25
%


544.92
%


115600.00
%Allowance for loan losses to total
    loans(4)


0.99
%


0.93
%


0.82
%


0.87
%


0.88
%Capital Ratios:Equity to total assets at end of
    year


11.97
%


12.47
%


6.05
%


6.39
%


6.59
%Average equity to average assets


12.20
%


11.36
%


6.13
%


6.42
%


6.49
%Risk-based capital ratio at end of
    year


14.43
%


15.30
%


12.48
%


13.94
%


13.54
%Other Data:Number of full service offices


10



9



6



6



6     (1)
    
    The net interest rate spread represents the difference between
    the weighted-average yield on interest-earning assets and the
    weighted-average cost of interest-bearing liabilities for the
    period.(2)
    
    The net interest margin represents net interest income as a
    percent of average interest-earning assets for the period.(3)
    
    The efficiency ratio represents operating expense minus expenses
    related to the amortization of intangible assets and (in
    2005) to the contribution to the Benjamin Franklin Bank
    Charitable Foundation, divided by the sum of net interest income
    (before the loan loss provision) plus other income (excluding
    net gains (losses) on sale of bank assets).(4)
    
    Including loans held for sale.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations   40




---



##### Table of Contents




    In September, 2006, the Company opened a new branch in Wellesley
    Hills, Massachusetts. The Company is committed to opening
    additional new branches, most likely in the markets contiguous
    to its existing branch communities. One such location has been
    identified, in Watertown, Massachusetts, where the Company
    expects to open a branch in mid-2007. Management estimates the
    annual direct costs of operating this branch at $650,000. This
    branch opening, the recent opening in Wellesley, and any others
    that occur, are likely to act as a drag on earnings until such
    time as they attain profitability.
    The Company experienced net interest margin (NIM)
    compression throughout 2006 (and in the fourth quarter in
    particular), due to the effect of increased price competition
    for certificate accounts and the inversion of the Treasury yield
    curve, which had the effect of reducing the spread between the
    Companys earning assets and its deposit accounts. Until,
    and if, the Treasury yield curve regains a positive slope,
    management expects that the Companys NIM will remain
    compressed compared to the NIM earned in earlier periods.
    The Board of Directors adopted the Benjamin Franklin Bancorp,
    Inc. Stock Incentive Plan (the Plan), approved by
    stockholders at the May 11, 2006 Annual Meeting. Awards
    made under the Plan on July 28, 2006 will have the effect
    of increasing compensation expense in future periods. In
    particular, for stock options awarded under the Plan, the
    Company is employing an accelerated method of expense
    recognition, whereby compensation cost is measured on a
    straight-line basis over the requisite service period for each
    separately vesting portion of the award, as if the award was in
    substance, multiple awards. Refer to page F-30 for an
    estimate of the amount and timing of compensation cost to be
    recognized for awards made to date under the Plan.  Overview
  Income.
  Expenses.
    Critical
    Accounting Policies
    Allowance for Loan Losses.
 41




---



##### Table of Contents



Income Taxes.
  Intangible Assets.
    Analysis
    of Net Interest Income
   42




---



##### Table of Contents



Years Ended December 31,2006


2005


2004Average








Average








AverageOutstanding





Yield/


Outstanding





Yield/


Outstanding





Yield/Balance


Interest


Rate


Balance


Interest


Rate


Balance


Interest


RateInterest-earning
    assets:Loans(4)

$
626,715


$
37,676



5.97
%

$
547,542


$
30,409



5.56
%

$
338,198


$
17,320



5.12
%Securities


137,765



5,925



4.30
%


120,007



4,211



3.51
%


107,122



3,336



3.11
%Short-term investments


13,906



658



4.66
%


18,701



515



2.75
%


13,367



139



1.04
%Total interest-earning assets


778,386



44,259



5.65
%


686,250



35,135



5.13
%


458,687



20,795



4.53
%Non-interest-earning assets


113,930











91,508











33,838Total assets

$
892,316










$
777,758










$
492,525Interest-bearing
    liabilities:Savings deposits

$
91,201



456



0.50
%

$
102,781



518



0.50
%

$
98,753



490



0.50
%Money market accounts


100,741



2,299



2.28
%


95,638



1,553



1.62
%


53,246



535



1.00
%NOW accounts


27,155



75



0.27
%


31,742



63



0.20
%


23,657



36



0.15
%Certificates of deposit


288,969



11,717



4.05
%


222,500



6,366



2.86
%


134,034



3,305



2.47
%Total deposits


508,066



14,547



2.86
%


452,661



8,500



1.88
%


309,690



4,366



1.41
%Borrowings


140,281



6,316



4.44
%


110,281



4,617



4.19
%


60,497



2,666



4.41
%Total interest-bearing liabilities


648,347



20,863



3.20
%


562,942



13,117



2.34
%


370,187



7,032



1.90
%Non-interest bearing liabilities


135,082











126,455











92,124Total liabilities


783,429











689,397











462,311Equity


108,887











88,361











30,214Total liabilities and equity

$
892,316










$
777,758










$
492,525Net interest income





$
23,396










$
22,018










$
13,763Net interest rate spread(1)










2.45
%










2.79
%










2.63
%Net interest-earning assets(2)

$
130,039










$
123,308










$
88,500Net interest margin(3)










3.01
%










3.21
%










3.00
%Average of interest-earning assets
    to interest-bearing liabilities










120.06
%










121.90
%










123.91
%     (1)
    
    Net interest rate spread represents the difference between the
    weighted-average yield on interest-earning assets and the
    weighted-average cost of interest-bearing liabilities.(2)
    
    Net interest-earning assets represents total interest-earning
    assets less total interest-bearing liabilities.(3)
    
    Net interest margin represents net interest income divided by
    average total interest-earning assets.(4)
    
    Loans include loans held for sale. 43




---



##### Table of Contents



Years Ended December 31,


Years Ended December 31,2006 vs. 2005


2005 vs. 2004Total


Increase (Decrease)


TotalIncrease (Decrease) Due to


Increase


Due to


IncreaseVolume


Rate


(Decrease)


Volume


Rate


(Decrease)Interest-earning
    assets:Loans

$
4,628


$
2,639


$
7,267


$
11,518


$
1,571


$
13,089Securities


679



1,035



1,714



426



449



875Short-term investments


(157
)


300



143



74



302



376Total interest-earning assets


5,150



3,974



9,124



12,018



2,322



14,340Interest-bearing
    liabilities:Savings deposits


(58
)


(4
)


(62
)


20



8



28Money market accounts


87



659



746



574



444



1,018NOW accounts


(10
)


22



12



14



13



27Certificates of deposit


2,233



3,118



5,351



2,463



598



3,061Total deposits


2,252



3,795



6,047



3,071



1,063



4,134Borrowings


1,330



369



1,699



2,091



(140
)


1,951Total interest-bearing liabilities


3,582



4,164



7,746



5,162



923



6,085Change in net interest income

$
1,568


$
(190
)

$
1,378


$
6,856


$
1,399


$
8,255   Comparison
    of Financial Condition At December 31, 2006 and
    December 31, 2005
  Total Assets.
  Cash and Short-term Investments.
  Securities.
 44




---



##### Table of Contents



Net Loans. year-over-year year-over-year, year-over-year.
  Loans Held for Sale.
  Deposits. year-over-year.
      Borrowed Funds.
  Stockholders Equity.
 45




---



##### Table of Contents



Comparison
    of Operating Results For The Year Ended December 31, 2006
    and December 31, 2005
  Net Income. $924,000 year-over-year,
  Net Interest Income.
  year-over-year year-over-year,
  year-over-year
  Interest Income. year-over-year,
    Interest Expense.
  year-over-year,
   46




---



##### Table of Contents



year-over-year, year-over-year,
  year-over-year,
  Provision for Loan Losses.
  Non-interest Income. year-over-year.
    2006


2005


$ VarianceReported non-interest income

$
3,524


$
3,487


$
37Write-down of loans transferred to
    held for sale


2,361







2,361Loss/(gain) on sale of premises


503



(380
)


883Write-down of premises






1,400



(1,400
)Normalized non-interest income

$
6,388


$
4,507


$
1,881      47




---



##### Table of Contents



year-over-year
  Non-interest Expense.
  year-over-year
  year-over-year
  year-over-year year-over-year year-over-year
  Income Taxes.
 48




---



##### Table of Contents



Comparison
    of Financial Condition At December 31, 2005 and
    December 31, 2004
  Total Assets.
    Cash and Short-term Investments.
  Securities.
  Net Loans. Year-over-year
  Deposits. year-over-year,
 49




---



##### Table of Contents



Borrowed Funds.
  Stockholders Equity. mutual-to-stock
  Comparison
    of Operating Results For The Year Ended December 31, 2005
    and December 31, 2004
  Net Income. year-over-year
  Net Interest Income.
  year-over-year. year-over-year,
   50




---



##### Table of Contents



Interest Income. year-over-year
  Interest Expense.
  year-over-year,
  year-over-year, year-over-year,
  Provision for Loan Losses.
  Non-interest Income.
 51




---



##### Table of Contents



year-over-year
  Non-interest Expense. year-over-year
  year-over-year year-over-year
 52




---



##### Table of Contents



Income Taxes.
  Off-Balance-Sheet
    Arrangements
    Impact of
    Inflation and Changing Prices
    Impact of
    Recent Accounting Standards
         53




---



##### Table of Contents



instrument-by-instrument
    Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk      Management of Credit Risk.
  Management of Market Risk.
 54




---



##### Table of Contents




    Emphasizing the origination and retention of adjustable-rate
    mortgage loans, variable rate commercial loans and variable rate
    home equity
    lines-of-credit;
    Investing in securities with relatively short maturities
    and/or
    expected average lives;
    Classifying nearly all of the investment portfolio as
    available for sale in order to provide for
    flexibility in liquidity management.        Percentage Change in EstimatedNet Interest IncomeOver 12 months300 basis point increase in
    rates


1.57
%200 basis point increase in
    rates


1.08
%100 basis point increase in
    rates


.64
%Flat interest rates


100 basis point decrease in
    rates


(.38
)%200 basis point decrease in
    rates


(3.75
)%   12-month 12-month
 55




---



##### Table of Contents



Liquidity Risk Management.
       56




---



##### Table of Contents



Contractual
    Obligations:
  At December 31, 2006More than


More thanOne Year


Three YearsOne Year


through


through


Over FiveTotal


or Less


Three Years


Five Years


Years(Dollars in thousands)Federal Home Loan Bank
    advances(1)

$
149,969


$
32,969


$
54,000


$
55,000


$
8,000Subordinated debt


9,000















9,000Operating leases(2)


13,769



1,165



2,089



1,954



8,561Other contractual obligations(3)


6,089



2,732



3,357







Total contractual obligations

$
178,827


$
36,866


$
59,446


$
56,954


$
25,561     (1)
    
    Secured under a blanket security agreement on qualifying assets,
    principally 1-4 Family Residential mortgage loans. One advance
    in the amount of $10 million maturing in June, 2010 will
    become immediately payable if
    3-month
    LIBOR rises above 6.0% (measured on a quarterly basis, beginning
    June 2006).(2)
    
    Represents non-cancelable operating leases for branch offices.(3)
    
    Represents contracts for technology services and employment
    agreements.  Loan Commitments:
  December 31, 2006More than


More thanOne Year


Three YearsOne Year


through


through


Over FiveTotal


or Less


Three Years


Five Years


Years(Dollars in thousands)Commitments to grant loans(1)

$
15,657


$
15,657


$



$



$
Unused portion of commercial loan
    lines of credit


21,001



19,599



1,402







Unused portion of home equity
    lines of credit(2)


39,905















39,905Unused portion of construction
    loans(3)


27,783



20,343



7,018







422Unused portion of personal lines
    of credit(4)


2,432















2,432Commercial letter of credit


1,355



1,355Total loan commitments

$
108,133


$
56,954


$
8,420


$



$
42,759     General:
  (1)
    
    Commitments for loans are extended to customers for up to
    180 days after which they expire.(2)
    
    Unused portions of home equity lines of credit are available to
    the borrower for up to 10 years.(3)
    
    Unused portions of construction loans are available to the
    borrower for up to 2 years for development loans and up to
    1 year for other construction loans.(4)
    
    Unused portion of checking overdraft lines of credit are
    available to customers in good standing indefinitely.  Management of Other Risks.
 57




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  page F-1
  Item 9.
    Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures.
  Rules 13a-15(e) 15d-15(e)),
  Changes
    in Internal Controls Over Financial Reporting.
    Managements
    Report on Internal Control Over Financial Reporting.
    Internal
    Control  Integrated Framework.
   58




---



##### Table of Contents



Important
    Considerations.
   59




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm on Internal
    Control over Financial Reporting
  To the Board
    of Directors
    Internal ControlIntegrated Framework
        Internal ControlIntegrated Framework Internal ControlIntegrated Framework
        60




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##### Table of Contents



Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    Item 11.
    Executive
    Compensation    Item 12
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Form 10-K.
  Item 13
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14
    Principal
    Accountant Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules.  (a) Exhibits
  Exhibit No.

Description

Footnotes2
.1

Plan of Conversion of Benjamin
    Franklin Bancorp.


32
.2

Agreement and Plan of Merger among
    Benjamin Franklin Bancorp, M.H.C., Benjamin Franklin Savings
    Bank and Chart Bank, a Cooperative Bank, dated as of
    September 1, 2004.


23
.1

Articles of Organization of
    Benjamin Franklin Bancorp, Inc.


23
.2

Bylaws of Benjamin Franklin
    Bancorp, Inc.


74
.1

Form of Common Stock Certificate
    of Benjamin Franklin Bancorp, Inc.


510
.1.1

Form of Employment Agreement with
    Thomas R. Venables.*


610
.1.2

Form of Employment Agreement with
    Claire S. Bean.*


610
.2

Form of Change in Control
    Agreement with five other Executive Officers, providing one
    years severance to Brian E. Ledwith, Michael J. Piemonte
    and Kathleen P. Sawyer, and two years severance to Mariane
    E. Broadhurst and Rose M. Buckley. This form contains all
    material information concerning the agreement and the only
    differences are the name and contact information of the
    executive officer who is party to the agreement and the number
    of years of severance provided.*


210
.3

Form of Benjamin Franklin Bank
    Benefit Restoration Plan.*


2 61




---



##### Table of Contents



Exhibit No.

Description

Footnotes10
.4.1

Amended and Restated Supplemental
    Executive Retirement Agreement between Benjamin Franklin Bank
    and Thomas R. Venables dated as of March 22, 2006.*


810
.4.2

Amended and Restated Supplemental
    Executive Retirement Agreement between Benjamin Franklin Bank
    and Claire S. Bean dated as of March 22, 2006.*


810
.5

Benjamin Franklin Bancorp Director
    Fee Continuation Plan.*


410
.6

Benjamin Franklin Bancorp Employee
    Salary Continuation Plan.*


210
.7.1

Payments and Waiver Agreement
    among Richard E. Bolton, Jr., Benjamin Franklin Bancorp,
    M.H.C., Benjamin Franklin Savings Bank and Chart Bank, a
    Cooperative Bank, dated as of September 1, 2004. *


210
.7.2

Consulting and Noncompetition
    Agreement between Richard E. Bolton, Jr. and Benjamin
    Franklin Bancorp, M.H.C., dated as of September 1, 2004.*


210
.8

Benjamin Franklin Bancorp, Inc.
    2006 Stock Incentive Plan*


910
.8.1

Form of Incentive Stock Option
    Agreement*


1010
.8.2

Form of Non-Statutory Stock Option
    Agreement (Officer)*


1010
.8.3

Form of Non-Statutory Stock Option
    Agreement (Director)*


1010
.8.4

Form of Restricted Stock Agreement
    (Officer)*


1010
.8.5

Form of Restricted Stock Agreement
    (Director)*


1011


See Note 3 to the Financial
    Statements for a discussion of earnings per share.


21


Subsidiaries of Registrant.


823
.1

Consent of Wolf &
    Company, P.C., independent registered public accounting
    firm.31
.1

Certification of Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.


131
.2

Certification of Chief Financial
    Officer pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.


132
.1

Certification of Chief Executive
    Officer pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


132
.2

Certification of Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


1     *
    
    Relates to compensation.1.
    
    Filed herewith.2.
    
    Incorporated by reference to the Registrants Registration
    Statement on
    Form S-1,
    File
    No. 333-121154,
    filed on December 10, 2004.3.
    
    Incorporated by reference to Amendment No. 1 to the
    Registrants Registration Statement on
    Form S-1,
    File No. 333-121154, filed on January 24, 2005.4.
    
    Incorporated by reference to the Registrants Registration
    Statement on
    Form S-4,
    File
    No. 333-121608,
    filed on December 23, 2004.5.
    
    Incorporated by reference to the Registrants Registration
    Statement on
    Form 8-A,
    File
    No. 000-51194,
    filed on March 9, 2005.6.
    
    Incorporated by reference to the Registrants Annual Report
    on
    Form 10-K,
    filed on March 29, 2005.7.
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K,
    filed on March 3, 2006.8.
    
    Incorporated by reference to the Registrants Annual Report
    on
    Form 10-K,
    filed on March 28, 20069.
    
    Incorporated by reference to Appendix B to the
    Registrants Proxy Statement for the 2006 Annual Meeting of
    Stockholders, filed on March 28, 2006.10.
    
    Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q/A,
    filed on August 18, 2006.  (b) Financial Statement Schedules
   62




---



##### Table of Contents



SIGNATURES
    Benjamin Franklin Bancorp, Inc.
  By:
    /s/  Thomas
    R. Venables   President and Chief Executive Officer
      Signature

Title/s/  Thomas
    R. VenablesThomas
    R. Venables

President and Chief Executive
    Officer, Director
    (Principal Executive Officer)/s/  Claire
    S. BeanClaire
    S. Bean

Treasurer and Chief Financial
    Officer(Principal Financial and Accounting Officer)/s/  Mary
    AmblerMary
    Ambler

Director/s/  William
    P. BissonnetteWilliam
    P. Bissonnette

Director/s/  Richard
    E.
    Bolton, Jr.Richard
    E. Bolton, Jr.

Director/s/  William
    F. Brady, Jr.William
    F. Brady, Jr.

Director/s/  Paul
    E. CapassoPaul
    E. Capasso

Director/s/  John
    C. FullerJohn
    C. Fuller

Director/s/  Jonathan
    A. HaynesJonathan
    A. Haynes

Director/s/  Anne
    M. KingAnne
    M. King

Director 63




---



##### Table of Contents



Signature

Title/s/  Richard
    D. MannRichard
    D. Mann

Director/s/  Daniel
    F. OBrienDaniel
    F. OBrien

Director/s/  Charles
    F. OteriCharles
    F. Oteri

Director/s/  Donald
    P. QuinnDonald
    P. Quinn

Director/s/  Neil
    E. TodreasNeil
    E. Todreas

Director/s/  Alfred
    H. WahlersAlfred
    H. Wahlers

Director/s/  Charles
    YergatianCharles
    Yergatian

Director  64




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##### Table of Contents



Benjamin
    Franklin Bancorp, Inc.
  Annual Report on
    Form 10-K
    for the Year Ended December 31, 2006
    Exhibits Filed Herewith
  ExhibitNumber

Description23
.1

Consent of Wolf &
    Company, P.C., independent registered public accounting
    firm.31
.1

Certification of Chief Executive
    Officer pursuant to Section 302 of the Sarbanes-Oxley act
    of 2002.31
.2

Certification of Chief Financial
    Officer pursuant to Section 302 of the Sarbanes-Oxley act
    of 2002.32
.1

Certification of Chief Executive
    Officer pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32
.2

Certification of Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  65




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##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC.
  CONSOLIDATED
    FINANCIAL STATEMENTS
    Years Ended December 31, 2006, 2005 and 2004
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  PageReport of
    Independent Registered Public Accounting Firm


F-2Consolidated
    Balance Sheets


F-3Consolidated
    Statements of Income


F-4Consolidated
    Statements of Changes in Stockholders Equity


F-5Consolidated
    Statements of Cash Flows


F-6Notes to
    Consolidated Financial Statements


F-7-F-35  F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM            Internal Control 
    Integrated Framework
      F-2




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY



CONSOLIDATED
    BALANCE SHEETS  December 31,2006


2005(Dollars in thousands)ASSETSCash and due from banks

$
16,115


$
16,499Cash supplied by CSSI to ATM
    customers


39,732



37,200Short-term investments


16,748



12,051Total cash and cash equivalents


72,595



65,750Securities available for sale, at
    fair value


126,982



122,379Securities held to maturity, at
    amortized cost


31



109Restricted equity securities, at
    cost


10,951



10,012Loans, net of allowance for loan
    losses of $5,781 in 2006 and $5,670 in 2005


576,039



605,132Loans held for sale, net


63,730



Premises and equipment, net


5,202



11,167Accrued interest receivable


3,480



3,045Bank-owned life insurance


10,298



7,451Goodwill


33,763



33,763Other intangible assets


3,069



4,133Other assets


7,538



4,116$
913,678


$
867,057LIABILITIES AND
    STOCKHOLDERS EQUITYDeposits

$
633,179


$
611,673Short-term borrowings


10,000



Long-term debt


148,969



140,339Deferred gain on sale of premises


3,783



Other liabilities


8,342



6,933Total liabilities


804,273



758,945Commitments and contingencies
    (Notes 7 and 13)Stockholders equity:Common stock, no par value,
    75,000,000 shares authorized; 8,468,137 shares issued
    and 8,249,802 shares outstanding at December 31, 2006;
    8,488,898 shares issued and outstanding at
    December 31, 2005






Additional paid-in capital


82,909



82,849Retained earnings


36,634



32,942Unearned compensation


(7,938
)


(5,353
)Accumulated other comprehensive
    loss


(2,200
)


(2,326
)Total stockholders equity


109,405



108,112$
913,678


$
867,057    F-3




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY



CONSOLIDATED
    STATEMENTS OF INCOME  Years Ended December 31,2006


2005


2004(Dollars in thousands)Interest and dividend income:Loans, including fees

$
37,676


$
30,409


$
17,320Debt securities


5,374



3,811



3,092Dividends


551



400



244Short-term investments


658



515



139Total interest and dividend income


44,259



35,135



20,795Interest expense:Interest on deposits


14,547



8,500



4,366Interest on borrowings


6,316



4,617



2,666Total interest expense


20,863



13,117



7,032Net interest income


23,396



22,018



13,763Provision for loan losses


186



686



620Net interest income, after
    provision for loan losses


23,210



21,332



13,143Other income (charges):ATM servicing fees


3,059



1,639



Deposit service fees


1,428



1,233



882Loan servicing fees


487



442



254Gain (loss) on loans sold and held
    for sale, net


(2,030
)


116



123Loss on sale/writedown of
    securities, net


(25
)






(24
)Loss on sale/write-down of
    premises, net


(495
)


(1,020
)


Income from bank-owned life
    insurance


347



269



198Miscellaneous


753



808



691Total other income


3,524



3,487



2,124Operating expenses:Salaries and employee benefits


11,682



9,882



7,487Occupancy and equipment


2,631



2,374



1,410Data processing


1,945



1,734



1,353Professional fees


1,289



1,021



373Marketing and advertising


778



738



581Contribution to Benjamin Franklin
    Bank Charitable Foundation






4,000



Amortization of core deposit
    intangible


1,064



1,400



181Other general and administrative


2,963



2,127



1,301Total operating expenses


22,352



23,276



12,686Income before income taxes


4,382



1,543



2,581Provision (benefit) for income
    taxes


(358
)


1,112



892Net income

$
4,740


$
431


$
1,689Weighted-average shares
    outstanding:Basic


7,949,042



n/a



n/aDiluted


7,953,739



n/a



n/aEarnings per share:Basic

$
0.60



n/a



n/aDiluted

$
0.60



n/a



n/a    F-4




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY



CONSOLIDATED
    STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

Years
    Ended December 31, 2006, 2005 and 2004  AccumulatedAdditional








Other


TotalCommon Stock


Paid-In


Retained


Unearned


Comprehensive


StockholdersShares


Amount


Capital


Earnings


Compensation


Loss


Equity(Dollars in thousands)Balance at December 31, 2003





$



$



$
31,308


$



$
(2,007
)

$
29,301Comprehensive income:Net income














1,689











1,689Net unrealized gain on securities
    available for sale, net of reclassification adjustment and tax
    effects






















338



338Total comprehensive income


























2,027Balance at December 31, 2004














32,997







(1,669
)


31,328Comprehensive loss:Net income














431











431Net unrealized loss on securities
    available for sale, net of tax effects






















(657
)


(657
)Total comprehensive loss


























(226
)Issuance of common stock for
    initial public offering, net of expenses of $2,053


5,577,419







53,721















53,721Issuance of common stock to
    Benjamin Franklin Bank Charitable Foundation


400,000







4,000















4,000Issuance of common stock for
    acquisition of Chart Bank


2,511,479







25,115















25,115Stock purchased by ESOP


















(5,537
)






(5,537
)Release of ESOP stock










13







184







197Dividends declared ($.06 per
    share)














(486
)










(486
)Balance at December 31, 2005


8,488,898







82,849



32,942



(5,353
)


(2,326
)


108,112Comprehensive income:Net income














4,740











4,740Net unrealized gain on securities
    available for sale, net of reclassification adjustment and tax
    effects






















424



424Total comprehensive income


























5,164Common stock repurchased


(239,096
)






(3,373
)














(3,373
)Issuance of common stock in
    connection with stock incentive plan










3,046







(3,046
)






Restricted stock expense


















277







277Stock option expense










347















347Release of ESOP stock










40







184







224Dividends declared ($.13 per
    share)














(1,048
)










(1,048
)Adjustment to initially apply FASB
    Statement No. 158






















(298
)


(298
)Balance at December 31, 2006


8,249,802


$



$
82,909


$
36,634


$
(7,938
)

$
(2,200
)

$
109,405    F-5




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY



CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Years Ended December 31,2006


2005


2004(Dollars in thousands)Cash flows from operating
    activities:Net income

$
4,740


$
431


$
1,689Adjustments to reconcile net income
    to net cash provided by operating activities:Amortization (accretion) of
    securities, net


(760
)


9



855Amortization (accretion) of loans,
    net


(37
)


(64
)


250Loss on sale/writedown of
    securities, net


25







24Provision for loan losses


186



686



620Accretion of deposit and
    borrowings, net


(35
)


(307
)


Amortization of mortgage servicing
    rights


241



282



450Depreciation expense


1,019



983



679Amortization of core deposit
    intangible


1,064



1,400



181Stock-based compensation and ESOP


848



197



Deferred income tax benefit


(4,231
)


(1,944
)


(161
)Income from bank-owned life
    insurance


(347
)


(269
)


(198
)Gains on sales of loans, net


(331
)


(116
)


(123
)Loans originated for sale


(33,205
)


(23,160
)


(31,185
)Proceeds from sales of loans


33,536



23,276



31,308Loss on loans transferred to held
    for sale


2,361







Increase in accrued interest
    receivable


(435
)


(1,555
)


(102
)Loss on sales of premises and
    equipment, net


499



1,020



Contribution of common stock to
    Charitable Foundation






4,000



Amortization of deferred gain on
    sale of premises


(4
)






Other, net


1,640



3,360



(1,211
)Net cash provided by operating
    activities


6,774



8,229



3,076Cash flows from investing
    activities:Activity in
    available-for-sale
    securities:Sales


10







5,591Maturities, calls, and principal
    repayments


65,970



49,770



41,830Purchases


(69,350
)


(52,900
)


(31,278
)Maturities of and principal
    repayments on
    held-to-maturity
    securities


78



108



169Net change in restricted equity
    securities


(974
)


(653
)


247Purchases of mortgage loans


(16,118
)






(34,207
)Loan originations, net


(21,029
)


(38,346
)


(61,174
)Purchases of bank-owned life
    insurance


(2,500
)






(1,400
)Proceeds from sales of premises and
    equipment


9,743



785



Additions to premises and equipment


(1,509
)


(819
)


(627
)Net cash used for investing
    activities


(35,679
)


(42,055
)


(80,849
)Cash flows from financing
    activities:Net increase (decrease) in deposits


21,574



(1,858
)


16,242Net change in short-term borrowings


10,000



(4,250
)


4,250Net proceeds from long-term debt


8,597



33,903



36,000Net proceeds from issuance of
    common stock






53,721



Common stock repurchased


(3,373
)






Dividends paid on common stock


(1,048
)


(486
)


Acquisition of common stock by ESOP






(5,537
)


Net cash provided by financing
    activities


35,750



75,493



56,492Net change in cash and cash
    equivalents


6,845



41,667



(21,281
)Cash and cash equivalents acquired
    in the purchase of Chart Bank






9,879



Cash and cash equivalents at
    beginning of year


65,750



14,204



35,485Cash and cash equivalents at end of
    year

$
72,595


$
65,750


$
14,204Supplemental cash flow information:Interest paid on deposits

$
14,450


$
8,476


$
4,367Interest paid on borrowings


6,186



4,452



2,568Income taxes paid


3,595



1,238



865Loans reclassified as held for sale


66,091







Deferred gain recorded on sale of
    premises and equipment


3,787







Premises and equipment transferred
    to other assets






634



Assets acquired and liabilities
    assumed were as follows:Fair value of noncash assets
    acquired

$



$
259,008


$
Fair value of liabilities assumed






243,772



Fair value of common stock issued






25,115



    F-6




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARYNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYears Ended December 31, 2006, 2005 and 2004
    (Dollars in Thousands)
  1.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Basis
    of presentation and consolidation
    mutual-to-stock
    Note 11-
  Business
    and operating segments
      Use of
    estimates
   F-7




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   Reclassifications
    Cash
    and cash equivalents
    Securities
    held-to-maturity available-for-sale other-than-temporary other-than-temporary
    Loans
    held for sale
    Loans
         F-8




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
    Allowance
    for loan losses
      non-classified
      Servicing
  10-30 years
  Premises
    and equipment
   F-9




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
    Bank-owned
    life insurance
    Transfers
    of financial assets
    Goodwill
    and other intangible assets
    Derivative
    financial instruments
    Retirement
    plan
     F-10




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
     Before





AfterApplication of





Application ofSFAS 158


Adjustments


SFAS 158Accrued pension obligation

$
(420
)

$
(298
)

$
(718
)Total liabilities


803,975



298



804,273Accumulated other comprehensive
    loss


(1,902
)


(298
)


(2,200
)Total stockholders equity


109,703



(298
)


109,405   Stock
    Compensation Plans
    Income
    taxes
      Advertising
    costs
    Comprehensive
    income
   F-11




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
    Years Ended December 31,2006


2005


2004Unrealized holding gains (losses)
    on securities available for sale

$
438


$
(750
)

$
266Reclassification adjustment for
    (gains) losses realized in income


(10
)






24Reclassification adjustment for
    impairment losses recognized in income


35







Tax effect


(39
)


93



48Net of tax amount


424



(657
)


338Adjustment to initially apply
    SFAS No. 158


(298
)






Total change

$
126


$
(657
)

$
338     December 31,2006


2005Net unrealized loss on securities
    available for sale

$
(2,125
)

$
(2,588
)Tax effect


223



262Net-of-tax
    amount


(1,902
)


(2,326
)Unrecognized net actuarial gain
    pertaining to defined benefit plan


346



Unrecognized prior service cost
    pertaining to defined benefit plan


(644
)


(298
)


$
(2,200
)

$
(2,326
)   Earnings
    per share
     F-12




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
     Years Ended December 31,2006


2005


2004Net income

$
4,740


$
431


$
1,689Average number of common shares
    outstanding


7,949,042



n/a



n/aEffect of dilutive restricted stock


4,697



n/a



n/aAverage number of common shares
    outstanding used to calculate diluted earnings per common share


7,953,739



n/a



n/a   Recent
    accounting pronouncements
        instrument-by-instrument
 F-13




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
      2.
    RESTRICTIONS
    ON CASH AND DUE FROM BANKS    3.
    SHORT-TERM
    INVESTMENTS    December 31,2006


2005Federal funds sold

$
12,438


$
10,777Money market accounts


4,310



1,274$
16,748


$
12,051   4.
    SECURITIES    Gross


GrossAmortized


Unrealized


Unrealized


FairCost


Gains


Losses


ValueDecember 31,
    2006:Securities available for sale:Government-sponsored enterprise
    obligations

$
97,723


$
70


$
(291
)

$
97,502Municipal obligations


1,707







(20
)


1,687Mortgage-backed securities


29,677



8



(1,892
)


27,793$
129,107


$
78


$
(2,203
)

$
126,982Securities held to maturity:Mortgage-backed securities

$
31


$



$



$
31   F-14




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
  Gross


GrossAmortized


Unrealized


Unrealized


FairCost


Gains


Losses


ValueDecember 31,
    2005:Securities available for sale:Government-sponsored enterprise
    obligations

$
86,141


$
1


$
(648
)

$
85,494Municipal obligations


4,719







(28
)


4,691Mortgage-backed securities


34,107



15



(1,928
)


32,194$
124,967


$
16


$
(2,604
)

$
122,379Securities held to maturity:Mortgage-backed securities

$
109


$



$



$
109     Amortized


FairCost


ValueWithin 1 year

$
53,995


$
53,804After 1 year through
    5 years


45,435



45,385$
99,430


$
99,189       Less Than Twelve Months


Over Twelve MonthsGross





GrossUnrealized


Fair


Unrealized


FairLosses


Value


Losses


ValueDecember 31,
    2006:Government-sponsored enterprise
    obligations

$
70


$
29,972


$
221


$
41,865Municipal obligations










20



1,687Mortgage-backed securities










1,892



27,220Total temporarily impaired
    securities

$
70


$
29,972


$
2,133


$
70,772December 31,
    2005:Government-sponsored enterprise
    obligations

$
235


$
36,670


$
413


$
48,824Municipal obligations


10



3,001



18



1,690Mortgage-backed securities










1,928



32,303Total temporarily impaired
    securities

$
245


$
39,671


$
2,359


$
82,817  F-15




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
    5.
    LOANS    December 31,2006


2005Mortgage loans on real estate:Residential

$
212,131


$
286,204Commercial


231,372



209,009Construction


68,877



60,399Home equity


36,546



32,419548,926



588,031Other loans:Commercial


28,871



19,162Consumer


3,110



2,39531,981



21,557Total loans


580,907



609,588Allowance for loan losses


(5,781
)


(5,670
)Net deferred loan costs


913



1,214Loans, net

$
576,039


$
605,132     Years Ended December 31,2006


2005


2004Balance at beginning of year

$
5,670


$
3,172


$
2,523Allowance added from acquisition
    of Chart Bank






1,812



Provision for loan losses


186



686



620Recoveries


77



79



46Charge-offs


(152
)


(79
)


(17
)Balance at end of year

$
5,781


$
5,670


$
3,172     December 31,2006


2005Total impaired loans

$
1,256


$
264Valuation allowances related to
    impaired loans

$



$
140Non-accrual loans

$
1,548


$
465Loans greater than 90 days
    past due and still accruing

$



$
2  F-16




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
  Years Ended December 31,2006


2005


2004Average recorded investment in
    impaired loans

$
38


$
266


$
395Interest income recognized on a
    cash basis on impaired loans

$



$
12


$
     Borrower-in-Custody
  6.
    SERVICING      Years Ended December 31,2006


2005


2004Mortgage servicing rights
    capitalized

$
73


$
132


$
241Mortgage servicing rights amortized

$
241


$
282


$
450   7.
    PREMISES
    AND EQUIPMENT    December 31,


Estimated2006


2005


Useful LivesPremises:Land

$
1,415


$
3,121


Buildings and improvements


4,339



11,264


5-39 yearsEquipment


6,940



6,174


2-10 years12,694



20,559Less accumulated depreciation


(7,492
)


(9,392
)$
5,202


$
11,167      F-17




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
    Year Ending December 31,

Amount2007

$
1,1652008


1,0622009


1,0272010


1,0272011


927Thereafter


8,561$
13,769   15-year 5-year 15-year
    8.
    GOODWILL
    AND OTHER INTANGIBLE ASSETS      December 31,2006


2005Core deposit intangible

$
6,756


$
6,756Accumulated amortization


(3,687
)


(2,623
)$
3,069


$
4,133  F-18




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
    Year Ending December 31,

Amount2007

$
7792008


5742009


4242010


3102011


230Thereafter


752$
3,069   9.
    DEPOSITS    December 31,2006


2005Demand deposits

$
120,966


$
124,396NOW


28,606



32,147Regular and other savings


81,569



97,960Money market deposits


93,988



94,347Total non-certificate accounts


325,129



348,850Term certificates less than
    $100,000


176,677



157,933Term certificates of $100,000 or
    more


131,373



104,890Total certificate accounts


308,050



262,823Total deposits

$
633,179


$
611,673     December 31, 2006


December 31, 2005Weighted





WeightedAverage





AverageAmount


Rate


Amount


RateWithin 1 year

$
274,465



4.60
%

$
204,459



3.47
%Over 1 year to 3 years


27,690



4.25



51,066



3.71Over 3 years to 5 years


5,895



4.61



7,298



4.17$
308,050



4.57
%

$
262,823



3.53
%   10.
    SHORT-TERM
    BORROWINGS   F-19




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   11.
    LONG-TERM
    DEBT    December 31,2006


2005FHLB fixed-rate advances

$
139,969


$
128,936Subordinated debt issued to trust
    subsidiary


9,000



9,000Secured borrowing






2,403$
148,969


$
140,339   FHLB
    Advances
    December 31, 2006


December 31, 2005Weighted





WeightedAverage





AverageMaturity Date

Amount


Rate


Amount


Rate2006

$





%

$
8,936



3.00
%2007


22,969



3.25



23,000



3.252008


27,000



4.09



27,000



4.092009


27,000



5.38



6,000



4.912010*


40,000



4.29



34,000



4.192011


15,000



5.63



30,000



4.382027


8,000



5.31



$
139,969



4.49
%

$
128,936



4.00
%     *
    
    Includes a $10,000 advance that is callable in 2007.      Subordinated
    Debt
   F-20




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
      Secured
    Borrowing
    12.
    INCOME
    TAXES    Years Ended December 31,2006


2005


2004Current tax provision:Federal

$
2,711


$
2,394


$
809State


1,162



662



2443,873



3,056



1,053Deferred tax benefit:Federal


(976
)


(2,012
)


(139
)State


(1,117
)


(365
)


(38
)(2,093
)


(2,377
)


(177
)Change in valuation reserve


(2,138
)


433



16(4,231
)


(1,944
)


(161
)Total tax provision (benefit)

$
(358
)

$
1,112


$
892     Years Ended December 31,2006


2005


2004Statutory rate


34.0
%


34.0
%


34.0
%Increase (decrease) resulting from:State taxes, net of federal tax


0.7



12.7



5.3Change in valuation reserve


(40.2
)


28.1



0.6Officers life insurance


(2.6
)


(5.4
)


(2.4
)Other, net


(0.1
)


2.7



(2.9
)Effective tax rates


(8.2
)%


72.1
%


34.6
%  F-21




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
    December 31,2006


2005Deferred tax liabilities:Federal

$
(1,599
)

$
(2,371
)State


(525
)


(787
)(2,124
)


(3,158
)Deferred tax assets:Federal


6,048



5,873State


1,736



8917,784



6,764Valuation reserve


(584
)


(2,722
)7,200



4,042Net deferred tax asset

$
5,076


$
884     December 31,2006


2005Allowance for loan losses

$
2,192


$
2,028Employee benefit plans


900



465Net unrealized loss on securities
    available for sale


223



262Depreciation


(148
)


(937
)Net deferred loan costs


(373
)


(497
)Mortgage servicing rights


(136
)


(205
)Capital loss carryforward


11



2,149Writedown of land


573



573Deferred gain on sale of premises


1,547



Writedown of loans


966



Charitable contribution carryover


977



1,113Purchase accounting adjustments


(1,220
)


(1,433
)Other, net


148



885,660



3,606Valuation reserve


(584
)


(2,722
)Deferred tax asset

$
5,076


$
884      F-22




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
    13.
    OTHER
    COMMITMENTS AND CONTINGENCIES    Loan
    commitments
  lines-of-credit.
      December 31,2006


2005Commitments to grant loans

$
15,657


$
30,420Unadvanced funds on construction
    loans


27,783



24,420Unadvanced funds on home equity
    lines-of-credit


39,905



39,896Unadvanced funds on commercial
    lines-of-credit


21,001



19,547Unadvanced funds on personal
    lines-of-credit


2,432



2,457Commercial letters of credit


1,355



1,412   lines-of-credit case-by-case lines-of-credit lines-of-credit lines-of-credit
  letters-of-credit letters-of-credit letters-of-credit
  Derivative
    financial instruments
     F-23




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
    Other
    contingencies
    14.
    STOCKHOLDERS
    EQUITY  Minimum
    regulatory capital requirements
     F-24




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
     Minimum to beWell CapitalizedUnder PromptMinimum Capital


Corrective ActionActual


Requirements


ProvisionsAmount


Ratio


Amount


Ratio


Amount


RatioDecember 31,
    2006:Total capital to risk weighted
    assets:Consolidated

$
89,256



14.4
%

$
49,473



8.0
%


N/A



N/ABank


66,632



10.8



49,408



8.0


$
61,761



10.0
%Tier 1 capital to risk
    weighted assets:Consolidated


83,475



13.5



24,737



4.0



N/A



N/ABank


60,851



9.9



24,704



4.0



37,056



6.0Tier 1 capital to average
    assets:Consolidated


83,475



9.6



34,710



4.0



N/A



N/ABank


60,851



6.7



34,793



4.0



43,491



5.0December 31,
    2005:Total capital to risk weighted
    assets:Consolidated

$
87,212



15.3
%

$
45,614



8.0
%


N/A



N/ABank


61,393



10.8



45,528



8.0


$
56,910



10.0
%Tier 1 capital to risk
    weighted assets:Consolidated


81,543



14.3



22,807



4.0



N/A



N/ABank


55,724



9.8



22,764



4.0



34,146



6.0Tier 1 capital to average
    assets:Consolidated


81,543



9.9



33,115



4.0



N/A



N/ABank


55,724



6.7



33,085



4.0



41,356



5.0  F-25




---



##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
    December 31, 2006


December 31, 2005Consolidated


Bank


Consolidated


BankTotal stockholders equity
    per financial statements

$
109,405


$
95,781


$
108,112


$
91,293Adjustments for Tier 1
    capital:Goodwill


(33,763
)


(33,763
)


(33,763
)


(33,763
)Intangible assets


(3,069
)


(3,069
)


(4,133
)


(4,133
)Trust preferred securities


9,000







9,000



Accumulated losses on securities
    available for sale, net of tax


1,902



1,902



2,326



2,326Total Tier 1 capital


83,475



60,851



81,542



55,723Adjustments for total capital:Allowance for loan losses


5,781



5,781



5,670



5,670Total capital per regulatory
    reporting

$
89,256


$
66,632


$
87,212


$
61,393   Share
    Repurchase Plan
    Liquidation
    account
    15.
    RESTRICTIONS
    ON DIVIDENDS, LOANS AND ADVANCES     F-26




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##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
     16.
    EMPLOYEE
    BENEFIT PLANS  401(k)
    plan
    Supplemental
    retirement plans
    Director
    fee continuation plan
    Year Ended December 31,2006


2005Change in benefit obligation:Benefit obligation at inception
    for prior service cost

$
788


$
824Service cost


65



110Interest cost


45



34Change in discount rate


(9
)


(10
)Actuarial gain


(88
)


(170
)Benefit obligation at end of year


801



788Fair value of plan assets at end
    of year






Funded status


(718
)


(788
)Unrecognized net actuarial gain






(179
)Unrecognized prior service cost






746Accrued pension cost

$
(718
)

$
(221
)Accumulated benefit obligation at
    end of year

$
(718
)

$
(599
)  F-27




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##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
    December 31,2006


2005Discount rate


6.00
%


5.75
%Rate of fee increase


2.00



2.00     Year Ended December 31,2006


2005Service cost

$
65


$
110Interest cost


45



34Amortization of prior service cost


103



77Recognized net actuarial gain


(14
)


$
199


$
221     Actuarial gain

$
(26
)Prior service costs

$
103     Year Ended December 31,2006


2005Discount rate


5.75
%


5.75
%Annual salary increase


2.00



2.00     Year Ending December 31,

Amount2007

$
952008


1492009


1682010


1682011


168Years
    2012-2016


171   Executive
    employment and change in control agreements
     F-28




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##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
    Employee
    Stock Ownership Plan
  30-year
    Year Ending December 31,

Amount2007

$
792008


832009


882010


942011


99Thereafter


4,809$
5,252       December 31,2006


2005Allocated


15,940



Committed to be allocated


15,940



15,940Unallocated


446,314



462,254478,194



478,194       17.
    STOCK
    COMPENSATION PLANS   F-29




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##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
      Fair value

$
3.86Risk-free interest rate


4.49
%Expected dividend yield


0.85
%Expected volatility


14.66
%Expected term


7 years         2007


2008


2009


2010


2011


TotalStock options

$
668


$
371


$
210


$
105


$
35


$
1,389Restricted stock


664



664



607



527



307



2,769$
1,332


$
1,035


$
817


$
632


$
342


$
4,158  F-30




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##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
  18.
    LOANS TO
    RELATED PARTIES    Years Ended December 31,2006


2005Beginning balance

$
1,348


$
2,082Originations


1,875



455Payments and change in status


(87
)


(1,189
)Ending balance

$
3,136


$
1,348     19.
    FAIR
    VALUE OF FINANCIAL INSTRUMENTS      Cash and cash equivalents:
  Securities:
  Loans including loans held for
    sale:
  Deposits:
  Short-term borrowings:
  Long-term debt:
 F-31




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##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
   Accrued interest:
  Off-balance-sheet instruments:
    December 31,2006


2005Carrying





CarryingAmount


Fair Value


Amount


Fair ValueFinancial assets:Cash and cash equivalents

$
72,595


$
72,595


$
65,750


$
65,750Securities available for sale


126,982



126,982



122,379



122,379Securities held to maturity


31



31



109



109Restricted equity securities


10,951



10,951



10,012



10,012Loans and loans held for sale


639,769



629,054



605,132



591,577Accrued interest receivable


3,480



3,480



3,045



3,045Financial liabilities:Deposits


633,179



633,056



611,673



610,456Short-term borrowings


10,000



10,000







Long-term debt


148,969



151,160



140,339



136,715Accrued interest payable


815



815



553



553   20.
    CONDENSED
    FINANCIAL STATEMENTS OF PARENT COMPANY    BALANCE
    SHEETS
  December 31,2006


2005AssetsCash due from Benjamin Franklin
    Bank

$
16,567


$
17,432Investment in common stock of
    Benjamin Franklin Bank


95,779



91,245Loan to Benjamin Franklin Bank ESOP


5,252



5,326Other assets


909



3,142Total assets

$
118,507


$
117,145Liabilities and
    Stockholders EquitySubordinated debt issued to trust
    subsidiary

$
9,000


$
9,000Other liabilities


102



33Total liabilities


9,102



9,033Stockholders equity


109,405



108,112Total liabilities and
    stockholders equity

$
118,507


$
117,145  F-32




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##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
  STATEMENTS
    OF INCOME
  Years Ended December 31,2006


2005


2004Income:Dividends from Benjamin Franklin
    Bank

$
633


$
633


$
635Interest on investments


692



464



6Total income


1,325



1,097



641Contribution to Benjamin Franklin
    Bank Charitable Foundation






4,000



Other operating expenses


642



642



646Income (loss) before income taxes
    and equity in undistributed net income of Benjamin Franklin Bank


683



(3,545
)


(5
)Applicable income tax provision
    (benefit)


20



(1,420
)


(218
)663



(2,125
)


213Equity in undistributed net income
    of Benjamin Franklin Bank


4,077



2,556



1,476Net income

$
4,740


$
431


$
1,689  F-33




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##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
  STATEMENTS
    OF CASH FLOWS
  Years Ended December 31,2006


2005


2004Cash flows from operating
    activities:Net income

$
4,740


$
431


$
1,689Adjustments to reconcile net
    income to net cash provided (used) by operating activities:Equity in undistributed net income
    of Benjamin Franklin Bank


(4,077
)


(2,556
)


(1,476
)Contribution to Benjamin Franklin
    Bank Charitable Foundation






4,000



Decrease (increase) in other assets


2,233



(2,192
)


157Increase (decrease) in other
    liabilities


69







(2
)Other, net


517







(574
)Net cash provided (used) by
    operating activities


3,482



(317
)


(206
)Cash flows from investing
    activities:Investment in Benjamin Franklin
    Bank






(30,120
)


Loan to ESOP






(5,537
)


Repayment of ESOP loan


74



212



Other, net






(41
)


Net cash provided (used) for
    investing activities


74



(35,486
)


Cash flows from financing
    activities:Proceeds from issuance of common
    stock






53,721



Common stock repurchased


(3,373
)






Dividends paid on common stock


(1,048
)


(486
)


Net cash provided (used) for
    financing activities


(4,421
)


53,235



Net increase (decrease) in cash
    and cash equivalents


(865
)


17,432



(206
)Cash and cash equivalents at
    beginning of year


17,432







206Cash and cash equivalents at end
    of year

$
16,567


$
17,432


$
  F-34




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##### Table of Contents



BENJAMIN
    FRANKLIN BANCORP, INC. AND SUBSIDIARY
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (Dollars
    in Thousands)
  21.
    QUARTERLY
    DATA (UNAUDITED)  Years Ended December 31,2006


2005Fourth


Third


Second


First


Fourth


Third


Second


FirstQuarter


Quarter


Quarter


Quarter


Quarter


Quarter


Quarter


Quarter(In thousands, except per share data)Interest and dividend income

$
11,602


$
11,395


$
10,822


$
10,440


$
10,207


$
10,029


$
9,186


$
5,713Interest expense


6,016



5,410



4,908



4,528



4,196



3,709



3,128



2,084Net interest income


5,586



5,985



5,914



5,912



6,011



6,320



6,058



3,629Provision for loan losses


(141
)


200



122



6



38



152



328



168Net interest income, after
    provision for loan losses


5,727



5,785



5,792



5,906



5,973



6,168



5,730



3,461Non-interest income


(1,202
)(2)


1,719



1,547



1,397



1,436



1,314



245



492Non-interest expenses


5,911



5,704



5,355



5,318



5,332



5,339



9,142
(1)


3,463Income (loss) before income taxes


(1,386
)


1,800



1,984



1,985



2,077



2,143



(3,167
)


490Provision (benefit) for income taxes


(2,430
)


632



724



717



764



814



(625
)


159Net income (loss)

$
1,044


$
1,168


$
1,260


$
1,268


$
1,313


$
1,329


$
(2,542
)

$
331Earnings per common share:Basic

$
0.13


$
0.15


$
0.16


$
0.16


$
0.16


$
0.16



n/a



n/aDiluted

$
0.13


$
0.15


$
0.16


$
0.16


$
0.16


$
0.16



n/a



n/a     (1)
    
    Includes $4.0 million Foundation contribution and
    $1.0 million net loss on sale/writedown of bank-owned land.(2)
    
    Includes $2,361 loss on loans held for sale. F-35