##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-QSB



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

FOR THE QUARTERLY PERIOD ENDED September 30, 2007

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



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Ben Franklin Financial, Inc.

(Exact name of registrant as specified in its charter)



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



|                                                |  |           
|----------------------------------------------- |  | ----------
|14 N. Dryden Place, Arlington Heights, Illinois |  | 60004     
|(Address of principal executive offices)        |  | (Zip Code)

(847) 398-0990

(Registrants telephone number, including area code)



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Check whether the registrant (1) filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 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 November 14, 2007: 1,983,750 shares

Transitional Small Business Disclosure format (check
one)    Yes ̈No  x



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##### Table of Contents

BEN FRANKLIN FINANCIAL, INC.

INDEX

The information in this report at or for the period ended September 30, 2006 relates to Ben Franklin Bank of Illinois only.



|                                                                                                                             |  |         
|---------------------------------------------------------------------------------------------------------------------------- |  | --------
|                                                                                                                             |  | PAGE NO.
|PART I  Financial Information                                                                                               |  |         
|                                                                                                                             | 
|Item 1. Financial Statements of Ben Franklin Financial, Inc.                                                                 |  |         
|                                                                                                                             | 
|Consolidated Statements of Financial Condition (Unaudited) as of September 30, 2007 and December 31, 2006                    |  | 1       
|                                                                                                                             | 
|Consolidated Statements of Income (Unaudited) for the three and nine months ended September 30, 2007 and 2006                |  | 2       
|                                                                                                                             | 
|Consolidated Statements of Changes in Stockholders Equity (Unaudited) for the nine months ended September 30, 2007 and 2006 |  | 3       
|                                                                                                                             | 
|Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2007 and 2006                      |  | 4       
|                                                                                                                             | 
|Notes to Consolidated Financial Statements (Unaudited)                                                                       |  | 5       
|                                                                                                                             | 
|Item 2. Managements Discussion and Analysis or Plan of Operation                                                            |  | 8       
|                                                                                                                             | 
|Item 3. Controls and Procedures                                                                                              |  | 20      
|                                                                                                                             | 
|PART II  Other Information                                                                                                  |  |         
|                                                                                                                             | 
|Item 1. Legal Proceedings                                                                                                    |  | 21      
|                                                                                                                             | 
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                                          |  | 21      
|                                                                                                                             | 
|Item 3. Defaults Upon Senior Securities                                                                                      |  | 21      
|                                                                                                                             | 
|Item 4. Submission of Matters to a Vote of Security Holders                                                                  |  | 21      
|                                                                                                                             | 
|Item 5. Other Information                                                                                                    |  | 21      
|                                                                                                                             | 
|Item 6. Exhibits                                                                                                             |  | 21      
|                                                                                                                             | 
|Form 10-QSB Signatures                                                                                                       |  | 22      



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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)



|                                                                                                                                                      |  |                   |         |   |                  |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                                      |  | September 30,2007 |         |   | December 31,2006 |  
|ASSETS                                                                                                                                                |  |                   |         |   |                  |   |         |  
|Cash and due from banks                                                                                                                               |  | $                 | 975     |   |                  | $ | 1,803   |  
|Interest-bearing deposit accounts                                                                                                                     |  |                   | 2,293   |   |                  |   | 6,653   |  
|Federal funds sold                                                                                                                                    |  |                   | 2,920   |   |                  |   | 12,150  |  
|                                                                                                                                                      |  |                   |         |   |                  |   |         |  
|Cash and cash equivalents                                                                                                                             |  |                   | 6,188   |   |                  |   | 20,606  |  
|Securities available-for-sale                                                                                                                         |  |                   | 4,120   |   |                  |   | 4,856   |  
|Loans, net of allowance for loan losses of $519 at September 30, 2007 and $508 at December 31, 2006                                                   |  |                   | 102,591 |   |                  |   | 90,574  |  
|Federal Home Loan Bank stock                                                                                                                          |  |                   | 1,337   |   |                  |   | 1,337   |  
|Premises and equipment, net                                                                                                                           |  |                   | 884     |   |                  |   | 597     |  
|Repossessed assets                                                                                                                                    |  |                   | 27      |   |                  |   |        |  
|Accrued interest receivable                                                                                                                           |  |                   | 601     |   |                  |   | 534     |  
|Other assets                                                                                                                                          |  |                   | 356     |   |                  |   | 397     |  
|                                                                                                                                                      |  |                   |         |   |                  |   |         |  
|Total assets                                                                                                                                          |  | $                 | 116,104 |   |                  | $ | 118,901 |  
|                                                                                                                                                      |  |                   |         |   |                  |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                  |  |                   |         |   |                  |   |         |  
|Liabilities                                                                                                                                           |  |                   |         |   |                  |   |         |  
|Demand-noninterest-bearing deposits                                                                                                                   |  | $                 | 1,769   |   |                  | $ | 1,740   |  
|Demand-interest-bearing deposits                                                                                                                      |  |                   | 6,413   |   |                  |   | 8,320   |  
|Savings deposits                                                                                                                                      |  |                   | 8,012   |   |                  |   | 9,608   |  
|Money Market deposits                                                                                                                                 |  |                   | 10,063  |   |                  |   | 11,894  |  
|Certificates of deposit                                                                                                                               |  |                   | 68,194  |   |                  |   | 68,631  |  
|                                                                                                                                                      |  |                   |         |   |                  |   |         |  
|Total deposits                                                                                                                                        |  |                   | 94,451  |   |                  |   | 100,193 |  
|Advances from Federal Home Loan Bank                                                                                                                  |  |                   | 4,500   |   |                  |   | 2,000   |  
|Advances from borrowers for taxes and insurance                                                                                                       |  |                   | 1,016   |   |                  |   | 683     |  
|Other liabilities                                                                                                                                     |  |                   | 289     |   |                  |   | 320     |  
|Common stock in ESOP subject to contingent purchase obligation                                                                                        |  |                   | 40      |   |                  |   | 11      |  
|                                                                                                                                                      |  |                   |         |   |                  |   |         |  
|Total liabilities                                                                                                                                     |  |                   | 100,296 |   |                  |   | 103,207 |  
|Stockholders equity                                                                                                                                  |  |                   |         |   |                  |   |         |  
|Common stock, par value $0.01 per share; authorized 20,000,000 shares; issued and outstanding at September 30, 2007 and December 31,
2006  1,983,750 |  |                   | 20      |   |                  |   | 20      |  
|Additional paid-in-capital                                                                                                                            |  |                   | 7,955   |   |                  |   | 7,955   |  
|Retained earnings, substantially restricted                                                                                                           |  |                   | 8,632   |   |                  |   | 8,541   |  
|Unearned Employee Stock Ownership Plan (ESOP) shares                                                                                                  |  |                   | (737    | ) |                  |   | (767    | )
|Accumulated other comprehensive loss                                                                                                                  |  |                   | (22     | ) |                  |   | (44     | )
|Reclassification of ESOP shares                                                                                                                       |  |                   | (40     | ) |                  |   | (11     | )
|                                                                                                                                                      |  |                   |         |   |                  |   |         |  
|Total equity                                                                                                                                          |  |                   | 15,808  |   |                  |   | 15,694  |  
|                                                                                                                                                      |  |                   |         |   |                  |   |         |  
|Total liabilities and equity                                                                                                                          |  | $                 | 116,104 |   |                  | $ | 118,901 |  
|                                                                                                                                                      |  |                   |         |   |                  |   |         |  

See accompanying notes to consolidated financial statements



1



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##### Table of Contents

BEN FRANKLIN FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands except per share amounts)

(Unaudited)



|                                                             |  |                                 |       |                                |   |       |  |      |       |  |   |       |  
|------------------------------------------------------------ |  | ------------------------------- | ----- | ------------------------------ | - | ----- |  | ---- | ----- |  | - | ----- | -
|                                                             |  | Three Months EndedSeptember 30, |       | Nine Months EndedSeptember 30, |  
|                                                             |  | 2007                            |       | 2006                           |   | 2007  |  | 2006 |      
|Interest and dividend income                                 |  |                                 |       |                                |   |       |  |      |       |  |   |       |  
|Loans                                                        |  | $                               | 1,648 |                                | $ | 1,414 |  | $    | 4,550 |  | $ | 4,082 |  
|Securities                                                   |  |                                 | 59    |                                |   | 74    |  |      | 188   |  |   | 234   |  
|Federal funds sold                                           |  |                                 | 37    |                                |   | 91    |  |      | 226   |  |   | 213   |  
|Interest-bearing deposit accounts and other                  |  |                                 | 37    |                                |   | 62    |  |      | 192   |  |   | 128   |  
|                                                             |  |                                 |       |                                |   |       |  |      |       |  |   |       |  
|                                                             |  |                                 | 1,781 |                                |   | 1,641 |  |      | 5,156 |  |   | 4,657 |  
|                                                             |  |                                 |       |                               
|Interest expense                                             |  |                                 |       |                                |   |       |  |      |       |  |   |       |  
|Deposits                                                     |  |                                 | 906   |                                |   | 843   |  |      | 2,690 |  |   | 2,323 |  
|Federal Home Loan Bank advances                              |  |                                 | 35    |                                |   | 23    |  |      | 81    |  |   | 69    |  
|                                                             |  |                                 |       |                                |   |       |  |      |       |  |   |       |  
|                                                             |  |                                 | 941   |                                |   | 866   |  |      | 2,771 |  |   | 2,392 |  
|                                                             |  |                                 |       |                                |   |       |  |      |       |  |   |       |  
|Net interest income                                          |  |                                 | 840   |                                |   | 775   |  |      | 2,385 |  |   | 2,265 |  
|                                                             |  |                                 |       |                               
|Provision (credit) for loan losses                           |  |                                 | 7     |                                |   |      |  |      | 12    |  |   | (1    | )
|                                                             |  |                                 |       |                                |   |       |  |      |       |  |   |       |  
|Net interest income after provision (credit) for loan losses |  |                                 | 833   |                                |   | 775   |  |      | 2,373 |  |   | 2,266 |  
|                                                             |  |                                 |       |                               
|Noninterest income                                           |  |                                 |       |                                |   |       |  |      |       |  |   |       |  
|Service fee income                                           |  |                                 | 41    |                                |   | 54    |  |      | 118   |  |   | 141   |  
|Other                                                        |  |                                 | 9     |                                |   | 12    |  |      | 23    |  |   | 34    |  
|                                                             |  |                                 |       |                                |   |       |  |      |       |  |   |       |  
|                                                             |  |                                 | 50    |                                |   | 66    |  |      | 141   |  |   | 175   |  
|Noninterest expenses                                         |  |                                 |       |                                |   |       |  |      |       |  |   |       |  
|Compensation and employee benefits                           |  |                                 | 455   |                                |   | 451   |  |      | 1,385 |  |   | 1,322 |  
|Occupancy expenses                                           |  |                                 | 119   |                                |   | 132   |  |      | 364   |  |   | 398   |  
|Data processing services                                     |  |                                 | 53    |                                |   | 95    |  |      | 166   |  |   | 223   |  
|Professional fees                                            |  |                                 | 52    |                                |   | 24    |  |      | 189   |  |   | 77    |  
|Regulatory fees                                              |  |                                 | 13    |                                |   | 12    |  |      | 42    |  |   | 61    |  
|Other                                                        |  |                                 | 76    |                                |   | 76    |  |      | 235   |  |   | 211   |  
|                                                             |  |                                 |       |                                |   |       |  |      |       |  |   |       |  
|                                                             |  |                                 | 768   |                                |   | 790   |  |      | 2,381 |  |   | 2,292 |  
|                                                             |  |                                 |       |                                |   |       |  |      |       |  |   |       |  
|Income before income taxes                                   |  |                                 | 115   |                                |   | 51    |  |      | 133   |  |   | 149   |  
|                                                             |  |                                 |       |                               
|Provision for income taxes                                   |  |                                 | 38    |                                |   | 18    |  |      | 42    |  |   | 55    |  
|                                                             |  |                                 |       |                                |   |       |  |      |       |  |   |       |  
|Net income                                                   |  | $                               | 77    |                                | $ | 33    |  | $    | 91    |  | $ | 94    |  
|                                                             |  |                                 |       |                                |   |       |  |      |       |  |   |       |  
|Total comprehensive income                                   |  | $                               | 114   |                                | $ | 113   |  | $    | 113   |  | $ | 113   |  
|                                                             |  |                                 |       |                                |   |       |  |      |       |  |   |       |  
|Earnings per common share                                    |  | $                               | 0.04  |                                |   | N/A   |  |      | 0.05  |  |   | N/A   |  

---

N/A = Not applicable

Earnings per share is not applicable for the period ended September 30, 2006 since there were no shares outstanding prior to the initial public offering on
October 18, 2006.

See accompanying notes to consolidated financial statements



2



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##### Table of Contents

BEN FRANKLIN FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

For the Nine Months Ended September 30, 2007 and 2006  (Unaudited)



|                                                                                                                             |  |             |    |                          |   |       |                  |  |                    |       |  |                                            |      |   |                                 |   |     |       |  |   |                     |   |  |   |        |   |  |   |    
|---------------------------------------------------------------------------------------------------------------------------- |  | ----------- | -- | ------------------------ | - | ----- | ---------------- |  | ------------------ | ----- |  | ------------------------------------------ | ---- | - | ------------------------------- | - | --- | ----- |  | - | ------------------- | - |  | - | ------ | - |  | - | ---
|                                                                                                                             |  | CommonStock |    | AdditionalPaid-InCapital |   |       | RetainedEarnings |  | UnearnedESOPShares |       |  | AccumulatedOtherComprehensiveIncome (Loss) |      |   | AmountReclassifiedon ESOPShares |   |     | Total |  |   | ComprehensiveIncome
|Balance at January 1, 2006                                                                                                   |  | $           |   |                          | $ |      |                  |  | $                  | 8,410 |  | $                                          |     |   |                                 | $ | (76 | )     |  |   |                    |   |  | $ | 8,334  |   |  |   |   
|Comprehensive income:                                                                                                        |  |             |    |                          |   |       |                  |  |                    |       |  |                                            |      |   |                                 |   |     |       |  |   |                     |   |  |   |        |   |  |   |    
|Net income                                                                                                                   |  |             |   |                          |   |      |                  |  |                    | 94    |  |                                            |     |   |                                 |   |    |       |  |   |                    |   |  |   | 94     |   |  |   | 94 
|Change in unrealized loss on securities available-for-sale, net of taxes                                                     |  |             |   |                          |   |      |                  |  |                    |      |  |                                            |     |   |                                 |   | 19  |       |  |   |                    |   |  |   | 19     |   |  |   | 19 
|                                                                                                                             |  |             |    |                          |   |       |                  |  |                    |       |  |                                            |      |   |                                 |   |     |       |  |   |                     |   |  |   |        |   |  |   |    
|Total comprehensive income                                                                                                   |  |             |    |                          |   |       |                  |  |                    |       |  |                                            |      |   |                                 |   |     |       |  |   |                     |   |  |   |        |   |  | $ | 113
|                                                                                                                             |  |             |    |                          |   |       |                  |  |                    |       |  |                                            |      |   |                                 |   |     |       |  |   |                     |   |  |   |        |   |  |   |    
|Balance at September 30, 2006                                                                                                |  | $           |   |                          | $ |      |                  |  | $                  | 8,504 |  | $                                          |     |   |                                 | $ | (57 | )     |  | $ |                    |   |  | $ | 8,447  |   |  |   |    
|                                                                                                                             |  |             |    |                          |   |       |                  |  |                    |       |  |                                            |      |   |                                 |   |     |       |  |   |                     |   |  |   |        |   |  |   |    
|Balance at January 1, 2007                                                                                                   |  | $           | 20 |                          | $ | 7,955 |                  |  | $                  | 8,541 |  | $                                          | (767 | ) |                                 | $ | (44 | )     |  | $ | (11                 | ) |  | $ | 15,694 |   |  |   |   
|Comprehensive income:                                                                                                        |  |             |    |                          |   |       |                  |  |                    |       |  |                                            |      |   |                                 |   |     |       |  |   |                     |   |  |   |        |   |  |   |    
|Net income                                                                                                                   |  |             |   |                          |   |      |                  |  |                    | 91    |  |                                            |     |   |                                 |   |    |       |  |   |                    |   |  |   | 91     |   |  | $ | 91 
|Earned ESOP shares                                                                                                           |  |             |   |                          |   | 2     |                  |  |                    |      |  |                                            | 30   |   |                                 |   |    |       |  |   |                    |   |  |   | 32     |   |  |   |    
|Additional offering costs                                                                                                    |  |             |   |                          |   | (2    | )                |  |                    |      |  |                                            |     |   |                                 |   |    |       |  |   |                    |   |  |   | (2     | ) |  |   |    
|Change in unrealized loss on securities available-for-sale, net of deferred income taxes                                     |  |             |   |                          |   |      |                  |  |                    |      |  |                                            |     |   |                                 |   | 22  |       |  |   |                    |   |  |   | 22     |   |  |   | 22 
|Reclassification due to release and change in fair value of common stock in ESOP subject to contingent repurchase obligation |  |             |   |                          |   |      |                  |  |                    |      |  |                                            |     |   |                                 |   |    |       |  |   | (29                 | ) |  |   | (29    | ) |  |   |   
|                                                                                                                             |  |             |    |                          |   |       |                  |  |                    |       |  |                                            |      |   |                                 |   |     |       |  |   |                     |   |  |   |        |   |  |   |    
|Total comprehensive income                                                                                                   |  |             |    |                          |   |       |                  |  |                    |       |  |                                            |      |   |                                 |   |     |       |  |   |                     |   |  |   |        |   |  | $ | 113
|                                                                                                                             |  |             |    |                          |   |       |                  |  |                    |       |  |                                            |      |   |                                 |   |     |       |  |   |                     |   |  |   |        |   |  |   |    
|Balance at September 30, 2007                                                                                                |  | $           | 20 |                          | $ | 7,955 |                  |  | $                  | 8,632 |  | $                                          | (737 | ) |                                 | $ | (22 | )     |  | $ | (40                 | ) |  | $ | 15,808 |   |  |   |    
|                                                                                                                             |  |             |    |                          |   |       |                  |  |                    |       |  |                                            |      |   |                                 |   |     |       |  |   |                     |   |  |   |        |   |  |   |    

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)



|                                                                          |  |                                |         |   |      |   |         |  
|------------------------------------------------------------------------- |  | ------------------------------ | ------- | - | ---- | - | ------- | -
|                                                                          |  | Nine Months EndedSeptember 30, |        
|                                                                          |  | 2007                           |         |   | 2006 |  
|Cash flows from operating activities                                      |  |                                |         |   |      |   |         |  
|Net income                                                                |  | $                              | 91      |   |      | $ | 94      |  
|Adjustments to reconcile net income to net cash from operating activities |  |                                |         |   |      |   |         |  
|Depreciation                                                              |  |                                | 78      |   |      |   | 106     |  
|ESOP expense                                                              |  |                                | 32      |   |      |   |        |  
|Amortization of premiums and discounts                                    |  |                                | 50      |   |      |   | 26      |  
|Provision (credit) for loan losses                                        |  |                                | 12      |   |      |   | (1      | )
|Loans originated for sale                                                 |  |                                |        |   |      |   | (1,262  | )
|Proceeds from the sale of loans                                           |  |                                |        |   |      |   | 1,262   |  
|Changes in:                                                               |  |                                |         |   |      |   |         |  
|Deferred loan costs                                                       |  |                                | (152    | ) |      |   | 44      |  
|Accrued interest receivable                                               |  |                                | (67     | ) |      |   | (57     | )
|Other assets                                                              |  |                                | 28      |   |      |   | (514    | )
|Other liabilities                                                         |  |                                | (31     | ) |      |   | (364    | )
|                                                                          |  |                                |         |   |      |   |         |  
|Net cash from operating activities                                        |  |                                | 41      |   |      |   | (666    | )
|                                                                          |  |                               
|Cash flows from investing activities                                      |  |                                |         |   |      |   |         |  
|Principal repayments on mortgage-backed securities                        |  |                                | 759     |   |      |   | 1,963   |  
|Net decrease (increase) in loans                                          |  |                                | (116    | ) |      |   | 8,523   |  
|Purchase of loans                                                         |  |                                | (11,826 | ) |      |   | (12,140 | )
|Redemption of Federal Home Loan Bank stock                                |  |                                |        |   |      |   | 489     |  
|Purchase of premises and equipment                                        |  |                                | (365    | ) |      |   | (69     | )
|                                                                          |  |                                |         |   |      |   |         |  
|Net cash from investing activities                                        |  |                                | (11,548 | ) |      |   | (1,234  | )
|                                                                          |  |                               
|Cash flows from financing activities                                      |  |                                |         |   |      |   |         |  
|Net increase (decrease) in deposits                                       |  |                                | (5,742  | ) |      |   | 23,525  |  
|Additional offering costs                                                 |  |                                | (2      | ) |      |   |        |  
|Federal Home Loan Bank advance                                            |  |                                | 2,500   |   |      |   |        |  
|Net change in advances from borrowers for taxes and insurance             |  |                                | 333     |   |      |   | (427    | )
|                                                                          |  |                                |         |   |      |   |         |  
|Net cash from financing activities                                        |  |                                | (2,911  | ) |      |   | 23,098  |  
|                                                                          |  |                                |         |   |      |   |         |  
|Net change in cash and cash equivalents                                   |  |                                | (14,418 | ) |      |   | 21,198  |  
|                                                                          |  |                               
|Cash and cash equivalents at beginning of year                            |  |                                | 20,606  |   |      |   | 7,039   |  
|                                                                          |  |                                |         |   |      |   |         |  
|Cash and cash equivalents at end of period                                |  | $                              | 6,188   |   |      | $ | 28,237  |  
|                                                                          |  |                                |         |   |      |   |         |  
|Supplemental disclosures of cash flow information                         |  |                                |         |   |      |   |         |  
|Interest paid                                                             |  | $                              | 2,742   |   |      | $ | 2,431   |  
|Income taxes paid                                                         |  |                                | 88      |   |      |   | 467     |  
|Transfers of loans to repossessed assets                                  |  |                                | 27      |   |      |   |        |  

See accompanying notes to consolidated financial statements



4



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##### Table of Contents

NOTES TO 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. All significant intercompany transactions are eliminated in consolidation. In the opinion of the Companys management, all adjustments consisting of normal
recurring accruals necessary for a fair presentation of the financial condition and results of operations for the interim periods included herein have been made. 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 2006 Annual Report on Form 10-KSB.

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 savings accounts with the Deposit Insurance Fund (DIF) of the Federal
Deposit Insurance Corporation.

Note 2  Reorganization and Stock Issuance

Effective October 18, 2006, the Bank reorganized into the mutual holding company structure with Ben Franklin Financial, MHC (the MHC), becoming the federal mutual holding company parent of Ben
Franklin Financial, Inc., a federal corporation, which in turn owns 100% of the stock of the Bank. Concurrently with the reorganization, the Company offered and sold 892,688 shares of its common stock in a public offering (including 77,763 shares
sold to its employee stock ownership plan) representing 45% of its shares outstanding after the offering. The MHC retained 1,091,062 shares representing 55% of the outstanding shares of common stock of the Company. The common stock was offered on a
priority basis to eligible depositors. The MHC will continue to own at least a majority of the common stock of the Company as long as the MHC exists.

Costs incurred in connection with the offering (approximately $856,000) were recorded as a reduction of the proceeds from the offering. Net proceeds from the common stock offering were approximately $8.1 million.

Notes 3  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 stock in
connection with the reorganization at a price of $10 per share.

Shares purchased by the ESOP with the loan proceeds are held in a suspense account and are
allocated to ESOP participants on a pro rata basis as principal and interest payments are made by the ESOP to the Company. The loan is secured by shares purchased with the loan proceeds and will be repaid by the ESOP with funds from the
Companys discretionary contributions to the ESOP and earnings on ESOP assets. Annual principal and interest payments of approximately $92,000 are to be made by the ESOP for 2007.



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As shares are released from collateral, the Company will report compensation expense equal to the current market price of
the shares and the shares will become outstanding for earnings-per-share computations. Dividends on allocated ESOP shares reduce retained earnings; dividends on unearned ESOP shares reduce accrued interest. Because participants may require the
Company to purchase their ESOP shares upon termination of their employment, the fair value of all earned and allocated ESOP shares may become a liability.

The ESOP has a plan year end of December 31. Expense related to the ESOP was $5,000 for the three months and $32,000 for the nine months-ended September 30, 2007.

Shares held by the ESOP at September 30, 2007 were as follows:



|                                                                |  |   |        
|--------------------------------------------------------------- |  | - | -------
|Shares committed to be released                                 |  |   | 4,148  
|Unearned ESOP shares                                            |  |   | 73,615 
|                                                                |  |   |        
|Total ESOP shares                                               |  |   | 77,763 
|                                                                |  |   |        
|Fair value of unearned ESOP shares                              |  | $ | 707,000
|                                                                |  |   |        
|Fair value of allocated shares subject to repurchase obligation |  | $ | 40,000 
|                                                                |  |   |        

Note 4  Earnings Per Share

Basic earnings per share is based on net income divided by the weighted average number of shares outstanding during the period, including allocated and committed-to-be-released ESOP shares. Diluted earnings per share
shows the dilutive effect, if any, of additional common shares issuable under stock options. The Company has no common stock equivalents; consequently, basic and diluted earnings per share are the same. There were no common shares outstanding prior
to October 18, 2006.

The following table presents a reconciliation of the components used to compute basic and diluted earnings per share for 2007:



|                                            |  |                                      |           |                                     |   |          
|------------------------------------------- |  | ------------------------------------ | --------- | ----------------------------------- | - | ---------
|                                            |  | Three months endedSeptember 30, 2007 |           | Nine months endedSeptember 30, 2007
|Net income available to common stockholders |  | $                                    | 77,000    |                                     | $ | 91,000   
|Weighted average common shares outstanding  |  | $                                    | 1,910,255 |                                     | $ | 1,908,962
|Basic and diluted earnings per share        |  | $                                    | 0.04      |                                     | $ | 0.05     

Note 5  New Accounting Standards

The Company adopted FASB Interpretation 48, Accounting for Uncertainty in Income Taxes (FIN 48), as of January 1, 2007. A tax position is recognized as a benefit only if it is more
likely than not that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on
examination. For tax positions not meeting the more likely than not test, no tax benefit is recorded. The adoption did not have a material impact on the results of operations or financial condition of the Company.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of the state of Illinois. The Company is no longer subject to examination
by taxing authorities for years before 2004. The Company currently does not have any unrecognized tax benefits and does not expect unrecognized tax benefits to significantly increase in the next twelve months.

The Company recognizes interest related to income tax matters as interest expense and penalties related to income tax matters as other expense. The Company did not have
any amounts accrued for interest and penalties at September 30, 2007.



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In September 2006, Statement.157, Fair Value Measurements, was issued. This Statement defines fair value,
establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Where applicable, this Statement simplifies and codifies related guidance within GAAP. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, except this Statement does not apply under accounting pronouncements that address share-based payment transactions: Statement 123 (revised 2004), Share-Based Payment,and its related interpretive accounting pronouncements that address share-based payment transactions. Statement 157 does not eliminate the practicability exceptions to fair value measurements in accounting pronouncements within the scope of this
Statement. Management is in the process of evaluating the impact of this statement on its financial condition and results of operations.

In February 2007,
Statement 159, The Fair Value Option for Financial Assets and Financial Liabilities, was issued. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to
improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This
Statement is expected to expand the use of fair value measurement, which is consistent with the FASBs long-term measurement objectives for accounting for financial instruments. This Statement shall be effective for the Company as of
January 1, 2008. Management is in the process of evaluating the impact of this statement on its financial condition and results of operations.



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|Item 2. | Managements Discussion and Analysis or Plan of Operation
|------- | ---------------------------------------------------------

Ben
Franklin Financial, Inc. (the Company) completed its initial public offering on October 18, 2006 and consequently, the information herein at and for the periods ending on September 30, 2006 does not contain any per share
information.

Forward-Looking Statements

This
quarterly report on Form 10-QSB 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 claims 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
multi-family, commercial real estate, construction, commercial, and auto lending including purchased loans; significantly increased competition among 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; changes in the interest rate environment that reduce our margins or reduce the fair value of
financial instruments and inflation; general economic conditions, either nationally or in our market area; adverse changes in the securities and national and local real estate markets (including real estate values); legislative or regulatory changes
that adversely affect our business; 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; and changes in our organization, compensation and benefit plans; and other factors discussed elsewhere in this report or set forth under Risk Factors in our Registration
Statement on Form SB-2 under the Securities Act of 1933. 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

Ben Franklin Bank of Illinois (the Bank) is a federally chartered savings bank headquartered in Arlington Heights, Illinois. Ben Franklin Bank of Illinois was originally founded in 1893 as a building and
loan association. We conduct our business from our main office and two branch offices. All of our offices are located in the northwestern corridor of the Chicago metropolitan area.

Our principal business activity is the origination and purchase of mortgage loans secured by one- to four-family residential real estate. We also invest in commercial real estate, multi-family, construction, land,
home equity and auto loans. 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. Deposits have traditionally been our
primary source of funds for use in lending and investment activities. We also use borrowings, primarily Federal Home Loan Bank of Chicago advances, to supplement cash flow needs, lengthen the maturities of liabilities for interest rate risk purposes
and to manage the cost of funds. In addition, we receive funds from scheduled loan payments, maturities of debt securities, loan prepayments, and net income. Our competition for loans and deposits comes principally from commercial banks, savings
institutions, mortgage banking firms and credit unions. We face additional competition for deposits from short-term money market funds, brokerage firms, mutual funds and insurance companies. Our primary focus is to develop and build profitable
customer relationships across all lines of business while maintaining our focus as a community bank.



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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, investment securities (including mortgage-backed and other securities) and other interest-earning cash equivalents, 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 fees, fees for loan origination services for other financial institutions, gains and losses on the sale of loans and securities, and miscellaneous other income. Non-interest
expense consists primarily of compensation and employee benefits, occupancy and equipment expenses, data processing, professional fees, and other operating expenses. Our results of operations also may be affected significantly by general and local
economic and competitive conditions, changes in market interest rates, governmental policies and actions of regulatory authorities.

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 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 economy and changes in the financial condition of borrowers. Management believes that its critical accounting
policies include determining the allowance for loan losses and accounting for deferred income taxes.

Comparison of Financial Condition at
September 30, 2007 and December 31, 2006

Assets.Total assets at September 30, 2007 were $116.1 million compared to $118.9
million at December 31, 2006, a decrease of $2.8 million or 2.4%. This decrease reflects a decrease in cash and cash equivalents of $14.4 million used to fund our loan portfolio, which increased $12.0 million, and a decrease in our deposit
accounts of $5.7 million. During the third quarter of 2007, our assets increased $3.0 million with loan balances increasing $6.6 million. The increase in loans was funded from a decrease in our cash and cash equivalents of $3.7 million and from a
$2.5 million advance from the Federal Home Loan Bank of Chicago.

For the first nine months of 2007, loan balances increased to $102.6 million compared to
$90.6 million at December 31, 2006. Our auto loan portfolio has increased to $7.0 million, 6.5% of our total loan portfolio as of September 30, 2007 as we continued our acquisition program under an agreement with a local bank. Since
inception of the program at the beginning of 2007, we have purchased $7.6 million of auto loans. We anticipate future purchases of approximately $1.0 million per month through the remainder of 2007. Our construction loans, primarily for
single-family residences, increased $5.4 million or 112.5% to $10.2 million as of September 30, 2007 compared to $4.8 million at December 31, 2006. Our single-family loans increased $837,000 or 1.7% to $50.5 million at September 30,
2007. During the nine month period, we purchased $3.8 million of primarily adjustable rate single-family loans. Our multi-family real estate loans decreased $2.2 million or 16.7% to $11.0 million at September 30, 2007. Our home equity
lines-of-credit increased $669,000 or 9.9% to $7.5 million at September 30, 2007 compared to $6.8 million at December 31, 2006. While loan origination and purchase activity increased in the third quarter, we anticipate lower origination
and purchase volume through the remainder of the year due to general economic conditions.

At September 30, 2007, the allowance for loan losses was
$519,000 or 0.50% of the total loan portfolio compared to the allowance for loan losses at December 31, 2006 of $508,000 or 0.56% of the total loan portfolio. The Companys nonperforming loans decreased to $379,000 or 0.37% of total
loans at September 30, 2007 compared to $707,000 or 0.78% of total loans at December 31, 2006. The Companys loans delinquent 90 days and over at September 30, 2007 total $379,000 in commercial real estate and auto loans.



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Securities balances decreased $736,000 to $4.1 million at September 30, 2007 from $4.9 million at December 31,
2006 due to payments on mortgage-backed securities Our Federal Home Loan Bank stock balance remained unchanged at $1.3 million for the nine months ended September 30, 2007. Given the capital restrictions imposed on the Federal Home Loan Bank of
Chicago, we may be unable to redeem additional shares for some time. The Federal Home Loan Bank of Chicago has also announced that it will not pay a dividend for the third quarter of 2007. It is unknown when dividend payments will resume and the
amount of such dividends, if any.

Cash and cash equivalents decreased $14.4 million or 70.0% to $6.2 million at September 30, 2007 compared to $20.6
million at December 31, 2006. This decrease is due to an increase in our loan portfolio and the decrease in customer deposits.

We are currently
developing new leased space for our main office as part of the overall redevelopment of the existing commercial property we currently occupy. This project has been one of our focal points in 2007. The redevelopment plan includes new commercial space
as well as 110 new residential condominium units and 56 single-family homes. We anticipate relocating to our new main office early in December of 2007 at which time we will consolidate our branch office located in Arlington Heights into the new
office. Construction of the residential portion of the redevelopment is expected to begin in early spring of 2008. As of September 30, 2007, costs related to the new office totaled $405,000.

Liabilities. Deposit balances decreased $5.7 million or 5.7% to $94.5 million at September 30, 2007 from $100.2 million at December 31, 2006. Our
certificates of deposit accounts decreased $437,000 or 0.64% to $68.2 million at September 30, 2007 compared to $68.6 million at December 31, 2006. Our savings accounts decreased $1.6 million or 16.6% to $8.0 million at September 30,
2007 and our demand and money market accounts decreased $3.7 million or 16.9% to $18.2 million at September 30, 2007. The decrease in accounts reflects the competitive market from banks and other financial services firms. We are evaluating
strategies to help increase non-certificate of deposit accounts and we will be introducing electronic bill payment in the fourth quarter of 2007 to our online banking product as an additional feature for our demand account customers.

Our balance in advances from the Federal Home Loan Bank of Chicago increased $2.5 million to $4.5 million at September 30, 2007 from $2.0 million at
December 31, 2006 primarily to fund loan activity during the third quarter and to meeting liquidity needs. Additional advances may be taken in the future based on liquidity and cost considerations.

Equity. Total equity at September 30, 2007 was $15.8 million compared to $15.7 million at December 31, 2006. Equity increased by $91,000 due to
net income and increased $22,000 due to a decrease in the unrealized loss on securities available-for-sale, net of deferred income taxes.

Interest
Rate Risk.An important measure of interest rate risk is the amount by which the net present value of an institutions cash flow from assets, liabilities and off balance sheet items (the institutions net portfolio value or
NPV) changes in the event of a range of assumed changes in market interest rates. We have utilized the Office of Thrift Supervision net portfolio value model (NPV) to provide an analysis of estimated changes in our NPV under
the assumed instantaneous changes in the United States Treasury yield curve. The financial model uses a discounted cash flow analysis and an option-based pricing approach to measuring the interest rate sensitivity of the NPV. Set forth below is an
analysis of the changes that would occur to our NPV as of June 30, 2007, the most recent information available, in the event of designated changes in the United States Treasury yield curve. Management does not believe there is a material change
in market risk since June 30, 2007.



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|                                            |  |                        |               |                                      |         |                        |                                                   |  |     |    |  |       |   |  |      |  
|------------------------------------------- |  | ---------------------- | ------------- | ------------------------------------ | ------- | ---------------------- | ------------------------------------------------- |  | --- | -- |  | ----- | - |  | ---- | -
|Change in Interest Rates (basis points)
(1) |  | Estimated NPV (2)      |               | Estimated Increase (Decrease) in NPV |         |                        | NPV as a Percentage ofPresent Value of Assets (3) | 
|                                            |  |                        | NPV Ratio (4) |                                      |         | Change in Basis Points |                                                  
|                                            |  | Amount                 |               |                                      | Percent |                        |                                                   | 
|                                            |  | (Dollars in thousands) |              
|+300                                        |  | $                      | 10,463        |                                      | $       | (4,196                 | )                                                 |  | (29 | )% |  | 9.47  | % |  | (319 | )
|+200                                        |  |                        | 12,113        |                                      |         | (2,546                 | )                                                 |  | (17 | )  |  | 10.77 |   |  | (189 | )
|+100                                        |  |                        | 13,526        |                                      |         | (1,133                 | )                                                 |  | (8  | )  |  | 11.84 |   |  | (82  | )
|0                                           |  |                        | 14,659        |                                      |         |                       |                                                   |  |    |    |  | 12.66 |   |  |     |  
|-100                                        |  |                        | 15,458        |                                      |         | 799                    |                                                   |  | 5   |    |  | 13.21 |   |  | 55   |  
|-200                                        |  |                        | 15,965        |                                      |         | 1,306                  |                                                   |  | 9   |    |  | 13.54 |   |  | 88   |  

---

|(1) | Assumes an instantaneous uniform change in interest rates at all maturities.
|--- | ----------------------------------------------------------------------------

|(2) | NPV is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.
|--- | --------------------------------------------------------------------------------------------------------------------

|(3) | Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.
|--- | ------------------------------------------------------------------------------------------------------------------

|(4) | NPV Ratio represents NPV divided by the present value of assets.
|--- | ----------------------------------------------------------------

Certain
shortcomings are inherent in the methodology used in the above interest rate risk measurement. Modeling changes in net portfolio value requires making certain assumptions that may or may not reflect the manner in which actual yields and costs
respond to changes in market interest rates. In this regard, the net portfolio value table presented assumes that the composition of our interest-sensitive assets and liabilities existing at the beginning of a period remains constant over the period
being measured and assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the net portfolio value table
provides an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net interest income and
will differ from actual results. In addition, the model does not address the changes in credit risk which could arise from changes in interest rates.



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Comparison of Operating Results for the Three Months Ended September 30, 2007 and September 30, 2006

General.Net income increased 133.3% to $77,000 for the three months ended September 30, 2007 compared to $33,000 for the three months
ended September 30, 2006. The primary reasons for this increase were increases in net interest income, non-interest income and a decrease in non-interest expense. Our net interest income increased $65,000 or 8.4% to $840,000 for the three
months ended September 30, 2007 from $775,000 for the same period in 2006, primarily due to an increase in our average net interest earning assets resulting from the proceeds from our stock offering, partially offset by a decrease in deposit
account balances. This resulted in an increase in our net interest margin to 3.00% for the three months ended September 30, 2007 compared to 2.83% for the prior year quarter. Non-interest income decreased by $16,000 or 24.2% to $50,000 for the
three months ended September 30, 2007 compared to $66,000 for the three months ended September 30, 2006. Non-interest expense decreased $22,000 or 2.8% to $768,000 from $790,000 the prior year quarter primarily due to a decrease in data
processing services.

Interest Income. Interest income increased $140,000 or 8.5% to $1.8 million for the three months ended
September 30, 2007 compared to the prior year quarter. Interest income from loans increased $234,000 or 16.6% to $1.6 million due to increases in the average balance and the average yield of our loan portfolio and a $35,000 payment for interest
owed on a prior loan restructuring. The average yield on loans for the three months ended September 30, 2007 increased to 6.53% compared to 6.25% for the three months ended September 30, 2006 due to higher rates on new originations,
primarily from our auto loan portfolio and the additional $35,000 interest payment. The average loan balance increased $9.9 million or 10.9% to $100.5 million for the three months ended September 30, 2007 compared to $90.6 million for the three
months ended September 30, 2006. The increase in our average portfolio balance was attributable to a $5.9 million increase in our consumer loans, primarily auto loans; a $2.0 million increase in our one-to-four family loans; and a $2.4 million
increase in our construction loans.

Interest income from securities decreased $15,000 or 20.3% to $59,000 for the three months ended September 30,
2007 from $74,000 for three months ended September 30, 2006. Dividend income from Federal Home Loan Bank of Chicago stock declined $6,000 to $9,000 for the three months ended September 30, 2007 primarily due to the lower balance following
the redemption of stock. The average balance of our securities decreased $1.6 million to $5.6 million for the three months ended September 30, 2007 compared to $7.2 million for three months ended September 30, 2006 due primarily to the
payments on mortgage-backed securities and the redemption of $739,000 of Federal Home Loan Bank of Chicago stock during 2006. The yield on securities for the three months ended September 30, 2007 was 4.23% compared to 4.09% for the three months
ended September 30, 2006 due to the repricing of adjustable mortgage-backed securities.

Interest from other interest-earning assets for the three
months ended September 30, 2007 decreased $79,000 or 51.6% to $74,000 from $153,000 for the three months ended September 30, 2006. The average balance for the three months ended September 30, 2007 was $5.9 million with an average
yield of 5.02%. For the three months ended September 30, 2006, the average balance was $11.7 million with an average yield of 5.25%. The decrease in yield reflected the 50 basis point decrease in the federal funds rate in September of 2007.

Interest Expense. Interest expense for the three months ended September 30, 2007 was $941,000, an increase of $75,000 or 8.7% from
$866,000 for the three months ended September 30, 2006. This increase was primarily due to the rising cost of our certificates of deposit in a highly competitive market. The average balance of interest bearing liabilities decreased $6.6 million
due to a $7.5 million decrease in the average balance of deposit accounts. The average cost of deposits was 3.89% for the three months ended September 30, 2007 compared to 3.38% for the prior year period. Deposits for the quarter ended
September 30, 2006 included subscription funds held in a savings account at the Bank relating to our initial public offering which averaged approximately $3.1 million and helped reduce our overall costs during the period. We continue to face
strong competition for demand and money market accounts in our market which has resulted in a decrease in the average balance for these accounts of $4.3 million during the quarter ended September 30, 2007 compared to the prior year quarter. Our
strategy for these products has been to maintain our rate structure and expand the product features.

Interest expense on advances from the Federal Home
Loan Bank of Chicago increased $12,000 for the quarter ended September 30, 2007 from the prior year quarter due to an additional advance of $2.5 million. The average balance of advances for the quarter ended September 30, 2007 was $2.9
million with an average cost of 4.80% compared to an average balance of $2.0 million with a cost 4.69% the prior year quarter.



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Net Interest Income. Net interest income for the three months ended September 30, 2007 was $840,000
compared to $775,000 for the three months ended September 30, 2006, an increase of $65,000 or 8.4%. The average yield on interest-earning assets for the three months ended September 30, 2007 was 6.33% compared to 6.01% for the prior year
period. The average cost of interest-bearing liabilities increased to 3.92% for the three months ended September 30, 2007 from 3.41% for the three months ended September 30, 2006. These changes resulted in a decrease in our net interest
rate spread to 2.41% for the three months ended September 30, 2007 compared to 2.60% for the three months ended September 30, 2006. The repricing of our maturing certificates of deposit at higher interest rates was the primary factor in
the decrease in our net interest rate spread.

Provision for Loan Losses. Our allowance for loan losses is the estimated amount considered
necessary to reflect probable incurred losses in the loan portfolio at the balance sheet date. Our analysis includes a review of identified problem loans for which a specific allowance is required as well as a general allowance for the remainder of
the portfolio.

The provision for loan losses for the three months ended September 30, 2007 was $7,000. There was no provision for the three months
ended September 30, 2006. While the credit quality and underwriting of our loans has remained relatively unchanged, the increase in our provision reflects a general increase in our loan portfolio as well as changes in the mix of our portfolio.
While our methodology takes into account higher risk factors for multi-family real estate, commercial real estate, construction, commercial and land lending, other factors including our experience with our borrowers and community, our underwriting
standards and the repayment performance of our portfolio loans may offset these risks.

Non-interest Income. For the three months ended
September 30, 2007, non-interest income decreased $16,000 or 24.2% to $50,000 compared to $66,000 for the three months ended September 30, 2006. Fees received from providing loan origination services for other financial institutions, one
of the largest component of non-interest income, totaled $15,000 for the three months ended September 30, 2007 compared to $25,000 for the three months ended September 30, 2006. This decrease was due to lower origination activity.

Non-interest Expense. For the three months ended September 30, 2007, non-interest expense totaled $768,000 compared to $790,000 for the
prior year period, a decrease of 2.8%. Compensation and benefits expense increased $4,000 or 0.8% for the three months ended September 30, 2007 from the three months ended September 30, 2006. Professional fees increased $28,000 or 116.7%
to $52,000 for the three months ended September 30, 2007 from $24,000 the three months ended September 30, 2006 due to fees related to operating as a public company. Data processing decreased $42,000 from the prior year quarter due to
system changes implemented in the fourth quarter of 2006. All other components of non-interest expense decreased $12,000 or 5.5% from the prior year period on a net basis.

Income Tax Provision.The provision for income taxes was $38,000 for the three months ended September 30, 2007 compared to $18,000 for the three months ended September 30, 2006. The increase in
the provision was due to the increase in pretax income of $64,000.

Comparison of Operating Results for the Nine Months Ended September 30, 2007
and September 30, 2006

General.Net income decreased 3.2% to $91,000 for the nine months ended September 30, 2007 compared to
$94,000 for the nine months ended September 30, 2006. Our net interest income increased $120,000 or 5.3% for the nine months ended September 30, 2007 to $2.4 million. Our net interest margin was relatively unchanged from 2.81% for the nine
months ended September 30, 2006 to 2.82% for the nine months ended September 30, 2007. The impact on our net interest income due to the declining margin was offset by an increase in our average net interest earning assets resulting from
the deployment of proceeds from our stock offering. Non-interest income was $141,000, for the nine months ended September 30, 2007 compared to $175,000 for the prior year period. Non-interest expense increased $89,000 or 3.9% to $2.4 million
from $2.3 million the prior year period primarily due to an increase in professional fees related to operating as a public company.



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Interest Income. Interest income increased $499,000 or 10.7% for the nine months ended September 30,
2007 compared with the prior year period to $5.2 million. Interest income from loans increased $468,000 or 11.5% to $4.6 million for the nine months ended September 30, 2007 due to an increase in yields, an increase in the average portfolio
balance, and a $35,000 payment for interest owed on a prior loan restructuring. The average yield on loans for the nine months ended September 30, 2007 increased to 6.33% compared to 6.06% for the nine months ended September 30, 2006 due
to upward repricing of certain adjustable rate loans and higher rates on new originations and the additional $35,000 interest payment. The average loan balance increased $6.0 million or 6.7% to $96.0 million for the nine months ended
September 30, 2007 compared to $90.0 million for the nine months ended September 30, 2006. The increase in our average portfolio balance was attributable to a $3.5 million increase in our consumer loans, primarily auto loans; a $1.8
million increase in our one-to-four family loans; and a $1.1 million increase in our commercial loans.

Interest income from securities decreased $46,000
or 19.7% to $188,000 for the nine months ended September 30, 2007 from $234,000 for nine months ended September 30, 2006. Dividend income from Federal Home Loan Bank of Chicago stock declined $17,000 to $31,000 for the nine months ended
September 30, 2007 primarily due to the lower balance following the redemption of stock. The average balance of our securities decreased $2.3 million to $5.9 million for the nine months ended September 30, 2007 compared to $8.2 million for
nine months ended September 30, 2006 due primarily to the payments on mortgage-backed securities and the redemption of $739,000 of Federal Home Loan Bank of Chicago stock during 2006. The yield on securities for the nine months ended
September 30, 2007 was 4.27% compared to 3.80% for the nine months ended September 30, 2006 due to the repricing of adjustable mortgage-backed securities and the reduced Federal Home Loan Bank stock balance.

Interest from other interest-earning assets for the nine months ended September 30, 2007 increased $77,000 or 22.6% to $418,000 from $341,000 for the nine months
ended September 30, 2006 due to higher balances and higher interest rates. The average balance for the nine months ended September 30, 2007 was $10.8 million with an average yield of 5.17%. For the nine months ended September 30,
2006, the average balance was $9.3 million with an average yield of 4.90%. The higher rate reflect an increase in the federal funds rate during 2006.

Interest Expense. Interest expense for the nine months ended September 30, 2007 was $2.8 million, an increase of $380,000 or 15.9% from $2.4 million for the nine months ended September 30, 2006 due to an increase in
the average cost to 3.86% for the nine months ended September 30, 2007 compared to 3.22% for the prior year period. This increase was due to an increase in general interest rates and a highly competitive market combined with a higher percentage
of our deposits in certificates of deposit. The average balance of interest bearing liabilities decreased $3.3 million due to a $3.6 million decrease in the average balance of deposit accounts. The average cost of deposits was 3.83% for the nine
months ended September 30, 2007 compared to 3.19% for the prior year period.

Interest expense on advances from the Federal Home Loan Bank increased
$12,000 for the nine months ended September 30, 2007 compared to the prior year period. The average balance increased $312,000 to $2.3 million with an average cost of 4.71% compared to an average balance of $2.0 million and average cost of
4.64% the prior year due to an additional advance of $2.5 million.

Net Interest Income. Net interest income for the nine months ended
September 30, 2007 increased $120,000 or 5.3% to $2.4 million. The average yield on interest-earning assets for the nine months ended September 30, 2007 was 6.11% compared to 5.79% for the prior year period. The average cost of
interest-bearing liabilities increased to 3.86% for the nine months ended September 30, 2007 from 3.22% for the nine months ended September 30, 2006. These changes resulted in a decrease in our net interest rate spread to 2.25% for the
nine months ended September 30, 2007 compared to 2.57% for the nine months ended September 30, 2006.

Provision for Loan Losses.
Our allowance for loan losses is the estimated amount considered necessary to reflect probable incurred losses in the loan portfolio at the balance sheet date. Our analysis includes a review of identified problem loans for which a specific allowance
is required as well as a general allowance for the remainder of the portfolio.

Our provision for loan losses for the nine months ended September 30,
2007 was $12,000 compared to a credit of $1,000 for the nine months ended September 30, 2006. While the credit quality and underwriting of our loans has



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remained relatively unchanged, the increase in our provision reflects a general increase in our loan portfolio as well as changes in the mix of our
portfolio. While our methodology takes into account higher risk factors for multi-family real estate, commercial real estate, construction, commercial and land lending, other factors including our experience with our borrowers and community, our
underwriting standards and the repayment performance of our portfolio loans may offset these risks.

Non-interest Income. For the nine months
ended September 30, 2007, non-interest income was $141,000 compared to $175,000 for the nine months ended September 30, 2006. Fees received from providing loan origination services for other financial institutions, the largest component of
non-interest income, decreased $21,000 to $38,000 for the nine months ended September 30, 2007 compared to $59,000 for the nine months ended September 30, 2006 due to a lower originations.

Non-interest Expense. For the nine months ended September 30, 2007, non-interest expense totaled $2.4 million compared to $2.3 million for the prior
year period, a 4.3% increase. Compensation and benefits expense increased $63,000 or 4.8% for the nine months ended September 30, 2007 from the nine months ended September 30, 2006 due to normal salary increases and the cost related to the
ESOP which was implemented with the initial public offering. Professional fees increased $112,000 or 145.5% to $189,000 for the nine months ended September 30, 2007 from $77,000 the nine months ended September 30, 2006 due to fees related
to operating as a public company. Data processing decreased $57,000 from the prior year quarter due to system changes implemented in the fourth quarter of 2006. Regulatory fees decreased $19,000 to $42,000 for the nine months ended
September 30, 2007 from the prior year period. All other components of non-interest expense decreased $10,000 or 1.6% from the prior year period on a net basis.

Income Tax Provision.The provision for income taxes was $42,000 for the nine months ended September 30, 2007 compared to $55,000 for the nine months ended September 30, 2006. The decrease in
the provision was due to the decrease in pretax income of $16,000.

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 tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated, as well as balances and average yields and costs as of September 30, 2007. 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.



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|                                                                   |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  
|------------------------------------------------------------------ |  | ---------------------- | ------- | ---------- | -------------------------------- | - | ------------------------- | - | -------- |  | ---------- | ----- |  | ------------------------- | - | -------- | - | ---------- |  | - | ----- |  | ------ | -
|                                                                   |  | At September 30, 2007  |         |            | Three Months Ended September 30, |  
|                                                                   |  | 2007                   |         |            | 2006                             |  
|                                                                   |  | OutstandingBalance(1)  |         | Yield/Rate |                                  |   | AverageOutstandingBalance |   | Interest |  | Yield/Cost |       |  | AverageOutstandingBalance |   | Interest |   | Yield/Cost | 
|                                                                   |  | (Dollars in thousands) |        
|Assets:                                                            |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  
|One- to four-family                                                |  | $                      | 50,173  |            | 5.44                             | % |                           | $ | 50,088   |  | $          | 697   |  | 5.57                      | % |          | $ | 48,117     |  | $ | 620   |  | 5.16   | %
|Multi-family, commercial real estate, and land                     |  |                        | 27,966  |            | 6.47                             |   |                           |   | 27,263   |  |            | 452   |  | 6.58                      |   |          |   | 27,789     |  |   | 461   |  | 6.65   |  
|Construction                                                       |  |                        | 6,010   |            | 7.54                             |   |                           |   | 5,532    |  |            | 165   |  | 11.79                     |   |          |   | 3,151      |  |   | 85    |  | 10.88  |  
|Commercial business                                                |  |                        | 3,773   |            | 8.66                             |   |                           |   | 3,906    |  |            | 89    |  | 9.03                      |   |          |   | 3,503      |  |   | 93    |  | 10.62  |  
|Home equity lines-of-credit                                        |  |                        | 7,486   |            | 7.23                             |   |                           |   | 7,688    |  |            | 141   |  | 7.26                      |   |          |   | 7,870      |  |   | 152   |  | 7.73   |  
|Consumer                                                           |  |                        | 7,183   |            | 7.38                             |   |                           |   | 6,045    |  |            | 104   |  | 6.82                      |   |          |   | 147        |  |   | 3     |  | 9.60   |  
|                                                                   |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  
|Total loans                                                        |  |                        | 102,591 |            | 6.23                             |   |                           |   | 100,522  |  |            | 1,648 |  | 6.53                      |   |          |   | 90,577     |  |   | 1,414 |  | 6.25   |  
|Securities and FHLB stock                                          |  |                        | 5,457   |            | 4.30                             |   |                           |   | 5,639    |  |            | 59    |  | 4.23                      |   |          |   | 7,180      |  |   | 74    |  | 4.09   |  
|Other interest-earning assets                                      |  |                        | 5,213   |            | 4.66                             |   |                           |   | 5,880    |  |            | 74    |  | 5.02                      |   |          |   | 11,674     |  |   | 153   |  | 5.25   |  
|                                                                   |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  
|Total interest-earning assets                                      |  |                        | 113,261 |            | 6.07                             |   |                           |   | 112,041  |  | $          | 1,781 |  | 6.33                      |   |          |   | 109,431    |  | $ | 1,641 |  | 6.01   |  
|Non-interest-earning assets                                        |  |                        | 2,843   |            |                                  |   |                           |   | 2,475    |  |            |       |  |                           |   |          |   | 3,594      |  |   |       |  |        |  
|                                                                   |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  
|Total assets                                                       |  | $                      | 116,104 |            |                                  |   |                           | $ | 114,516  |  |            |       |  |                           |   |          | $ | 113,025    |  |   |       |  |        |  
|                                                                   |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  
|                                                                   |  |                        |         |            |                                  |   |                           |  
|Liabilities and retained earnings:                                 |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  
|Savings deposits                                                   |  | $                      | 8,012   |            | 0.85                             |   |                           | $ | 8,208    |  | $          | 17    |  | 0.84                      |   |          | $ | 13,670     |  | $ | 29    |  | 0.84   |  
|Money market/demand accounts                                       |  |                        | 16,476  |            | 1.52                             |   |                           |   | 16,903   |  |            | 64    |  | 1.50                      |   |          |   | 21,228     |  |   | 94    |  | 1.78   |  
|Certificates of deposit                                            |  |                        | 68,194  |            | 4.90                             |   |                           |   | 67,321   |  |            | 825   |  | 4.86                      |   |          |   | 65,025     |  |   | 720   |  | 4.44   |  
|                                                                   |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  
|Total deposits                                                     |  |                        | 92,682  |            | 3.95                             |   |                           |   | 92,432   |  |            | 906   |  | 3.89                      |   |          |   | 99,923     |  |   | 843   |  | 3.38   |  
|FHLB advances                                                      |  |                        | 4,500   |            | 4.65                             |   |                           |   | 2,924    |  |            | 35    |  | 4.80                      |   |          |   | 2,000      |  |   | 23    |  | 4.69   |  
|                                                                   |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  
|Total interest-bearing liabilities                                 |  |                        | 97,182  |            | 3.98                             |   |                           |   | 95,356   |  |            | 941   |  | 3.92                      |   |          |   | 101,923    |  |   | 866   |  | 3.41   |  
|Non-interest-bearing deposits                                      |  |                        | 1,769   |            |                                  |   |                           |   | 1,872    |  |            |       |  |                           |   |          |   | 1,831      |  |   |       |  |        |  
|Other liabilities                                                  |  |                        | 1,345   |            |                                  |   |                           |   | 1,491    |  |            |       |  |                           |   |          |   | 861        |  |   |       |  |        |  
|                                                                   |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  
|Total liabilities                                                  |  |                        | 100,296 |            |                                  |   |                           |   | 98,719   |  |            |       |  |                           |   |          |   | 104,615    |  |   |       |  |        |  
|Stockholders equity                                               |  |                        | 15,808  |            |                                  |   |                           |   | 15,797   |  |            |       |  |                           |   |          |   | 8,410      |  |   |       |  |        |  
|                                                                   |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  
|Total liabilities and stock-holders equity                        |  | $                      | 116,104 |            |                                  |   |                           | $ | 114,516  |  |            |       |  |                           |   |          | $ | 113,025    |  |   |       |  |        |  
|                                                                   |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  
|Net interest income                                                |  |                        |         |            |                                  |   |                           |   |          |  | $          | 840   |  |                           |   |          |   |            |  | $ | 775   |  |        |  
|                                                                   |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  
|Net interest rate spread                                           |  |                        |         |            | 2.09                             | % |                           |   |          |  |            |       |  | 2.41                      | % |          |   |            |  |   |       |  | 2.60   | %
|                                                                   |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  
|Net interest-earning assets                                        |  | $                      | 16,079  |            |                                  |   |                           | $ | 16,685   |  |            |       |  |                           |   |          | $ | 7,508      |  |   |       |  |        |  
|                                                                   |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  
|Net interest margin                                                |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  | 3.00                      | % |          |   |            |  |   |       |  | 2.83   | %
|                                                                   |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  
|Average of interest-earning assets to interest-bearing liabilities |  |                        |         |            | 116.55                           | % |                           |   |          |  |            |       |  | 117.50                    | % |          |   |            |  |   |       |  | 117.37 | %
|                                                                   |  |                        |         |            |                                  |   |                           |   |          |  |            |       |  |                           |   |          |   |            |  |   |       |  |        |  

---

|(1) | Net of allowance for loan
losses, loans in process, loan costs and discounts and premiums.
|--- | ------------------------------------------------------------------------------------------



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|                                                                   |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|------------------------------------------------------------------ |  | ------------------------------- | ------- | -------- | ---- | ---------- |  | ------ | ------------------------- |  | -------- | ------- | ---------- | - | ----- |  | ------ | -
|                                                                   |  | Nine Months Ended September 30, |        
|                                                                   |  | 2007                            |         |          | 2006 |           
|                                                                   |  | AverageOutstandingBalance       |         | Interest |      | Yield/Cost |  |        | AverageOutstandingBalance |  | Interest |         | Yield/Cost |  
|                                                                   |  | (Dollars in thousands)          |        
|Assets:                                                            |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|One- to four-family                                                |  | $                               | 49,764  |          | $    | 2,024      |  | 5.42   | %                         |  | $        | 47,975  |            | $ | 1,830 |  | 5.01   | %
|Multi-family, commercial real estate, and land                     |  |                                 | 27,119  |          |      | 1,330      |  | 6.55   |                           |  |          | 27,736  |            |   | 1,369 |  | 6.60   |  
|Construction                                                       |  |                                 | 4,186   |          |      | 328        |  | 10.49  |                           |  |          | 3,348   |            |   | 265   |  | 10.61  |  
|Commercial business                                                |  |                                 | 3,874   |          |      | 260        |  | 8.97   |                           |  |          | 2,813   |            |   | 184   |  | 8.75   |  
|Home equity lines-of-credit                                        |  |                                 | 7,362   |          |      | 413        |  | 7.50   |                           |  |          | 7,936   |            |   | 425   |  | 7.15   |  
|Consumer                                                           |  |                                 | 3,680   |          |      | 195        |  | 7.10   |                           |  |          | 157     |            |   | 9     |  | 7.75   |  
|                                                                   |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Total loans                                                        |  |                                 | 95,985  |          |      | 4,550      |  | 6.33   |                           |  |          | 89,965  |            |   | 4,082 |  | 6.06   |  
|Securities and FHLB stock                                          |  |                                 | 5,886   |          |      | 188        |  | 4.27   |                           |  |          | 8,220   |            |   | 234   |  | 3.80   |  
|Other interest-earning assets                                      |  |                                 | 10,815  |          |      | 418        |  | 5.17   |                           |  |          | 9,301   |            |   | 341   |  | 4.90   |  
|                                                                   |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Total interest-earning assets                                      |  |                                 | 112,686 |          | $    | 5,156      |  | 6.11   |                           |  |          | 107,486 |            | $ | 4,657 |  | 5.79   |  
|Non-interest-earning assets                                        |  |                                 | 2,352   |          |      |            |  |        |                           |  |          | 3,093   |            |   |       |  |        |  
|                                                                   |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Total assets                                                       |  | $                               | 115,038 |          |      |            |  |        |                           |  | $        | 110,579 |            |   |       |  |        |  
|                                                                   |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Liabilities and retained earnings:                                 |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Savings deposits                                                   |  | $                               | 8,587   |          | $    | 54         |  | 0.84   |                           |  | $        | 11,981  |            | $ | 76    |  | 0.84   |  
|Money market/demand accounts                                       |  |                                 | 17,652  |          |      | 197        |  | 1.49   |                           |  |          | 21,799  |            |   | 263   |  | 1.61   |  
|Certificates of deposit                                            |  |                                 | 67,544  |          |      | 2,439      |  | 4.83   |                           |  |          | 63,646  |            |   | 1,984 |  | 4.17   |  
|                                                                   |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Total deposits                                                     |  |                                 | 93,783  |          |      | 2,690      |  | 3.83   |                           |  |          | 97,426  |            |   | 2,323 |  | 3.19   |  
|FHLB advances                                                      |  |                                 | 2,312   |          |      | 81         |  | 4.71   |                           |  |          | 2,000   |            |   | 69    |  | 4.64   |  
|                                                                   |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Total interest-bearing liabilities                                 |  |                                 | 96,095  |          |      | 2,771      |  | 3.86   |                           |  |          | 99,426  |            |   | 2,392 |  | 3.22   |  
|Non-interest-bearing liabilities                                   |  |                                 | 1,887   |          |      |            |  |        |                           |  |          | 1,826   |            |   |       |  |        |  
|Other liabilities                                                  |  |                                 | 1,304   |          |      |            |  |        |                           |  |          | 990     |            |   |       |  |        |  
|                                                                   |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Total liabilities                                                  |  |                                 | 99,286  |          |      |            |  |        |                           |  |          | 102,242 |            |   |       |  |        |  
|Stockholders equity                                               |  |                                 | 15,752  |          |      |            |  |        |                           |  |          | 8,337   |            |   |       |  |        |  
|                                                                   |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Total liabilities and stock-holders equity                        |  | $                               | 115,038 |          |      |            |  |        |                           |  | $        | 110,579 |            |   |       |  |        |  
|                                                                   |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Net interest income                                                |  |                                 |         |          | $    | 2,385      |  |        |                           |  |          |         |            | $ | 2,265 |  |        |  
|                                                                   |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Net interest rate spread                                           |  |                                 |         |          |      |            |  | 2.25   | %                         |  |          |         |            |   |       |  | 2.57   | %
|                                                                   |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Net interest-earning assets                                        |  | $                               | 16,591  |          |      |            |  |        |                           |  | $        | 8,060   |            |   |       |  |        |  
|                                                                   |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Net interest margin                                                |  |                                 |         |          |      |            |  | 2.82   | %                         |  |          |         |            |   |       |  | 2.81   | %
|                                                                   |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  
|Average of interest-earning assets to interest-bearing liabilities |  |                                 |         |          |      |            |  | 117.27 | %                         |  |          |         |            |   |       |  | 108.11 | %
|                                                                   |  |                                 |         |          |      |            |  |        |                           |  |          |         |            |   |       |  |        |  



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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. 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 September 30,2007 vs. 2006 |     |   | Nine Months Ended September 30,2007 vs. 2006 |  
|                                               |  | Increase(Decrease) Due to                     |     |   | TotalIncrease(Decrease)                      |   |     | Increase (Decrease) Due to |        |   | TotalIncrease(Decrease) |     
|                                               |  | Volume                                        |     |   | Rate                                         |   |     |                            | Volume |   |                         | Rate |  |  
|                                               |  | (Dollars in thousands)                        |    
|Interest-earning assets:                       |  |                                               |     |   |                                              |   |     |                            |        |   |                         |      |  |   |     |   |  |   |      |   |  |   |     |  
|Loans:                                         |  |                                               |     |   |                                              |   |     |                            |        |   |                         |      |  |   |     |   |  |   |      |   |  |   |     |  
|One- to four-family                            |  | $                                             | 26  |   |                                              | $ | 51  |                            |        | $ | 77                      |      |  | $ | 71  |   |  | $ | 123  |   |  | $ | 194 |  
|Multi-family, commercial real estate, and land |  |                                               | (6  | ) |                                              |   | (3  | )                          |        |   | (9                      | )    |  |   | (29 | ) |  |   | (10  | ) |  |   | (39 | )
|Construction                                   |  |                                               | 72  |   |                                              |   | 8   |                            |        |   | 80                      |      |  |   | 66  |   |  |   | (3   | ) |  |   | 63  |  
|Commercial business                            |  |                                               | 10  |   |                                              |   | (14 | )                          |        |   | (4                      | )    |  |   | 71  |   |  |   | 5    |   |  |   | 76  |  
|Home equity lines-of-credit                    |  |                                               | (3  | ) |                                              |   | (8  | )                          |        |   | (11                     | )    |  |   | (32 | ) |  |   | 20   |   |  |   | (12 | )
|Consumer                                       |  |                                               | 102 |   |                                              |   | (1  | )                          |        |   | 101                     |      |  |   | 187 |   |  |   | (1   | ) |  |   | 186 |  
|                                               |  |                                               |     |   |                                              |   |     |                            |        |   |                         |      |  |   |     |   |  |   |      |   |  |   |     |  
|Total loans                                    |  |                                               | 201 |   |                                              |   | 33  |                            |        |   | 234                     |      |  |   | 334 |   |  |   | 134  |   |  |   | 468 |  
|Securities                                     |  |                                               | (17 | ) |                                              |   | 2   |                            |        |   | (15                     | )    |  |   | (72 | ) |  |   | 26   |   |  |   | (46 | )
|Other interest-earning assets                  |  |                                               | (72 | ) |                                              |   | (7  | )                          |        |   | (79                     | )    |  |   | 58  |   |  |   | 19   |   |  |   | 77  |  
|                                               |  |                                               |     |   |                                              |   |     |                            |        |   |                         |      |  |   |     |   |  |   |      |   |  |   |     |  
|Total interest-earning assets                  |  |                                               | 112 |   |                                              |   | 28  |                            |        |   | 140                     |      |  |   | 320 |   |  |   | 179  |   |  |   | 499 |  
|                                               |  |                                               |     |   |                                              |   |     |                            |        |   |                         |      |  |   |     |   |  |   |      |   |  |   |     |  
|Interest-bearing liabilities:                  |  |                                               |     |   |                                              |   |     |                            |        |   |                         |      |  |   |     |   |  |   |      |   |  |   |     |  
|Savings deposits                               |  |                                               | (12 | ) |                                              |   |    |                            |        |   | (12                     | )    |  |   | (22 | ) |  |   |     |   |  |   | (22 | )
|Money market/demand accounts                   |  |                                               | (17 | ) |                                              |   | (13 | )                          |        |   | (30                     | )    |  |   | (47 | ) |  |   | (19  | ) |  |   | (66 | )
|Certificates of deposit                        |  |                                               | 28  |   |                                              |   | 77  |                            |        |   | 105                     |      |  |   | 127 |   |  |   | 328  |   |  |   | 455 |  
|                                               |  |                                               |     |   |                                              |   |     |                            |        |   |                         |      |  |   |     |   |  |   |      |   |  |   |     |  
|Total deposits                                 |  |                                               | (1  | ) |                                              |   | 64  |                            |        |   | 63                      |      |  |   | 58  |   |  |   | 309  |   |  |   | 367 |  
|FHLB Advances                                  |  |                                               | 11  |   |                                              |   | 1   |                            |        |   | 12                      |      |  |   | 11  |   |  |   | 1    |   |  |   | 12  |  
|                                               |  |                                               |     |   |                                              |   |     |                            |        |   |                         |      |  |   |     |   |  |   |      |   |  |   |     |  
|Total interest-bearing Liabilities             |  |                                               | 10  |   |                                              |   | 65  |                            |        |   | 75                      |      |  |   | 69  |   |  |   | 310  |   |  |   | 379 |  
|                                               |  |                                               |     |   |                                              |   |     |                            |        |   |                         |      |  |   |     |   |  |   |      |   |  |   |     |  
|Change in net interest income                  |  | $                                             | 102 |   |                                              | $ | (37 | )                          |        | $ | 65                      |      |  | $ | 251 |   |  | $ | (131 | ) |  | $ | 120 |  
|                                               |  |                                               |     |   |                                              |   |     |                            |        |   |                         |      |  |   |     |   |  |   |      |   |  |   |     |  

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.



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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 investment 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, and short and intermediate-term U.S. Government and agency 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
$41,000 and ($666,000) for the nine months ended September 30, 2007 and 2006, respectively. Net cash from investing activities consisted primarily of disbursements for loan originations and purchases, offset by principal collections on loans
and mortgage-backed securities, and proceeds from Federal Home Loan Bank stock redemption. Net cash from investing activities were ($11.5) million and ($1.2) million for the nine months ended September 30, 2007 and 2006, respectively. Net cash
from financing activities consisted primarily of the activity in deposit, borrowing, and escrow accounts. The net cash from financing activities was ($2.9) million and $23.1 million for the nine months ended September 30, 2007 and 2006,
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 September 30,
2007, cash and cash equivalents totaled $6.2 million.

At September 30, 2007, the Bank exceeded all of its regulatory capital requirements with a Tier
1 (core) capital level of $12.0 million, or 10.30% of adjusted total assets which was $7.4 million above the required level of $4.6 million, or 4.00%; and total risk-based capital of $12.5 million or 14.41% of risk weighted assets, which was $5.5
million above the required level of $6.9 million or 8.00%. The Bank at September 30, 2007 was categorized as well capitalized. Management is not aware of any conditions or events since the most recent notification that would change the
Banks category.

At September 30, 2007, we had outstanding commitments to originate loans of $1.6 million. During the first quarter of 2007, we
entered into an agreement with a local bank to purchase approximately $1.0 million per month in auto loans through the remainder of 2007. We anticipate that we will 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 September 30, 2007 totaled $60.8 million. Management believes, based on past
experience that a significant portion of such deposits will remain with us. Our new main office building, which is currently under construction, is projected to cost $1.1 million. 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 lines of credit. For the three months ended September 30, 2007, 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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##### Table of Contents

|Item 3. | 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 interim 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 the financial reporting in the last quarter that have materially affected, or is reasonably likely to materially affect, our internal control over financial
reporting.



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##### Table of Contents

PART II Other Information



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

There are no material pending legal proceedings
to which the Holding Company or the Bank is a party other than ordinary routine litigation incidental to their respective businesses.



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

Not Applicable



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

Not Applicable



|Item 4 | Submission of Matters to a Vote of Security Holders
|------ | ---------------------------------------------------

Not Applicable



|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: November 14, 2007 |  | /s/ C. Steven Sjogren                
|                        |  | C. Steven Sjogren                    
|                        |  | President and Chief Executive Officer



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