##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTER ENDED MARCH 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Commission file number 000-51194
 Benjamin Franklin Bancorp, Inc.
  Massachusetts
    
    04-3336598(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)58 Main Street, Franklin, MA
    
    02038(Address of Principal Executive Offices)
    
    (Zip Code)
 (617) 528-7000
 þ o
  o þ o
  o þ




---



##### 



PagePART I  FINANCIAL INFORMATIONItem 1. Consolidated Financial StatementsConsolidated Balance Sheets at March 31, 2007 and December 31, 2006
    
    
    3Consolidated Statements of Income for the three months ended
March 31, 2007 and 2006
    
    
    4Consolidated Statements of Changes in Stockholders Equity for the three months ended
March 31, 2007 and 2006
    
    
    5Consolidated Statements of Cash Flows for the three months ended
March 31, 2007 and 2006
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    9Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    23Item 4. Controls and Procedures
    
    
    24PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    26Item 1A Risk Factors That May Affect Future Results
    
    
    26Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    26Item 3. Defaults on Senior Securities
    
    
    26Item 4. Submission of Matters to a Vote of Security Holders
    
    
    26Item 5. Other Information
    
    
    26Item 6. Exhibits
    
    
    26SIGNATURES
    
    
    29EX-31.1 SECTION 302 CERTIFICATION OF CEOEX-31.2 SECTION 302 CERTIFICATION OF CFOEX-32.1 SECTION 906 CERTIFICATION OF CEOEX-32.2 SECTION 906 CERTIFICATION OF CFO
  2




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 BENJAMIN FRANKLIN BANCORP, INC. AND SUBSIDIARY
 
 CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands)
 March 31,
    
    
    December 31,2007
    
    
    2006(Unaudited)
    
    
    (Audited)ASSETSCash and due from banks
    
    $
    20,383
    
    
    $
    16,115Cash supplied by CSSI to ATM customers
    
    
    33,783
    
    
    
    39,732Short-term investments
    
    
    9,432
    
    
    
    16,748Total cash and cash equivalents
    
    
    63,598
    
    
    
    72,595Securities available for sale, at fair value
    
    
    159,880
    
    
    
    126,982Securities held to maturity, at amortized cost
    
    
    29
    
    
    
    31Restricted equity securities, at cost
    
    
    11,184
    
    
    
    10,951Total securities
    
    
    171,093
    
    
    
    137,964LoansResidential real estate
    
    
    209,436
    
    
    
    212,131Commercial real estate
    
    
    248,768
    
    
    
    231,372Construction
    
    
    67,498
    
    
    
    68,877Commercial business
    
    
    32,551
    
    
    
    28,871Consumer
    
    
    38,909
    
    
    
    39,656Net deferred loan costs
    
    
    905
    
    
    
    913Total loans, gross
    
    
    598,067
    
    
    
    581,820Allowance for loan losses
    
    
    (5,929
    )
    
    
    (5,781
    )Loans, net
    
    
    592,138
    
    
    
    576,039Loans held for sale, net
    
    
    
    
    
    
    63,730Premises and equipment, net
    
    
    5,115
    
    
    
    5,202Accrued interest receivable
    
    
    3,768
    
    
    
    3,480Bank-owned life insurance
    
    
    10,395
    
    
    
    10,298Goodwill
    
    
    33,763
    
    
    
    33,763Other intangible assets
    
    
    2,852
    
    
    
    3,069Other assets
    
    
    8,442
    
    
    
    7,538$
    891,164
    
    
    $
    913,678LIABILITIES AND STOCKHOLDERS EQUITYDeposits:Regular savings accounts
    
    $
    83,816
    
    
    $
    81,569Money market accounts
    
    
    103,369
    
    
    
    93,988NOW accounts
    
    
    36,613
    
    
    
    28,606Demand deposit accounts
    
    
    119,072
    
    
    
    120,966Time deposit accounts
    
    
    288,777
    
    
    
    308,050Total deposits
    
    
    631,647
    
    
    
    633,179Short-term borrowings
    
    
    600
    
    
    
    10,000Long-term debt
    
    
    138,934
    
    
    
    148,969Deferred gain on sale of premises
    
    
    3,720
    
    
    
    3,783Other liabilities
    
    
    7,282
    
    
    
    8,342Total liabilities
    
    
    782,183
    
    
    
    804,273Common stock, no par value; 75,000,000 shares authorized;
8,418,137 shares issued and 8,199,802 shares outstanding
at March 31, 2007; 8,468,137 shares issued and
8,249,802 shares outstanding at December 31, 2006
    
    
    
    
    
    
    Additional paid-in capital
    
    
    82,382
    
    
    
    82,909Retained earnings
    
    
    36,889
    
    
    
    36,634Unearned compensation
    
    
    (7,728
    )
    
    
    (7,938
    )Accumulated other comprehensive loss
    
    
    (2,562
    )
    
    
    (2,200
    )Total stockholders equity
    
    
    108,981
    
    
    
    109,405$
    891,164
    
    
    $
    913,678
  3




---



##### Table of Contents



BENJAMIN FRANKLIN BANCORP, INC. AND SUBSIDIARY
 
 CONSOLIDATED STATEMENTS OF INCOME
 (Dollars in thousands, except share and per share data)
 Three Months EndedMarch 31,2007
    
    
    2006(Unaudited)Interest and dividend income:Loans, including fees
    
    $
    9,706
    
    
    $
    8,842Debt securities
    
    
    1,686
    
    
    
    1,262Dividends
    
    
    166
    
    
    
    120Short-term investments
    
    
    281
    
    
    
    216Total interest and dividend income
    
    
    11,839
    
    
    
    10,440Interest expense:Interest on deposits
    
    
    4,156
    
    
    
    3,102Interest on borrowings
    
    
    1,857
    
    
    
    1,426Total interest expense
    
    
    6,013
    
    
    
    4,528Net interest income
    
    
    5,826
    
    
    
    5,912Provision for loan losses
    
    
    170
    
    
    
    6Net interest income, after provision for loan
losses
    
    
    5,656
    
    
    
    5,906Other income:ATM servicing fees
    
    
    697
    
    
    
    625Deposit service fees
    
    
    340
    
    
    
    329Loan servicing fees
    
    
    331
    
    
    
    122Gain on sale of loans, net
    
    
    103
    
    
    
    65Gain on sale of bank-owned premises, net
    
    
    250
    
    
    
    Income from bank-owned life insurance
    
    
    97
    
    
    
    65Miscellaneous
    
    
    154
    
    
    
    204Total other income
    
    
    1,972
    
    
    
    1,410Operating expenses:Salaries and employee benefits
    
    
    3,613
    
    
    
    2,721Occupancy and equipment
    
    
    908
    
    
    
    666Data processing
    
    
    604
    
    
    
    448Professional fees
    
    
    237
    
    
    
    378Marketing and advertising
    
    
    128
    
    
    
    162Amortization of core deposit intangible
    
    
    217
    
    
    
    301Other general and administrative
    
    
    1,092
    
    
    
    655Total operating expenses
    
    
    6,799
    
    
    
    5,331Income before income taxes
    
    
    829
    
    
    
    1,985Provision for income taxes
    
    
    238
    
    
    
    717Net income
    
    $
    591
    
    
    $
    1,268Weighted-average shares outstanding:Basic
    
    
    7,814,438
    
    
    
    8,026,644Diluted
    
    
    7,837,969
    
    
    
    8,026,644Earnings per share:Basic
    
    $
    0.08
    
    
    $
    0.16Diluted
    
    $
    0.08
    
    
    $
    0.16
  4




---



##### Table of Contents



BENJAMIN FRANKLIN BANCORP, INC. AND SUBSIDIARY
 
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
 (Dollars in thousands)
 (Unaudited)
 AccumulatedAdditional
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    TotalCommon Stock
    
    
    Paid-in
    
    
    Retained
    
    
    Unearned
    
    
    Comprehensive
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Compensation
    
    
    Loss
    
    
    EquityBalance at December 31, 2005
    
    
    8,488,898
    
    
    $
    
    
    
    $
    82,849
    
    
    $
    32,942
    
    
    $
    (5,353
    )
    
    $
    (2,326
    )
    
    $
    108,112Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,268
    
    
    
    
    
    
    
    
    
    
    
    1,268Net unrealized loss on securities available
for
sale, net of reclassification adjustment
and tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (421
    )
    
    
    (421
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    847Release of ESOP stock
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    46
    
    
    
    
    
    
    
    54Dividends declared ($.03 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (254
    )
    
    
    
    
    
    
    
    
    
    
    (254
    )Balance at March 31, 2006
    
    
    8,488,898
    
    
    $
    
    
    
    $
    82,857
    
    
    $
    33,956
    
    
    $
    (5,307
    )
    
    $
    (2,747
    )
    
    $
    108,759Balance at December 31, 2006
    
    
    8,249,802
    
    
    $
    
    
    
    $
    82,909
    
    
    $
    36,634
    
    
    $
    (7,938
    )
    
    $
    (2,200
    )
    
    $
    109,405Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    591
    
    
    
    
    
    
    
    
    
    
    
    591Net unrealized loss on securities available
for
sale, net of reclassification adjustment
and tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (362
    )
    
    
    (362
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    229Common stock repurchased
    
    
    (50,000
    )
    
    
    
    
    
    
    (747
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (747
    )Restricted stock expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    164
    
    
    
    
    
    
    
    164Stock option expense
    
    
    
    
    
    
    
    
    
    
    205
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    205Release of ESOP stock
    
    
    
    
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    46
    
    
    
    
    
    
    
    61Dividends declared ($.04 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (336
    )
    
    
    
    
    
    
    
    
    
    
    (336
    )Balance at March 31, 2007
    
    
    8,199,802
    
    
    $
    
    
    
    $
    82,382
    
    
    $
    36,889
    
    
    $
    (7,728
    )
    
    $
    (2,562
    )
    
    $
    108,981
  5




---



##### Table of Contents



BENJAMIN FRANKLIN BANCORP, INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Dollars in thousands)
 (Unaudited)
 Three Months Ended March 31,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    591
    
    
    $
    1,268Adjustments to reconcile net income to net cash
provided by (used for) operating activities:Accretion of securities, net
    
    
    (181
    )
    
    
    (177
    )Amortization (accretion) of loans, net
    
    
    19
    
    
    
    (46
    )Gain on sale of bank-owned premises, net
    
    
    (250
    )
    
    
    Provision for loan losses
    
    
    170
    
    
    
    6Accretion of deposit and borrowings, net
    
    
    (3
    )
    
    
    (17
    )Amortization of mortgage servicing rights
    
    
    62
    
    
    
    64Depreciation and amortization
    
    
    237
    
    
    
    250Amortization of core deposit intangible
    
    
    217
    
    
    
    301Stock-based compensation and ESOP expense
    
    
    430
    
    
    
    54Income from bank-owned life insurance
    
    
    (97
    )
    
    
    (65
    )Gain on sales of loans, net
    
    
    (103
    )
    
    
    (65
    )Loans originated for sale
    
    
    (9,886
    )
    
    
    (5,879
    )Proceeds from sales of loans
    
    
    9,989
    
    
    
    5,944Increase in accrued interest receivable
    
    
    (288
    )
    
    
    (190
    )Other, net
    
    
    (2,113
    )
    
    
    433Net cash provided by (used for) operating activities
    
    
    (1,206
    )
    
    
    1,881Cash flows from investing activities:Activity in available-for-sale securities:Maturities, calls, and principal repayments
    
    
    15,206
    
    
    
    12,577Purchases
    
    
    (48,287
    )
    
    
    (19,843
    )Principal repayments on held-to-maturity securities
    
    
    2
    
    
    
    29Net change in restricted equity securities
    
    
    (233
    )
    
    
    Purchases of mortgage loans
    
    
    
    
    
    
    (16,118
    )Loan repayments (originations), net
    
    
    (15,225
    )
    
    
    5,199Proceeds from sales of loans held for sale
    
    
    62,122
    
    
    
    Proceeds from sales of bank-owned premises
    
    
    821
    
    
    
    Additions to premises and equipment
    
    
    (150
    )
    
    
    (220
    )Net cash provided by (used for) investing activities
    
    
    14,256
    
    
    
    (18,376
    )
   6




---



##### Table of Contents



BENJAMIN FRANKLIN BANCORP,INC. AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF CASH FLOWS (Concluded)
 (Dollars in thousands)
 (Unaudited)
 Three Months Ended March 31,2007
    
    
    2006Cash flows from financing activities:Net increase (decrease) in deposits
    
    
    (1,523
    )
    
    
    40,506Net repayments of short-term borrowings
    
    
    (9,400
    )
    
    
    Net repayments of long-term debt
    
    
    (10,041
    )
    
    
    (12,403
    )Common stock repurchased
    
    
    (747
    )
    
    
    Dividends paid on common stock
    
    
    (336
    )
    
    
    (254
    )Net cash provided by (used for) financing activities
    
    
    (22,047
    )
    
    
    27,849Net change in cash and cash equivalents
    
    
    (8,997
    )
    
    
    11,354Cash and cash equivalents at beginning of period
    
    
    72,595
    
    
    
    65,750Cash and cash equivalents at end of period
    
    $
    63,598
    
    
    $
    77,104Supplemental cash flow information:Interest paid on deposits
    
    $
    4,260
    
    
    $
    3,655Interest paid on short-term borrowings
    
    
    129
    
    
    
    Interest paid on long-term debt
    
    
    1,750
    
    
    
    1,382Income taxes paid
    
    
    965
    
    
    
    132Loans held for sale transferred to loans, net
    
    
    1,063
    
    
    
    Loans held for sale transferred to other assets
    
    
    545
    
    
    
    
  7




---



##### Table of Contents



BENJAMIN FRANKLIN BANCORP, INC AND SUBSIDIARY
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 1. Basis of presentation and consolidation
   Recent Accounting Pronouncements
    8




---



##### Table of Contents



2. Commitments
   3. Earnings per share
  
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Forward-Looking Statements
  9




---



##### Table of Contents



Critical Accounting Policies
  Comparison of Financial Condition at March 31, 2007 and December 31, 2006
 Overview
   Investment Activities
  10




---



##### Table of Contents





March 31, 2007
    
    
    December 31, 2006Amortized
    
    
    Fair
    
    
    Amortized
    
    
    FairCost
    
    
    Value
    
    
    Cost
    
    
    Value(In thousands)Securities available for sale:Government-sponsored enterprise
obligations
    
    $
    97,121
    
    
    $
    97,061
    
    
    $
    97,723
    
    
    $
    97,502Municipal obligations
    
    
    1,707
    
    
    
    1,691
    
    
    
    1,707
    
    
    
    1,687Mortgage-backed securities
    
    
    63,540
    
    
    
    61,128
    
    
    
    29,677
    
    
    
    27,793Total securities available for sale
    
    $
    162,368
    
    
    $
    159,880
    
    
    $
    129,107
    
    
    $
    126,982Securities held to maturity:Mortgage-backed securities
    
    $
    29
    
    
    $
    29
    
    
    $
    31
    
    
    $
    31Restricted equity securities:Federal Home Loan Bank of Boston stock
    
    $
    8,703
    
    
    $
    8,703
    
    
    $
    8,470
    
    
    $
    8,470Access Capital Strategies
Community Investment Fund
    
    
    1,965
    
    
    
    1,965
    
    
    
    1,965
    
    
    
    1,965SBLI & DIF stock
    
    
    516
    
    
    
    516
    
    
    
    516
    
    
    
    516Total restricted equity securities
    
    $
    11,184
    
    
    $
    11,184
    
    
    $
    10,951
    
    
    $
    10,951


Lending Activities


11




---



##### Table of Contents





March 31, 2007
    
    
    December 31, 2006Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(Dollars in thousands)Mortgage loans on real estate:Residential
    
    $
    209,436
    
    
    
    35.1
    %
    
    $
    212,131
    
    
    
    36.5
    %Commercial
    
    
    248,768
    
    
    
    41.7
    %
    
    
    231,372
    
    
    
    39.8
    %Construction
    
    
    67,498
    
    
    
    11.3
    %
    
    
    68,877
    
    
    
    11.9
    %Home equity
    
    
    36,116
    
    
    
    6.0
    %
    
    
    36,546
    
    
    
    6.3
    %561,818
    
    
    
    94.1
    %
    
    
    548,926
    
    
    
    94.5
    %Other loans:Commercial business
    
    
    32,551
    
    
    
    5.4
    %
    
    
    28,871
    
    
    
    5.0
    %Consumer
    
    
    2,793
    
    
    
    0.5
    %
    
    
    3,110
    
    
    
    0.5
    %35,344
    
    
    
    5.9
    %
    
    
    31,981
    
    
    
    5.5
    %Total loans, gross
    
    
    597,162
    
    
    
    100.0
    %
    
    
    580,907
    
    
    
    100.0
    %Other items:Net deferred loan costs
    
    
    905
    
    
    
    
    
    
    
    913Allowance for loan losses
    
    
    (5,929
    )
    
    
    
    
    
    
    (5,781
    )Total loans, net
    
    $
    592,138
    
    
    
    
    
    
    $
    576,039


Non-performing Assets


12




---



##### Table of Contents





March 31, 2007
    
    
    December 31, 2006(Dollars in thousands)Non-accrual loans:Residential mortgage
    
    $
    808
    
    
    $
    230Commercial mortgage
    
    
    1,685
    
    
    
    1,257Construction
    
    
    
    
    
    
    Commercial business
    
    
    
    
    
    
    Consumer
    
    
    164
    
    
    
    61Total non-accrual loans (2)
    
    $
    2,657
    
    
    $
    1,548Loans greater than 90 days delinquent and still accruing:Residential mortgage
    
    $
    260
    
    
    $
    Commercial mortgage
    
    
    
    
    
    
    Construction
    
    
    
    
    
    
    Commercial business
    
    
    
    
    
    
    Consumer
    
    
    
    
    
    
    Total loans 90 days and still accruing
    
    $
    260
    
    
    $
    Total non-performing assets
    
    $
    2,917
    
    
    $
    1,548Ratios:Non-performing loans to total loans (1)
    
    
    0.49
    %
    
    
    0.24
    %Non-performing assets to total assets
    
    
    0.33
    %
    
    
    0.17
    %





|    |  |                                                                                                                                                                                         
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) |  | Total loans include loans held for sale.                                                                                                                                                
|   
|(2) |  | The increase in non-accrual loans at March 31, 2007 from
year end 2006 is due primarily to the addition of one commercial relationship, consisting of three loans totaling $1.7 million.

Allowance for Loan Losses






13




---



##### Table of Contents











14




---



##### Table of Contents





Three Months EndedMarch 31,2007
    
    
    2006(Dollars in thousands)Balance at beginning of period
    
    $
    5,781
    
    
    $
    5,670Charge-offs:Mortgage loans on real estate
    
    
    
    
    
    
    Other loans:Commercial business
    
    
    (5
    )
    
    
    Consumer
    
    
    (32
    )
    
    
    (29
    )Total other loans
    
    
    (37
    )
    
    
    (29
    )Total charge-offs
    
    
    (37
    )
    
    
    (29
    )Recoveries:Mortgage loans on real estate
    
    
    
    
    
    
    Other loans:Commercial business
    
    
    2
    
    
    
    8Consumer
    
    
    13
    
    
    
    11Total other loans
    
    
    15
    
    
    
    19Total recoveries
    
    
    15
    
    
    
    19Net charge-offs
    
    
    (22
    )
    
    
    (10
    )Provision for loan losses
    
    
    170
    
    
    
    6Balance at end of period
    
    $
    5,929
    
    
    $
    5,666Ratios:Net (charge-offs) to average
loans outstanding (annualized)
    
    
    -0.01
    %
    
    
    -0.01
    %Allowance for loan losses to
non-performing loans at end of period
    
    
    203.24
    %
    
    
    1671.29
    %Allowance for loan losses to
total loans at end of period
    
    
    0.99
    %
    
    
    0.91
    %


Deposits


15




---



##### Table of Contents





March 31,
    
    
    % of
    
    
    December 31,
    
    
    % of2007
    
    
    Total
    
    
    2006
    
    
    Total(Dollars in thousands)Deposit type:Demand deposit accounts
    
    $
    119,072
    
    
    
    18.8
    %
    
    $
    120,966
    
    
    
    19.1
    %NOW accounts
    
    
    36,613
    
    
    
    5.8
    %
    
    
    28,606
    
    
    
    4.5
    %Regular savings accounts
    
    
    83,816
    
    
    
    13.3
    %
    
    
    81,569
    
    
    
    12.9
    %Money market accounts
    
    
    103,369
    
    
    
    16.4
    %
    
    
    93,988
    
    
    
    14.8
    %Total non-certificate accounts
    
    
    342,870
    
    
    
    54.3
    %
    
    
    325,129
    
    
    
    51.3
    %Term certificates less than $100,000
    
    
    170,088
    
    
    
    26.9
    %
    
    
    176,677
    
    
    
    27.9
    %Term certificates of $100,000 or more
    
    
    118,689
    
    
    
    18.8
    %
    
    
    131,373
    
    
    
    20.8
    %Total certificate accounts
    
    
    288,777
    
    
    
    45.7
    %
    
    
    308,050
    
    
    
    48.7
    %Total deposits
    
    $
    631,647
    
    
    
    100.0
    %
    
    $
    633,179
    
    
    
    100.0
    %




Borrowed Funds




Stockholders Equity




Comparison of Operating Results for the Three Months Ended March 31, 2007 and 2006




Analysis of Net Interest Income




16



---



##### Table of Contents



Three Months Ended March 31,2007
    
    
    2006Average
    
    
    
    
    
    
    
    
    
    
    AverageOutstanding
    
    
    
    
    
    
    
    
    
    
    OutstandingBalance
    
    
    Interest
    
    
    Yield/Rate(1)
    
    
    Balance
    
    
    Interest
    
    
    Yield/Rate(1)(Dollars in thousands)Interest-earning assets:Loans
    
    $
    625,857
    
    
    $
    9,706
    
    
    
    6.21
    %
    
    $
    606,510
    
    
    $
    8,842
    
    
    
    5.91
    %Securities
    
    
    150,793
    
    
    
    1,852
    
    
    
    4.92
    %
    
    
    136,805
    
    
    
    1,382
    
    
    
    4.10
    %Short-term investments
    
    
    22,361
    
    
    
    281
    
    
    
    5.03
    %
    
    
    19,697
    
    
    
    216
    
    
    
    4.45
    %Total interest-earning assets
    
    
    799,011
    
    
    
    11,839
    
    
    
    5.93
    %
    
    
    763,012
    
    
    
    10,440
    
    
    
    5.55
    %Non-interest-earning assets
    
    
    108,532
    
    
    
    
    
    
    
    
    
    
    
    115,936Total assets
    
    $
    907,543
    
    
    
    
    
    
    
    
    
    
    $
    878,948Interest-bearing liabilities:Savings deposits
    
    $
    83,546
    
    
    
    102
    
    
    
    0.50
    %
    
    $
    96,624
    
    
    
    118
    
    
    
    0.50
    %Money market accounts
    
    
    98,504
    
    
    
    620
    
    
    
    2.55
    %
    
    
    98,587
    
    
    
    510
    
    
    
    2.10
    %NOW accounts
    
    
    28,458
    
    
    
    90
    
    
    
    1.28
    %
    
    
    27,155
    
    
    
    10
    
    
    
    0.15
    %Certificates of deposit
    
    
    297,288
    
    
    
    3,344
    
    
    
    4.56
    %
    
    
    275,787
    
    
    
    2,464
    
    
    
    3.62
    %Total deposits
    
    
    507,796
    
    
    
    4,156
    
    
    
    3.32
    %
    
    
    498,153
    
    
    
    3,102
    
    
    
    2.53
    %Borrowings
    
    
    158,145
    
    
    
    1,857
    
    
    
    4.70
    %
    
    
    141,797
    
    
    
    1,426
    
    
    
    4.08
    %Total interest-bearing liabilities
    
    
    665,941
    
    
    
    6,013
    
    
    
    3.65
    %
    
    
    639,950
    
    
    
    4,528
    
    
    
    2.87
    %Non-interest bearing liabilities
    
    
    131,766
    
    
    
    
    
    
    
    
    
    
    
    130,530Total liabilities
    
    
    797,707
    
    
    
    
    
    
    
    
    
    
    
    770,480Equity
    
    
    109,836
    
    
    
    
    
    
    
    
    
    
    
    108,468Total liabilities and equity
    
    $
    907,543
    
    
    
    
    
    
    
    
    
    
    $
    878,948Net interest income
    
    
    
    
    
    $
    5,826
    
    
    
    
    
    
    
    
    
    
    $
    5,912Net interest rate spread (2)
    
    
    
    
    
    
    
    
    
    
    2.28
    %
    
    
    
    
    
    
    
    
    
    
    2.68
    %Net interest-earning assets (3)
    
    $
    133,070
    
    
    
    
    
    
    
    
    
    
    $
    123,062Net interest margin (4)
    
    
    
    
    
    
    
    
    
    
    2.96
    %
    
    
    
    
    
    
    
    
    
    
    3.14
    %Average interest-earning assets to
interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    119.98
    %
    
    
    
    
    
    
    
    
    
    
    119.23
    %
 
 (1)
    
    Yields and rates for the three months ended March 31, 2007 and 2006 are annualized.(2)
    
    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.(3)
    
    Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.(4)
    
    Net interest margin represents net interest income divided by average total interest-earning assets.




---



##### Table of Contents



Three Months Ended March 31,2007 vs. 2006Increase (Decrease)Due to
    
    
    TotalIncreaseVolume
    
    
    Rate
    
    
    (Decrease)(In thousands)Interest-earning assets:Loans
    
    $
    288
    
    
    $
    576
    
    
    $
    864Securities
    
    
    151
    
    
    
    319
    
    
    
    470Short-term investments
    
    
    31
    
    
    
    34
    
    
    
    65Total interest-earning assets
    
    
    470
    
    
    
    929
    
    
    
    1,399Interest-bearing liabilities:Savings accounts
    
    
    (16
    )
    
    
    
    
    
    
    (16
    )Money market accounts
    
    
    
    
    
    
    110
    
    
    
    110NOW accounts
    
    
    1
    
    
    
    79
    
    
    
    80Certificates of deposit
    
    
    204
    
    
    
    676
    
    
    
    880Total deposits
    
    
    189
    
    
    
    865
    
    
    
    1,054Borrowings
    
    
    176
    
    
    
    255
    
    
    
    431Total interest-bearing liabilities
    
    
    365
    
    
    
    1,120
    
    
    
    1,485Change in net interest income
    
    $
    105
    
    
    $
    (191
    )
    
    $
    (86
    )
    18




---



##### Table of Contents



Provision for Loan Losses
   Non-interest Income
    19




---



##### Table of Contents



Non-interest Expense
      20




---



##### Table of Contents



Income Taxes
  Liquidity and Capital Resources
     Contractual Obligations:
 March 31, 2007More than
    
    
    More thanOne Year
    
    
    Three YearsOne Year
    
    
    through Three
    
    
    through five
    
    
    Over FiveTotal
    
    
    or Less
    
    
    Years
    
    
    Years
    
    
    Years(In thousands)Federal Home Loan Bank advances(1)
    
    $
    130,534
    
    
    $
    13,600
    
    
    $
    53,975
    
    
    $
    55,000
    
    
    $
    7,959Subordinated debt
    
    
    9,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,000Operating leases (2)
    
    
    13,512
    
    
    
    1,197
    
    
    
    2,056
    
    
    
    1,930
    
    
    
    8,329Other contractual obligations(3)
    
    
    7,392
    
    
    
    3,439
    
    
    
    3,953
    
    
    
    
    
    
    
    Total contractual obligations
    
    $
    160,438
    
    
    $
    18,236
    
    
    $
    59,984
    
    
    $
    56,930
    
    
    $
    25,288
 
 (1)
    
    Secured under a blanket security agreement on qualifying assets, principally 1-4 Family Residential mortgage loans.
An advance in the amount of $10.0 million maturing in June, 2010, will become immediately payable if 3-month LIBOR rises above 6.0% (measured on a quarterly basis, beginning in June 2006).(2)
    
    Represents non-cancelable operating leases for branch offices.(3)
    
    Represents contracts for technology services and employment agreements. 21




---



##### Table of Contents



Loan Commitments
 March 31, 2007More than
    
    
    More thanOne Year
    
    
    Three YearsOne Year
    
    
    through
    
    
    through
    
    
    Over FiveTotal
    
    
    or Less
    
    
    Three Years
    
    
    Five Years
    
    
    Years(In thousands)Commitments to grant loans (1)
    
    $
    19,863
    
    
    $
    19,863
    
    
    $
    
    
    
    $
    
    
    
    $
    Unused portion of commercial loan lines of credit
    
    
    24,220
    
    
    
    21,490
    
    
    
    2,730
    
    
    
    
    
    
    
    Unused portion of home equity lines of credit (2)
    
    
    40,781
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,781Unused portion of construction lines of credit (3)
    
    
    20,550
    
    
    
    16,810
    
    
    
    3,562
    
    
    
    
    
    
    
    178Unused portion of personal lines of credit (4)
    
    
    2,459
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,459Commercial letter of credit
    
    
    1,460
    
    
    
    1,460
    
    
    
    
    
    
    
    
    
    
    
    Total loan commitments
    
    $
    109,333
    
    
    $
    59,623
    
    
    $
    6,292
    
    
    $
    
    
    
    $
    43,418
  
 (1)
    
    Commitments to grant 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 lines of credit are available to the borrower for up to 2 years for development loans and up to 1 year for other construction loans.(4)
    
    Unused portions of personal lines of credit are available to customers in good standing indefinitely. Minimum Regulatory Capital Requirements:
  22




---



##### Table of Contents



MinimumTo Be WellMinimum
    
    
    Capitalized UnderCapital
    
    
    Prompt CorrectiveActual
    
    
    Requirements
    
    
    Action ProvisionsAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio(Dollars in thousands)March 31, 2007:Total capital to risk weighted assets:Consolidated
    
    $
    89,560
    
    
    
    14.7
    %
    
    $
    48,682
    
    
    
    8.0
    %
    
    
    N/A
    
    
    
    N/ABank
    
    
    67,603
    
    
    
    11.1
    
    
    
    48,685
    
    
    
    8.0
    
    
    $
    60,857
    
    
    
    10.0
    %Tier 1 capital to risk weighted assets:Consolidated
    
    
    83,631
    
    
    
    13.7
    
    
    
    24,341
    
    
    
    4.0
    
    
    
    N/A
    
    
    
    N/ABank
    
    
    61,674
    
    
    
    10.1
    
    
    
    24,343
    
    
    
    4.0
    
    
    
    36,514
    
    
    
    6.0Tier 1 capital to average assets:Consolidated
    
    
    83,631
    
    
    
    9.6
    
    
    
    36,302
    
    
    
    4.0
    
    
    
    N/A
    
    
    
    N/ABank
    
    
    61,674
    
    
    
    7.1
    
    
    
    36,273
    
    
    
    4.0
    
    
    
    45,341
    
    
    
    5.0December 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
    
    
    
    7.0
    
    
    
    34,793
    
    
    
    4.0
    
    
    
    43,491
    
    
    
    5.0
 
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
   23




---



##### Table of Contents



Percentage Change in EstimatedNet Interest Income over 12months200 basis point increase in rates
    
    
    (5.03
    )%100 basis point increase in rates
    
    
    (2.41
    )%Flat interest rates
    
    
    100 basis point decrease in
rates
    
    
    2.46
    %200 basis point decrease in rates
    
    
    1.84
    %
   
 Item 4. Controls and Procedures.
 (a) Evaluation of Disclosure Controls and Procedures.
  24




---



##### Table of Contents



Changes in Internal Controls Over Financial Reporting
 25




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors That May Affect Future Results
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
 (a)
    
    Unregistered Sale of Equity Securities.Not applicable.(b)
    
    Use of Proceeds. Not applicable.(c)
    
    Repurchases of Our Equity Securities.On November 14, 2006,
Benjamin Franklin Bancorp announced that its Board of Directors had authorized a plan
to repurchase up to 412,490 shares (approximately 5%) of the Companys outstanding
common shares, at the discretion of management through open market transactions or
negotiated block transactions. In the first quarter of 2007, the Company purchased
50,000 shares under this plan, as follows:
 (a) Total
    
    
    
    
    
    (c) Total Number of
    
    (d) Maximum number (orNumber of
    
    (b) Average
    
    Shares Purchased as Part
    
    approximate dollar value) ofShares
    
    Price Paid per
    
    of Publicly Announced
    
    shares that may yet be purchasedPeriod
    
    Purchased
    
    Share
    
    Plans or Programs
    
    under the Plans or ProgramsJanuary 1-31
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    412,490February 1-28
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    412,490March 1-31
    
    
    50,000
    
    
    $
    14.93
    
    
    
    50,000
    
    
    
    362,490
  
 Item 3. Defaults on Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
  
 Item 6. Exhibits.
  26




---



##### Table of Contents



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. *
    
    
    210.4.1
    
    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.
    
    -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.
    
    
    1
 27




---



##### Table of Contents



Exhibit No.
    
    Description
    
    Footnotes32.1
    
    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
 
  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.
 28




---



##### Table of Contents



SIGNATURES
  Benjamin Franklin Bancorp, Inc.Date: May 9, 2007
    
    By:
    
    /s/ Thomas R. VenablesThomas R. VenablesPresident and Chief Executive OfficerDate: May 9, 2007
    
    By:
    
    /s/ Claire S. BeanClaire S. BeanTreasurer and Chief Financial Officer
 29




---



##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Item31.1
    
    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.
 30