Benjamin Franklin Bancorp Reports Results for Second Quarter of 2007; Declares Quarterly Dividend.

FRANKLIN, Mass. -- Benjamin Franklin Bancorp, Inc. (the "Company" or "Benjamin Franklin") (Nasdaq: BFBC), the bank holding company for Benjamin Franklin Bank (the "Bank"), today reported net income of $829,000, or $.11 per share (basic and diluted), for the quarter ended June 30, 2007. In the comparable 2006 quarter, the Company earned $1.3 million or $.16 per share (basic and diluted). For the six months ended June 30, 2007, the Company earned $1.4 million, or $.18 per share (basic and diluted) compared to $2.5 million, or $.32 per share (basic and diluted) in the comparable 2006 period.

The Company also today announced that its Board of Directors declared a quarterly cash dividend of $.06 per common share. This dividend will be payable on August 24, 2007 to stockholders of record as of August 10, 2007.

Thomas R. Venables, President and CEO, noted: "Over the past year we've put in place a number of strategies to promote profitable growth and to address the highly unfavorable interest rate environment. We are encouraged by improvement in our net interest margin over the past six months, a direct result of our continued focus on our commercial business lines and on core deposit growth."

The Bank has continued to generate strong growth in commercial loans, which have increased by $32.8 million or 10.0% since December 31, 2006. Growth was achieved in both commercial real estate and commercial business loans, which increased by 12.0% and 19.7%, respectively, during this period. Construction lending declined slightly, by 1.1%. Residential mortgage loans outstanding (excluding loans held for sale) decreased by $12.2 million or 5.8% during the first six months of 2007. Most new residential loan originations are fixed rate loans, which the Company sells in the secondary market.

Core deposit accounts also experienced strong growth during the first six months of 2007, increasing by $36.6 million or 11.3%. This growth was primarily the result of increased commercial cash management offerings and associated sales efforts, as well as to the introduction of new retail deposit products. Total deposit growth was offset by a $34.9 million decrease in time deposits during the period, as the Bank cut back its premium-rate promotional certificate offerings.

Non-performing assets as a percentage of total assets stood at .40% at June 30, 2007. The provision for loan losses in the second quarter of 2007 was a credit of $24,000, due to a change made in the Company's method of calculating reserves for loan commitments and the undrawn portions of lines of credit. The Company re-analyzed the risk characteristics of these various 'unfunded' exposures, and determined that it would be appropriate to reduce reserves by $260,000 for this category. Without that adjustment, the provision for the second quarter of 2007 would have been $236,000. The allowance for loan losses as a percent of loans was .98% at June 30, 2007, compared to .99% at December 31, 2006.

The Company's quarterly net interest margin ("NIM") of 3.08% was little changed from the NIM of 3.06% for the second quarter of 2006. However, second quarter 2007 NIM improved from the 2.96% produced in the first quarter of 2007 and the 2.80% earned in the fourth quarter of 2006. The rebound in the Company's NIM is primarily the result of steps taken in late 2006/early 2007, including the sale of low-rate residential mortgages and the six-branch sale/leaseback transaction. Reductions in higher-cost certificate accounts and FHLBB borrowings, increases in core deposit funding and increases in higher-yielding commercial loans also contributed to the widening of the NIM.

The Company's operating expenses increased by $1.3 million or 24.0% in the second quarter of 2007, compared to the second quarter of 2006. The major components of this increase are:

1. An increase of $1.1 million in salaries and benefits. Forty-four percent of this increase is due to the cost of stock incentive and retirement plans. Stock incentive awards were made for the first time in July, 2006, and an accelerated method is being used to recognize a significant portion of this expense. Further, the Company reduced its staff by 8% in June (half of which was reductions related to its ATM cash management unit - see below), and recorded $148,000 in severance costs related to staff reductions. The remainder of the increase is due primarily to increases in commercial and retail business development staff, including two new branch locations.

2. An increase of $194,000 in occupancy costs, due primarily to the sale/leaseback transaction and two new branch locations.

Expenses associated with new branch openings and other business development initiatives will continue to adversely affect the Company's profits in 2007, since many of these require more than one year to achieve breakeven.

As noted in the Company's last quarterly report on Form 10-Q, on May 1, 2007 the Bank and its subsidiary, Creative Strategic Solutions, Inc. ("CSSI"), entered into an agreement to sell certain of CSSI's assets (principally its customer list and rights and obligations under its customer contracts) to another bank with an ATM servicing division. As part of this transaction, the Bank retained the right to continue to supply ATM cash to its former customers, for a minimum of 30 months. The Company will continue to earn fees for providing cash to former CSSI customers, but those fees will be lower, since the Company will no longer be providing full administrative and operational service for these customers. As of May 1, 2007, the rate on cash provided declined to 6.76% from 8.30%, the approximate rate earned in the 6 months prior to the sale. Operating expenses associated with providing cash to ATM owners remained at normalized levels through late June, 2007, as CSSI continued to provide administrative services to these customers during a transitional period, but will decline significantly beginning in the third quarter of 2007.

Certain statements herein constitute "forward-looking statements" and actual results may differ from those contemplated by these statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Certain factors that could cause actual results to differ materially from expected results include changes in the interest rate environment, changes in general economic conditions, legislative and regulatory changes that adversely affect the businesses in which Benjamin Franklin Bancorp is engaged and changes in the securities market. The Company disclaims any intent or obligation to update any forward-looking statements, whether in response to new information, future events or otherwise.

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Reconciliation of Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company's management uses these non-GAAP measures in its analysis of the Company's performance. These measures typically adjust GAAP performance measures to exclude significant gains or losses that are expected to be non-recurring and to exclude the effects of amortization of intangible assets (in the case of the efficiency ratio). Because these items and their impact on the Company's performance are difficult to predict, management believes that presentations of financial measures excluding the impact of these items provide useful supplemental information that is essential to a proper understanding of the operating results of the Company's core businesses. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

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