##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-Q







|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

FOR THE QUARTERLY PERIOD ENDED March 31, 2010

OR



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

For the transition period from  to

Commission file number 000-52240





Ben Franklin Financial, Inc.

(Exact name of registrant as specified in its charter)







|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Federal                                                        |  | 20-5838969                       
|(State or other jurisdiction of
incorporation or organization) |  | (IRS Employer
Identification No.)



|                                                      |  |           
|----------------------------------------------------- |  | ----------
|830 East Kensington Road, Arlington Heights, Illinois |  | 60004     
|(Address of principal executive offices)              |  | (Zip Code)

(847)
398-0990

(Registrants telephone number, including area code)





Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  x    No   ̈

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

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



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large Accelerated Filer |  |  ̈ |  | Accelerated Filer         |  |  ̈
|                        |  |   | 
|Non-accelerated filer   |  |  ̈ |  | Smaller Reporting Company |  | x

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

Number of outstanding shares of common stock as of May 14, 2010: 1,950,383 shares









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##### Table of Contents

BEN FRANKLIN FINANCIAL, INC.

INDEX



|                                                                                                                           |  |         
|-------------------------------------------------------------------------------------------------------------------------- |  | --------
|                                                                                                                           |  | PAGE NO.
|PART I  Financial Information                                                                                             |  |         
|                                                                                                                           | 
|Item 1. Financial Statements of Ben Franklin Financial, Inc.                                                               |  |         
|                                                                                                                           | 
|Consolidated Statements of Financial Condition (Unaudited) as of March 31, 2010 and December 
31, 2009                     |  | 1       
|                                                                                                                           | 
|Consolidated Statements of Operations (Unaudited) for the three months ended March 31, 2010 and
2009                       |  | 2       
|                                                                                                                           | 
|Consolidated Statements of Changes in Stockholders Equity (Unaudited) for the three months ended March 31,
 2010 and 2009 |  | 3       
|                                                                                                                           | 
|Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2010 and
2009                       |  | 4       
|                                                                                                                           | 
|Notes to Consolidated Financial Statements (Unaudited)                                                                     |  | 5       
|                                                                                                                           | 
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations                              |  | 11      
|                                                                                                                           | 
|Item 3. Quantitative and Qualitative Disclosures about Market Risk                                                         |  | 19      
|                                                                                                                           | 
|Item 4(T). Controls and Procedures                                                                                         |  | 19      
|                                                                                                                           | 
|PART II  Other Information                                                                                                |  |         
|                                                                                                                           | 
|Item 1. Legal Proceedings                                                                                                  |  | 19      
|Item 1A. Risk Factors                                                                                                      |  | 19      
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                                        |  | 19      
|Item 3. Defaults Upon Senior Securities                                                                                    |  | 19      
|Item 4. Removed and Reserved                                                                                               |  | 19      
|Item 5. Other Information                                                                                                  |  | 19      
|Item 6. Exhibits                                                                                                           |  | 19      
|Form 10-Q Signatures                                                                                                       |  | 20      



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##### Table of Contents

PART I  Financial Information



|Item 1. | Financial Statements
|------- | --------------------

BEN FRANKLIN FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Dollars in thousands except share data)

(Unaudited)



|                                                                                                                                        |  |               |         |   |                  |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                        |  | March 31,2010 |         |   | December 31,2009 |  
|ASSETS                                                                                                                                  |  |               |         |   |                  |   |         |  
|Cash and due from banks                                                                                                                 |  | $             | 1,975   |   |                  | $ | 1,016   |  
|Interest-earning deposit accounts                                                                                                       |  |               | 2,455   |   |                  |   | 2,090   |  
|Federal funds sold                                                                                                                      |  |               | 4,625   |   |                  |   | 4,690   |  
|                                                                                                                                        |  |               |         |   |                  |   |         |  
|Cash and cash equivalents                                                                                                               |  |               | 9,055   |   |                  |   | 7,796   |  
|Securities available-for-sale                                                                                                           |  |               | 2,340   |   |                  |   | 2,463   |  
|Loans receivable, net of allowance for loan losses of $997 at March 31, 2010 and $940 at December 31, 2009                              |  |               | 101,955 |   |                  |   | 104,594 |  
|Federal Home Loan Bank stock                                                                                                            |  |               | 1,337   |   |                  |   | 1,337   |  
|Premises and equipment, net                                                                                                             |  |               | 954     |   |                  |   | 963     |  
|Repossessed assets                                                                                                                      |  |               | 220     |   |                  |   | 991     |  
|Accrued interest receivable                                                                                                             |  |               | 397     |   |                  |   | 457     |  
|Prepaid FDIC premiums                                                                                                                   |  |               | 573     |   |                  |   | 613     |  
|Other assets                                                                                                                            |  |               | 507     |   |                  |   | 468     |  
|                                                                                                                                        |  |               |         |   |                  |   |         |  
|                                                                                                                                        |  |              
|Total assets                                                                                                                            |  | $             | 117,338 |   |                  | $ | 119,682 |  
|                                                                                                                                        |  |               |         |   |                  |   |         |  
|                                                                                                                                        |  |              
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                    |  |               |         |   |                  |   |         |  
|Liabilities                                                                                                                             |  |               |         |   |                  |   |         |  
|Demand deposits - noninterest-bearing                                                                                                   |  | $             | 2,093   |   |                  | $ | 1,835   |  
|Demand deposits - interest-bearing                                                                                                      |  |               | 7,071   |   |                  |   | 7,332   |  
|Savings deposits                                                                                                                        |  |               | 7,031   |   |                  |   | 7,278   |  
|Money market deposits                                                                                                                   |  |               | 13,114  |   |                  |   | 11,002  |  
|Certificates of deposit                                                                                                                 |  |               | 71,634  |   |                  |   | 75,666  |  
|                                                                                                                                        |  |               |         |   |                  |   |         |  
|Total deposits                                                                                                                          |  |               | 100,943 |   |                  |   | 103,113 |  
|Advances from Federal Home Loan Bank                                                                                                    |  |               | 2,000   |   |                  |   | 2,000   |  
|Advances from borrowers for taxes and insurance                                                                                         |  |               | 244     |   |                  |   | 433     |  
|Other liabilities                                                                                                                       |  |               | 185     |   |                  |   | 264     |  
|Common stock in ESOP subject to contingent purchase obligation                                                                          |  |               | 37      |   |                  |   | 43      |  
|                                                                                                                                        |  |               |         |   |                  |   |         |  
|                                                                                                                                        |  |              
|Total liabilities                                                                                                                       |  |               | 103,409 |   |                  |   | 105,853 |  
|                                                                                                                                        |  |              
|Stockholders equity                                                                                                                    |  |               |         |   |                  |   |         |  
|Common stock, par value $0.01 per share; 20,000,000 shares authorized; 1,950,383 shares issued and outstanding (net of treasury
shares) |  |               | 20      |   |                  |   | 20      |  
|Additional paid-in-capital                                                                                                              |  |               | 8,104   |   |                  |   | 8,088   |  
|Treasury stock, at cost  67,843 shares                                                                                                 |  |               | (461    | ) |                  |   | (461    | )
|Retained earnings, substantially restricted                                                                                             |  |               | 6,835   |   |                  |   | 6,776   |  
|Unearned Employee Stock Ownership Plan (ESOP) shares                                                                                    |  |               | (596    | ) |                  |   | (609    | )
|Accumulated other comprehensive income                                                                                                  |  |               | 64      |   |                  |   | 58      |  
|Reclassification of ESOP shares                                                                                                         |  |               | (37     | ) |                  |   | (43     | )
|                                                                                                                                        |  |               |         |   |                  |   |         |  
|Total stockholders equity                                                                                                              |  |               | 13,929  |   |                  |   | 13,829  |  
|                                                                                                                                        |  |               |         |   |                  |   |         |  
|                                                                                                                                        |  |              
|Total liabilities and stockholders equity                                                                                              |  | $             | 117,338 |   |                  | $ | 119,682 |  
|                                                                                                                                        |  |               |         |   |                  |   |         |  

See accompanying notes to consolidated financial statements



1



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BEN FRANKLIN FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands except per share amounts)

(Unaudited)



|                                                    |  |                              |       |   |      |   |       |  
|--------------------------------------------------- |  | ---------------------------- | ----- | - | ---- | - | ----- | -
|                                                    |  | Three Months EndedMarch 
31, |      
|                                                    |  | 2010                         |       |   | 2009 |  
|Interest income                                     |  |                              |       |   |      |   |       |  
|Loans                                               |  | $                            | 1,380 |   |      | $ | 1,499 |  
|Securities                                          |  |                              | 23    |   |      |   | 35    |  
|Federal funds sold and other                        |  |                              | 1     |   |      |   | 2     |  
|                                                    |  |                              |       |   |      |   |       |  
|                                                    |  |                              | 1,404 |   |      |   | 1,536 |  
|                                                    |  |                             
|Interest expense                                    |  |                              |       |   |      |   |       |  
|Deposits                                            |  |                              | 471   |   |      |   | 719   |  
|Federal Home Loan Bank advances                     |  |                              | 19    |   |      |   | 72    |  
|                                                    |  |                              |       |   |      |   |       |  
|                                                    |  |                              | 490   |   |      |   | 791   |  
|                                                    |  |                              |       |   |      |   |       |  
|                                                    |  |                             
|Net interest income                                 |  |                              | 914   |   |      |   | 745   |  
|                                                    |  |                             
|Provision for loan losses                           |  |                              | 69    |   |      |   | 77    |  
|                                                    |  |                              |       |   |      |   |       |  
|                                                    |  |                             
|Net interest income after provision for loan losses |  |                              | 845   |   |      |   | 668   |  
|                                                    |  |                             
|Non-interest income                                 |  |                              |       |   |      |   |       |  
|Service fee income                                  |  |                              | 35    |   |      |   | 31    |  
|Loss on sale of other assets                        |  |                              | (1    | ) |      |   | (10   | )
|Other                                               |  |                              | 3     |   |      |   | 2     |  
|                                                    |  |                              |       |   |      |   |       |  
|                                                    |  |                              | 37    |   |      |   | 23    |  
|                                                    |  |                             
|Non-interest expense                                |  |                              |       |   |      |   |       |  
|Compensation and employee benefits                  |  |                              | 386   |   |      |   | 440   |  
|Occupancy and equipment                             |  |                              | 132   |   |      |   | 138   |  
|Data processing services                            |  |                              | 64    |   |      |   | 59    |  
|Professional fees                                   |  |                              | 110   |   |      |   | 79    |  
|FDIC insurance premiums                             |  |                              | 44    |   |      |   | 21    |  
|Other real estate losses and holding costs          |  |                              | 15    |   |      |   | 28    |  
|Other                                               |  |                              | 76    |   |      |   | 73    |  
|                                                    |  |                              |       |   |      |   |       |  
|                                                    |  |                              | 827   |   |      |   | 838   |  
|                                                    |  |                              |       |   |      |   |       |  
|                                                    |  |                             
|Income (loss) before income taxes                   |  |                              | 55    |   |      |   | (147  | )
|                                                    |  |                             
|Income tax benefit                                  |  |                              | (4    | ) |      |   | (51   | )
|                                                    |  |                              |       |   |      |   |       |  
|                                                    |  |                             
|Net income (loss)                                   |  | $                            | 59    |   |      | $ | (96   | )
|                                                    |  |                              |       |   |      |   |       |  
|                                                    |  |                             
|Earnings (loss) per common share                    |  |                              | 0.03  |   |      |   | (0.05 | )

See accompanying notes to
consolidated financial statements



2



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BEN FRANKLIN FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

For the three Months Ended March 31, 2010 and 2009  (Unaudited)



|                                                                                                                 |  |             |    |                          |   |               |  |   |                  |   |  |                    |       |   |                                     |   |                                 |   |  |       |    |  |                            |     |   |  |   |        |   |  |   |     |  
|---------------------------------------------------------------------------------------------------------------- |  | ----------- | -- | ------------------------ | - | ------------- |  | - | ---------------- | - |  | ------------------ | ----- | - | ----------------------------------- | - | ------------------------------- | - |  | ----- | -- |  | -------------------------- | --- | - |  | - | ------ | - |  | - | --- | -
|                                                                                                                 |  | CommonStock |    | AdditionalPaid-InCapital |   | TreasuryStock |  |   | RetainedEarnings |   |  | UnearnedESOPShares |       |   | AccumulatedOtherComprehensiveIncome |   | AmountReclassifiedon ESOPShares |   |  | Total |    |  | ComprehensiveIncome
(Loss) |    
|                                                                                                                 |  |             |    |                          |   |               |  |   |                 
|Balance at January 1, 2009                                                                                       |  | $           | 20 |                          | $ | 8,014         |  | $ | (285             | ) |  | $                  | 8,397 |   |                                     | $ | (665                            | ) |  | $     | 9  |  | $                          | (73 | ) |  | $ | 15,417 |   |  |   |     |  
|Comprehensive income (loss)                                                                                      |  |             |    |                          |   |               |  |   |                  |   |  |                    |       |   |                                     |   |                                 |   |  |       |    |  |                            |     |   |  |   |        |   |  |   |     |  
|Net loss                                                                                                         |  |             |   |                          |   |              |  |   |                 |   |  |                    | (96   | ) |                                     |   |                                |   |  |       |   |  |                            |    |   |  |   | (96    | ) |  | $ | (96 | )
|Unrealized gain on securities available- for-sale, net of deferred income taxes                                  |  |             |   |                          |   |              |  |   |                 |   |  |                    |      |   |                                     |   |                                |   |  |       | 27 |  |                            |    |   |  |   | 27     |   |  |   | 27  |  
|                                                                                                                 |  |             |    |                          |   |               |  |   |                  |   |  |                    |       |   |                                     |   |                                 |   |  |       |    |  |                            |     |   |  |   |        |   |  |   |     |  
|Total comprehensive loss                                                                                         |  |             |    |                          |   |               |  |   |                  |   |  |                    |       |   |                                     |   |                                 |   |  |       |    |  |                            |     |   |  |   |        |   |  | $ | (69 | )
|                                                                                                                 |  |             |    |                          |   |               |  |   |                  |   |  |                    |       |   |                                     |   |                                 |   |  |       |    |  |                            |     |   |  |   |        |   |  |   |     |  
|Earned ESOP shares and other stock based compensation                                                            |  |             |   |                          |   | 21            |  |   |                 |   |  |                    |      |   |                                     |   | 13                              |   |  |       |   |  |                            |    |   |  |   | 34     |   |  |   |     |  
|Purchase of common stock (19,300 shares)                                                                         |  |             |   |                          |   |              |  |   | (117             | ) |  |                    |      |   |                                     |   |                                |   |  |       |   |  |                            |    |   |  |   | (117   | ) |  |   |     |  
|Reclassification due to change in fair value of common stock in ESOP subject to contingent repurchase obligation |  |             |   |                          |   |              |  |   |                 |   |  |                    |      |   |                                     |   |                                |   |  |       |   |  |                            | 9   |   |  |   | 9      |   |  |   |     |  
|                                                                                                                 |  |             |    |                          |   |               |  |   |                  |   |  |                    |       |   |                                     |   |                                 |   |  |       |    |  |                            |     |   |  |   |        |   |  |   |     |  
|Balance at March 31, 2009                                                                                        |  | $           | 20 |                          | $ | 8,035         |  | $ | (402             | ) |  | $                  | 8,301 |   |                                     | $ | (652                            | ) |  | $     | 36 |  | $                          | (64 | ) |  | $ | 15,274 |   |  |   |     |  
|                                                                                                                 |  |             |    |                          |   |               |  |   |                  |   |  |                    |       |   |                                     |   |                                 |   |  |       |    |  |                            |     |   |  |   |        |   |  |   |     |  
|                                                                                                                 |  |             |    |                          |   |               |  |   |                 
|Balance at January 1, 2010                                                                                       |  | $           | 20 |                          | $ | 8,088         |  | $ | (461             | ) |  | $                  | 6,776 |   |                                     | $ | (609                            | ) |  | $     | 58 |  | $                          | (43 | ) |  | $ | 13,829 |   |  |   |     |  
|Comprehensive income                                                                                             |  |             |    |                          |   |               |  |   |                  |   |  |                    |       |   |                                     |   |                                 |   |  |       |    |  |                            |     |   |  |   |        |   |  |   |     |  
|Net income                                                                                                       |  |             |   |                          |   |              |  |   |                 |   |  |                    | 59    |   |                                     |   |                                |   |  |       |   |  |                            |    |   |  |   | 59     |   |  | $ | 59  |  
|Unrealized gain on securities available for-sale, net of deferred income taxes                                   |  |             |   |                          |   |              |  |   |                 |   |  |                    |      |   |                                     |   |                                |   |  |       | 6  |  |                            |    |   |  |   | 6      |   |  |   | 6   |  
|                                                                                                                 |  |             |    |                          |   |               |  |   |                  |   |  |                    |       |   |                                     |   |                                 |   |  |       |    |  |                            |     |   |  |   |        |   |  |   |     |  
|Total comprehensive income                                                                                       |  |             |    |                          |   |               |  |   |                  |   |  |                    |       |   |                                     |   |                                 |   |  |       |    |  |                            |     |   |  |   |        |   |  | $ | 65  |  
|                                                                                                                 |  |             |    |                          |   |               |  |   |                  |   |  |                    |       |   |                                     |   |                                 |   |  |       |    |  |                            |     |   |  |   |        |   |  |   |     |  
|Earned ESOP shares and other stock based compensation                                                            |  |             |   |                          |   | 16            |  |   |                 |   |  |                    |      |   |                                     |   | 13                              |   |  |       |   |  |                            |    |   |  |   | 29     |   |  |   |     |  
|Reclassification due to change in fair value of common stock in ESOP subject to contingent repurchase obligation |  |             |   |                          |   |              |  |   |                 |   |  |                    |      |   |                                     |   |                                |   |  |       |   |  |                            | 6   |   |  |   | 6      |   |  |   |     |  
|                                                                                                                 |  |             |    |                          |   |               |  |   |                  |   |  |                    |       |   |                                     |   |                                 |   |  |       |    |  |                            |     |   |  |   |        |   |  |   |     |  
|                                                                                                                 |  |             |    |                          |   |               |  |   |                 
|Balance at March 31, 2010                                                                                        |  | $           | 20 |                          | $ | 8,104         |  | $ | (461             | ) |  | $                  | 6,835 |   |                                     | $ | (596                            | ) |  | $     | 64 |  | $                          | (37 | ) |  | $ | 13,929 |   |  |   |     |  
|                                                                                                                 |  |             |    |                          |   |               |  |   |                  |   |  |                    |       |   |                                     |   |                                 |   |  |       |    |  |                            |     |   |  |   |        |   |  |   |     |  

See accompanying notes to consolidated financial statements



3



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##### Table of Contents

BEN FRANKLIN FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)



|                                                                                 |  |                             |        |   |      |   |        |  
|-------------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                 |  | Three Months EndedMarch 31, |       
|                                                                                 |  | 2010                        |        |   | 2009 |  
|Cash flows from operating activities                                             |  |                             |        |   |      |   |        |  
|Net income (loss)                                                                |  | $                           | 59     |   |      | $ | (96    | )
|Adjustments to reconcile net income (loss) to net cash from operating activities |  |                             |        |   |      |   |        |  
|Depreciation                                                                     |  |                             | 30     |   |      |   | 27     |  
|ESOP and other stock based compensation                                          |  |                             | 29     |   |      |   | 34     |  
|Amortization of premiums and discounts                                           |  |                             | 6      |   |      |   | 10     |  
|Provision for loan losses                                                        |  |                             | 69     |   |      |   | 77     |  
|Loss on sale of other assets                                                     |  |                             | 1      |   |      |   | 10     |  
|Changes in:                                                                      |  |                             |        |   |      |   |        |  
|Deferred loan costs                                                              |  |                             | 21     |   |      |   | 49     |  
|Accrued interest receivable                                                      |  |                             | 60     |   |      |   | 36     |  
|Other assets                                                                     |  |                             | (4     | ) |      |   | (82    | )
|Other liabilities                                                                |  |                             | (79    | ) |      |   | 50     |  
|                                                                                 |  |                             |        |   |      |   |        |  
|Net cash from operating activities                                               |  |                             | 192    |   |      |   | 115    |  
|                                                                                 |  |                            
|Cash flows from investing activities                                             |  |                             |        |   |      |   |        |  
|Principal repayments on mortgage-backed securities                               |  |                             | 132    |   |      |   | 116    |  
|Net decrease in loans                                                            |  |                             | 2,541  |   |      |   | 2,289  |  
|Purchase of loans                                                                |  |                             |       |   |      |   | (673   | )
|Sales of other assets                                                            |  |                             | 774    |   |      |   | 22     |  
|Expenditures for premises and equipment                                          |  |                             | (21    | ) |      |   |       |  
|                                                                                 |  |                             |        |   |      |   |        |  
|Net cash from investing activities                                               |  |                             | 3,426  |   |      |   | 1,754  |  
|                                                                                 |  |                            
|Cash flows from financing activities                                             |  |                             |        |   |      |   |        |  
|Net increase (decrease) in deposits                                              |  |                             | (2,170 | ) |      |   | 2,210  |  
|Purchase of treasury stock                                                       |  |                             |       |   |      |   | (117   | )
|Net change in advances from borrowers for taxes and insurance                    |  |                             | (189   | ) |      |   | (169   | )
|                                                                                 |  |                             |        |   |      |   |        |  
|Net cash from financing activities                                               |  |                             | (2,359 | ) |      |   | 1,924  |  
|                                                                                 |  |                             |        |   |      |   |        |  
|                                                                                 |  |                            
|Net change in cash and cash equivalents                                          |  |                             | 1,259  |   |      |   | 3,793  |  
|                                                                                 |  |                            
|Cash and cash equivalents at beginning of year                                   |  |                             | 7,796  |   |      |   | 7,950  |  
|                                                                                 |  |                             |        |   |      |   |        |  
|                                                                                 |  |                            
|Cash and cash equivalents at end of period                                       |  | $                           | 9,055  |   |      | $ | 11,743 |  
|                                                                                 |  |                             |        |   |      |   |        |  
|                                                                                 |  |                            
|Supplemental disclosures                                                         |  |                             |        |   |      |   |        |  
|Interest paid                                                                    |  | $                           | 499    |   |      | $ | 726    |  
|Transfers from loans to repossessed assets                                       |  |                             | 7      |   |      |   | 31     |  



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##### Table of Contents

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1  Basis of Financial Statement Presentation

The accompanying consolidated financial statements of Ben Franklin Financial, Inc. (the Company) and its wholly owned subsidiary Ben Franklin
Bank of Illinois (the Bank) have been prepared in conformity with U.S. generally accepted accounting principles (GAAP) and with the rules and regulations of the Securities and Exchange Commission for interim financial
reporting. Accordingly, they do not include all of the information and footnotes required for complete financial statements. These interim financial statements should be read in conjunction with the consolidated financial statements and notes
thereto that were included in the Companys Form 10-K for the year ended December 31, 2009. All significant intercompany transactions are eliminated in consolidation. In the opinion of the Companys management, all adjustments
necessary (i) for a fair presentation of the financial statements for the interim periods included herein and (ii) to make such financial statements not misleading have been made and are of a normal and recurring nature. Interim results
are not necessarily indicative of results for a full year.

In preparing the financial statements, management is required to make estimates
and assumptions that affect the recorded amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the period. Actual results
could differ from those estimates. For further information with respect to significant accounting policies followed by the Company in preparation of the financial statements, refer to the Companys 2009 Annual Report on Form 10-K.

The Bank is a federally chartered stock savings bank and a member of the Federal Home Loan Bank (FHLB) system. The Bank maintains insurance
on deposit accounts with the Deposit Insurance Fund (DIF) of the Federal Deposit Insurance Corporation (FDIC). Ben Franklin Financial, MHC (the MHC), a federally chartered mutual holding company, owns 1,091,062
shares of the Companys common stock and will continue to own at least a majority of the Companys common stock as long as the MHC exists.

Note 2  New Accounting Standards

In
January 2010, the FASB issued guidance to improve disclosure requirements related to fair value measurements and disclosures. The guidance requires that a reporting entity should disclose separately the amounts of significant transfers in and out of
Level 1 and Level 2 fair value measurements and describe the reasons for the transfers and that activity in Level 3 should be presented on a gross basis rather than one net number for information about purchases, issuances, and settlements. The
guidance also requires that a reporting entity should provide fair value measurement disclosures for each class of assets and liabilities and about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring
fair value measurements. This guidance is effective for interim and annual reporting periods beginning after December 31, 2009 except for the roll forward of activity in Level 3 which is effective for interim and annual reporting periods
beginning after December 31, 2010. Adopting this pronouncement did not have a material effect on the results of operations or financial condition of the Company.

In February 2010, the FASB issued guidance related to certain recognition and disclosure requirements of subsequent events which previously may have
conflicted with some of the Securities and Exchange Commission (SEC) guidance. This guidance removes the requirement for an SEC filer to disclose a date in both issued and revised financial statements. Additionally the Board has
clarified that if financial statements have been revised, then an entity that is not an SEC filer should disclose both the date that the financial statements were issued or available to be issued and the date the revised financial statements were
issued or available to be issued. This guidance is effective upon issuance. Adopting this pronouncement did not have a material effect on the results of operations or financial condition of the Company.

Note 3  Securities Available-for-Sale

As
of March 31, 2010 and December 31, 2009, the Companys securities available-for-sale consisted of residential mortgage-backed securities issued by the Government National Mortgage Association, Federal Home Loan Mortgage Corporation or
Federal National Mortgage Association. Gross unrealized gains and losses at March 31, 2010 were $105,000 and zero, respectively.



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##### Table of Contents

Note 4  Non-performing Assets

All non-performing loans were in non-accrual status at March 31, 2010 and December 31, 2009. No loans were past due ninety days or more and
still accruing interest at March 31, 2010 or December 31, 2009.

The following table sets forth our non-performing assets by
category at the dates indicated.



|                                                                           |  |                |  |        |                   |   |        |    |        |   |       |  
|-------------------------------------------------------------------------- |  | -------------- |  | ------ | ----------------- | - | ------ | -- | ------ | - | ----- | -
|                                                                           |  | March 31, 2010 |  |        | December 31, 2009 |  
|                                                                           |  | Number         |  | Amount |                   |   | Number |    | Amount |  
|Non-performing loans                                                       |  |                |  |        |                   |   |        |    |        |   |       |  
|One-to four-family                                                         |  | 7              |  | $      | 1,261             |   |        | 7  |        | $ | 1,264 |  
|Multi-family                                                               |  | 1              |  |        | 326               |   |        | 1  |        |   | 326   |  
|Commercial real estate                                                     |  | 2              |  |        | 1,927             |   |        | 2  |        |   | 1,927 |  
|Construction                                                               |  | 1              |  |        | 653               |   |        | 1  |        |   | 653   |  
|Commercial business                                                        |  | 2              |  |        | 868               |   |        | 2  |        |   | 868   |  
|Other                                                                      |  | 1              |  |        | 3                 |   |        |   |        |   |      |  
|                                                                           |  |                |  |        |                   |   |        |    |        |   |       |  
|Total non-performing loans                                                 |  | 14             |  |        | 5,038             |   |        | 13 |        |   | 5,038 |  
|                                                                           |  |                |  |       
|Troubled debt restructurings                                               |  |                |  |        |                   |   |        |    |        |   |       |  
|One-to four-family                                                         |  | 1              |  |        | 542               |   |        | 1  |        |   | 542   |  
|Multi-family                                                               |  | 1              |  |        | 808               |   |        |   |        |   |      |  
|Commercial business                                                        |  | 1              |  |        | 712               |   |        |   |        |   |      |  
|                                                                           |  |                |  |        |                   |   |        |    |        |   |       |  
|Total troubled debt restructurings                                         |  | 3              |  |        | 2,062             |   |        | 1  |        |   | 542   |  
|                                                                           |  |                |  |       
|Other assets                                                               |  |                |  |        |                   |   |        |    |        |   |       |  
|Foreclosed real estate                                                     |  | 1              |  |        | 213               |   |        | 2  |        |   | 963   |  
|Repossessed automobiles                                                    |  | 1              |  |        | 7                 |   |        | 3  |        |   | 28    |  
|                                                                           |  |                |  |        |                   |   |        |    |        |   |       |  
|Total non-performing assets                                                |  | 2              |  |        | 220               |   |        | 5  |        | $ | 991   |  
|                                                                           |  |                |  |        |                   |   |        |    |        |   |       |  
|Total non-performing loans, troubled debt restructurings, and other assets |  | 19             |  | $      | 7,320             |   |        | 19 |        | $ | 6,571 |  
|                                                                           |  |                |  |        |                   |   |        |    |        |   |       |  
|                                                                           |  |                |  |       
|Non-performing loans to total loans                                        |  |                |  |        | 4.89              | % |        |    |        |   | 4.77  | %
|Non-performing loans and trouble debts restructuring to total loans        |  |                |  |        | 6.90              | % |        |    |        |   | 5.29  | %
|Non-performing assets to total assets                                      |  |                |  |        | 6.24              | % |        |    |        |   | 5.49  | %

At March 31, 2010, our loans
classified as troubled debt restructurings had either a reduction in interest rate or payment amount for a twelve month period or less, at which time the loans will revert to the original terms. At March 31, 2010, all of these loans are
performing under their terms. There were no additional commitments to lend on the restructured notes.



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Note 5  Allowance for Loan Losses

The following table sets forth the activity in our allowance for loan losses for the periods indicated:



|                                                                   |  |                                      |       |   |                  |   |       |  
|------------------------------------------------------------------ |  | ------------------------------------ | ----- | - | ---------------- | - | ----- | -
|                                                                   |  | For the Three Months 
EndedMarch 31, |      
|                                                                   |  | 2010                                 |       |   | 2009             |  
|                                                                   |  | (Dollars in thousands)               |      
|                                                                   |  |                                     
|Balance at beginning of period                                     |  | $                                    | 940   |   |                  | $ | 584   |  
|Total charge-offs                                                  |  |                                      | (20   | ) |                  |   | (35   | )
|Total recoveries                                                   |  |                                      | 8     |   |                  |   |      |  
|Provision for loan losses                                          |  |                                      | 69    |   |                  |   | 77    |  
|                                                                   |  |                                      |       |   |                  |   |       |  
|                                                                   |  |                                     
|Balance at end of period                                           |  | $                                    | 997   |   |                  | $ | 626   |  
|                                                                   |  |                                      |       |   |                  |   |       |  
|                                                                   |  |                                     
|                                                                   |  | March 31,2010                        |       |   | December 31,2009 |  
|Ratios:                                                            |  |                                      |       |   |                  |   |       |  
|Allowance for loan losses to non-performing loans at end of period |  |                                      | 19.79 | % |                  |   | 18.66 | %
|Allowance for loan losses to total loans at end of period          |  |                                      | 0.97  | % |                  |   | 0.89  | %

Note 6  Stock Based Compensation

On October 18, 2006, the Company adopted an employee stock ownership plan (the ESOP) for the benefit of substantially all
employees. The ESOP borrowed $778,000 from the Company and used those funds to acquire 77,763 shares of the Companys common stock in connection with the Companys initial public offering at a price of $10 per share.

The ESOP has a plan year end of December 31. Expense related to the ESOP was $3,000 and $7,000 during the three months ended March 31, 2010 and
2009 respectively.

Shares held by the ESOP at March 31, 2010 were as follows:



|                                                                |  |   |        
|--------------------------------------------------------------- |  | - | -------
|Shares committed to be released                                 |  |   | 1,250  
|Allocated shares                                                |  |   | 16,433 
|Unearned ESOP shares                                            |  |   | 59,585 
|                                                                |  |   |        
|                                                                | 
|Total ESOP shares                                               |  |   | 77,268 
|                                                                |  |   |        
|                                                                | 
|Fair value of unearned ESOP shares                              |  | $ | 125,000
|                                                                |  |   |        
|                                                                | 
|Fair value of allocated shares subject to repurchase obligation |  | $ | 37,000 
|                                                                |  |   |        

On March 26, 2008, stockholders of the Company approved the Ben
Franklin Financial, Inc. Equity Incentive Plan (the Plan) which provides officers, employees, and directors of the Company and the Bank with stock based incentives to promote our growth and performance. The Plan shall remain in effect as
long as any awards are outstanding provided, however, that no awards be granted under the Plan after ten years from the date of adoption. The Plan authorizes the issuance of up to 136,085 shares of our common stock pursuant to grants of incentive
and non-statutory stock options, stock appreciation rights, and restricted stock awards. No more than 38,881 shares may be issued as restricted stock awards. No more than 97,204 shares may be issued pursuant to stock options and stock appreciation
rights, all of which may be granted pursuant to the exercise of incentive stock options. On April 17, 2008, we granted restricted stock awards for 34,476 common shares and stock options for 86,740 common shares under the Plan, all of which vest
over a five year period. Awards under the Plan may also fully vest upon the participants death or disability or change in control of the Company. All of the options granted have an exercise price of $9.36 per share, which was the closing price
of the stock on the grant date. As of March 31, 2010, 17,348 options had vested. No options were exercised or forfeited as of March 31, 2010. The options had no intrinsic value as of March 31, 2010.



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##### Table of Contents

Stock option expense was $10,000 for the three months ended March 31, 2010, and 2009, respectively. As
of March 31, 2010, $120,000 of unrecognized compensation cost is expected to be recognized over the next 3.1 years.

The fair value of
the restricted stock awards was $9.36 per share, which was the closing price of the stock on the April 17, 2008 grant date. As of March 31, 2010, 6,896 shares had vested. None of the restricted stock awards were forfeited as of
March 31, 2010. Restricted stock award expense was $16,000 during the three months ended March 31, 2010 and 2009, respectively. As of March 31, 2010, there was $196,000 of unrecognized compensation cost related to shares granted under
the Plan. The cost is expected to be recognized over the next 3.1 years.

The value of stock options and restricted stock awards as of the
grant date is expensed over the five year vesting period. Forfeitures of stock options and restricted stock awards are expected to be insignificant.

No stock options or restricted stock awards have been granted since April 17, 2008.

Note 7  Income Taxes

In the third
quarter of 2009, the Company recorded a valuation allowance against its net deferred tax asset, thus reducing the net carrying value of deferred tax assets to zero. The valuation allowance is reviewed quarterly and adjusted based on amounts expected
to be realized. The valuation allowance for our net deferred tax asset was $569,000 as of March 31, 2010.

Note 8  Stock Repurchase
Program

On April 23, 2008 the Company adopted a stock repurchase program to repurchase up to 44,634 shares or 4.8% of the Companys
outstanding common stock (excluding shares held by the MHC). This program was completed in January of 2009. On January 28, 2009 the Company adopted a second stock repurchase program to repurchase up to 42,487 shares representing approximately
5.0% of the Companys outstanding common stock (excluding shares held by the MHC). As of March 31, 2010, the Company had repurchased 67,650 shares under both programs.

Note 9  Earnings Per Share

Basic
earnings (loss) per share is based on net income (loss) divided by the weighted average number of shares outstanding during the period, including allocated and committed-to-be-released ESOP shares. Diluted earnings (loss) per share shows the
dilutive effect, if any, of additional common shares issuable under stock options, using the treasury stock method. All stock options were considered antidilutive and were excluded from the computation of diluted earnings (loss) per share for the
three months ended March 31, 2010 and 2009.

The following table presents a reconciliation of the components used to compute basic and
diluted earnings (loss) per share:



|                                           |  |                            |           |               |   |           |  
|------------------------------------------ |  | -------------------------- | --------- | ------------- | - | --------- | -
|                                           |  | For the Three Months Ended |          
|                                           |  | March 31,2010              |           | March 31,2009 |  
|Net income (loss)                          |  | $                          | 59,000    |               | $ | (96,000   | )
|Weighted average common shares outstanding |  |                            | 1,890,180 |               |   | 1,905,387 |  
|Basic and diluted income (loss) per share  |  | $                          | 0.03      |               | $ | (0.05     | )



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##### Table of Contents

Note 10  Fair Value

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. GAAP establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the
use of unobservable inputs when measuring fair value. GAAP describes three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of
the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for
similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data, (for example, interest rate and
yield curves observable at commonly quoted intervals, prepayment speeds, credit risks, and default rates).

Level 3:
Significant unobservable inputs that reflect a reporting entitys own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

Securities Available for Sale: The fair values of securities available-for-sale are determined by matrix pricing, which is a mathematical
technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities relationship to other benchmark quoted securities (Level 2 inputs).

Impaired Loans: The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on real
estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for
differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Repossessed Assets: Nonrecurring adjustments to certain commercial and residential real estate properties classified as other real estate owned
(OREO) and repossessed automobiles are measured at the lower of carrying amount or fair value, less costs to sell. Fair values for OREO are generally based on third party appraisals of the property while fair values for automobiles are based on
published values of comparable models, resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized.



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##### Table of Contents

Assets measured at fair value on a recurring basis are summarized below:



|                                                            |  |                |       |                                                            |   |                                           |  |                                         |       |  |   |  
|----------------------------------------------------------- |  | -------------- | ----- | ---------------------------------------------------------- | - | ----------------------------------------- |  | --------------------------------------- | ----- |  | - | -
|                                                            |  |                |       | Fair Value Measurements Using                             
|                                                            |  | Balance        |       | Quoted Prices inActive Marketsfor
IdenticalAssets(Level 1) |   | SignificantOtherObservableInputs(Level 2) |  | SignificantUnobservableInputs(Level
 3)
|                                                            |  | (In thousands)
|March 31, 2010                                              |  |                |       |                                                            |   |                                           |  |                                         |       |  |   |  
|Assets:                                                     |  |                |       |                                                            |   |                                           |  |                                         |       |  |   |  
|Mortgage-backed securities available for sale - residential |  | $              | 2,340 |                                                            | $ |                                          |  | $                                       | 2,340 |  | $ | 
|                                                            |  |                |       |                                                           
|December 31, 2009                                           |  |                |       |                                                            |   |                                           |  |                                         |       |  |   |  
|Assets:                                                     |  |                |       |                                                            |   |                                           |  |                                         |       |  |   |  
|Mortgage-backed securities available for sale - residential |  | $              | 2,463 |                                                            | $ |                                          |  | $                                       | 2,463 |  | $ | 

Assets Measured on a
Non-Recurring Basis

Assets measured at fair value on a non-recurring basis are summarized below:



|                   |  |                |       |                                                            |   |                                           |  |                                         |   |  |   |      
|------------------ |  | -------------- | ----- | ---------------------------------------------------------- | - | ----------------------------------------- |  | --------------------------------------- | - |  | - | -----
|                   |  |                |       | Fair Value Measurements Using                             
|                   |  | Balance        |       | Quoted Prices inActive Marketsfor
IdenticalAssets(Level 1) |   | SignificantOtherObservableInputs(Level 2) |  | SignificantUnobservableInputs(Level
 3)
|                   |  | (In thousands)
|March 31, 2010     |  |                |       |                                                            |   |                                           |  |                                         |   |  |   |      
|Assets:            |  |                |       |                                                            |   |                                           |  |                                         |   |  |   |      
|Impaired loans     |  | $              | 2,001 |                                                            | $ |                                          |  | $                                       |  |  | $ | 2,001
|Repossessed assets |  |                | 220   |                                                            |   |                                          |  |                                         |  |  |   | 220  
|                   |  |                |       |                                                           
|December 31, 2009  |  |                |       |                                                            |   |                                           |  |                                         |   |  |   |      
|Assets:            |  |                |       |                                                            |   |                                           |  |                                         |   |  |   |      
|Impaired loans     |  | $              | 2,841 |                                                            | $ |                                          |  | $                                       |  |  | $ | 2,841
|Repossessed assets |  |                | 991   |                                                            |   |                                          |  |                                         |  |  |   | 991  

Impaired loans, which are measured for
impairment using the fair value of the collateral (less cost to sell) for collateral dependent loans, had a cost basis of $2,339,000, with a $338,000 valuation allowance at March 31, 2010 resulting in an additional provision for loan losses of
$35,000 for the three months ended March 31, 2010. Impaired loans at December 31, 2009 had a cost basis of $3,144,000 with a $303,000 valuation allowance.

Repossessed assets, consisting of other real estate owned and repossessed automobiles are measured at the lower of cost or fair value less cost to sell.
Repossessed assets were carried at cost of $220,000 at March 31, 2010 and at $991,000 at December 31, 2009, consisting of the cost basis of $1,125,000 and a valuation allowance of $134,000.



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The carrying amounts and estimated fair values of the Companys financial instruments are as follows:



|                                  |  |                |         |   |                      |   |         |  
|--------------------------------- |  | -------------- | ------- | - | -------------------- | - | ------- | -
|                                  |  | March 31, 2010 |        
|                                  |  | CarryingValue  |         |   | Estimated 
FairValue |  
|Financial assets                  |  |                |         |   |                      |   |         |  
|Cash and cash equivalents         |  | $              | 9,055   |   |                      | $ | 9,055   |  
|Securities available-for-sale     |  |                | 2,340   |   |                      |   | 2,340   |  
|Loans receivable, net             |  |                | 101,955 |   |                      |   | 105,960 |  
|FHLB stock                        |  |                | 1,337   |   |                      |   | N/A     |  
|Accrued interest receivable       |  |                | 397     |   |                      |   | 397     |  
|                                  |  |               
|Financial liabilities             |  |                |         |   |                      |   |         |  
|Demand, money market, and savings |  | $              | (29,309 | ) |                      | $ | (29,309 | )
|Certificates of deposits          |  |                | (71,634 | ) |                      |   | (72,690 | )
|FHLB advances                     |  |                | (2,000  | ) |                      |   | (2,020  | )
|Accrued interest payable          |  |                | (10     | ) |                      |   | (10     | )

The methods and assumptions used to
determine fair values for each class of financial instrument are presented below.

The estimated fair values for cash and cash equivalents,
accrued interest receivable, demand, money market, and savings deposits, and accrued interest payable approximate their carrying values. The estimated fair values for securities available-for-sale are based on matrix pricing. It was not practicable
to determine the fair value of FHLB stock due to the restriction placed on transferability. The estimated fair value for loans is based on current market rates for similar loans, applied for the time period until estimated payment. The estimated
fair value of certificates of deposit is based on current market rates for such deposits, applied for the time period until maturity. The fair value of FHLB advances is based on current rates for similar financing. Commitments to extend credit are
not included in the table above as their estimated fair value is immaterial.

While the above estimates are based on managements
judgment of the most appropriate factors, there is no assurance that were the Company to have disposed of these items on March 31, 2010, the fair values would have been achieved, because the market value may differ depending on the
circumstances.



|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Forward-Looking Statements

This
quarterly report on Form 10-Q may contain statements relating to the future results of the Company (including certain projections and business trends) that are considered forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995 (the PSLRA). Such forward-looking statements, in addition to historical information, which involve risk and uncertainties, are based on the beliefs, assumptions and expectations of management. Words such as
expects, believes, should, plans, anticipates, will, potential, could, intend, may, outlook, predict,
project, would, estimates, assumes, likely, and variations of such similar expressions are intended to identify such forward-looking statements. Examples of forward-looking statements
include, but are not limited to: 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. For this presentation, the Company and its subsidiary claim the protection of the safe harbor for forward-looking statements contained in the PSLRA.

Factors that could cause future results to vary from current management expectations include, but are not limited to: our ability to manage the risk from
our one-to four family, home equity line-of-credit, multi-family, commercial real estate, construction, commercial business, and automobile lending including purchased loans; the future level of deposit insurance premiums and special assessments
applicable to us; significantly increased competition among



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##### Table of Contents

depository and other financial institutions; our ability to execute our plan to grow our assets on a profitable basis; our ability to execute on a favorable basis any plan we may have to acquire
other institutions or branches or establish new offices including a transaction assisted by the FDIC; changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; inflation; general economic
conditions, both nationally and in our market area; adverse changes in the securities and national and local real estate markets (including loan demand, housing demand, and real estate values); our ability to originate a satisfactory amount of high
quality loans in an unfavorable economic environment; legislative or regulatory changes that adversely affect our business including the banking reform legislation currently under consideration by the U.S. Congress; the impact of the U.S.
governments stimulus program and its various financial institution rescue plans including TARP; our ability to enter new markets successfully and take advantage of growth opportunities; changes in consumer spending, borrowing and savings
habits; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies and the authoritative accounting bodies; the performance of our investment in FHLB of Chicago stock; changes in our organization, compensation
and benefit plans; and other factors. The forward-looking statements are made as of the date of this report, and the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from
those projected in the forward-looking statements.

General

The Bank is a federally chartered savings bank headquartered in Arlington Heights, Illinois. The Bank was originally founded in 1893 as a building and
loan association. We conduct our business from our main office and one branch office. Both of our offices are located in the northwestern corridor of the Chicago metropolitan area.

Our principal business activity is attracting retail deposits from the general public in our market and investing those deposits, together with funds
generated from operations and to a lesser extent borrowings, in one- to four-family residential mortgage loans and, to a lesser extent, home equity lines-of-credit, commercial real estate loans, multi-family real estate loans, construction and land
loans, and other loans. Over the past several years, we have also purchased automobile loans and commercial loans secured by medical equipment although purchases for automobile ended in 2008 and purchases of medical loans ended in 2009. We have also
invested in mortgage-backed securities and U.S. Government sponsored entity notes. Our primary sources of funds are deposits and principal and interest payments on loans and securities. The Bank offers a variety of deposit accounts, including
checking, money market, savings, and certificates of deposit, and emphasizes personal and efficient service for its customers. We also use borrowings, primarily Federal Home Loan Bank of Chicago advances, to supplement cash flow needs, to lengthen
the maturities of liabilities for interest rate risk purposes and to manage the cost of funds. Our competition for loans and deposits comes principally from commercial banks, savings institutions, mortgage banking firms and credit unions. Our
primary focus is to develop and build profitable customer relationships across all lines of business while maintaining our focus as a community bank.

Our results of operations depend primarily on our net interest income. Net interest income is the difference between the interest income we earn on our
interest-earning assets, consisting primarily of loans, mortgage-backed and other securities, and other interest-earning assets, and the interest paid on our interest-bearing liabilities, consisting primarily of savings and transaction accounts,
certificates of deposit, and Federal Home Loan Bank of Chicago advances. Our results of operations also are affected by our provision for loan losses, non-interest income and non-interest expense. Non-interest income consists primarily of deposit
service charges and loan origination service fees charged for loans funded by other institutions, and miscellaneous other income. Non-interest expense consists primarily of compensation and employee benefits, occupancy and equipment expenses, data
processing, professional fees, FDIC insurance premiums and assessments, and other operating expenses. Our results of operations may be affected significantly by general and local economic and competitive conditions, changes in market interest rates,
governmental policies and actions of regulatory authorities.

To achieve our growth and profitability objectives, management will continue,
subject to market conditions, to focus on expanding multi-family, home equity lines-of-credit, commercial real estate and commercial business lending while maintaining our current level of one- to four-family residential lending. We also anticipate,
depending on the real estate market and economic conditions, continuing construction lending. In addition, we will pursue other lending alternatives to diversify our loan portfolio and to manage credit and interest rate risks and may pursue other
opportunities to achieve growth.



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##### Table of Contents

At the beginning of 2010 we bid for another financial institution marketed by the FDIC; however, a larger
financial institution was selected based on a higher offer. We may explore additional expansion opportunities in the future, subject to our capital or other limitations.

The current weak economic environment has impacted the value of real estate and has many businesses facing financial pressures, and thus will present
challenges to our growth objectives. While we believe growth is essential for our future profitability, we intend to carefully monitor our underwriting standards and the concentration levels within our loan portfolio to manage our exposure to credit
risks. We are also working to reduce our current non-performing assets to strengthen our financial condition. While we are hopeful that development of the residential area immediately surrounding our main office will proceed as the village and
developer negotiate terms, continued weakness in the economy and loan demand may adversely impact this development as well as our ability to achieve our financial objectives including loan growth in 2010.

Critical Accounting Policies

Certain of
our accounting policies are important to the reporting of our financial results, since they require management to make difficult, complex and/or subjective judgments, some of which may relate to matters that are inherently uncertain. Estimates
associated with these policies are susceptible to material changes as a result of changes in facts and circumstances. Facts and circumstances which could affect these judgments include, but are not limited to, changes in interest rates, changes in
performance of the local economy, changes in the financial condition of borrowers, and changes in value of loan collateral such as real estate. As discussed in the Companys Annual Report on Form 10-K for the year ended December 31, 2009,
management believes that its critical accounting policies include determining the allowance for loan losses, determination of the fair value of stock options and accounting for stock based compensation under the Companys Equity Incentive Plan,
and accounting for deferred income taxes.

Comparison of Financial Condition at March 31, 2010 and December 31, 2009

General. The local economy provided mixed signals during the first quarter of 2010 as home sales statewide in Illinois rose
23.5% compared to the first quarter of 2009; however, foreclosures increased 17.5% over the same period statewide. We continued to experience lower loan origination activity in the first quarter of 2010 as loan demand remained weak. Our efforts to
reduce the balance of our non-performing assets resulted in the sale of a foreclosed single-family property during the first quarter of 2010, reducing the balance of our repossessed assets by $750,000. We also experienced a decrease in deposit
accounts since December 31, 2009, primarily certificates of deposit, as interest rates for these accounts have generally decreased in our market area. While we have experienced some contraction in our balance sheet, our capital position has
improved and we continue to explore opportunities to deploy our excess liquidity.

Assets.Total assets at March 31, 2010
were $117.3 million compared to $119.7 million at December 31, 2009, a decrease of $2.4 million or 2.0%. This decrease was primarily due to a $2.6 million decrease in our net loan portfolio balance and a $771,000 decrease in our repossessed
assets, partially offset by a $1.3 million increase in our cash and cash equivalents.

Our net loan portfolio balance was $102.0 million at
March 31, 2010 compared to $104.6 million at December 31, 2009. During the three months ended March 31, 2010, the balance of our construction and automobile loans decreased $1.8 million and $667,000 respectively, due to repayments and
pay-offs. These decreases were partially offset by a $451,000 increase in our commercial real estate loans. Overall, we anticipate our loan origination activity will remain at current levels until real estate values stabilize and the economy begins
to recover.

At March 31, 2010 our allowance for loan losses was $997,000 or 0.97% of total loans compared to $940,000 or 0.89% of total
loans at December 31, 2009. Our allowance reflects the decrease in value of collateral securing non-performing real estate loans and an increase in the loss factors applied to pools of performing loans due to declining real estate values. Our
non-performing loans totaled $5.0 million or 4.89% of total loans at March 31, 2010 compared to $5.0 million or 4.77% of total loans at December 31, 2009. Our non-performing assets totaled $7.3 million or 6.24% of total assets at
March 31, 2010 compared to $6.6 million or 5.49% of total assets at December 31, 2009 primarily due a $1.5 million increase in our loans classified as troubled debt restructurings, partially offset by a $750,000 decrease in repossessed
assets from the sale of a single-family residence.



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##### Table of Contents

Our securities portfolio decreased $123,000 or 5.0% to $2.3 million at March 31, 2010 primarily due to
repayments on mortgage-backed securities. Cash and cash equivalents increased $1.3 million to $9.1 million at March 31, 2010. Subject to market conditions, management anticipates reducing the balance of cash and cash equivalents in the future
to generate additional income.

Liabilities. Our customer deposits decreased by $2.2 million or 2.1% to $100.9 million at
March 31, 2010 compared to $103.1 million at December 31, 2009. Our certificate of deposit accounts decreased $4.0 million or 5.3% to $71.6 million at March 31, 2010 primarily due to lower market rates offered by the Company. Our
non-certificate of deposit accounts increased $1.9 million or 6.8% to $29.3 million at March 31, 2010 primarily due to an increase in our money market accounts.

Equity. Total stockholders equity at March 31, 2010 was $13.9 million, an increase of $100,000 or 0.7% from $13.8 million at
December 31, 2009. The increase resulted primarily from our net income of $59,000 for the three months ended March 31, 2010, an increase of $35,000 for ESOP and other stock based compensation and an increase of $6,000 due to unrealized
gains on available-for-sale securities.

Comparison of Operating Results for the Three Months Ended March 31, 2010 and 2009

General.For the three months ended March 31, 2010 our net income was $59,000 compared to a net loss of $96,000 for the
three months ended March 31, 2009 primarily due to an increase in our net interest income as deposit costs continued to decrease due to maturing certificates of deposit repricing at current low market rates. Our valuation allowance for the
balance of our net deferred tax asset also decreased in the first quarter of 2010 resulting in a small tax benefit of $4,000 compared to $51,000 in 2009.

Interest Income. Interest income was $1.4 million for the three months ended March 31, 2010, $132,000 or 8.6% less than the prior year
period. Interest income from loans decreased $119,000 or 7.9% to $1.4 million for the three months ended March 31, 2010 primarily due to a $5.7 million decrease in the average balance of our loan portfolio to $103.4 million for the three months
ended March 31, 2010 compared to the prior year period. The average balance of our construction loans, automobile and consumer loans, and one -to four- family real estate loans decreased $3.8 million, $3.3 million, and $1.9 million respectively
for the comparative period primarily to repayments and pay-offs. These decreases were partially offset by a $1.7 million increase in the average balance of our commercial business loans due to the purchase of medical equipment loans during 2009 and
a $1.5 million increase in the average balance of our multi-family, commercial real estate, and land loans. The decrease in interest income from loans was also due to a decrease in the average yield of our loan portfolio which was 5.38% for the
first quarter of 2010 compared to 5.54% for the prior year period primarily due to the downward repricing of our adjustable rate loans.

Interest income from securities decreased $12,000 or 34.3% to $23,000 for the three months ended March 31, 2010. The average balance of our
securities portfolio decreased $743,000 to $2.3 million for the three months ended March 31, 2010 as compared to the prior year period due to repayments on mortgage-backed securities. The average yield on securities for the three months ended
March 31, 2010 was 4.05% compared to 4.55% for the prior year period, primarily due to the downward repricing of our adjustable rate mortgage-backed securities.

Interest Expense. Interest expense for the three months ended March 31, 2010 was $490,000, a decrease of $301,000 or 38.1% from the
prior year period primarily due to the decrease in interest expense on deposits as a result of the general decline in market interest rates. Interest expense on deposits decreased $248,000 as our average cost of deposits decreased to 1.91% for the
three months ended March 31, 2010 compared to 2.86% for the prior year period. The average balance of interest bearing deposits decreased $1.8 million to $100.1 million for the first quarter of 2010 compared to the prior year period primarily
due to a $5.5 million decrease in the average balance of our certificate of deposit accounts to $74.0 million. The average balance of our non-certificate of deposit accounts increased to $26.1 million for the first quarter of 2010 compared to $22.3
million from the prior year period. Interest expense on advances from the Federal Home Loan Bank of Chicago was $19,000 for the three months ended March 31, 2010 compared to $72,000 for the prior year period primarily due to a $4.5 million
decrease in the average balance of our advances due to the repayments in 2009.



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##### Table of Contents

Net Interest Income. Net interest income for the three months ended March 31, 2010 was
$914,000 compared to $745,000 for the three months ended March 31, 2009. For the three months ended March 31, 2010, the average yield on interest-earning assets was 5.00% and the average cost of interest-bearing liabilities was 1.95%
compared to 5.18% and 2.96%, respectively, for the three months ended March 31, 2009. These changes resulted in an increase in our net interest rate spread to 3.05% and net interest margin to 3.25% for the first quarter of 2010 compared to a
net interest rate spread of 2.22% net interest rate margin of 2.50% for the first quarter of 2009.

Provision for Loan
Losses. Our provision for loan losses was $69,000 for the three months ended March 31, 2010 compared to $77,000 for the three months ended March 31, 2009. Our provision for the three months ended March 31, 2010 was primarily
related to the decrease in value of collateral securing non-performing real estate loans and an increase in the loss factors applied to pools of performing loans due to weak real estate values.

Non-interest Income. For the three months ended March 31, 2010, non-interest income was $37,000 compared to $23,000 for the three
months ended March 31, 2009 primarily due to a $9,000 decrease in losses on the sale of other assets.

Non-interest
Expense. For the three months ended March 31, 2010, non-interest expense totaled $827,000 compared to $838,000 for the three months ended March 31, 2009, a decrease of 1.3%. Compensation and employee benefit expenses decreased
$54,000 primarily due to staff reductions and a 5.0% salary reduction for senior officers which was effective May 2009. Other real estate losses and holding expenses decreased $13,000. Occupancy and equipment expense decreased $6,000. These
decreases were partially offset by a $31,000 increase in professional fees including $27,000 for legal and advisory fees related to our bid for a financial institution in an FDIC assisted transaction in January of 2010. FDIC insurance premiums
increased $23,000 due to the increase in assessment rates.

Income Tax.Our income tax benefit was $4,000 for the
three months ended March 31, 2010 compared to $51,000 for the three months ended March 31, 2009. Our review of the allowance for our deferred tax asset resulted in a $4,000 tax benefit in the first quarter of 2010. The tax benefit for the
three months ended March 31, 2009 was a result of our pretax loss of $147,000.



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##### Table of Contents

Analysis of Net Interest Income

Net interest income represents the difference between the income we earn on interest-earning assets and the interest expense we pay on interest-bearing
liabilities. Net interest income also depends upon the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on them.

The following table sets forth average balance sheets, average yields and costs, and certain other information for the periods indicated. All average
balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees,
discounts and premiums that are amortized or accreted to interest income.



|                                                                   |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|------------------------------------------------------------------ |  | ---------------------------- | ------- | -------- | ---- | ---------- |  | ------ | ------------------------- |  | -------- | ------- | ---------- | - | ----- |  | ------ | -
|                                                                   |  | Three Months Ended March 31, |        
|                                                                   |  | 2010                         |         |          | 2009 |           
|                                                                   |  | AverageOutstandingBalance    |         | Interest |      | Yield/Cost |  |        | AverageOutstandingBalance |  | Interest |         | Yield/Cost |  
|                                                                   |  | (Dollars in thousands)       |        
|Assets:                                                            |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Loans:                                                             |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|One- to four-family                                                |  | $                            | 38,702  |          | $    | 506        |  | 5.23   | %                         |  | $        | 40,627  |            | $ | 555   |  | 5.46   | %
|Multi-family, commercial real estate, and land                     |  |                              | 31,412  |          |      | 489        |  | 6.31   |                           |  |          | 29,925  |            |   | 490   |  | 6.64   |  
|Construction                                                       |  |                              | 3,247   |          |      | 54         |  | 6.67   |                           |  |          | 7,023   |            |   | 105   |  | 6.08   |  
|Commercial business                                                |  |                              | 6,469   |          |      | 95         |  | 5.98   |                           |  |          | 4,759   |            |   | 73    |  | 6.17   |  
|Home equity lines-of-credit                                        |  |                              | 16,677  |          |      | 131        |  | 3.19   |                           |  |          | 16,571  |            |   | 120   |  | 2.94   |  
|Automobile and other consumer                                      |  |                              | 6,893   |          |      | 105        |  | 6.19   |                           |  |          | 10,230  |            |   | 156   |  | 6.20   |  
|                                                                   |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Total loans                                                        |  |                              | 103,400 |          |      | 1,380      |  | 5.38   |                           |  |          | 109,135 |            |   | 1,499 |  | 5.54   |  
|Securities                                                         |  |                              | 2,304   |          |      | 23         |  | 4.05   |                           |  |          | 3,047   |            |   | 35    |  | 4.55   |  
|Other interest-earning assets                                      |  |                              | 7,549   |          |      | 1          |  | 0.07   |                           |  |          | 7,348   |            |   | 2     |  | 0.12   |  
|                                                                   |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Total interest-earning assets                                      |  |                              | 113,253 |          | $    | 1,404      |  | 5.00   |                           |  |          | 119,530 |            | $ | 1,536 |  | 5.18   |  
|Non-interest-earning assets                                        |  |                              | 5,717   |          |      |            |  |        |                           |  |          | 6,894   |            |   |       |  |        |  
|                                                                   |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Total assets                                                       |  | $                            | 118,970 |          |      |            |  |        |                           |  | $        | 126,424 |            |   |       |  |        |  
|                                                                   |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|                                                                   |  |                              |         |          |      |           
|Liabilities and stockholders equity:                              |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Savings deposits                                                   |  | $                            | 7,300   |          | $    | 4          |  | 0.20   |                           |  | $        | 7,475   |            | $ | 7     |  | 0.41   |  
|Money market/demand deposits                                       |  |                              | 18,757  |          |      | 34         |  | 0.73   |                           |  |          | 14,841  |            |   | 30    |  | 0.82   |  
|Certificates of deposit                                            |  |                              | 74,001  |          |      | 433        |  | 2.38   |                           |  |          | 79,537  |            |   | 682   |  | 3.48   |  
|                                                                   |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Total deposits                                                     |  |                              | 100,058 |          |      | 471        |  | 1.91   |                           |  |          | 101,853 |            |   | 719   |  | 2.86   |  
|FHLB advances                                                      |  |                              | 2,000   |          |      | 19         |  | 3.93   |                           |  |          | 6,500   |            |   | 72    |  | 4.48   |  
|                                                                   |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Total interest-bearing liabilities                                 |  |                              | 102,058 |          |      | 490        |  | 1.95   |                           |  |          | 108,353 |            |   | 791   |  | 2.96   |  
|                                                                   |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Non-interest-bearing deposits                                      |  |                              | 2,131   |          |      |            |  |        |                           |  |          | 1,669   |            |   |       |  |        |  
|Other liabilities                                                  |  |                              | 810     |          |      |            |  |        |                           |  |          | 963     |            |   |       |  |        |  
|                                                                   |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Total liabilities                                                  |  |                              | 104,999 |          |      |            |  |        |                           |  |          | 110,985 |            |   |       |  |        |  
|Stockholders equity                                               |  |                              | 13,971  |          |      |            |  |        |                           |  |          | 15,439  |            |   |       |  |        |  
|                                                                   |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Total liabilities and stockholders equity                         |  | $                            | 118,970 |          |      |            |  |        |                           |  | $        | 126,424 |            |   |       |  |        |  
|                                                                   |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|                                                                   |  |                              |         |          |      |           
|Net interest income                                                |  |                              |         |          | $    | 914        |  |        |                           |  |          |         |            | $ | 745   |  |        |  
|                                                                   |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Net interest rate spread                                           |  |                              |         |          |      |            |  | 3.05   | %                         |  |          |         |            |   |       |  | 2.22   | %
|                                                                   |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Net interest-earning assets                                        |  | $                            | 11,195  |          |      |            |  |        |                           |  | $        | 11,177  |            |   |       |  |        |  
|                                                                   |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Net interest margin                                                |  |                              |         |          |      |            |  | 3.25   | %                         |  |          |         |            |   |       |  | 2.50   | %
|                                                                   |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Average of interest-earning assets to interest-bearing Liabilities |  |                              |         |          |      |            |  | 110.97 | %                         |  |          |         |            |   |       |  | 110.32 | %
|                                                                   |  |                              |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  



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##### Table of Contents

Rate/Volume Analysis

The following table presents the dollar amount of changes in interest income and interest expense for the major categories of Ben Franklin Financial,
Inc.s interest-earning assets and interest-bearing liabilities. Information is provided for each category of interest-earning assets and interest-bearing liabilities with respect to (i) changes attributable to changes in volume (i.e.,
changes in average balances multiplied by the prior-period average rate) and (ii) changes attributable to rate (i.e., changes in average rate multiplied by prior-period average balances). For purposes of this table, changes attributable to both
rate and volume, which cannot be segregated, have been allocated proportionately to the change due to volume and the change due to rate.



|                                               |  |                                           |     |   |                         |   |      |   |  |   |      |  
|---------------------------------------------- |  | ----------------------------------------- | --- | - | ----------------------- | - | ---- | - |  | - | ---- | -
|                                               |  | Three Months Ended March 31,2010
vs. 2009 |    
|                                               |  | Increase(Decrease) Due to                 |     |   | TotalIncrease(Decrease) |  
|                                               |  | Volume                                    |     |   | Rate                    |   |      |   | 
|Interest-earning assets:                       |  |                                           |     |   |                         |   |      |   |  |   |      |  
|Loans:                                         |  |                                           |     |   |                         |   |      |   |  |   |      |  
|One- to four-family                            |  | $                                         | (26 | ) |                         | $ | (23  | ) |  | $ | (49  | )
|Multi-family, commercial real estate, and land |  |                                           | 24  |   |                         |   | (25  | ) |  |   | (1   | )
|Construction                                   |  |                                           | (61 | ) |                         |   | 10   |   |  |   | (51  | )
|Commercial business                            |  |                                           | 25  |   |                         |   | (3   | ) |  |   | 22   |  
|Home equity lines-of-credit                    |  |                                           | 1   |   |                         |   | 10   |   |  |   | 11   |  
|Automobile and other consumer                  |  |                                           | (51 | ) |                         |   |     |   |  |   | (51  | )
|                                               |  |                                           |     |   |                         |   |      |   |  |   |      |  
|Total loans                                    |  |                                           | (88 | ) |                         |   | (31  | ) |  |   | (119 | )
|Securities                                     |  |                                           | (8  | ) |                         |   | (4   | ) |  |   | (12  | )
|Other interest-earning assets                  |  |                                           |    |   |                         |   | (1   | ) |  |   | (1   | )
|                                               |  |                                           |     |   |                         |   |      |   |  |   |      |  
|Total interest-earning assets                  |  |                                           | (96 | ) |                         |   | (36  | ) |  |   | (132 | )
|                                               |  |                                           |     |   |                         |   |      |   |  |   |      |  
|                                               |  |                                           |    
|Interest-bearing liabilities:                  |  |                                           |     |   |                         |   |      |   |  |   |      |  
|Savings deposits                               |  |                                           |    |   |                         |   | (3   | ) |  |   | (3   | )
|Money market/demand deposits                   |  |                                           | 7   |   |                         |   | (3   | ) |  |   | 4    |  
|Certificates of deposit                        |  |                                           | (45 | ) |                         |   | (204 | ) |  |   | (249 | )
|                                               |  |                                           |     |   |                         |   |      |   |  |   |      |  
|Total deposits                                 |  |                                           | (38 | ) |                         |   | (210 | ) |  |   | (248 | )
|FHLB Advances                                  |  |                                           | (45 | ) |                         |   | (8   | ) |  |   | (53  | )
|                                               |  |                                           |     |   |                         |   |      |   |  |   |      |  
|Total interest-bearing Liabilities             |  |                                           | (83 | ) |                         |   | (218 | ) |  |   | (301 | )
|                                               |  |                                           |     |   |                         |   |      |   |  |   |      |  
|Change in net interest income                  |  | $                                         | (13 | ) |                         | $ | 182  |   |  | $ | 169  |  
|                                               |  |                                           |     |   |                         |   |      |   |  |   |      |  



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##### Table of Contents

Liquidity and Capital Resources

Our primary sources of funds are deposits and the proceeds from principal and interest payments on loans and mortgage-backed securities. While maturities
and scheduled amortization of loans and securities are predicable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition. We generally manage the pricing of our
deposits to be competitive within our market and to increase core deposit relationships.

Liquidity management is both a daily and long-term
responsibility of management. We adjust our investments in liquid assets based upon managements assessment of (i) expected loan demand, (ii) expected deposit flows, (iii) yields available on interest-earning deposits and
securities, and (iv) the objectives of our asset/liability management program. Excess liquid assets are invested generally in interest-earning overnight deposits, federal funds sold, short and intermediate-term U.S. Government sponsored entity
obligations, and mortgage-backed securities of short duration. If we require funds beyond our ability to generate them internally, we have additional borrowing capacity with the Federal Home Loan Bank of Chicago.

Our cash flows are comprised of three primary classifications: (i) cash flows from operating activities, (ii) investing activities, and
(iii) financing activities. Net cash from operating activities was $192,000 and $115,000 for the three months ended March 31, 2010 and 2009, respectively. Net cash from investing activities consisted primarily of disbursements for loan
originations and purchases which were offset by principal collections on loans and mortgage-backed securities. Net cash from investing activities was $3.4 million and $1.8 million for the three months ended March 31, 2010 and 2009,
respectively. Net cash from financing activities consisted primarily of the activity in deposit, borrowing, and escrow accounts. The net cash from financing activities was ($2.4) million and $1.9 million for the three months ended March 31,
2010 and 2009, respectively.

Our most liquid assets are cash and short-term investments. The levels of these assets are dependent on our
operating, financing, lending, and investing activities during any given period. We may also utilize the sale of securities available-for-sale, federal funds purchased, Federal Home Loan Bank of Chicago advances and other borrowings as sources of
funds. At March 31, 2010, cash and cash equivalents totaled $9.1 million.

At March 31, 2010, the Bank exceeded all of its
regulatory capital requirements to be well capitalized with a Tier 1 (core) capital level of $10.4 million, or 8.89% of adjusted total assets which was $4.5 million above the required level of $5.9 million, or 5.00%; and total risk-based capital of
$11.4 million or 12.0% of risk weighted assets, which was $1.9 million above the required level of $9.5 million or 10.00%. The Bank at March 31, 2010 was categorized as well capitalized under applicable regulatory criteria. Management is not
aware of any conditions or events since the most recent notification that would change the Banks category.

At March 31, 2010, we
had outstanding commitments to originate loans of $455,000. We expect to have sufficient funds available to meet our current loan commitments. Loan commitments have, in recent periods, been funded through liquidity and normal deposit flows.
Certificates of deposit scheduled to mature in one year or less from March 31, 2010 totaled $45.6 million. Management believes, based on past experience, that a significant portion of such deposits will remain with us. Based on the foregoing,
in addition to our level of core deposits and capital, we consider our liquidity and capital resources sufficient to meet our outstanding short-term and long-term needs.

Off-Balance Sheet Arrangements.

In the
normal course of operations, we engage in a variety of financial transactions that, in accordance with generally accepted accounting principles, are not recorded in our financial statements. These transactions involve, to varying degrees, elements
of credit, interest rate and liquidity risk. Such transactions are used primarily to manage customers requests for funding and take the form of loan commitments and available lines of credit. For the three months ended March 31, 2010 and
2009, we did not engage in any off-balance sheet transactions other than loan origination commitments in the normal course of our lending activities.



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|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

This item is not applicable because we are a smaller reporting company.



|Item 4T. | Controls and Procedures
|-------- | -----------------------

We have adopted
disclosure controls and procedures designed to facilitate our financial reporting. The disclosure controls currently consist of communications among the Chief Executive Officer, the Chief Financial Officer and each department head to identify any
transactions, events, trends, risks or contingencies which may be material to our operations. Our disclosure controls also contain certain elements of our internal controls adopted in connection with applicable accounting and regulatory guidelines.
Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls as of the end of the period covered by this report and found them to be effective. Finally, the Chief Executive Officer, Chief
Financial Officer, the Audit Committee and our independent registered public accounting firm also meet on a quarterly basis.

We maintain
internal control over financial reporting. There have not been any significant changes in such internal control over financial reporting in the last quarter that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

PART II - Other Information



|Item 1. | Legal Proceedings
|------- | -----------------

At March 31, 2010
there were no material pending legal proceedings to which the Company or the Bank is a party other than ordinary routine litigation incidental to their respective businesses.



|Item 1A. | Risk Factors
|-------- | ------------

This item is not applicable
because we are a smaller reporting company.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

There was no Ben Franklin Financial, Inc. common stock repurchase activity during the first quarter of 2010.



|Item 3. | Defaults upon Senior Securities
|------- | -------------------------------

Not Applicable



|Item 4. | Removed and Reserved
|------- | --------------------



|Item 5. | Other Information
|------- | -----------------

Not
Applicable



|Item 6. | Exhibits
|------- | --------

(a) Exhibits



|     |  |                                                           
|---- |  | ----------------------------------------------------------
|31.1 |  | Rule 13(a)  14(a) Certification (Chief Executive Officer)
|31.2 |  | Rule 13(a)  14(a) Certification (Chief Financial Officer)
|32.1 |  | Section 1350 Certification (Chief Executive Officer)      
|32.2 |  | Section 1350 Certification (Chief Financial Officer)      



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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.



|                   |  |                                      
|------------------ |  | -------------------------------------
|                   |  | BEN FRANKLIN FINANCIAL, INC.         
|                   |  | (Registrant)                         
|                   | 
|Date: May 14, 2010 |  | /s/ C. Steven Sjogren                
|                   |  | C. Steven Sjogren                    
|                   |  | President and Chief Executive Officer



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